Culp 2Q sales increase 9%
By Larry Thomas -- Furniture Today, December 2, 2007
High Point — Powered by a strong mattress ticking business, fabric producer Culp Inc. said last week its sales rose 9% in its second quarter, as 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 comparable period a year ago.
Net income was $1.6 million, or 12 cents per share, which includes a restructuring charge of 4 cents per share. In last year's second quarter, the net was $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 last year's first half.
Six-month net income was $2.4 million, or 19 cents per share, compared with $946,000, or 8 cents per share, a year earlier. This year's net income includes restructuring charges of 9 cents per share.
Saxon said the company is projecting that mattress fabric sales will be up 30% to 35% from a year ago 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.
Separately, the company said in a regulatory filing that the salaries of Saxon and Chairman Rob Culp III had been reduced as part of company-wide cost-cutting efforts. Saxon's salary was reduced by $25,000 to $325,000 — a 7.1% decrease — while Culp's was cut by $50,000 to $250,000, representing a 16.7% decrease.
According to the Securities and Exchange Commission filing, Culp and Saxon recommended the reductions to the board of directors and its compensation committee.
| Culp Inc. | |||
|---|---|---|---|
| Earnings per share are fully diluted. | |||
| Quarter ended 10/28 | 2007 | 2006 | Change |
| (a) Includes pretax restructuring and related charges of $503,000 in the 2007 quarter, $232,000 in the 2006 quarter, $1.5 million in the 2007 six months and $1.5 million in the 2006 six months. (b) Based on average shares outstanding of 12.8 million in the 2007 quarter and six months and 11.7 million in the 2006 quarter and six months. |
|||
| Sales | $64,336,000 | $59,040,000 | 9.0% |
| Operating income | 2,584,000 | 1,718,000 | 50.4% |
| Net income (a) | 1,554,000 | 812,000 | 91.4% |
| Earnings per share (b) | 0.12 | 0.07 | 71.4% |
| 6 months ended 10/28 | 2007 | 2006 | Change |
| Sales | $129,566,000 | $121,625,000 | 6.5% |
| Operating income | 5,319,000 | 3,205,000 | 66.0% |
| Net income (a) | 2,405,000 | 946,000 | 154.2% |
| Earnings per share (b) | 0.19 | 0.08 | 137.5% |
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Culp sales rise 9%; income nearly doubles
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