NEWS RELEASE Exhibit 99.1
Cone Mills Corporation
Greensboro, NC 27415
For Immediate Release
Contact:
Gary L. Smith W. Scott Wenhold
Executive Vice President and CFO Treasurer
336.379.6220 336.379.6220
Cone Extends Credit Facilities
Greensboro, NC -May 28 2003 - Cone Mills Corporation (NYSE:COE)
announced that on May 27, 2003 it amended agreements with its lenders extending
its existing credit facility and senior note obligations through March 15, 2004.
With the amendments, the outstanding balance of the senior note is $22 million
with an interest rate of 14.2%, and the existing revolving credit agreement has
been split into two components. The first component is a $25 million, 12% senior
note and the second component is a $31 million revolving credit facility priced
at LIBOR + 6.75% (currently approximately 8.10%).
The agreements call for monthly amortizations of $833,333, beginning in July
2003. As a part of the extension, Cone settled the Equity Appreciation Rights,
which were contingent rights that were granted as a part of the November 2001
agreements, for $4.1 million. The rights were paid 50% in cash ($2.1 million),
the entering into new senior notes of $1.8 million and the election by two
lenders to receive approximately 169,000 shares of Cone common stock. The
company will recognize a pre-tax charge of $4.1 million in its second quarter
financial statements to reflect the settlement of these contingent rights. As of
the date of closing, the company had cash and availability under its credit
facilities in excess of $20 million.
Chief financial officer, Gary L. Smith, commented, " This transaction provides
the time necessary to evaluate potential business opportunities that would allow
us to execute our strategic vision and propose a comprehensive plan for a
long-term capital structure. It also provides the necessary liquidity and
flexibility for the company to operate during these uncertain economic
conditions."
Founded in 1891, Cone Mills Corporation, headquartered in Greensboro, NC, is the
world's largest producer of denim fabrics and the largest commission printer of
home furnishings fabrics in North America. Manufacturing facilities are located
in North Carolina and South Carolina, with a joint venture plant in Coahuila
Mexico.
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The matters disclosed in the foregoing release include forward-looking
statements. These statements represent Cone's current judgment on the
future and are subject to risks and uncertainties that could cause actual
results to differ materially. These forward-looking statements include
statements relating to our anticipated financial performance and business
prospects. These forward-looking statements speak only as of the date
stated and we do not undertake any obligation to update or revise publicly
any forward-looking statements, whether as a result of new information,
future events or otherwise, even if experience or future events make it
clear that any expected results expressed or implied by these
forward-looking statements will not be realized. Although we believe that
the expectations reflected in these forward-looking statements are
reasonable, these expectations may not prove to be correct or we may not
achieve the financial results, savings or other benefits anticipated in the
forward-looking statements. These forward-looking statements are
necessarily estimates reflecting the best judgment of our senior management
and involve a number of risks and uncertainties, some of which may be
beyond our control, that could cause actual results to differ materially
from those suggested by the forward-looking statements. Such factors
include, without limitation:
o the demand for textile products, including Cone's products, will vary
with the U.S. and world business cycles, imbalances between consumer
demand and inventories of retailers and manufacturers and changes in
fashion trends,
o the highly competitive nature of the textile industry and the possible
effects of reduced import protection, free-trade initiatives and
retaliatory measures in trade disputes,
o the unpredictability of the cost and availability of cotton, Cone's
principal raw material, and other manufacturing costs,
o Cone's relationships with Levi Strauss as its major customer including
its sourcing practices,
o Cone's ability to attract and maintain adequate capital to fund
operations and strategic initiatives,
o increases in prevailing interest rates,
o Cone's ability to complete an acceptable recapitalization transaction
that will enable it to expand its denim manufacturing in low-cost
countries, and
o the effect on Cone's sales and markets of events such as the events of
September 11, 2001.
For a further description of these risks, see Cone's 2002 Form 10-K, "Item
1. Business -Competition, - Raw Materials and - Customers" and "Item 7.
Management's Discussion and Analysis of Results of Operations and Financial
Condition - Overview." Other risks and uncertainties may be described from
time to time in Cone's other reports and filings with the Securities and
Exchange Commission.
http://www.cone.com
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