Culp's Net Income for 3Q Notches $3 Million

March 1, 2010  by in UnCategorized   

By Home Furnishings Business in Financial Reports on March 2, 2010 Fabric and ticking supplier Culp (NYSE: CFI) posted net income of $3 million for the third quarter  ended Jan. 31, compared with a net loss of $450,000 during the same period last year.

Net sales for the three-month period were $54 million, a 21 percent increase compared with $44.6 million a year ago.

"We are pleased with Culp's strong performance for the third quarter," said Frank Saxon, chief executive officer. "We achieved a 21 percent gain in overall sales from the third quarter of last year, marking the first year-over-year sales gain for the company in two years. We are encouraged taht the consumer appears to be slowly returning to the marketplace."

In the mattress ticking segment, the company posted sales of $27 million, a 7 percent increases compared with $25.2 million for the prior year quarter.

"These results reflect the benefits of the ongoing investments we have made to develop an efficient and scalable manufacturing platform," Saxon said. "In addition, we benefitted from other operating initiatives. During the third quarter, we began the installation of state-of-the-art finishing equipment for our growing knit business and will complete the project during the fourth quarter."

The company will also be investing in additional capacity for knit and woven goods, and completing and energy efficiency initiative in its Canadian operation.

Sales in the company's upholstery segment were $27 million, a 39 percent improvement compared with $19.4 million in the third quarter of fiscal 2009.  Sales of non-U.S. produced fabrics were $23.5 million, up 53 percent over the prior year period. Sales of U.S. produced fabrics were $3.5 million, down 12 percent from the third quarter of fiscal 2009.

"This period marks the first year-over-year sales increase for this business segment in three year, and the highest quarterly profit in over five years," Saxon said. "We are especially encouraged by the extent of our sales gains throughout our customer base."

Looking forward, Saxon said economic uncertainties and unemployment will continue to impact consumer demand for furniture and bedding.

"Our results to date for fiscal 2010 demonstrate that we have positioned Culp to operate effectively and profitably through this challenging period," he said. "We have created lean and agile business models in both of our segments that are scalable and position us very well to handle significant growth as the home furnishings industry recovers. We believe we are a market leader in both of our businesses, and we have the financial strength necessary to build upon our position."