Cone sees 1Q turnaround
Staff -- Home Textiles Today, 4/29/2002
GREENSBORO, NC — 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.
| Qtr. to 3/31 (x000) | 2002 | 2001 | % change |
| 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% | — |
| (loss) 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. |
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