Exhibit 99.1
Burlington Industries, Inc. Greensboro, N.C. 27410 (336) 379-2303
NEWS Date: November 15, 2001
Release: Immediate
Contact (press): Delores Sides (336) 379-2303
(analysts): Ross Haymes (336) 379-2788
Burlington Industries Files Voluntary Petitions for Reorganization --
Accelerates New Business Model
Burlington Industries, Inc. (NYSE: BUR) today announced its intention to
accelerate its initiatives to transition and modify its business model in order
to better serve its customers' expanding needs in the global supply chain. In
order to implement the company's new business model, Burlington Industries and
certain of its U.S. subsidiaries today filed voluntary petitions for
reorganization under Chapter 11 of the U.S. Bankruptcy Code. The emerging
business model, which is centered on elevating the company's ability to bring
fabric innovation and distinctive products to the market, consists of four main
components:
o Continuing to build its highly successful Lees Carpets business
o Expanding global sourcing partners and leveraging its own styling and
technology capabilities internationally through Burlington WorldWide Limited, a
recently formed subsidiary based in Hong Kong
o Providing unsurpassed performance and fabric innovation through the advanced
proprietary technology developed by Nano-Tex, LLC
o Building upon and accelerating the manufacturing improvements made in its
North American operations
George W. Henderson, III, Chairman and CEO, commented, "Our business model going
forward adds worldwide reach to our North American capability to provide
products, services and global solutions to our customers. The ability to enhance
products with the advanced technology of Nano-Tex and extend our reach beyond
our borders through Burlington WorldWide Limited increases the value of our
product development and technology capabilities while providing us access to
broader, more comprehensive product lines. Our Lees Carpets business continues
to serve the market with innovative flooring solutions and industry firsts. We
are creating a more flexible and responsive company capable of meeting the
diversified and ever changing needs of our customers."
The voluntary petitions for reorganization were filed in the U.S. Bankruptcy
Court for the district of Delaware. International operations, joint venture
partnerships, Nano-Tex, LLC and Burlington WorldWide Limited were not included
in the filing.
Henderson continued, "This filing is necessitated by the excess level of debt in
our capital structure which prevents us from making the changes we deem
necessary to our future success."
Burlington Industries also announced it has received a commitment for a facility
of up to $190 million in debtor-in-possession (DIP) financing underwritten by
J.P. Morgan Chase & Co., which, subject to court approval, will augment the
company's liquidity to provide adequate funding for operations during the
reorganization period. The company expects to generate positive cash flow during
fiscal 2002. The company anticipates no disruption to daily operations at the
company's headquarters and manufacturing plants or to the delivery of customer
orders. Its main priority continues to be delivering innovative, high-quality
products and services on time.
"This decision was not made lightly and we believe it is in the best interest of
the long-term viability of the company," said Henderson, commenting on the
restructuring action. "We recognize the need for aggressive and comprehensive
change in our business model and we can no longer afford the time needed to
incrementally transition the company. By utilizing the Chapter 11 process, we
can control and guide our reorganization activities under the protection of the
court to expedite the debt and operational restructuring that we have been
pursuing and at the same time ensure that our daily operations continue
uninterrupted.
"We currently have good liquidity. As a result of our working capital and
operational improvements achieved during the year, we currently have
approximately $60 million cash on hand. This cash, along with the DIP,
financing, once approved, will provide the funds we need to operate during the
reorganization process."
Henderson continued, "Our restructuring efforts over the last 2 1/2 years have
resulted in significant progress towards transitioning Burlington to better
compete with and serve the needs of an emerging global environment. We made
tough decisions and streamlined many of our businesses. While we have met the
goals set in these plans, outside factors, including a continuing flood of
low-cost and often subsidized foreign imports and a slowdown in consumer
spending have hit the textile industry hard.
"A key factor that led Burlington to take these steps is the U.S. Government's
history of using the textile industry as a bargaining chip in international
relations. The results have been devastating for the industry, leading to job
losses, plant closing and liquidations. Imports have been growing rapidly for
many years, but since 1999, the volume of imported apparel has grown at five
times the rate of consumption, squeezing out U.S.-made products to the point
that four out of five garments sold in this country today are imported.
"To make matters worse, we are not competing on a level playing field. This
flood of textile and apparel imports includes not only products subsidized by
foreign governments, but billions of dollars of goods that are imported
illegally. Our government, with the exception of support from elected officials
in our region, has made no effective response to these unfair trade practices,
and our industry does not have reciprocal access to the markets of the exporting
countries."
In a closing comment Henderson stated, "The intensity of these challenges has
worsened with the recent economic decline and uncertainty, and additional
slowing in retail sales since September. It has become clear that we need to
accelerate our efforts to reshape the company so that we can serve our
customers' needs and add value to the company long-term. We are committed to
meeting the challenges of our industry head on and emerging from this process a
stronger, leaner and more profitable enterprise."
Burlington Industries, Inc. is one of the world's largest and most diversified
manufacturers of softgoods for apparel and interior furnishings.
This press release contains statements that are forward-looking statements
within the meaning of applicable federal securities laws and are based upon the
company's current expectations and assumptions, which are subject to a number of
risks and uncertainties that could cause actual results to differ materially
from those anticipated. Such risks and uncertainties include, among other
things, global economic activity and the implications thereon of the attack on
September 11 and the U.S. government's response thereto, the success of the
company's overall business strategy including successful implementation of the
company's restructuring plan, the confirmation of the restructuring plan and the
DIP financing commitment, the terms and conditions of the DIP financing, the
impact that public disclosure of the company's Chapter 11 filing may have on the
company's relationships with its principal customers and suppliers, the success
of the company's expansion in other countries, the demand for textile products,
the cost and availability of raw materials and labor, the company's ability to
finance its operations and restructuring activities, the level of the company's
indebtedness and ability to borrow, and the exposure to interest rate
fluctuations, governmental legislation and regulatory changes, and the long-term
implications of regional trade blocs and the effect of quota phase-out and
lowering of tariffs under the WTO trade regime and other factors identified in
the company's filings with the Securities and Exchange Commission.