Provided By Business Wire
Last update: Mar 5, 2025
Culp, Inc. (NYSE: CULP) (together with its consolidated subsidiaries, “CULP” or the "company") today reported financial and operating results for the third quarter ended January 26, 2025.
Fiscal 2025 Third Quarter Financial Highlights
Commenting on CULP's third quarter performance, Iv Culp, President and Chief Executive Officer, said, “Despite continued macro industry weakness, we achieved further sequential improvement in our operating results for the quarter, driven largely by the positive effects of our mattress fabrics restructuring activity. We also continue to see increasing potential to grow our market share, particularly with new business opportunities for mattress fabrics and sewn mattress covers. We remain very confident in the future of our two business segments, especially considering the competitive advantages generated from a more streamlined cost structure with an agile manufacturing and sourcing platform and our market-leading design and innovation capabilities, ultimately supported by an eventual market recovery.
"Our mattress fabrics segment continued to reduce its operating loss, building on the prior quarter improvement, and we also achieved near break-even consolidated adjusted EBITDA for the quarter, even with lower sequential sales. We are pleased that our restructuring initiatives within the mattress fabrics segment are mostly finished. The team has worked hard to execute on our plans and they are beginning to generate the savings and efficiency improvements we anticipated.
"Additionally, we entered into an agreement for the sale of our Canadian mattress fabrics facility during the quarter, and we are working to close this transaction in the upcoming months. Assuming completion, we intend to use the cash proceeds to pay off outstanding borrowings and further bolster our liquidity.
"Our consolidated sales for the third quarter were down sequentially, largely due to ongoing weakness in the home furnishings industry and, as expected, specific pressure on residential upholstery fabric sales that was exacerbated by some unique inventory adjustments from a large customer. Sales were also pressured in both segments by fewer shipping days due to holiday closures and weather-related disruptions during the quarter. However, we noted stronger demand in our upholstery fabrics hospitality/contract business, with both year-over-year and sequential increases in sales for the third quarter. Despite the tough residential demand environment, we remain pleased with this segment's continuing profitability, supported by our asset-light and flexible global platform.
"Looking ahead at the various and ongoing macro-economic headwinds, including increasing tariff uncertainty, as well as industry consolidation, we believe we are well positioned in both businesses with strong customer relationships and a variety of agile manufacturing and sourcing options. We are confident that our actions to optimize the cost platform in our mattress fabrics segment will enable us to return to profitability post-restructuring, even at currently depressed demand levels.
"Moreover, we took new and additional cost saving actions in the third quarter related to labor and professional fees that we expect will generate annual savings of approximately $1.0 million. We are also targeting further strategic actions to synergize and create more cost and operating efficiencies across our businesses going forward. Our management team continues to diligently focus on controlling what we can control and taking the critical steps to position our business for profitability as we head into fiscal 2026," added Culp.
Restructuring Update
The restructuring plan announced on May 1, 2024, primarily focused on the company's mattress fabrics segment, was substantially complete as of the end of the third quarter. The company still expects to generate $10.0 - $11.0 million in annualized savings and operating improvements following the restructuring, with most of the benefits beginning to be realized during the fourth quarter of fiscal 2025.
Based on completed restructuring activities, along with remaining restructuring estimates primarily related to limited ongoing building maintenance in Canada, the company now expects to incur total restructuring and restructuring-related costs and charges of $8.5 million in fiscal 2025, of which $5.3 million is now expected to be cash expenditures. The company still expects to fund close to $1.8 million of the cash costs with proceeds from the sale of excess manufacturing equipment and proceeds from a building lease termination in Haiti.
These restructuring and restructuring-related costs and charges exclude any gain on the sale of owned real estate in Canada, the amount and precise timing of which is currently unknown, which would ultimately reduce the total amount of charges incurred. The company has entered into a conditional agreement for the sale of the Canadian real estate, contingent on the satisfaction of certain due diligence and closing conditions. Assuming completion of the transaction, the company currently anticipates receiving approximately $6.0 to $8.0 million in cash proceeds (net of all taxes and commissions).
Third Quarter Fiscal 2025 Results versus Third Quarter Fiscal 2024 Results
Business Segment Highlights
Mattress Fabrics Segment (“CHF”)
Upholstery Fabrics Segment (“CUF”)
Balance Sheet, Cash Flow, and Liquidity
Financial Outlook
Conference Call
Culp, Inc. will hold a conference call to discuss financial results for the fiscal 2025 third quarter on Thursday, March 6, 2025, at 9:00 a.m. Eastern Time. A live webcast of this call can be accessed on the “Upcoming Events” section on the investor relations page of the company’s website, www.culp.com. A replay of the webcast will be available for 30 days under the “Past Events” section on the investor relations page of the company’s website, beginning at 2:00 p.m. Eastern Time on March 6, 2025.
