October 7, 2002-- Home Textiles Today,
Chief execs bullish on short-term prospects
Chief executives of American companies are still wary about the state of the economy but growing somewhat more optimistic about the near-term future, The Conference Board reported.
Scoping out the current state of the economy, chief executives are still nervous, with their confidence level declining during the third quarter to a current reading of 54, down from 61 during the second quarter, the business think tank reported. A reading of more than 50 reflects more positive than negative responses. The survey is based on a quarterly canvass of more than 100 chief executives representing a cross-section of U.S. industry.
"Despite executives' concern about the present state of the economy, chief executives' expectations for the near future remain cautiously optimistic," said Lynn Franco, director of The Conference Board's Consumer Research Center.
Chief executives' short-term outlook for the economy is less optimistic than it was last quarter but is still solidly in positive territory. About 62 percent expect an improvement in economic conditions in the coming months, down from 71 percent during the second quarter. About 53 percent expect an improvement in their own industry, down from 61 percent three months ago.
Burlington gets approval to sell assets
A U.S. bankruptcy court has given Burlington Industries Inc., a Greensboro, NC-based textiles producer, an okay to sell off more of its assets to raise cash and pay down debt.
The court allowed Burlington to modify its debtor-in-possession financing to increase asset sales by $31.3 million, from an earlier cap of $50 million, and to pay down $33.7 million of the principal on its pre-petition secured loan.
Burlington also said it has reduced the amount of maximum available borrowings and the accompanying commitment fee to $100 million.
The textiles producer said that, since filing for Chapter 11 last November, it has generated a substantial amount of cash and has fully repaid borrowings of $95 million drawn against its DIP financing. Burlington said it has sufficient liquidity to fund operations and is acting to cut its interest costs by making the $33.7 million payment on pre-bankruptcy debt.
In a separate move, the court gave Burlington a four-month extension of its exclusive period in which to file a plan of reorganization. The extension request was the company's second. In court papers, Burlington said it will use the extension to evaluate a recently implemented business plan and to analyze claims.
Job cuts reduced in September
In one hopeful sign that the economy is starting to turn, job cuts in September were at their lowest level in almost two years, according to Challenger, Gray & Christmas, an international outplacement company that tracks job cut announcements.
Planned job cuts in September dropped 41 percent, to 70,057, the lowest figure in 22 months, said Challenger.
Last month's announced job-cut total was 72 percent lower than during September 2001, when employers, in the wake of the terrorist attacks on Sept. 11, slashed 248,332 jobs, the highest monthly number on record.
Lowe's expects earnings to improve
Home improvement retailer Lowe's Cos. said it expects earnings to grow 10 percent to 20 percent a year over the next two years, as its sales climb higher each year by 18 percent to 19 percent.
Lowe's said it expects to meet the upper end of its earnings guidance of $0.39 to $0.40 a share for the third quarter and $1.74 to $1.75 for all of this year.
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