Culp Comes in Below Expectations
Staff Staff -- Furniture Today, November 1, 2004
Hard hit by slowing demand for upholstery fabrics and lower margins in its mattress-ticking business, Culp Fabrics Inc. cautioned that earnings for its second fiscal quarter, which ended Oct. 31, will fall sharply lower than expected.
The decorative fabrics producer said earnings per share — excluding restructuring and other charges — will come in at 2 to 4 cents per fully diluted share, beneath 13 to 17 cents per share the company had earlier forecast.
With sales and profits both under heavy pressure, the company said it will lay off about 250 workers, about 14 percent of employees in the upholstery fabrics business, as it shuts a decorative fabrics weaving plant in Pageland, S.C., shifting operations to a the Graham, N.C., facility.
Additionally, the company will consolidate yarn production, moving operations from a plant in Cherryville, N.C., into another plant in Shelby, N.C.
Robert Culp III, chairman and CEO, said, “Another important element of the restructuring plan will be a substantial reduction in certain raw material and finished goods stock keeping units, or skus, to reduce manufacturing complexities and lower costs” as the company exits unprofitable product lines. “We will continue to identify and eliminate products that are not generating acceptable volumes or margins,” said Culp.
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