Exhibit 99.1
[PILLOWTEX CORPORATION LOGO]
FOR IMMEDIATE RELEASE
September 25, 2002
Contacts:
Investor Relations: Hank Pollock, Vice President, Treasurer
(704)939-2976
Media: Karen Cobb, Communications Manager
(704)939-2775
Pillowtex Enters Into Amendment to Term Loan Agreement
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Kannapolis, N.C. - September 25, 2002 -- Pillowtex Corporation (OTC: PWTX) today
announced that it has entered into an amendment to its term loan agreement, to
be effective September 27, 2002. The amendment adds two new financial covenants,
an asset coverage ratio test and a minimum availability requirement under the
Company's revolving credit facility, which covenants will be measured at the end
of each fiscal month for the remainder of the year. The amendment also includes
a waiver of compliance with the interest coverage ratio and leverage ratio
financial covenants contained in the term loan agreement for the 2002 third
fiscal quarter. The Company has also agreed in the amendment to provide to its
term loan lenders by November 27, 2002 revised projected financial statements
for fiscal years 2003, 2004 and 2005.
Pillowtex's Chief Financial Officer Michael R. Harmon stated: "A difficult
retail environment combined with covenants that were based upon projections
prepared in connection with the Company's plan of reorganization filed in
December 2001 had put in doubt the Company's ability to meet those covenants in
the term loan agreement for the third quarter. As a result, the Company sought
and obtained from its term loan lenders a waiver from compliance with those
covenants for the third quarter. Once the revised projections are completed, the
Company and the term loan lenders will review the financial covenants in the
term loan agreement as they apply to future periods."
The Company also announced that it expected to be in compliance with all of
the covenants in its revolving credit agreement at the end of the third quarter
and that availability under the revolving credit agreement as of September 23,
2002 was approximately $76 million.
The Company plans to release its third quarter earnings on Wednesday,
October 23, 2002 and will hold a conference call that day for interested
investors.
About Pillowtex
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Pillowtex Corporation, with corporate offices in Kannapolis, N.C., is one
of America's leading producers and marketers of household textiles including
towels, sheets, rugs, blankets, pillows, mattress pads, feather beds, comforters
and decorative bedroom and bath accessories. The Company's brands include
Cannon, Fieldcrest, Royal Velvet, Charisma and private labels. Pillowtex
currently employs approximately 8,300 people in its network of manufacturing and
distribution facilities in the United States and Canada.
Forward-Looking Statements
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Certain statements contained in this press release, including, but not
limited to, information regarding the Company's ability to comply with financial
covenants, are forward looking in nature. Factors that could cause actual
results to differ from the forward-looking information contained in this press
release include, but are not limited to, the economic performance, financial
condition and prospects of the Company, which are, in turn, affected by general
retail industry conditions; competition; the Company's ability to implement its
business plan; the Company's leverage; the price and availability of raw
materials; reliance on key suppliers and vendors; dependence on specific brand
names; risk of loss of material customers, labor relations and seasonality of
the business. These and other such factors are discussed in greater detail under
the caption "Risk Factors" in the Company's Annual Report on Form 10-K filed
with the Securities and Exchange Commission on March 28, 2002.
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