Culp's mattress fabrics business delivers solid performance
Culp Inc reported financial and operating results for the first quarter of fiscal 2012 ended July 31, 2011.
Highlights for the first quarter of fiscal 2012 include the following:
• Net sales were $60.3 million, a 7.8 percent increase compared with the first quarter of fiscal 2011, with mattress fabrics segment sales up four percent and upholstery fabric segment sales up 12.4 percent over the same period a year ago.
• Pre-tax income was $3.0 million, or 4.9 percent of sales, compared with $4.3 million, or 7.7 percent of sales in the prior year period.
• Net income was $1.8 million, or $0.14 per diluted share, compared with net income of $3.7 million, or $0.28 per diluted share, for the first quarter of fiscal 2011. Net income for the current quarter reflected a significantly higher tax rate primarily due to non-cash U.S.-related tax expense.
• As of July 31, 2011, the company's financial position reflected cash and cash equivalents and short term investments of $25.0 million and total debt of $11.5 million.
• The company announced the addition of $2.0 million to the previously announced $5.0 million share repurchase program announced in June. As of August 26, 2011, the company has repurchased 364,000 shares, or 2.7 percent of shares outstanding at the beginning of the program, for approximately $3.2 million.
• The second quarter projection for fiscal 2012 is for overall sales to increase by approximately four to eight percent. Pre-tax income for the second quarter of fiscal 2012 is expected to be in the range of $2.6 million to $3.5 million.
Expanded Stock Repurchase Program
The company also announced that its Board of Directors has authorized the expenditure of an additional $2.0 million, for a total authorization of $7.0 million, as part of the share repurchase program originally announced June 16, 2011. Since announcing the repurchase, the Company has used approximately $3.2 million to purchase 364,000 shares through August 26, 2011. Based on the current market value of the common stock, and together with the shares already repurchased, the expanded authorization from the Board of Directors will allow the company to repurchase up to approximately 6.5 percent of the 13.3 million shares outstanding at the beginning of the program. Under the stock repurchase program, shares may be purchased from time to time in open market transactions, block trades, through plans established under Securities Exchange Act Rule 10b5-1, or otherwise. The amount of shares purchased and the timing of the purchases will be based on working capital requirements, market and general business conditions and other factors, including alternative investment opportunities.
Frank Saxon, president and chief executive officer of Culp, Inc., stated, "The expansion of the share repurchase program reflects our confidence in Culp's long-term prospects. Our strong financial position provides us the opportunity to continue to execute our global growth strategy, while also creating value for our shareholders through share repurchases."