Culp Inc. posts fourth-quarter sales drop

Fabric supplier Culp Inc. reported net sales for its fiscal 2009 fourth quarter, which ended May 3, were $47.8 million, down from $64 million for the same quarter of 2008. The company reported net income of $1.7 million for the fourth quarter of fiscal 2009, compared with net income of $2.1 million for the fourth quarter of fiscal 2008.

Ticking sales for the fourth quarter were $26.6 million, a 23% decline compared with $34.6 million for the fourth quarter of fiscal 2008. Operating income for mattress fabrics was $3.5 million compared with $3.9 million a year ago, while operating income margin was 13.3%, compared to 11.1% of sales in the prior year.

Mattress fabric sales for fiscal 2009 were $115.4 million, down 16.4% from $138.1 million in fiscal 2008, reflecting a decline in demand for mattresses. Operating income for the year was $13.2 million, or 11.5% of sales, compared with $14.1 million, or 10.2% of sales in fiscal 2008.

“While the sales environment has been very challenging, we are pleased with the strong operating performance of our mattress fabrics business,” said Frank Saxon, Culp Inc. president and chief executive officer. “The continued solid margin improvement reflects the implementation of the $5 million capital project completed earlier this year, as well as the successful integration of the mattress fabrics operation of Bodet & Horst acquired in August 2008. We believe that we are well positioned to effectively compete during this downturn in the bedding industry and to benefit very well from any upside in demand when it occurs.”

On a pretax basis, the company reported income of $2.2 million compared with pretax income of $1.4 million for the fourth quarter of fiscal 2008. The pretax results for the fourth quarters of fiscal 2009 and 2008 included restructuring and related charges in the upholstery fabrics segment of $48,000 and $633,000, respectively.

Excluding these charges in both periods, the company reported pretax income for the fourth quarter of fiscal 2009 was $2.3 million, compared with $2.1 million in the fourth quarter of fiscal 2008.

Culp reported net sales of $203.9 million for fiscal 2009 compared with $254 million for the same period a year ago.

“In spite of a decline in sales, both our mattress fabrics and upholstery fabrics businesses showed improved margins as we continued to realize the incremental benefits of a leaner and more agile operating platform,” Saxon said. “We have also continued to make important investments in our businesses during the year with a strategic acquisition and major capital expenditures in our mattress fabrics segment, along with product and marketing initiatives in both segments.”

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