Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, May 3, 1995 TAG: 9505030045
SECTION: BUSINESS PAGE: B-7 EDITION: METRO
SOURCE: JEFF STURGEON STAFF WRITER
DATELINE: MARTINSVILLE LENGTH: Medium
Tultex Corp. of Martinsville projects a nearly 9 percent jump in sales this year, and analysts said such optimism may be justified.
Speaking at the company's annual meeting Tuesday, President and Chief Executive Officer Charles W. Davies predicted that sales will reach $615 million, compared to $565 million last year.
The manufacturer and marketer of active wear and licensed sports apparel is concerned about higher interest rates and cotton and polyester prices, which could rise 20 percent this year. But it is encouraged by the contract ratified by its employee union March 26 and the expected comeback of sales of its sports apparel, now that the hockey lockout and the baseball strike have ended, Davies said.
The three-year contract, which provides the first raises in two years and expands benefits and blocks potential layoffs, "protects our competitive position," Davies said.
Looking out a window at gray skies, Davies said, "The sun - although it's not shining - is beginning to shine in our company."
About 200 shareholders assembled in Tultex's distribution center in Martinsville said little during a question-and-answer period that often is the liveliest segment of a company annual meeting. One man praised Davies and other members of company management, and the only questions were from a union official. Last year shareholders pointedly questioned executives about their pay and the company's slumping profits.
"I was very reassured," said Tom Harned, community development coordinator and economic watchdog for the city of Martinsville. "I think they've turned the corner."
Merrill Lynch this month raised its estimate of Tultex's 1995 profit from 25 cents per share to 50 cents per share, up from 26 cents in 1994. The research firm said Tultex could be in a position in 1996 to reinstate its dividend, which was suspended in early 1994.
Robinson-Humphrey Co. in Atlanta was more cautious. It forecasted higher sales but predicted profits will total 25 cents per share for the year. It said it wanted to see the company continue to reduce debt.
Davies said the company is reducing debt and costs while emphasizing advertising and outsourcing, in which Tultex contracts with other companies to do its manufacturing. Outsourcing will play a greater role in the future because Tultex plants in Virginia, North Carolina, Massachusetts, Indiana and Jamaica are running at capacity and the company doesn't intend to buy or build new plants, Davies said.
"The company is moving more and more to be a marketer of products rather than a manufacturer of products," said spokeswoman Kathy Rogers.
Employment has fallen from 7,690 workers in 1989 to 6,774 last month, but relatively few jobs have been eliminated in Martinsville, Harned said.
In response to a question by Michael Zucker, a spokesman for the Amalgamated Clothing and Textile Workers Union, company officials said they have no definite plans to sell additional stock but would consider doing so in the future.
by CNB