WestPoint Stevens Reports First Quarter 2004 Results

WestPoint Stevens Reports First Quarter 2004 Results 


WEST POINT, Ga., May 10  /PRNewswire-FirstCall/ -- WestPoint Stevens Inc. 
(BULLETIN BOARD: WSPT)  ( http://www.westpointstevens.com/ ) today reported
results for the first quarter ended March 31, 2004.

The Company's net sales for the first quarter of 2004 increased 5.4% to $399.6
million compared with $379.3 million a year ago.  Bed Product sales increased
9%, Bath Product sales increased 10% and Other (Mill Stores and International)
sales decreased 31%, primarily from a reduction in the Company's mill store
sales as a result of restructuring initiatives that have reduced the total
number of retail stores to 38 from 57 in the year ago period.  Furthermore, one
of the Company's foreign subsidiaries, WestPoint Stevens (Europe) Ltd., filed
for bankruptcy in the United Kingdom in August of 2003 and is in the process of
liquidating.  WestPoint Stevens Stores' same- store sales increased 6% in the
first quarter of 2004 versus the year ago period.

Net income for the first quarter of 2004 was a loss of $14.9 million or $0.30
per diluted share compared with a loss of $16.9 million or $0.34 per diluted
share in 2003.

Loss before taxes for the first quarter of 2004 was $21.2 million compared with
a loss before taxes in 2003 of $26.4 million. Included in the first quarter of
2004 were $7.8 million in expenses related to the Company's restructuring
initiatives, and $8.1 million in expenses related to the current bankruptcy
proceedings compared with $4.3 million in expenses in the first quarter of 2003
related to WestPoint Stevens previously announced restructuring initiatives.

M. L. "Chip" Fontenot, WestPoint Stevens President and CEO commented, "The
first quarter saw continued improvement in the retail environment.  Against
this backdrop we are maintaining the high service levels that our customers
expect from WestPoint Stevens and remain adequately funded with availability
under our $300 million debtor-in-possession facility of $134 million at the end
of the first quarter."

Mr. Fontenot continued, "The Company is continuing to move forward on a
consensual basis with negotiating new terms for a Chapter 11 plan of
reorganization with all its major creditor constituencies and has recently
received an extension of its exclusive period to file such a plan through July
29, 2004."

WestPoint Stevens Inc. is the nation's premier home fashions consumer products
marketing company, with a wide range of bed linens, towels, blankets,
comforters and accessories marketed under the well-known brand names GRAND
PATRICIAN, PATRICIAN, MARTEX, ATELIER MARTEX, BABY MARTEX, UTICA, STEVENS, LADY
PEPPERELL, SEDUCTION, VELLUX and CHATHAM -- all registered trademarks owned by
WestPoint Stevens Inc. and its subsidiaries -- and under licensed brands
including RALPH LAUREN HOME, DISNEY HOME and GLYNDA TURLEY. WestPoint Stevens
can be found on the World Wide Web at http://www.westpointstevens.com/ .

Safe Harbor Statement: Except for historical information contained herein,
certain matters set forth in this press release are "forward-looking
statements" within the meaning of the U.S. Private Securities Litigation Reform
Act of 1995. Such forward-looking statements involve certain risks and
uncertainties that could cause actual results to differ materially from those
in the forward-looking statements. Such risks and uncertainties may be
attributable to important factors that include but are not limited to the
following: Product margins may vary from those projected; Raw material prices
may vary from those assumed; Additional reserves may be required for bad debts,
returns, allowances, governmental compliance costs, or litigation; There may be
changes in the performance of financial markets or fluctuations in foreign
currency exchange rates; Unanticipated natural disasters could have a material
impact upon results of operations; There may be changes in the general economic
conditions that affect customer practices or consumer spending; Competition for
retail and wholesale customers, pricing and transportation of products may vary
from time to time due to seasonal variations or otherwise; Customer preferences
for our products can be affected by competition, or general market demand for
domestic or imported goods or the quantity, quality, price or delivery time of
such goods; There could be an unanticipated loss of a material customer or a
material license; The availability and price of raw materials could be affected
by weather, disease, energy costs or other factors;  The future results of
operations may be adversely affected by factors relating to the Chapter 11
proceedings.  The information contained in this release is as of May 10, 2004. 
WestPoint Stevens assumes no obligation to update publicly any forward-looking
statements, contained in this document as a result of new information or future
events or developments.

                      FINANCIAL STATEMENTS TO FOLLOW


                          WESTPOINT STEVENS INC.
               Condensed Consolidated Statements of Income
                  (In thousands, except per share data)

                                            Three Months Ended March 31,
                                                       2004
                                          ProForma   Restructuring
                                           Before       And Other
                                        Restructuring    Items      Actual

  Net sales                                $399,640          $-    $399,640
  Cost of goods sold                        328,517       2,957     331,474
          Gross earnings (loss)              71,123      (2,957)     68,166
  Selling, general and administrative
     expenses                                55,785           -      55,785
  Restructuring and impairment charge             -       4,813       4,813
          Operating earnings (loss)          15,338      (7,770)      7,568
  Interest expense                           17,813           -      17,813
  Other expense-net                           2,830           -       2,830
  Chapter 11 expenses                         8,119           -       8,119
          Income (loss) before income
             tax expense (benefit)          (13,424)     (7,770)    (21,194)
  Income tax expense (benefit)               (3,518)     (2,797)     (6,315)
          Net income (loss)                 $(9,906)    $(4,973)   $(14,879)

