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Cone sees 1Q turnaround

Climbing back on track and returning to profitability on the strength of operational improvements — and gaining despite continued top-line erosion — Cone Mills Corp. recorded a first-quarter profit of $1.4 million, compared with a year-before loss of $2.9 million.

But sales at the diversified textiles continued to weaken, falling by 20.2 percent, to $105.8 million from $132.7 million last year, hard hit by weakness in its core denim business and persistent softness in its home fashions business.

Steering toward a turnaround after a painful restructuring and down-sizing, Cone sharply widened its margins, while keeping its costs in check. Average gross margin improved by 400 basis points, or four percentage points, to 13.5 percent from 9.5 percent a year ago, reflecting, the company said, a more efficient cost structure. Gross margin dollars increased by 14.0 percent, to $14.3 million from $12.5 million last year. Operating costs held relatively steady at 7.2 percent, compared with 7.1 percent in the year-ago period.

Cone Mills Corp.

Qtr. to 3/31 (x000) 2002 2001 % change
a-First-quarter results include $465,000 in miscellaneous expenses, compared with $560,000 a year ago; and a $47,000 loss from an affiliate, compared with a $349,000 profit last year. The prior-year period included a $2.0 million loss from discontinued operations and an income-tax benefit of $673,000, compared with a $434,000 tax expense this year.
Sales $105,820 $132,661 -20.2
Oper. income (EBIT) 6,676 3,150 111.9
Net income 1,440a (2,903)a
Per share (diluted) 0.02 (0.15)
Average gross margin 13.5% 9.5%
SG&A expenses 7.2% 7.1%

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