Cone Mills profit up 20.5% in 4th qtr.
February 24, 2003,
With denim sales racing ahead, and at the same time boosting margins and slashing costs, Cone Mills Corp. recorded a fourth-quarter profit of $3.0 million, up 20.5 percent from $2.5 million last year.
Climbing out of a long trough of weak results, denim sales jumped up by more than 31 percent, to $86.1 million.. But acting as a drag, said Cone, the commission printing and jacquard segments reported lower sales "as a result of sharply weaker market conditions." Outside sales for the commission printing business, which produces product for other textiles companies, slumped by 26.3 percent, to $9.5 million, "primarily the result of depressed market conditions and the overall economy." Decorative fabric sales were off by more than a third, falling by 33.7 percent, to $6.6 million.
Lifted by stronger denim sales and improved operating rates in its plants, average gross margin expanded by 180 basis points, or 1.8 percentage points, to 14.3 percent of sales from 12.5 percent a year ago. Gross margin dollars grew by 31.6 percent, to $14.6 million from $11.1 million in 2001.
In another big lift to the bottom line, Cone kept hacking away at costs, reducing its overhead by 310 basis points, or 3.1 percentage points, to 6.7 percent of sales from 9.8 percent last year. Measured in absolute dollars, costs were slashed by 21.9 percent, to $6.8 million from $8.7 million, a cash savings of $1.9 million.
Cone Mills Corp.
|Qtr. 12/29 (x000)||2002||2001||% change|
|a- Fourth-quarter results include $853,000 in income from a Mexican affiliate, compared with a year-ago loss of $307,000; and an income-tax expense of $1.5 million vs. a year-ago tax benefit of $3.2 million. Prior-year results include a $1.1 million loss from discontinued operations.
b-12-month results include $2.5 million in income from a Mexican affiliate vs. $177,000 last year; income-tax expense of $4.4 million, compared with a year-ago tax benefit of $12.1 million. Year-ago results include a $19.9 million restructuring charge.
|Oper. income (EBIT)||7,783||2,376||227.6|
|Per share (diluted)||0.08||0.14||-42.9|
|Average gross margin||14.3%||12.5%||—|
|Oper. income (EBIT)||30,703||4,674||556.9|
|Per share (diluted)||0.28||1.59||-82.4|
|Average gross margin||14.2%||9.0%||—|