Culp cuts loss for first time in five quarters; expects profit this fiscal year
By Furniture Today Staff -- Furniture Today, September 3, 2001
HIGH POINT — Major fabric and ticking supplier Culp cut its loss in the first fiscal quarter for the first time in five quarters.
The company lost $1.4 million in the quarter ended July 29, excluding restructuring and related charges, on sales of $86.5 million, compared to a year-earlier loss of $1.8 million on sales of $101.9 million.
The sales decline was 15.1%.
Culp said it is still generating significant cash and earnings from operations, which has allowed it to pay down debt, reducing it 19% from a year ago.
In addition, the company intends to continue to reduce inventory, although at a slower pace.
"We are encouraged by the positive momentum in market share that is being generated by the successful new designs we are introducing," said Rob Culp, chief executive officer.
The company's placements with U.S. furniture makers, he said, are "gratifying, and as a result we seeing a firming in incoming orders from this portion of our business, as well as in mattress ticking. Some of this improvement is being offset, however, by continued weakness in our international area."
Global business is problematic for Culp, as it is for others, because of the strong U.S. dollar. This has in effect doubled the cost of U.S. goods over the past year in some countries, such as Turkey, where Culp once did significant business.
Three years ago, international sales were 30% of Culp's overall sales and the company was shipping as much as 250,000 yards of fabric overseas each week. Global sales now represent about 17% of total sales.
The company also said it expects to show a profit in the current fiscal year, excluding restructuring charges.
"We've come a long way since we announced the restructuring plan in January," Culp said. "In just seven months, we've accomplished what might have taken two years to complete…. Now we are well-positioned to reap the benefits in the quarters ahead."
| Culp | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 7/29 | 2001 | 2000 | Change |
| (a) Includes a $1.3 million pretax restructuring charge. | |||
| Sales | $86,463,000 | $101,878,000 | (15.1%) |
| Operating income | (446,000) | 396,000 | — |
| Net income | (a)(2,882,000) | (1,756,000) | — |
| Earnings per share | (0.26) | (0.16) | — |
