Culp 4Q sales off 5.8%; profits up 14.1%
By Furniture Today Staff -- Furniture Today, June 23, 2004
High Point — High Point— Fabric and ticking supplier Culp reported sales in its fourth quarter were off 5.8% while net income jumped 14.1%. Sales for the quarter ended May 2 came to $85.1 million, down from $90.4 million in the comparable period last year.
Profits in the latest quarter were $3.7 million, up from $3.3 million a year ago. The gross profit margin for the quarter inched up to 18.4% from 17.9% last year.
CEO Robert Culp III said the fourth quarter saw lower-than-expected sales of upholstery fabrics. "This segment continued to face demand pressure from both the current consumer preference for leather furniture as well as competition from imported fabrics, including cut-and-sewn kits," he said.
Culp added the company's mattress ticking business has continued to gain momentum throughout the year, with sales in this segment up 9.4% in the quarter and 6.7% for the year.
Sales for the year ended May 2 were off 6.3% to $318.1 million from $339.6 million in the prior year. Net income for the year was $7.2 million, compared with a loss of $24.9 million last year. The prior year included both a $13 million pretax restructuring charge and a $24.2 million extraordinary charge for a change in accounting methods.
Culp reported that sales for the upholstery fabric segment were off 11.6% to $57.9 million in the quarter and down 11.7% to $211.8 million for the year.
Sales in the mattress ticking segment were $27.2 million for the quarter and $106.3 million for the year, compared with $24.9 million and $99.7 million, respectively, a year ago.
Culp said the gross profit margin for upholstery fabric, excluding special charges, was 16.8% for the quarter, the same as in the comparable 2003 quarter. Gross profit margin for the year, also excluding special charges, was 16.5%, compared with 14.5% last year.
In ticking, gross profit margin was 31.9% in the quarter, up from 27.5% a year ago. For the year, the margin was 22%, dipping slightly from 22.9% last year.
In a conference call with analysts, Culp said the company was facing more pressure on promotional and midpriced fabric, but that "the domestic market is very viable."
Looking ahead, the company said it expected a net loss per share for the first quarter in the range of 8 cents to 13 cents.
| Culp Inc. | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are loses or declines. | |||
| Quarter ended 5/2 | 2004 | 2003 | Change |
| Sales | $85,148,000 | $90,406,000 | (5.8%) |
| Operating income | 5,713,000 | 5,864,000 | (2.6%) |
| Net income (a) | 3,733,000 | 3,272,000 | 14.1% |
| Earnings per share | 0.32 | 0.28 | 14.3% |
| Year ended 5/2 | 2004 | 2003 | Change |
| Sales | $318,116,000 | $339,646,000 | (6.3%) |
| Operating income | 17,303,000 | 17,533,000 | (1.3%) |
| Net income | (b)7,220,000 | (c)(24,887,000) | — |
| Earnings per share | 0.61 | (2.17) | — |
| (a) Includes pretax restructuring credits of $1 million in the 2004 quarter and $25,000 in the 2003 quarter. (b) Includes a $1 million pretax restructuring credit and a $1.7 million pretax charge for the early extinguishment of debt. (c) Includes a $13 million pretax restructuring charge and a $24.2 million extraordinary charge, the cumulative effect of an accounting change. |
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