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Culp Earnings More than Double

Susan Andrews, Larry Thomas -- Home Textiles Today, September 13, 2009

Fabric supplier Culp Inc. said sales tumbled 23.3% in the quarter ended Aug. 2, but profits more than doubled due to reduced expenses and cost-cutting measures.

The company said both its mattress ticking and upholstery fabric businesses were profitable during the quarter, with the upholstery fabric segment reversing an operating loss in the comparable quarter in 2008.

Net income for the period, the first quarter of Culp's fiscal year, totaled $1.9 million or 15 cents per share. That compares with $781,000 or 6 cents per share in the 2008 quarter.

The most recent quarter included a one-time restructuring credit of $158,000 and the comparable period in 2008 included one-time restructuring charges of $402,000.

Sales were $45.5 million, down from $59.3 million a year ago.

"In spite of the sales decline, we are very pleased with the strong turnaround in profitability for our upholstery fabrics segment and continued solid profitability in our mattress fabrics segment," said Frank Saxon, president and ceo. "We began fiscal 2010 with a much leaner operating platform that we had a year ago, and we are realizing the benefits of our strategic actions."

The company said mattress ticking sales fell 26% in the quarter, while upholstery fabric sales, which include cut-and-sew kits, were off 19%.

"Our sales ... are indicative of recent consumer demand trends for bedding and furniture," Saxon said.

Saxon said recent trends "show indications of a more stable business environment," and sales for the current quarter should be about 5% below the same quarter last year. He said the company's pretax income in the current quarter should be $2 million to $2.8 million.

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