(The following statement was released by the rating agency)
NEW YORK, Aug 20 - The announcement by Collins & Aikman (B+/Negative/--) of new restructuring actions and the appointment of David Stockman, its chairman, to the additional position of chief executive officer does not have an immediate effect on Standard & Poor's Ratings Services ratings on the company. Standard & Poor's recognizes that these actions may benefit the company's longer-term financial results. However, Collins & Aikman's current credit protection measures are weak, and the prospects for a sustained recovery in its financial results remains unclear over the near term, given challenging conditions in the highly competitive automotive industry, uncertainty arising from the realignment of top management, and lingering operational problems at certain Collins & Aikman facilities. In addition, Collins & Aikman announced that its audit committee is investigating claims made by two former executives about certain transactions that may affect the company's financial results. Standard & Poor's is concerned that the outcome of this investigation could have a negative effect on the company's financial flexibility. In the second quarter 2003, the company's EBITDA, adjusted to exclude nonrecurring items, totaled $83 million, compared with $110 million year-over-year and $69 million in first quarter 2003. Standard & Poor's will continue to closely monitor Collins & Aikman's operating and financial performance in the near term to determine whether maintenance of the rating is warranted.