Cone Mills reports 2Q net loss of $4.6M
By Furniture Today Staff -- Furniture Today, August 11, 2003
Greensboro, N.C. — Fabric supplier Cone Mills reported a net loss of $4.6 million in the second quarter, its first loss since 2001.
Excluding special charges, the company said its net loss was $500,000. Cone had net income of $2 million in last year's second quarter.
Sales for the quarter dropped 23.4% to $96.3 million from $125.8 million in 2002, with lower sales across all three of Cone's business segments — denim, commission finishing (Carlisle) and decorative fabrics (Cone Jacquards). Second-quarter sales for the decorative fabrics segment were $6.2 million, down 34.2% from 2002's quarter.
John Bakane, chairman and chief executive officer, said retailers have demonstrated "unprecedented conservatism" in ordering for the fall and holiday seasons. He also said profitability was hurt by ongoing increases in imported goods and "the inability of retailers to modify outstanding orders for imported goods, which have long lead times."
The outlook for the rest of the year is unclear, he said, adding, "We believe that recent massive government fiscal and monetary stimuli and the inevitable end of inventory liquidations will result in future recovery in our markets."
Founded in 1891, Cone Mills is a major producer of denim and a major commission printer of home furnishings fabrics with facilities in North and South Carolina, and a joint-venture plant in Mexico.
| Cone Mills | |||
|---|---|---|---|
| Owns Carlisle Finishing and Cone Jacquards | |||
| 13 weeks ended 6/29 | 2003 | 2002 | Change |
| (a) After preferred dividends; includes a $766,000 pretax charge for asset impairment in both periods, a $4.1 million pretax charge for equity appreciation rights in both periods and income tax benefits of $2.3 million in the 2003 13 weeks and $1.9 million in the 2003 26 weeks. (b) After preferred dividends. (c) Based on average shares outstanding of 25.8 million in the 2003 periods and 26.1 million in the 2002 periods. | |||
| Sales | $96,336,000 | $125,837,000 | (23.4%) |
| Operating income | 2,602,000 | 7,801,000 | (66.6%) |
| Net income | (a)(4,593,000) | (b)2,015,000 | — |
| Earnings per share (c) | (0.18) | 0.08 | — |
| 26 weeks ended 6/29 | 2003 | 2002 | Change |
| Sales | $198,600,000 | $231,657,000 | (14.3%) |
| Operating income | 7,718,000 | 14,477,000 | (46.7%) |
| Net income | (a)(3,768,000) | (b)2,423,000 | — |
| Earnings per share(c) | (0.15) | 0.09 | — |
