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19th June 2017, High Point, NC

Culp reports income growth in 2017

Culp has reported net income of US$ 22.3 million fiscal year ended 30 April 2017, compared to US$ 16.9 million in the previous year. Culp, a leading circular knitter and marketer of mattress fabrics for bedding and upholstery fabrics for residential and commercial furniture, has reported net income of US$ 22.3 million fiscal year ended 30 April 2017, compared to US$ 16.9 million in the previous year.

According to Frank Saxon, President and CEO of Culp, the company has the financial strength and cash flow generation to support our strategy and take advantage of additional growth opportunities, including a more active look at potential strategic acquisitions in each of our businesses.

Net sales were US$ 309.5 million, down 1.1% compared with the prior year, with mattress fabric sales up 2.4%, a record year, and upholstery fabric sales down 6.1% over the prior year. For the fourth quarter that ended 30 April, net sales were US$ 77.4 million, compared with US$ 77.3 million a year ago. The company reported net income of US$ 6.2 million for the quarter, compared with US$ 3.6 million for the fourth quarter of fiscal 2016.

“Our results for the fourth quarter were in line with expectations, capping off an outstanding performance for Culp in fiscal 2017 in spite of a more challenging retail environment for home furnishings. While our overall annual sales were slightly lower than the prior year, our mattress fabric segment had another record performance with total annual sales surpassing the previous year’s level,” commented Frank Saxon.

Product-driven strategy

“Throughout fiscal 2017, we demonstrated consistent execution of our product-driven strategy in both businesses, as a result of our relentless focus on design creativity and product innovation. Our ability to offer a diverse product mix and meet the changing demands of our customers has served us well in the marketplace,” said Frank Saxon.

“At the same time, we have continued to make substantial investments in our mattress fabric business to enhance our production capabilities, improve our operating efficiencies and continue to provide exceptional customer service. Our newest product introductions and ability to reach different market segments have produced favourable results for the upholstery fabric business, and we look forward to the opportunities ahead to build on this momentum.”

Mattress fabric segment

Sales for this segment were US$ 48.8 million for the fourth quarter, down by 0.1%, compared with sales of US$ 48.9 million in the fourth quarter of fiscal 2016. For fiscal 2017, mattress fabric sales were US$ 190.8 million, up by 2.4%, compared with US$ 186.4 million in fiscal 2016.

“Our results for the fourth quarter were in line with expectations, reflecting consistent execution of our strategy during a period of disruption in the mattress industry and a soft retail sales environment,” said Iv Culp, president of Culp’s mattress fabric division. “Overall, we were pleased to meet our objectives for the quarter.

“Notably, we delivered another record performance in fiscal 2017, topping the previous year’s results with the highest annual mattress fabric sales and profits in Culp’s history. Our focus on design and innovation continues to distinguish our products in the marketplace. Having a favorable product mix of mattress fabrics and sewn covers across most price points and style trends has allowed us to execute our diversification strategy and enhance our strong value proposition.

Upholstery fabric segment

Sales for this segment were US$ 28.5 million for the fourth quarter, up by 0.6% compared with sales of US$ 28.4 million in the fourth quarter of fiscal 2016. For fiscal 2017, upholstery fabric sales were US$ 118.7 million, down by 6.1% compared with US$ 126.4 million in fiscal 2016.

“Our results for the fourth quarter of fiscal 2017 were in line with expectations,” noted Boyd Chumbley, president of Culp’s upholstery fabrics division. “In spite of relatively flat sales growth, we were pleased with our overall operating performance and higher profitability compared with the fourth quarter of fiscal 2016.”

“For fiscal 2017, while the modest decline in annual sales reflects the soft retail environment for residential furniture that has persisted for most of the past fiscal year, we were able to grow margins and report comparable profitability to last year. In spite of the market challenges, we continued to execute our product-driven strategy with a sustained focus on innovation and creative designs, offering a more diverse product mix and expanding our sales into new markets. Over the past year, we made progress in each of these key areas of focus.”

www.culpinc.com

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