Culp Makes $13.2 Million for Fiscal 2010

June 16, 2010  by in UnCategorized   

By Home Furnishings Business in Financial Reports on June 17, 2010 Culp Inc. (NYSE: CFI)  reported net income for the fiscal year ended May 2 of $13.2 million, compared with a net loss of $38.8 milion during the previous year.

Sales for the year were $206.4 million, up 1.2 percent over the previous year sales of $203.9 million.

In the fourth quarter, net income was $5.4  million, compared with $1.7 million reported in the same quarter last year. Sales for the quarter were $57.2 million, up 20 percent from the fourth quarter sales of $47.8 million last year.

"We are pleased with our performance for the fourth quarter, capping off a year of significant growth and progress for Culp," said Frank Saxon, chief executive officer. "We are encouraged by the recent improvement in consumer demand trends, as evidenced by an overall 20 percent sales gain compared with a year ago. In particular, our mattress fabrics business has benefited from a recent uptick in consumer demand in the bedding industry. We have also continued to see favorable growth trends in our upholstery fabrics business, although not to the same level as bedding. Overall, our improved performance for the quarter and year reflects the benefits of a lean and agile operating platform and a strong competitive position in both businesses. Culp represents a stable and trusted supplier for our customers with a proven ability to execute. Our strong financial position is a key advantage in these uncertain economic times and provides us with greater operating flexibility to pursue our growth initiatives."

The company's ticking sales for the quarter were $33.4 million, a 26 percent increase compared with $26.6 million for the prior year quarter. For the fiscal year, sales in the segment were $114.8 million, compared with $115.4 million in fiscal 2009.

Sales for upholstery fabrics were $23.8  million for the fourth quarter, a 13 percent jump compared with $21.2 million in the same quarter last year. During the quarter, the company's sales of fabric produced in China were $19.8 million, up 15 percent from the same quarter last year. Sales of U.S.-produced fabric were $4 million, up 3 percent from the fourth quarter of fiscal 2009.

Sales of China-produced fabric were $77.3 million for the year, up 14 percent, and sales of U.S. produced fabrics were $14.3 million, down 30 percent.

"Our upholstery fabrics business has made substantial progress this fiscal year and we are pleased with the improvement in sales and profitability," Saxon said. "Our sales results for the year mark the first annual sales gain for this business in ten years. At the same time, we have returned Culp's upholstery fabrics business to solid profitability. After a multi-year restructuring process, we have established a leaner and more agile manufacturing platform, including a wholly-owned China operation that is scalable and vertical, but not capital intensive. We also have one remaining U.S. manufacturing facility that supports our customer needs. Our top priorities for upholstery fabrics in fiscal 2010 were to place a greater emphasis on product development, sales and marketing initiatives, and delivery performance. Customer response has been very favorable and we believe we have made excellent progress in each of these key areas. For fiscal 2011, we will continue to focus on these same key objectives."

Looking ahead to the first quarter of fiscal 2011, Saxon said external factors like high unemployment, consumer credit concerns and a volatile housing market will continue to impact consumer behavior and demand for furniture and bedding.

"We are encouraged by trends in both of our businesses as compared with this time last year and currently expect that overall sales will be up 11 to 16 percent compared with the same quarter of fiscal 2010," he said. "We believe our profitability will be somewhat affected by higher raw material costs in both segments and increased pricing pressure in mattress fabrics."

He said mattress ticking sales are expected to be up 15 percent to 20 percent for the first quarter, and upholstery fabric sales to be up about 5 percent to 10 percent from the first quarter of fiscal 2010.

Culp has the complete release posted online.