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Exhibit 99.1
DAN RIVER INC. FILES VOLUNTARY CHAPTER 11 PETITION TO
FACILITATE DEBT RESTRUCTURING;
RECEIVES COMMITMENT FOR UP TO $145 MILLION IN DEBTOR
IN POSSESSION FINANCING
Danville, Va., March 31, 2004. - Dan River Inc. (Other OTC: DVER.PK)
announced today that it has filed a voluntary petition under Chapter 11 of
the U.S. Bankruptcy Code to facilitate a restructuring of the Company's
debt. In conjunction with the filing, Dan River has received a commitment
for up to $145 million in new debtor-in-possession (DIP) financing. Upon
Bankruptcy Court approval, the DIP financing will help provide funding for
the Company's ongoing operations. Dan River expects to utilize the Chapter
11 process to reduce its debt and strengthen its balance sheet. The
Company emphasized that the restructuring process is not expected to impact
its ability to fulfill its obligations to its employees or customers.
Joseph L. Lanier, Jr., Chairman and CEO of Dan River emphasized that the
filing was primarily necessitated by the Company's over-leveraged balance
sheet. "This restructuring, once fully implemented, should provide Dan
River with a much improved balance sheet and a capital structure that is
more appropriate for the current economic and market conditions," Lanier
said.
"The strength of our operations and our ability to generate positive cash
flow distinguish Dan River from other companies in our industry that have
gone through this process and failed," said Lanier. "In the last several
months we have taken steps to reduce our costs by streamlining our
operations. We have closed manufacturing facilities, reduced our
workforce, and eliminated excess inventory. We believe that the financial
restructuring will allow us to emerge from Chapter 11 with a much-improved
balance sheet and a healthy business that is positioned to achieve long-
term success," Lanier said.
"We believe that, under the circumstances, filing for Chapter 11 was the
best course of action for Dan River. This action enables us to continue
operating our business without interruption while implementing a debt
restructuring in a Court-supervised and controlled environment," Lanier
said.
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"We do not anticipate that our customers and suppliers will experience a
change in the way we do business with them," said Lanier. "We have taken
steps to make sure that vendors get paid in full in the ordinary course of
business for all goods and services provided after the filing date, and
that our customers continue to receive the same high quality goods and
services to which they are accustomed. Our new DIP financing, combined with
the Company's cash from operations, is expected to provide sufficient
funding for operations during the Chapter 11 process."
Ongoing employee compensation and benefit programs are being presented to
the Court for approval as part of the Company's "first day" motions. The
Company anticipates that the Court will approve these requests, thereby
ensuring that employees will be paid and that qualified employee benefits
programs will remain intact.
Lanier also emphasized that the Company's relatively simple capital
structure should expedite the restructuring process and said that the
Company was hopeful it would be able to emerge from Chapter 11 by the end
of the year.
Lanier concluded, "I would like to thank our customers, vendors and
business partners for their continued support during this process. We also
appreciate the ongoing loyalty and support of our employees. Their
dedication and hard work are critical to our success and to the future of
the Company. Our management team is committed to making this financial
restructuring successful and leading Dan River towards a bright future."
The Company's Chapter 11 petitions were filed in the United States
Bankruptcy Court for the Northern District of Georgia, Newnan Division.
Details regarding the filing can be found at www.danriver.com and at
www.bmccorp.net/danriver.
The Company also announced that its Annual Report on Form 10-K is expected
to be filed on or about April 19, 2004 and that its Annual Meeting of
Shareholders, originally scheduled for April 30, 2004, has been postponed
until a date to be determined by the Board of Directors.
Dan River Inc. is a leading manufacturer and marketer of textile products
for the home fashions, apparel fabrics and industrial textiles markets. The
company designs, manufactures and markets a coordinated line of value-added
home fashions products consisting of bedroom furnishings such as
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comforters, sheets, pillowcases, shams, bed skirts, decorative pillows, and
draperies for the adult, juvenile, and institutional markets. Dan River
also manufactures and markets a broad range of high quality woven cotton
and cotton blend fabrics for apparel. Additionally, Dan River manufactures
and markets specialty engineered textile products used in making high-
pressure hoses and other industrial products.
FORWARD-LOOKING STATEMENTS: This news release contains forward-looking
statements under applicable securities laws. The Company believes its
forward-looking statements are reasonable; however, undue reliance should
not be placed on such statements, which are based on current expectations.
Such forward-looking statements are subject to risks and uncertainties
which may cause actual results to differ. There can be no assurance that
the Company's restructuring will be successful. The Company's results of
operations could be materially and adversely affected by numerous market
and industry factors outside of its control; in particular, further
weakening of demand for the Company's products could have an adverse effect
on its operating results. Additional factors related to its restructuring
efforts that could cause actual results to differ from these forward-
looking statements include, but are not limited to, the following: the
Company's ability to obtain court approval for its DIP facility;
restrictions which might be imposed by the court in relation to the
Company's first day papers or other motions filed with the bankruptcy
court; the ability of the Company to meet requirements imposed by the
lenders under the Company's DIP facility; risks associated with third
parties seeking and obtaining court approval to terminate or shorten plans
of reorganization, for the appointment of a Chapter 11 trustee or to
convert the cases to chapter 7 cases; the ability of the Company to obtain
trade credit and shipments and terms with vendors and service providers for
current orders; the Company's ability to maintain contracts and licenses
that are critical to its operations; potential adverse developments with
respect to the Company's liquidity or results of operations; the ability of
the Company to attract and retain customers; and the ability of the Company
to attract, retain and compensate key executives. Additional risks
associated with the Company's business are detailed in its annual report on
Form 10-K filed with the SEC on February 21, 2003.