Culp looks to sell wet-printed flock business
By Furniture Today Staff -- Furniture Today, March 24, 2002
HIGH POINT — HIGH POINT — Fabric producer Culp is seeking a buyer for its wet-printed flock upholstery business. If no buyer is found by April 28, the end of its fiscal year, Culp said it will shut down flock operations until the market picks up.
The segment, historically more important to international sales than domestic, lost $1.3 million in the 12-month period ended Jan. 27 on sales of $17.6 million, Culp said. Overall sales for that period were $374.6 million.
Sales of wet-printed flocks have declined significantly in recent years, primarily due to the strength of the U.S. dollar, said Chief Executive Officer Rob Culp, which makes it difficult to compete with foreign-based resources. In addition, he said, the category has suffered from the increased interest in textured goods.
"We regret the necessity of reviewing these alternatives for our wet-printed flock operations," Culp said. "This action, however, will enable us to devote our full capital and managerial resources to other product categories which are yielding a profitable return.''
Culp's wet-printed flock operations include a printing facility in Lumberton, N.C., which employs about 76 people, and some related operations in Burlington, N.C., employing about 25 people.
The company expects an after-tax charge from selling or idling the wet-printed flock operations of $3 million to $6 million, of which $2.5 million to $5 million would be a non-cash item representing the writedown of equipment.
The charge would be taken in the fourth quarter of fiscal 2002.
Culp has capital invested in the wet-printed flock operations of some $14 million, including fixed assets with a net book value of about $9.5 million. The company estimates that, if the business isn't sold, the annual after-tax carrying costs of the idled assets would be about $250,000.
-
La-Z-Boy's profits soar in 2Q
Dec 7, 2011 -
Culp Income Slides 19.2% in Latest Quarter
Mar 16, 2011 -
Culp earnings slide 19.2% in latest quarter
Mar 2, 2011
VIEW ALL GALLERIES
