Culp's mattress fabrics business delivers solid performance

06 Sep '10

5 min read

Culp, Inc. reported financial and operating results for the first quarter of fiscal 2011 ended August 1, 2010.

Highlights for the first quarter of fiscal 2011 include the following:

• Net sales were $55.9 million, a 23 percent increase compared with the first quarter of fiscal 2010, with mattress fabrics segment sales up 18 percent and upholstery fabric segment sales up 30 percent over the same period a year ago.
• Pre-tax income was $4.3 million, or 7.7 percent of sales, compared with $2.0 million, or 4.4 percent of sales in the prior year period, an increase of 115 percent.
• Net income was $3.7 million, or $0.28 per diluted share, compared with net income of $1.9 million, or $0.15 per diluted share, for the first quarter of fiscal 2010.
• The company's financial position remained strong, with cash and cash equivalents and short term investments of $18.1 million and total debt of $11.6 million as of August 1, 2010.
• The projection for second quarter fiscal 2011 is for overall sales to increase in the range of 5 to 10 percent. Mattress fabric sales are expected to be flat to up five percent and upholstery fabrics sales are expected to be up 10 to 15 percent compared with the second quarter of fiscal 2010. Pre-tax income for the second quarter of fiscal 2011 is expected to be in the range of $3.5 million to $4.0 million.

Overview
For the period ended August 1, 2010, net sales were $55.9 million, a 23 percent increase compared with $45.5 million a year ago. The company reported net income of $3.7 million, or $0.28 per diluted share, for the first quarter of fiscal 2011, compared with net income of $1.9 million, or $0.15 per diluted share, for the first quarter of fiscal 2010. On a pre-tax basis, the company reported income of $4.3 million compared with pre-tax income of $2.0 million for the first quarter of fiscal 2010.

Commenting on the results, Frank Saxon, president and chief executive officer of Culp, Inc., said, "Our stronger sales for the first quarter of fiscal 2011 reflect better consumer demand trends than a year ago, particularly in the first two months of the quarter, as well as success from our sales and marketing initiatives. Our improved profitability reflects the higher sales volumes, as well as the benefits of a leaner and more cost-efficient operating platform. Today, Culp has a strong competitive position in both mattress fabrics and upholstery fabrics, and, as always, our primary focus is on outstanding execution for our customers as a financially stable and trusted supplier. "

Mattress Fabrics Segment
Mattress fabric sales for the first quarter were $30.9 million, an 18 percent increase compared with $26.3 million for the first quarter of fiscal 2010.

"Our mattress fabrics business delivered a solid performance, primarily driven by improved retail demand in the bedding industry in the first two months of the quarter, and by the closureof a key competitor in late calendar 2009," said Saxon.

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