Industry textile supplier Culp Inc., with headquarters in High Point, North Carolina, reported net sales of $78.5 million in its fiscal 2016 third quarter, which ended Jan. 31.
The figure represents a 3.4% decline, compared with the same quarter in 2015. Net income, using generally accepted accounting principles, for the quarter was $4.9 million, or $0.39 per diluted share, a 29% increase.
Because of ͞income tax volatility͟ in previous years, the company also reported non-GAAP adjusted net income of $5.9 million, or $0.47 per diluted share, compared with $5 million, or $0.40 per diluted share, for the third quarter. The figure uses estimated cash income tax expense for Culp’s foreign subsidiaries.
The company currently does not incur cash income tax expense in the United States, nor does it expect to for a few more years, due to about $33 million in U.S. net operating loss carry-forwards as of the end of fiscal 2015.
Mattress fabric sales for the third quarter were $44.3 million, representing a 3.1% decline, compared with the third quarter of fiscal 2015.
Commenting on the results, Iv Culp, president of the company’s ticking division, said: ͞”Our sales for the third quarter were affected by several factors, including a significant weather event at the end of the quarter, which affected our production and shipment schedules. In addition, we experienced a timing difference related to customer roll-outs of new product lines that typically occur in our third quarter as they did the previous year. ͞
“We are encouraged by the execution of our operating strategy as we continue to realize the benefits of our recent capital investments with increased capacity via newer, more efficient equipment, enhanced finishing capabilities and better overall throughput,͟ Culp continued. ͞As planned, we completed the initial phase of our expansion project in our Canadian location, and we plan to install additional new equipment and make other technological improvements throughout our manufacturing platform during the fourth quarter. These investments demonstrate Culp’s commitment to our customers, and we look forward to the opportunities to drive further operational improvement.͟”
