BY LISA BIANK FASIG
The Cincinnati Enquirer
Brazos Sportswear Inc., which has spent the past year wrestling with consolidation issues, has hired a financial adviser to explore any option to make it profitable again in light of sharp third-quarter losses.
The maker of decorated sportswear said it hired BT Alex. Brown to advise it on reorganization and recapitalization opportunities. Such options could include selling parts or all of the company, which employs 500 in the Cincinnati area.
"The company has not performed up to expectations," said F. Clayton Chambers, chief financial officer of Brazos. "They've been hired to assist us in evaluating a wide variety of alternatives. Nothing has been ruled out."
Alex. Brown also is seeking to extend a forbearance agreement with Brazo's senior lenders. The agreement is scheduled to expire Nov. 30.
Brazos, which makes decorated sportswear and operates out of Batavia, reported a net loss of $8.3 million, or $1.93 a diluted share, in the quarter ended Oct. 3. That compares with net income of $4.2 million, or 70 cents a share, in the same period a year ago. Sales declined to $81.7 million from $105.2 million.
The current loss includes the write-off of a $5.8 million deferred tax asset.
Brazos' problems emerged in January, following four acquisitions in 1997. Consolidation of some of its Cincinnati operations into its Batavia location had not gone as planned, and the company fell short of required personnel to accommodate product flow. That, paired with a weakness in the industry, ate into its sales and earnings.
The company in October was dropped from the Nasdaq after failing to meet the stock exchange's listing requirements.
Brazos had hoped its third quarter would improve and relied on expectations of better sales, resolving its operational problems and placing new management. In May, the company's chief executive resigned to become vice president and was replaced by Robert Klein, formerly president of Brazos' branded sportswear division.
Brazos employs 1,750 people total.
