Culp, Inc. reported financial and operating results for the fourth quarter and fiscal year ended May 2, 2010.
Overview For the three months ended May 2, 2010, net sales were $57.2 million, a 20 percent increase compared with $47.8 million a year ago. The company reported net income of $5.4 million, or $0.41 per diluted share, for the fourth quarter of fiscal 2010, compared with net income of $1.7 million, or $0.13 per diluted share, for the fourth quarter of fiscal 2009. Net sales for fiscal 2010 were $206.4 million, compared with net sales of $203.9 million in fiscal 2009. Net income for fiscal 2010 was $13.2 million, or $1.01 per diluted share, compared with a net loss of $38.8 million, or $(3.07) per share, in fiscal 2009. The results for fiscal 2009 included a $27.2 million non-cash charge for the establishment of a valuation allowance against substantially all of the company's net deferred tax assets.
Frank Saxon, chief executive officer of Culp, Inc., said, "We are pleased with our performance for the fourth quarter, capping off a year of significant growth and progress for Culp. We are encouraged by the recent improvement in consumer demand trends, as evidenced by an overall 20 percent sales gain compared with a year ago. In particular, our mattress fabrics business has benefited from a recent uptick in consumer demand in the bedding industry. We have also continued to see favorable growth trends in our upholstery fabrics business, although not to the same level as bedding. Overall, our improved performance for the quarter and year reflects the benefits of a lean and agile operating platform and a strong competitive position in both businesses. Culp represents a stable and trusted supplier for our customers with a proven ability to execute. Our strong financial position is a key advantage in these uncertain economic times and provides us with greater operating flexibility to pursue our growth initiatives."
Mattress Fabrics Segment Mattress fabric sales for the fourth quarter of fiscal 2010 were $33.4 million, a 26 percent increase compared with $26.6 million for the prior year period. For fiscal 2010, mattress fabric sales were $114.8 million, compared with $115.4 million in fiscal 2009.
"Our mattress fabrics business had a great fourth quarter, primarily driven by significant improvement in consumer demand in the bedding industry," said Saxon. "Additionally, we are benefiting from the closure of a key competitor in late calendar 2009. These results also reflect the benefits of recent operating initiatives and the ongoing investments we have made to develop an efficient and scalable manufacturing platform. During the fourth quarter, we completed the installation of state-of-the-art finishing equipment for our growing knit business. We are also in the process of further expanding our capacity for both knit and woven product lines, as well as completing an energy efficiency initiative in our Canadian operation that will have an environmental benefit and reduce our operating costs going forward. Our capital expenditures in mattress fabrics for fiscal 2010 totaled approximately $6.6 million, reflecting our continued commitment to the industry. While we are pleased with the trends in this business, we are also facing increased pricing pressures and higher material costs. As we move into fiscal 2011, we are continuing our high level of capital spending for modernizing and expanding our woven and knit capacities. Above all, we will focus on execution for our customers with outstanding service, reliable delivery performance and consistent quality and value."