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Springs Industries Consolidates Production

FORT MILL, S.C., Dec. 6 /PRNewswire/ -- Springs Industries, Inc. (NYSE: SMI) announced today it would eliminatesome production at its Katherine and Elliott plants in Chester County, SC, inFebruary 2001, affecting approximately 320 people. "While we regret having to make the difficult decision to phase out thisproduction, we are going to work diligently to place every affected associateinto a job at other Springs facilities in the area," said William K. Easley,senior vice president of Springs and president of textile manufacturing. "Bycontinuing to invest in modern technology and replace or eliminate more costlymanufacturing, we are able to produce more yarn and fabric at fewer facilitiesand keep our domestic facilities competitive in this very demanding industry." Outdated yarn spinning will be eliminated at the Katherine and Elliottplants. In addition, some narrow looms, which are not compatible with newerfabrication equipment, will be phased down at the Katherine Plant.The company will make every effort to provide jobs for associates,including preference for job openings in nearby Springs facilities. All jobopenings will be posted at the affected facilities and additional supportservices such as personal assistance, job training and retraining and a jobhot line will be available. In the event that a position is not available foran affected associate, severance pay will be offered in addition tounemployment benefits. Springs will record a one-time after-tax charge of approximately $1.8million, or $0.10 per diluted share, during the fourth quarter of 2000. Thischarge includes $1.1 million related to non-cash asset write-offs and $0.7million for severance costs associated with discontinuing the production. Thecompany expects that its annual after-tax operating costs will be improved by$2.2 million compared with continuing to operate this outdated equipment.Including one-time transition costs and a partial-year benefit, after-taxoperating costs will be improved by $1.1 million in 2001. Over the past five years, Springs has invested over $54 million at theKatherine Plant on state-of-the-art air jet spinning and weaving, making itone of the most modern bedding manufacturing plants in the country. Also, theElliott Plant recently completed a $20 million installation of modern air jetweaving equipment. The Katherine Plant will employ 675 associates and the Elliott Plant willemploy 160 after the phase down is completed. These plants are two ofSprings' 10 facilities in the area that manufacture bedding products. This press release contains forward-looking statements within the meaningof applicable securities laws. These statements are based upon the company'scurrent expectations and assumptions, which are subject to a number of risksand uncertainties including the ability of the company to meet its cost-reduction goals, along with other factors which are discussed in certain ofthe company's SEC filings.SOURCE Springs Industries, Inc.Web Site: http://www.springs.com


Copyright 2000 PR Newswire




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