Delta Woodside Industries, Inc. Revises Estimates of Financial Results and Announces Credit Agreement Amendment

Business Wire, March 20, 2003

Business Editors

GREENVLLE, S.C.--(BUSINESS WIRE)--March 20, 2003

Delta Woodside Industries, Inc. (NYSE:DLW) reported today that a weak third quarter ending March 29, 2003 will create a short fall from its previously reported fiscal year 2003 earnings estimates which were $.70 to $.85 per share. For the quarter ending March 29, 2003, the Company expects a net loss in the range of $.16 to $.20 per share including an approximate $.04 per share after tax asset impairment and restructuring charge associated with the recently announced closing of the Maiden, N. C. yarn facility.

The uncertainty associated with a pending war combined with a harsh winter has stalled consumer spending and brought about a continued softening of retail sales that started in the December quarter and has continued through most of the third quarter. These events, coupled with the closing of the Maiden facility and skyrocketing energy prices, will have a negative impact on the bottom line in the third quarter. Improvement is expected in the fourth quarter. Supporting this improvement is a strong backlog of orders that should generate significantly improved plant operating schedules. Also, as a result of having closed its Maiden yarn facility, the Company expects to be more competitive through greater flexibility and lower costs. The closing of the Maiden facility should have no impact on the Company's capacity in the future. W.F. Garrett, President and CEO, commented, " I am disappointed we did not see the recovery in the market place that was expected to occur at the beginning of the third quarter. For the last two years, the third quarter has been a weak quarter; however, the estimated loss for this year's third quarter is a significant improvement over last year's third quarter when we lost $.42 per share. With a US trade deficit that annualizes to a record $500 billion, increased imports continue to bring about pressure on prices. This pressure will continue for the foreseeable future; therefore, we are continuing to look within for cost reductions and improved margins. Even though our margins will continue to be under pressure, we are encouraged that our order backlog suggests a significant improvement in our plant operating schedules that should return Delta Woodside to profitability in the fourth quarter."

Delta Woodside Industries, Inc. also reported that its wholly-owned subsidiary Delta Mills, Inc. has reached agreement with GMAC Commercial Finance LLC to amend Delta Mills' $50 million Revolving Credit Agreement with GMAC. The amendment, which becomes effective today, removes the minimum availability block of $12.5 million and adds financial covenants respecting a maximum leverage ratio and a minimum fixed charge coverage ratio that Delta Mills is required to maintain. Among other matters, the amendment also extends the term of the Revolving Credit Agreement to March 31, 2007, includes GMAC's consent to the sale of Delta Mills' Catawba Plant that was announced March 5, 2003, and allows Delta Mills to exclude from the calculation of financial covenant ratios the asset impairment and restructuring charge associated with the closing of its Catawba Plant.

The preceding discussion contains certain "forward-looking statements". These are based on the Company's expectations and are necessarily dependent upon assumptions, estimates and data that the Company believes are reasonable and accurate but may be incorrect, incomplete or imprecise. Forward-looking statements are also subject to a number of business risks and uncertainties, any of which could cause actual results to differ materially from those set forth in or implied by the forward-looking statements. These risks and uncertainties include, among others, changes in the retail demand for apparel products, the cost of raw materials, competitive conditions in the apparel and textile industries, the relative strength of the United States dollar as against other currencies, changes in United States trade regulations and the discovery of unknown conditions (such as with respect to environmental matters and similar items). Accordingly, any forward-looking statements do not purport to be predictions of future events or circumstances and may not be realized.

The Company does not undertake to publicly update or revise the forward-looking statements even if it becomes clear that any projected results will not be realized.

Delta Woodside Industries, Inc., headquartered in Greenville, South Carolina, manufactures and sells textile products for the apparel industry. The Company, which employs about 1,600 people, operates six plants located in South Carolina.