  Basic and diluted net income (loss)
     per common share                        $(0.20)                 $(0.30)

  Basic and diluted average common
     shares outstanding                      49,897                  49,897


                          WESTPOINT STEVENS INC.
               Condensed Consolidated Statements of Income
                  (In thousands, except per share data)

                                             Three Months Ended March 31,
                                                       2003
                                           ProForma  Restructuring
                                            Before     And Other
                                         Restructuring   Items      Actual

  Net sales                                $379,263          $-    $379,263
  Cost of goods sold                        302,973       2,895     305,868
          Gross earnings (loss)              76,290      (2,895)     73,395
  Selling, general and administrative
     expenses                                63,463           -      63,463
  Restructuring and impairment charge             -       1,378       1,378
          Operating earnings (loss)          12,827      (4,273)      8,554
  Interest expense                           32,465           -      32,465
  Other expense-net                           2,505           -       2,505
  Chapter 11 expenses                             -           -           -
          Income (loss) before income
             tax expense (benefit)          (22,143)     (4,273)    (26,416)
  Income tax expense (benefit)               (7,972)     (1,538)     (9,510)
          Net income (loss)                $(14,171)    $(2,735)   $(16,906)

  Basic and diluted net income (loss)
     per common share                        $(0.28)                 $(0.34)

  Basic and diluted average common
     shares outstanding                      49,852                  49,852


                          WESTPOINT STEVENS INC.
                  Condensed Consolidated Balance Sheets
                              (In thousands)

                                          March 31,  December 31,  March 31,
                                             2004        2003        2003
     Assets
     Current Assets
          Cash and cash equivalents          $7,035      $3,660      $2,663
          Accounts receivable               247,827     243,507     115,819
          Inventories                       414,255     368,620     412,088
          Prepaid expenses and other
           current assets                    26,549      32,996      35,510
     Total current assets                   695,666     648,783     566,080

     Property, Plant and Equipment, net     604,681     616,422     696,532

     Other Assets
          Deferred financing fees             8,933      12,837      23,185
          Other assets                        1,443       1,737       2,839
          Goodwill                                -           -      46,298
                                         $1,310,723  $1,279,779  $1,334,934


     Liabilities and Stockholders'
      Equity (Deficit)
     Current Liabilities
          Senior Credit Facility           $490,689    $490,689    $464,399
          Second-Lien Facility              165,000     165,000     165,000
          DIP Credit Agreement              113,137      89,017           -
          Long-term debt classified as
           current                                -           -   1,000,000
          Accrued interest payable            5,923         295      30,348
          Accounts payable                   60,203      56,198      63,159
          Pension and other accrued
           liabilities                      136,782     111,731     120,125
     Total current liabilities              971,734     912,930   1,843,031

     Noncurrent Liabilities
          Deferred income taxes              76,586      87,179     148,578
          Pension and other liabilities     147,210     141,936     164,925
     Total noncurrent liabilities           223,796     229,115     313,503

     Liabilities Subject to Compromise    1,086,846   1,086,869           -

     Stockholders' Equity (Deficit)        (971,653)   (949,135)   (821,600)
                                         $1,310,723  $1,279,779  $1,334,934



                          WESTPOINT STEVENS INC.
             Condensed Consolidated Statements of Cash Flows
                              (In thousands)

                                               Three Months Ended March 31,
                                                  2004              2003
      Cash flows from operating
       activities:
           Net loss                             $(14,879)         $(16,906)
           Adjustments to reconcile net
            loss to net cash provided by (used
            for) operating activities:
                    Depreciation and
                     other amortization           16,656            18,885
                    Deferred income
                     taxes                        (6,326)           (9,474)
                    Changes in working
                     capital                     (21,212)           11,190
                    Other-net                     10,105            12,330
                    Non-cash component
                     of restructuring
                     and impairment charge             -               186
      Net cash provided by (used for)
       operating activities                      (15,656)           16,211

      Cash flows from investing
       activities:
           Capital expenditures                   (5,127)           (4,454)
           Net proceeds from sale of
            assets                                    38                13
      Net cash used for investing
       activities                                 (5,089)           (4,441)

      Cash flows from financing
       activities:
           Senior Credit Facility:
                    Borrowings                         -           338,000
                    Repayments                         -          (321,396)
           DIP Credit Agreement:
                    Borrowings                   207,120                 -
                    Repayments                  (183,000)                -
           Trade Receivables Program                   -           (26,807)
      Net cash provided by (used for)
       financing activities                       24,120           (10,203)
      Net increase in cash and cash
       equivalents                                 3,375             1,567
      Cash and cash equivalents at
       beginning of period                         3,660             1,096
      Cash and cash equivalents at end
       of period                                  $7,035            $2,663

   Contact:  Lorraine D. Miller, CFA
             Senior Vice President Finance and External Communications
             404.378.0491


DATASOURCE: WestPoint Stevens Inc.



CONTACT:  Lorraine D. Miller, CFA, Senior Vice President Finance and

External Communications of WestPoint Stevens Inc., [phone]



Web site:  http://www.westpointstevens.com/ 

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