News Flash

Textile fabrics marketer Culp announces results of fiscal year ended May 1

21 Jun '05

8 min read

Outlook
Commenting on the outlook for the first quarter of fiscal 2006, Culp continued, "We are encouraged by the early indications for the first quarter of fiscal 2006 as we begin to see signs that the strategic moves we have made are starting to show positive results. Reduced operating costs and greater efficiencies make us optimistic about the future.

"They expect sales for the mattress ticking segment will show a modest decrease over first quarter sales last year, reflecting continued industry-wide pricing pressure. However, operating income margin in this segment is expected to improve from the fourth quarter of fiscal 2005. With respect to upholstery fabrics, they note that the summer months are typically slow for this segment.

While we expect continued significant growth in sales of fabrics produced outside the U.S., they believe demand for domestically produced upholstery fabrics will continue to decline.

For the first quarter of fiscal 2006, we expect overall upholstery fabrics segment sales to decrease, but to a much lesser extent than the fourth quarter decline because of the strong growth trends in the sales of fabrics produced offshore. We believe the decrease in sales of domestically produced upholstery fabrics, combined with manufacturing costs related to ongoing restructuring activities, will result in an operating loss for this segment.

Considering these factors, we expect the company to report a net loss ofa much lesser extent than the fourth quarter decline because of the strong growth trends in the sales of fabrics produced offshore. We believe the decrease in sales of domestically produced upholstery fabrics, combined with manufacturing costs related to ongoing restructuring activities, will result in an operating loss for this segment.

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