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Culp sales rise 9%; income nearly doubles

Strong mattress ticking business helps 2Q results

Larry Thomas -- Furniture Today, November 29, 2007

HIGH POINT — Powered by a strong mattress ticking business, fabric producer Culp Inc. said sales rose 9% in its second fiscal quarter and net income nearly doubled.

The company, which makes fabrics for upholstery and mattresses, said sales in its ticking segment shot up 53% to $36 million. The segment was aided by the January acquisition of ITG’s mattress fabric line, but the company said there also was some organic growth and slightly improved operating margins.

Upholstery fabric sales declined 20% to $28.3 million.

Companywide, sales for the quarter ended Oct. 28 totaled $64.3 million. That compares with $59 million in the same period a year ago.

Net income was $1.55 million or 12 cents per share, which includes a restructuring charge of 4 cents per share. In last year’s second quarter, the totals were $821,000 or 7 cents per share.

“We delivered a solid performance during what has continued to be a challenging retail environment for the furniture industry,” said Frank Saxon, CEO.

Saxon said sales of Culp’s U.S.-made and Chinese-made upholstery fabric fell in the second quarter — a reflection of weak consumer demand for furniture and increasing consumer preference for leather and faux suede covers.

For the six months ended Oct. 28, total sales were $129.6 million, a 6.5% increase over the same period in 2006.

Six-month net income was $2.4 million or 19 cents per share, compared with $946,000 or 8 cents per share in the comparable period. This year’s net income includes restructuring charges of 9 cents per share.

Saxon said the company is projecting mattress fabric sales will increase 30% to 35% in the third fiscal quarter, while upholstery fabric sales will be down 15% to 20%. Net income is projected to be 7 cents to 11 cents per share, excluding restructuring charges.

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