Cone denim celebrating 125 years

International Textile Group Inc., a global, diversified textile manufacturer headquartered in Greensboro, N.C. that operates Cone Denim and Burlington Worldwide, reported increases in sales and gross profit, led by its core bottom-weights division.

ITG said consolidated net sales in the three months ended March 31 were up 5 percent to $149.1 million from $144.1 million a year earlier.

Higher sales primarily resulted from increases in its commission finishing segment’s governmental business, increased demand for denim and program changes in the U.S. government wool uniform business, as well as higher-selling prices and an improved product mix in the technical fabrics, U.S. government wool uniform and synthetic fabrics businesses.

These improvements were partially offset by lower sales in the technical fabrics and nongovernment commission finishing businesses, lower demand at the retail level for worsted wool products and lower-selling prices and a less favorable product mix in the denim and worsted wool businesses due to lower cotton prices, fashion shifts, program changes and increased competition.

Gross profit in the three months was up 33 percent to $24.2 million compared with $18.2 million a year earlier. Gross profit margins increased primarily due to lower raw material and energy costs; higher selling prices and an improved product mix in the U.S. government wool uniform, synthetic fabrics, commission finishing and technical fabrics businesses; higher volumes in the U.S. government wool uniform and denim fabric business; favorable impacts from changes in foreign currency exchange rates, and lower manufacturing costs in certain businesses. Such improvements were partially offset by lower selling prices and a less favorable product mix primarily in the denim and wool uniform businesses, lower sales in the worsted wool apparel and technical fabrics businesses, and higher selling and administration and labor costs in certain businesses.

Operating income in the three months was $12.1 million compared to $6.4 million in the three months ended March 31, 2015.

In the core bottom-weight woven’s unit, net sales rose one percent to $137.9 million from $136.2 million, lifted by higher selling prices and an improved product mix primarily in the technical fabrics, U.S. government wool uniform and synthetic fabrics businesses, as well as higher sales related to increased demand for denim and program changes in the U.S. government wool uniform business. This was offset by lower sales in replenishment of certain large orders affecting the technical fabrics business, as well as lower selling prices and a less favorable product mix in the denim and worsted wool sectors due to lower cotton prices, fashion shifts, program changes and increased competition.

Income in the bottom-weight woven fabrics segment was up 47 percent to $13.8 million in the three months thanks to lower raw material and energy costs, higher selling prices and an improved product mix.

ITG, which manufactures in the U.S., Mexico and China, noted that the textile industry in general has seen a slowdown or leveling off of imports of textile products into the U.S. from other countries over the last few years due to, among other things, a narrowing of labor, energy and production cost differentials, the slowing pace of economic growth in China and an increased interest in U.S.-produced goods, partially offset in recent periods by lower shipping costs due to lower fuel prices and a strong dollar keeping the cost of foreign goods from rising.

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