Culp rallies in turnaround bid
Furniture Today Staff -- Furniture Today, June 20, 2007
High Point, N.C.-- Climbing back on track after restructuring and a shift to a global manufacturing platform, fabric producer Culp slashed its fourth-quarter loss 97% to a virtually break-even $40,000 and pushed sales higher by 3.5%, to $73.2 million, reversing a years-long string of declines under steady pressure from low-cost imports.
And after coming close to making money in the closing quarter, ceo Frank Saxon said Culp expects to record a profit of $0.08 to $0.12 per share, excluding already announced restructuring costs, during the current first fiscal quarter.
Increasingly driving the turnaround at Culp is the mattress fabrics unit that has become the company's core business, outpacing the upholstery fabrics operation that once defined the company.
Mattress fabric sales raced ahead of 57.9% during the closing quarter, to $38.1 million from $24.1 million a year ago. And profits in the segment jumped up by 92.7%, to $3.9 million from $2.0 million the preceding year.
But the upholstery operation continued to slide, with sales falling off by 24.6%, to $35.1 million from $46.6 million, a shortfall of $11.5 million in just one quarter. Operating profits in upholstery fell by 24.3%, to $863,000 from $1.1 million.
For all of 2006, Culp sales slipped by 4.0%, to $250.5 million from $261.1 million the prior year, and the company recorded a sharply narrowed net loss of $1.3 million from $11.8 million in 2005.
The turnaround in operating profit was just as dramatic, as Culp recorded an operating profit of $4.2 million, bounding back from a year-before loss of $5.1 million.
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