Culp sales slide in 4Q
By Furniture Today Staff -- Furniture Today, March 9, 2009
HIGH POINT — Fabric supplier Culp Inc. reported a net loss of $450,000 for the quarter ended Feb. 1 as sales slid 26.3%.
The loss included a non-cash restructuring charge of $504,000 and a cash restructuring charge of $273,000. Without the one-time charges, the company had pre-tax net income of $794,000.
“While our sales reflect the sharp decline in discretionary consumer spending, especially for furniture, we believe we have effectively managed our operations with a leaner and more agile operating platform,” said Frank Saxon, CEO.
He said the upholstery fabrics segment has been hardest hit by the economic downturn, while the mattress ticking business has been much steadier.
Net sales for the quarter, the third quarter of Culp's fiscal year, totaled $44.6 million. That's down from $60.5 million in the quarter ended Jan. 27, 2008.
Saxon said mattress ticking sales were down 18% to $25.2 million, while upholstery fabric sales tumbled 35% to $19.4 million.
The most recent quarter's net loss, which equals 4 cents per share, compares with net income of $903,000, or 7 cents per share, in the quarter ended Jan. 27, 2008.
Shortly before the end of the quarter, the company completed the sale of its corporate headquarters building in High Point. The $4 million sale price was used to retire a portion of the building's $6.1 million mortgage, and the remainder of that loan is now part of the company's unsecured long-term debt.
Saxon said Culp has agreed to lease the building from the new owner for a minimum of three years, a move that will reduce occupancy costs.
“We have been very diligent in our efforts to generate cash flow in this very weak and highly uncertain environment,” he said. “Our financial position has strengthened considerably during this fiscal year and is providing us with an important competitive advantage in light of the challenges facing our industry.”
For the nine months ended Feb. 1, net sales were $156.2 million, a decline of 17.8% from $190 million in the nine months ended Jan. 27, 2008.
The nine-month net loss was $40.5 million, or $3.20 per share. That figure included a $30.5 million non-cash charge to establish a valuation allowance for the company's deferred tax assets.
In the first nine months of the previous fiscal year, Culp had net income of $3.31 million, or 26 cents per share.
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