Home textiles company Culp Inc turns profitable

19 Jun '08

5 min read

Culp Inc reported financial and operating results for the fourth quarter and year ended April 27, 2008.

Highlights for the fourth quarter and fiscal year 2008 include the following:
• Net income for fiscal 2008 increased to $0.42 per share, reversing a net loss per share of $0.11 in fiscal 2007. Excluding restructuring charges, net income per share increased to $0.57 from $0.32 in fiscal 2007.
• Net sales for the year increased two percent to $254.0 million, with mattress fabrics up 28 percent and upholstery fabrics down 19 percent.
• Cash flow from operations increased to $16.4 million for fiscal 2008, up from $11.5 million in fiscal 2007
• Net income per share for Q4 of fiscal 2008 was $0.16 per share compared with a net loss per share of ($0.00) in Q4 of fiscal 2007. Excluding restructuring charges, net income per share for Q4 of fiscal 2008 was $0.18 compared with net income per share of $0.14 in the prior year period.
• Net sales for the quarter decreased 13 percent to $64.0 million, with mattress fabrics down 9 percent and upholstery fabrics down 16 percent.
• Total debt reduced 48 percent to $21.4 million at the end of fiscal 2008 from $40.8 million at the end of fiscal 2007, with debt to capital at 20 percent versus 34 percent for the prior year.
• Successfully integrated the acquisition of ITG's mattress fabrics business, adding approximately $35 million in sales with minimal additions to staffing and fixed assets and continued outstanding delivery performance to customers.
• Initiated a major $5.0 million capital project in the mattress fabrics business to install state-of-the art weaving and finishing equipment, designed to provide more reactive capacity for faster delivery response times and improved productivity.
• The upholstery fabrics business remained profitable and generated significant cash flow in the face of the most challenging furniture industry conditions in many years.
• Successfully executed a multi-year restructuring of the upholstery fabrics business, which began in fiscal 2001, and included aggressive development of a China operation and substantial downsizing to one manufacturing facility in the U.S.

Overview:
For the three months ended April 27, 2008, net sales were $64.0 million, compared with $73.2 million a year ago. The company reported net income of $2.1 million, or $0.16 per diluted share, for the fourth quarter of fiscal 2008, compared with a net loss of $40,000, or ($0.00) per diluted share, for the fourth quarter of fiscal 2007. The financial results for the fourth quarter of fiscal 2008 included $186,000, or $0.01 per diluted share, in restructuring and related charges, after taxes.

Excluding these charges, net income for the fourth fiscal quarter was $2.3 million, or $0.18 per diluted share. The financial results for the fourth quarter of fiscal 2007 included $1.8 million, or $0.14 per diluted share, in restructuring and related charges, after taxes. Excluding these charges, net income for the fourth quarter of fiscal 2007 was $1.8 million, or $0.14 per diluted share. (A reconciliation of the net income (loss) and net income (loss) per share has been set forth on Page 7.)

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