Upholstery drives Culp second-quarter sales spike

Textile supplier Culp Inc., with headquarters in High Point, N.C., reported that net sales for its fiscal 2014 second quarter ended Oct. 27 were $70.6 million, up 8% over the fiscal second quarter of 2013.

Culp second quarter
Net sales $70.6 million
Mattress fabric sales $40.3 million
Upholstery fabric sales $30.3 million

Upholstery fabric sales were $30.3 million, up 17% as compared with second-quarter 2013.

In his comments on second-quarter results, Frank Saxon, Culp Inc. president and chief executive officer, said: “We had a solid performance in our upholstery fabrics business with higher than expected sales. The sales increase was product-driven as we have continued to see very favorable customer response to our creative designs and new product introductions.”

Mattress fabric sales were $40.3 million, a 2% increase over the prior-year quarter.

“Our mattress fabric business has delivered solid results in spite of some intermittent industry headwinds,” said Iv Culp, president of the mattress fabrics division. “Our operating results for the second quarter were affected by higher sampling and development costs in advance of new customer rollouts for calendar 2014, as well as continued transition costs for our Culp-Lava operation. We are encouraged by the response to our exciting new innovative designs and recent product introductions with strong future placements for business in early calendar 2014.”

Pretax income was $4.8 million, up 6% from the prior-year quarter.

Adjusted net income was $4.1 million, or $0.33 per diluted share for the current quarter, as compared with $3.9 million, or $0.31 per diluted share, for second-quarter 2013. Net income (using generally accepted accounting practices) was $3.1 million, or $0.25 per diluted share, compared with GAAP net income of $8.3 million, or $0.67 per diluted share, in the prior-year period.

Culp said its financial position remained strong with a total cash position of $30.5 million and total debt of $5 million as of October 27, after spending $4 million during the quarter in debt and interest payments, dividends and capital expenditures.

The company announced an increase in its quarterly cash dividend from $0.04 to $0.05 per share, commencing in the third quarter of fiscal 2014.

“We are pleased with our second-quarter performance, marking another excellent quarter and building upon a solid first quarter,” Saxon said. “We compete in a product- and fashion-driven business that is always changing. As a result, our ability to create innovative fabrics season after season is the key driver to our long-term success. We are also pleased that our consistent financial performance, higher cash flow and sound balance sheet have enabled us to reward our shareholders with a 25% increase in our quarterly cash dividend. Looking ahead, we continue to expect another strong year of free cash flow this fiscal year.”

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