Culp income dips, sales climb in fiscal Q4, full year

Culp Inc. logoTextile manufacturer Culp Inc., with headquarters in High Point, North Carolina, reported that net sales rose 5.2% to $74 million in the fiscal fourth quarter of 2014, ending April 27, as compared with the same quarter in 2013. Ticking sales rose 6.9% to $43.7 million; upholstery sales rose 2.8% to $30.4 million.

Fourth-quarter net income, using generally accepted accounting principles, decreased 27% to $2.7 million, or $0.22 per diluted share, as compared with net income of $3.7 million in the fourth quarter of 2013.

Adjusted net income (non-GAAP), was $3.4 million in the quarter, or $0.27 per diluted share, a 32% decline as compared with adjusted net income of $5 million in the prior-year quarter.

“Culp had another solid performance in fiscal 2014 with higher annual sales in both businesses,” said Frank Saxon, Culp president and chief executive officer. “Notably, this is the fifth consecutive year of overall sales growth and a record year of annual sales for mattress fabrics. … Throughout the year, we have continued to make outstanding progress with our strategic focus on design creativity and product innovation. These efforts have been the key driver to our sales performance, with an increasing percentage of our sales coming from our latest product introductions.”

For full fiscal 2014, Culp net sales rose 6.8% to $287.2 million, representing the fifth consecutive year of overall annual sales growth. Mattress fabric sales were up 4.3% to $160.7 million, and upholstery fabric sales rose 10.2% to $126.5 million, as compared with fiscal 2013.

Full-year net income, using generally accepted accounting principles, was $17.4 million, or $1.41 per diluted share, a 5% decline, as compared with net income of $18.3 million in 2013.

Iv Culp, president of the mattress fabrics division, said ticking performed well in the fourth quarter, ” … capping off another year of growth and record sales. … With our extensive design capabilities and technical expertise, supported by a scalable manufacturing platform and reactive capacity, we have continued to expand our business with all the major players in the bedding industry.

“As previously announced, our operating profit and margins were affected by several factors during the fourth quarter of fiscal 2014,” Culp added. “The severe winter-weather conditions experienced in many parts of the country affected our mattress fabrics locations with at least a week of lost production. The interruption placed additional pressure on our operations to meet the ongoing sales demand. During the quarter, we also had higher than expected demand for premium, decorative knitted mattress fabrics, which stressed our production throughput and operating efficiencies. In order to meet this growing demand and to improve our efficiency, we are increasing knitted fabric production at all of our facilities. In addition, we are expanding our Stokesdale, North Carolina, building in order to increase and enhance our internal knit-finishing capabilities and improve our production flow.

The company said it plans to spend a total of $9.5 million in fiscal 2015, expanding its ticking manufacturing capacity.

In addition to paying a regular quarterly cash dividend of $0.05 per share, Culp paid a special cash dividend of $0.40 per share, due to “excellent free cash flow” in fiscal 2014.

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