Cone Mills Corporation on Tuesday announced its best third quarter earnings in seven years, with a 4.4 per cent increase in sales driven by its denim business.

Third quarter net sales were $111.7 million, up from $107.0 million in the same period last year, and net income was $3.8 million compared with a net loss of $4.6 million.
Denim sales for the quarter were $95.4 million, an increase of 15.3 per cent over the third quarter of 2001. The company attributed the increase in denim sales to higher denim volume and a better product mix.

Outside sales for its commission-finishing segment were down 21.8 per cent to $10.5 million, driven primarily by depressed market conditions and the overall economy. Third quarter 2002 sales for the decorative fabrics segment were $5.7 million, down 47.3 per cent from the same quarter in 2001.

Gross profit for the third quarter of 2002 was $17.1 million or 15.3 per cent of sales, as compared with the third quarter 2001 results of $13.0 million or 12.1 per cent of sales.

John L Bakane, president and chief executive officer, said: "For quite some time, we have been saying that we must re-capitalise our balance sheet to raise new funds for the further expansion of our denim capacity in Mexico, if we are truly to take advantage of our present favourable market position.

"The re-capitalisation of our balance sheet is expected to include the extension and modification of existing debt agreements and the raising of new funds, which may include equity, to fund Cone's Mexico expansion strategy. We continue to believe, as demonstrated by the success of Parras Cone, that the execution of our Mexico expansion strategy is important to rebuilding long-term shareholder value."