From Home Furnishing Business
Culp Records 12.2% Sales Increase in Fiscal Q3
Stronger-than-expected sales of mattress and upholstery fabrics led to a 12% sales increase at Culp Inc. (NYSE: CULP) in the quarter ended Jan. 28.
Total sales of $85.3 million included a 6.8% jump in mattress fabric sales and a 19.9% increase in upholstery fabric sales, the company said.
However, one-time charges related to the recently-enacted tax bill resulted in a net loss of $748,000 or 6 cents per share for the quarter. In the same quarter of the previous year, Culp recorded a profit of $6.3 million or 51 cents per share.
Excluding the impact of the tax bill, net income in the most recent quarter was $5.2 million or 42 cents per share.
One-time charges due to the tax legislation included $4.8 million for repatriation of earnings from foreign subsidiaries and net charge of $1.1 million for a reduction in the value of its deferred tax assets and a reduction in the company’s annual effective tax rate.
“Our third quarter was highlighted by higher than expected sales, and we are pleased with the strong financial and operating performance for both of our operating segments,” said Frank Saxon, president and CEO. “Our mattress fabrics sales showed solid year-over-year improvement, in spite of a more challenging marketplace and weather-related disruptions. Sales of upholstery fabrics were exceptionally strong, as many customers were ordering ahead of the Chinese New Year holiday that started in February as opposed to January last year.”
Going forward, Saxson said both business segments have solid growth potential from existing products and new product categories they are entering.
The mattress fabrics segment recently launched a line of mattress pads, mattress protectors and other bedding accessories that is being sold directly to retailers under the Comfort Supply Company by Culp brand name. And the upholstery fabrics segment is making a bigger push into the hospitality market, and is actively pursuing acquisitions to help broaden its product capabilities, the company said.
For the nine months ended Jan. 28, net sales were $245.5 million, up 5.7% from the first nine months of the previous fiscal year.
Nine-month net income totaled $8.2 million or 65 cents per share. That was down from $16.1 million or $1.29 per share in the prior year period.
The company said the board of directors also approved a 1-cent increase in the cash dividend. The new dividend of 9 cents per share is payable April 16 to stockholders of record April 2.