Culp Sees 2Q Profit
December 7, 2009,
Profits rose in both the upholstery fabric and mattress ticking segments and of Culp Inc.'s business in the fiscal second quarter ended Nov. 1, even though sales were down 4.9% from a year earlier, the company reported.
The company reported a profit of $2.9 million or 22 cents per share on sales of $49.7 million in the quarter just ended, a turnaround from a loss of $40.9 million or $3.23 per share a year ago. In the 2008 quarter, the company took a charge of $31.2 million to write down the value of deferred tax assets, and $11.8 million in restructuring and related charges.
Upholstery fabric sales were down 11% to $21.5 million, including $17.9 million in fabric made in China and $3.6 million in domestic product. Sales of China-made product declined 1% from a year ago and domestic fabric sales fell 41%. However, the segment's operating profit improved, the company said.
Mattress ticking sales rose 1% from a year earlier to $28.7 million. Saxon said the business has improved as Culp has installed equipment to expand its capacity in knit fabrics and improve its production capabilities in both knits and wovens.
"We are realizing the incremental benefits of the profit improvement plan completed last year and a leaner and more agile operating platform. With the completion of these initiatives, we have shifted our focus this fiscal year to product development, sales and marketing initiatives, and delivery performance," Saxon said.
The company said that for the first time in 30 years, it has more cash and cash equivalents on its balance sheet — $19.6 million — than it has total debt, which is $16.4 million.
For the six months ended Nov. 1, sales fell 14.7% to $95.2 million. The company reported a profit of $4.8 million or 38 cents per share, compared with a loss of $40.1 million or $3.17 per share a year earlier. For the fiscal third quarter, Saxon said the company expects to report pretax income in the $2.1 million to $2.9 million range.
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