NEW YORK — Cone Mills Corp.’s "reinvention plan" paid off in the second quarter as the textile maker reported its highest quarterly earnings in six years.
For the three months ended June 30, the Greensboro, N.C.-based fabric producer reported net income of $3.1 million, or 8 cents a diluted share. That compares favorably with last year’s period when Cone Mills lost $26.5 million, or $1.08 a share. Earnings per share beat Wall Street forecasts by a penny.
Year-ago losses reflect $19.7 million in pre-tax restructuring and asset impairment charges.
Sales for the quarter rose 3.4 percent to $125.8 million from $121.7 million a year ago.
Chief executive officer John Bakane noted in a statement that, "from the shop floor to the headquarters office," officials at Cone "are particularly encouraged by improvement in the gross profit margin. Nonetheless, we still have much to do in cost reduction, process improvement and the recapitalization of our balance sheet. These improvements in our long-term competitiveness will also allow us to serve our customers more efficiently."
After instituting an efficiency plan last year, Cone Mills saw its cost of goods sold fall 6.7 percent to $108.6 million from $116.3 million last year, and its selling and administrative expenses decline 2.9 percent to $9.5 million from $9.7 million. All of that contributed to its gross margin increasing to 13.7 percent of sales compared to 4.4 percent a year ago.
Overall, for the first half of fiscal 2002, Cone Mills reported net income of $4.5 million, or 9 cents a diluted share. Last year, including the previously noted charges, the company lost $29.4 million, or $1.23. Sales for the period dropped 8.9 percent to $231.7 million from $254.4 million a year ago.
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