SOUTHFIELD, Mich., April 27 /PRNewswire-FirstCall/ -- Collins & Aikman Corporation (CKCRQ) reported a net loss for the month of March 2007 in its Monthly Operating Report (MOR) for US Debtor entities of $740 million. The Company recorded non-cash impairment charges of approximately $723 million, substantially all of which is related to goodwill and included in the net loss of $740 million for March 2007. The Company is in the midst of restructuring its operations through the sale or liquidation of its operations and is expected to record further non-cash impairment charges upon completion of these transactions. In addition, the Company recorded other non-cash charges related to settlements of certain accounts receivable balances with certain Customers of approximately $22 million, which is also included in the net loss of $740 million for March 2007. Further non-cash charges related to accounts receivable are expected to be recorded upon settlement with other Customers.
In addition, non-cash impairments to property, plant and equipment and other balance sheet accounts are expected upon completion of sale transactions and facility wind downs.
The MOR represents the US debtor entities only and does not include Collins & Aikman Corporation non-debtor subsidiaries. The Financial Information in the MOR is not audited and reflects the net book values, rather than current market values, of the Debtors assets and may not reflect the net realizable value. The results of operations reflected in the MOR are not necessarily indicative of the results of operations of Collins & Aikman Corporation and all of its subsidiaries on a consolidated basis and in accordance with GAAP, as the consolidated financial statements include both debtor and non-debtor entities.
Collins & Aikman Corporation is a leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, plastic-based trim, and convertible top systems. The Company is headquartered in Southfield, Michigan. Additional information about Collins & Aikman, the Plan of Reorganization, the Disclosure Statement, and any exhibits, when filed, will be available on the Internet at http://www.collinsaikman.com.
Cautionary Statement Concerning Forward-Looking Information
The foregoing statements regarding asset purchase agreement and the sale transaction constitute "forward-looking" statements, as that term is defined by the federal securities laws. You can find many of these statements by looking for words such as "may," "will," "expect," "anticipate," "believe," "estimate," "should," "continue," "predict," "preliminary," "potential" and similar words used herein. These forward-looking statements are intended to be subject to the safe harbor protection provided by the federal securities laws. These forward-looking statements are subject to numerous assumptions, risks and uncertainties. Because the statements are subject to risks and uncertainties, actual developments and results may differ materially from those expressed or implied by the forward-looking statements. Readers are cautioned not to place undue reliance on the statements, which speak only as of the date hereof. Additionally, the letter of intent identified in this press release is nonbinding and subject to numerous conditions such as completion of due diligence and negotiation of a definitive agreement.
Various factors that may affect actual outcomes and performance and results include, but are not limited to, the parties' ability to satisfy all of the conditions to consummation of the sale, including, satisfaction of due diligence, negotiation of agreements with customers and unions and shareholder approvals; our ability to obtain bankruptcy court approval of the agreement; general economic conditions in the markets in which the Company operates, declines in North American, South American and European automobile and light truck builds; labor costs and strikes at the Company's major customers and at the Company's facilities; fluctuations in the production of vehicles for which we are a supplier; changes in the popularity of particular car models, particular interior trim packages or the loss of programs on particular vehicle models; dependence on significant automotive customers; the level of competition in the automotive supply industry and pricing pressure from automotive customers; risks associated with conducting business in foreign countries; and increases in the price of certain raw materials, including resins and other petroleum-based products. In addition, the following may have a material impact on actual outcomes and performance and results: the results of the pending investigation; the change in leadership at the Company, the Company's ability to maintain access to its receivables facility and other financing arrangements, the Company's ability to otherwise maintain satisfactory relations with its creditors, suppliers, customers and creditors; the Company's ability to maintain current trade credit terms and manage its cash and liquidity, the Company's high leverage and ability to service its debt; and the impact of defaults under its material agreements and debt instruments.
The cautionary statements set forth above should be considered in connection with any subsequent written or oral forward-looking statements that the Company or persons acting on its behalf may issue. The Company does not undertake any obligation to review or confirm analysts' expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events. On May 17, 2005, Collins & Aikman Corporation and 37 of its U.S. subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern District of Michigan. Collins & Aikman's affiliates outside the United States were not included in the Chapter 11 filing.