About the Company
Culp, Inc. is one of the largest marketers of mattress fabrics for bedding and upholstery fabrics for residential and commercial furniture in North America. The company markets a variety of fabrics to its global customer base of leading bedding and furniture companies, including fabrics produced at Culp’s manufacturing facilities and fabrics sourced through other suppliers. Culp has manufacturing and sourcing capabilities located in the United States, China, Haiti, Turkey, and Vietnam.
Forward Looking Statements
This release contains “forward-looking statements” within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995 (Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934). Such statements are inherently subject to risks and uncertainties that may cause actual events and results to differ materially from such statements. Forward-looking statements are statements that include projections, expectations, or beliefs about future events or results or otherwise are not statements of historical fact. Such statements are often but not always characterized by qualifying words such as “expect,” “believe,” “will,” “may,” “should,” “could,” “potential,” “continue,” “target,” “predict”, “seek,” “anticipate,” “estimate,” “intend,” “plan,” “project,” and their derivatives, and include but are not limited to statements about expectations, projections, or trends for our future operations, strategic initiatives and plans, restructuring actions, production levels, new product launches, sales, profit margins, profitability, operating (loss) income, capital expenditures, working capital levels, cost savings (including, without limitation, anticipated cost savings from restructuring actions), income taxes, SG&A or other expenses, pre-tax (loss) income, earnings, cash flow, and other performance or liquidity measures, as well as any statements regarding dividends, share repurchases, liquidity, use of cash and cash requirements, ending cash balances and cash positions, borrowing capacity, investments, potential acquisitions, cash and non-cash restructuring and restructuring-related charges, expenses, and/or credits, net proceeds from restructuring related asset dispositions, future economic or industry trends, public health epidemics, or future developments. There can be no assurance that we will realize these expectations or meet our guidance, or that these beliefs will prove correct.
Factors that could influence the matters discussed in such statements include the level of housing starts and sales of existing homes, demand for home furnishings products, consumer confidence, trends in disposable income, and general economic conditions. Decreases in these economic indicators could have a negative effect on our business and prospects. Likewise, increases in interest rates, particularly home mortgage rates, and increases in consumer debt or the general rate of inflation, could affect us adversely. The future performance of our business depends in part on our success in conducting and finalizing acquisition negotiations and integrating acquired businesses into our existing operations. Changes in consumer tastes or preferences toward products not produced by us could erode demand for our products. Changes in tariffs or trade policy, including changes in U.S. trade enforcement priorities, or changes in the value of the U.S. dollar versus other currencies, could affect our financial results because a significant portion of our operations are located outside the United States. Strengthening of the U.S. dollar against other currencies could make our products less competitive on the basis of price in markets outside the United States, and strengthening of currency in China can have a negative impact on our sales of products produced there. In addition, because our foreign operations use the U.S. dollar as their functional currency, changes in the exchange rate between the local currency of those operations and the U.S dollar can affect our reported profits from those foreign operations. Also, economic or political instability in international areas could affect our operations or sources of goods in those areas, as well as demand for our products in international markets. The impact of public health epidemics on employees, customers, suppliers, and the global economy, such as the recent coronavirus pandemic, could also adversely affect our operations and financial performance. In addition, the impact of potential asset impairments, including impairments of property, plant, and equipment, inventory, or intangible assets, as well as the impact of valuation allowances applied against our net deferred income tax assets, could affect our financial results. Increases in freight costs, labor costs, and raw material prices, including increases in market prices for petrochemical products, can also significantly affect the prices we pay for shipping, labor, and raw materials, respectively, and in turn, increase our operating costs and decrease our profitability. Also, our success in diversifying our supply chain with reliable partners to effectively service our global platform could affect our operations and adversely affect our financial results. Finally, the future performance of our business also depends on our ability to successfully restructure our mattress fabric operations and return the segment to profitability. Further information about these factors, as well as other factors that could affect our future operations or financial results and the matters discussed in forward-looking statements, is included in Item 1A “Risk Factors” in our most recent Form 10-K and Form 10-Q reports filed with the Securities and Exchange Commission.
Many of these factors are macroeconomic in nature and are, therefore, beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from those described in this release as anticipated, believed, estimated, expected, intended, planned or projected. The forward-looking statements included in this release are made only as of the date of this report. Unless required by United States federal securities laws, we neither intend nor assume any obligation to update these forward-looking statements for any reason after the date of this release to conform these statements to actual results or to changes in our expectations. A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. Additional risks and uncertainties that we do not presently know about or that we currently consider to be immaterial may also affect our business operations or financial results.
