The High Point, N.C.-based textile supplier Culp Inc. reported net sales for the third quarter of its fiscal 2011 were $51.7 million, a 4.3% decline over the prior–year period. Sales in the mattress fabric segment totaled $28 million, an increase of 3.9% over $27 million in third–quarter fiscal 2010. Upholstery fabrics sales were down 12.5%.
The company’s fiscal third–quarter ended Jan. 30.
“Our mattress fabrics business has continued to deliver a consistent performance,” said Frank Saxon, Culp chief executive officer. “Sales were higher compared with a strong third–quarter period in fiscal 2010, even with the discontinuation of a product line since a year ago. On a comparable basis, we are pleased with the favorable sales trends in our continuing product lines, which were up 8%.”
Saxon said profitability for the third quarter was negatively affected by higher raw material costs and noted that the company doesn’t expect improvement in global pricing trends for raw materials in the near term.
Still, he said, the future of Culp’s mattress fabric segment looks good.
“We have continued to enhance our capabilities in mattress fabrics and Culp is well positioned with a large and modern, vertically integrated manufacturing platform in the major decorative product categories. We have substantially improved upon our supply logistics from pattern inception to fabric delivery,” Saxon said. “With the completion in the second quarter of our multiyear, $45 million capital investment initiatives, we are now more focused on product development and sales and marketing initiatives.”
The company reported net income of $2.4 million, or $0.18 per diluted share, for its third quarter, compared to net income of $3 million, or $0.23 per diluted share, for the third quarter of fiscal 2010. On a pretax basis, the company reported income of $2.9 million compared with pretax income of $3.8 million for the third quarter of fiscal 2010.
Culp said it strengthened its financial position during the third quarter with cash, cash equivalents and short–term investments building to $22.8 million. Total debt was $11.6 million.
“Given the continued macroeconomic challenges in the U.S. and increased raw material costs we experienced, we are pleased with our results for the third quarter, even though they are down from last year’s strong third–quarter performance,” Saxon said. “For the year–to–date period, our sales and profitability are up over the prior year and we continued to report solid returns on our capital. Further, our net cash position is the highest in the company’s history, which is enabling us to pursue an aggressive growth strategy during these challenging times.”
