Fabric supplier Culp Inc., based in High Point, N.C., reported that net sales for its fiscal 2013 third quarter were $63.7 million, up 5.4% over the third quarter of fiscal 2012. The company’s fiscal third quarter ended Jan. 27.
Mattress fabric sales were $34.7 million, up 2.3% over the prior-year quarter and upholstery fabric sales were $28.2 million, up 9.5%, as compared with the same period a year ago.
| BRIEFLY | |
| Culp third quarter | |
| Net sales | $63.7 million |
| Mattress fabric sales | $34.7 million |
| Upholstery fabric sales | $28.2 million |
Commenting on the results, Culp President and Chief Executive Officer Frank Saxon said, “We are pleased with our results for the third quarter of fiscal 2013, with higher sales and profitability compared with the same period last year. We have continued to leverage our efficient global manufacturing platform to enhance our service capabilities and to meet the changing style demands of our customers. This strategy has enabled us to improve our return on capital from 18% to 28%. This improvement in return on capital was achieved by increasing operating income by 66% thus far this fiscal year, while only growing capital employed by 2%. In addition, our strong cash flow and balance sheet provide us with the financial flexibility to pursue organic growth initiatives, make strategic investments in both of our businesses and return substantial funds to shareholders by the way of dividends and share repurchases.”
Pretax income was $14.4 million, a gain of 65.5% over the third quarter of fiscal 2012.
Adjusted net income was $3.9 million (non-GAAP), or $0.32 per diluted share, compared with net income of $2.4 million, or $0.19 per diluted share, in the prior-year period.
Net income (GAAP) was $2.8 million, or $0.23 per diluted share, compared with net income of $1.8 million, or $0.14 per diluted share, in the prior-year period.
The company said its financial position remains strong and reported a total cash position of $24.7 million and total debt of $7.3 million.
Culp paid both a special cash dividend of $0.50 per share and a scheduled quarterly cash dividend of $0.03 per share, totaling $6.5 million.
“Our mattress fabrics business had a solid performance,” said Iv Culp, president of the mattress fabrics division. “While our overall sales moderated later in the quarter in tandem with industry demand, we continued to achieve consistent growth over the prior year. As market demand has evolved for higher-end bedding and more decorative mattress fabrics, Culp has effectively responded to this trend by providing our customers with the high-quality fabrics they need. We can support this functionality with our excellent design capabilities and expertise from our upholstery fabrics business to achieve today’s fashionable look. We are also making excellent progress in our latest business venture, the cutting and sewing of mattress covers, known as Culp-Lava. Our new Stokesdale, N.C., manufacturing facility, developed specifically for this operation, further leverages our design expertise with the ability to produce and market mattress covers. The initial equipment installation has been completed and we expect to incrementally add more capacity for this product category to meet anticipated demand.”
Culp projects overall sales to decrease 4% to 9% during the fourth quarter of fiscal 2013, compared with the same period a year ago, which had stronger industry demand. Pretax income is expected to be in the range of $5.2 million to $5.8 million.
