Culp Sees Sales Climb in Fiscal 2016

Culp Mattress Fabrics
Mattress fabrics from High Point, North Carolina-based Culp Inc. on display at this year’s ISPA EXPO in March, in Orlando, Florida.

Textile and sewn mattress cover supplier Culp Inc. announced net income (using generally accepted accounting principles) in its 2016 final fiscal quarter, ended May 1, of $3.6 million, a 26.5% decline compared with 2015’s final quarter.

Earnings per share for the quarter were $0.29, compared with $0.39 in the previous year’s quarter. The High Point, North Carolina-based company said that both quarters were impacted by income tax adjustments.

Net sales in Culp’s fourth quarter were $77.3 million, down 2% compared with the previous year. In the quarter, ticking sales were $48.2 million, an increase of 1.5%, and upholstery sales were $28.4 million, a 7.5% drop compared with the previous year’s final quarter.

Payable in July, the company provided a special cash dividend of $0.21 (its fourth in the past five years) and a quarterly cash dividend of $0.07.

For full-year 2016, GAAP net income was $16.9 million—a 12% increase compared with the previous year. Annual earnings per diluted share were $1.36.

Fiscal net sales were $312.9 million, a 1% increase compared with fiscal 2015. Ticking sales were up 3.7% to $186.4 million, and upholstery sales were $126.4 million, a 3.1% decline for the year. Return on invested capital was the company’s highest ever at 32%.

The company said its financial position remains solid, with cash and cash equivalents and short-term investments of $42.1 million, after spending $24.2 million in capital expenditures, dividends, debt repayments and share repurchases during fiscal 2016.

Culp projects first-quarter fiscal 2017 overall sales to be comparable or slightly lower than the first quarter of fiscal 2016, with pretax income forecast to be between $7 million and $7.5 million.

“Culp delivered another solid performance in fiscal 2016, as we reported on our seventh consecutive year of overall annual sales growth,” said Frank Saxon, president and chief executive officer. “We are well-positioned to support our continued growth with our flexible and scalable global manufacturing platform, backed by exceptional customer service. Our ability to sustain excellence in creating innovative fabrics and offering a product mix that meets changing customer demands is an important advantage for Culp. As a result, we have further enhanced our competitive position in both businesses, and we look forward to continued success in the year ahead.”

Commenting on the performance of mattress fabrics, Iv Culp, division president, said the company continues with its multiyear expansion plans in North Carolina and Canada.

“We are also pleased with the recent growth in CLASS, our mattress cover business,” he added. “Importantly, CLASS has allowed us to reach new customers and additional market segments, especially the internet bedding space, with solid growth prospects. We look forward to the opportunities ahead for another strong performance in both mattress fabrics and sewn covers during fiscal 2017.”