As always, our primary focus is on outstanding service for our customers as a financially stable and trusted supplier. Looking ahead, we have a solid financial position and the ability to support our growth strategy in fiscal 2012, while creating value for our shareholders through our share repurchase program.”
Overview For the quarter ended October 30, 2011, net sales were $58.0 million, a 19 percent increase compared with $48.9 million a year ago. The company reported net income of $6.3 million, or $0.49 per diluted share, for the second quarter of fiscal 2012, compared with net income of $4.0 million, or $0.30 per diluted share, for the second quarter of fiscal 2011. Net income for the second quarter of 2012 included an income tax benefit of $3.4 million, while net income for the previous year period included an $801,000 income tax benefit.
The income tax benefit for the second quarter of fiscal 2012 includes a $4.4 million non-cash reversal of a portion of a valuation allowance against net deferred tax assets in the United States. The company's overall adjusted effective income tax rate as of the second quarter of fiscal 2012 was 18.0 percent compared with 15.4 percent for the second quarter of fiscal 2011. On a pre-tax basis, the company reported income of $2.9 million compared with pre-tax income of $3.2 million for the second quarter of fiscal 2011.
Mattress Fabrics Segment Mattress fabric sales for the second quarter were $35.2 million, a 24 percent increase compared with $28.3 million for the second quarter of fiscal 2011.
“Our mattress fabrics business delivered a strong sales performance in the second quarter, reflecting improved industry demand and our sales and marketing initiatives,” said Iv Culp, president of Culp's mattress fabrics division. “Our ability to leverage recent investments in our production facilities along with the expanded capacity has enhanced our ability to serve our customers. Additionally, our outstanding design capabilities and product innovation have created additional sales opportunities with customers who are leading suppliers in the bedding industry. We are well positioned with a diverse product line that meets the current market demand in all product categories.
“We have worked diligently to manage our production costs in light of recent sustained increases in raw material prices. We have also continued to look for alternative sources of yarns and raw materials without compromising quality or production efficiency. While the higher costs and pricing pressures affected our operating margins for the second quarter, we are encouraged that raw material prices have at least stabilized following several quarters of upward volatility.
“We are pleased with the trends in our mattress fabrics business and we expect to build on this momentum,” added Culp. “We have a strong operating structure with an efficient and scalable manufacturingplatform supported by outstanding product design, superior customer service, reliable delivery performance and consistent quality and value.”
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.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "UBM China (Shanghai)")
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