CULP, INC. |
||||||||||||||||||||
CONSOLIDATED STATEMENTS OF NET LOSS |
||||||||||||||||||||
FOR THE THREE MONTHS ENDED JANUARY 26, 2025, AND JANUARY 28, 2024 |
||||||||||||||||||||
Unaudited |
||||||||||||||||||||
(Amounts in Thousands, Except for Per Share Data) |
||||||||||||||||||||
|
||||||||||||||||||||
|
|
THREE MONTHS ENDED |
|
|||||||||||||||||
|
|
Amount |
|
|
|
|
|
Percent of Sales |
|
|||||||||||
|
|
(1) |
|
|
(1) |
|
|
|
|
|
|
|
|
|
|
|||||
|
|
January 26, |
|
|
January 28, |
|
|
% Over |
|
|
January 26, |
|
|
January 28, |
|
|||||
|
|
2025 |
|
|
2024 |
|
|
(Under) |
|
|
2025 |
|
|
2024 |
|
|||||
Net sales |
|
$ |
52,253 |
|
|
$ |
60,418 |
|
|
|
(13.5 |
)% |
|
|
100.0 |
% |
|
|
100.0 |
% |
Cost of sales (1) |
|
|
(45,906 |
) |
|
|
(52,715 |
) |
|
|
(12.9 |
)% |
|
|
87.9 |
% |
|
|
87.3 |
% |
Gross profit |
|
|
6,347 |
|
|
|
7,703 |
|
|
|
(17.6 |
)% |
|
|
12.1 |
% |
|
|
12.7 |
% |
Selling, general and administrative expenses |
|
|
(8,579 |
) |
|
|
(9,493 |
) |
|
|
(9.6 |
)% |
|
|
16.4 |
% |
|
|
15.7 |
% |
Restructuring (expense) credit (2) |
|
|
(1,655 |
) |
|
|
50 |
|
|
N.M |
|
|
|
3.2 |
% |
|
|
(0.1 |
)% |
|
Loss from operations |
|
|
(3,887 |
) |
|
|
(1,740 |
) |
|
|
123.4 |
% |
|
|
(7.4 |
)% |
|
|
(2.9 |
)% |
Interest expense |
|
|
(63 |
) |
|
|
— |
|
|
|
100.0 |
% |
|
|
0.1 |
% |
|
|
— |
|
Interest income |
|
|
255 |
|
|
|
284 |
|
|
|
(10.2 |
)% |
|
|
0.5 |
% |
|
|
0.5 |
% |
Other income (expense) |
|
|
15 |
|
|
|
(705 |
) |
|
|
(102.1 |
)% |
|
|
0.0 |
% |
|
|
(1.2 |
)% |
Loss before income taxes |
|
|
(3,680 |
) |
|
|
(2,161 |
) |
|
|
70.3 |
% |
|
|
(7.0 |
)% |
|
|
(3.6 |
)% |
Income tax expense (3) |
|
|
(446 |
) |
|
|
(1,027 |
) |
|
|
(56.6 |
)% |
|
|
(12.1 |
)% |
|
|
(47.5 |
)% |
Net loss |
|
$ |
(4,126 |
) |
|
$ |
(3,188 |
) |
|
|
29.4 |
% |
|
|
(7.9 |
)% |
|
|
(5.3 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net loss per share - basic |
|
$ |
(0.33 |
) |
|
$ |
(0.26 |
) |
|
|
26.9 |
% |
|
|
|
|
|
|
||
Net loss per share - diluted |
|
$ |
(0.33 |
) |
|
$ |
(0.26 |
) |
|
|
26.9 |
% |
|
|
|
|
|
|
||
Average shares outstanding-basic |
|
|
12,559 |
|
|
|
12,470 |
|
|
|
0.7 |
% |
|
|
|
|
|
|
||
Average shares outstanding-diluted |
|
|
12,559 |
|
|
|
12,470 |
|
|
|
0.7 |
% |
|
|
|
|
|
|
Notes | ||
(1) |
See page 15 for a Reconciliation of Selected Income Statement Information to Adjusted Results for the three months ending January 26, 2025, and January 28, 2024. |
|
|
||
(2) |
See page 17 for a Summary of Restructuring Expense (Credit) for the three months ending January 26, 2025, and January 28, 2024. |
|
|
||
(3) |
Percent of sales column for income tax expense is calculated as a percent of loss before income taxes. |
CULP, INC. |
||||||||||||||||||||
CONSOLIDATED STATEMENTS OF NET LOSS |
||||||||||||||||||||
FOR THE NINE MONTHS ENDED JANUARY 26, 2025, AND JANUARY 28, 2024 |
||||||||||||||||||||
Unaudited |
||||||||||||||||||||
(Amounts in Thousands, Except for Per Share Data) |
||||||||||||||||||||
|
||||||||||||||||||||
|
|
NINE MONTHS ENDED |
|
|||||||||||||||||
|
|
Amount |
|
|
|
|
|
Percent of Sales |
|
|||||||||||
|
|
(1) |
|
|
(1) |
|
|
|
|
|
|
|
|
|
|
|||||
|
|
January 26, |
|
|
January 28, |
|
|
% Over |
|
|
January 26, |
|
|
January 28, |
|
|||||
|
|
2025 |
|
|
2024 |
|
|
(Under) |
|
|
2025 |
|
|
2024 |
|
|||||
Net sales |
|
$ |
164,464 |
|
|
$ |
175,804 |
|
|
|
(6.5 |
)% |
|
|
100.0 |
% |
|
|
100.0 |
% |
Cost of sales (1) |
|
|
(147,050 |
) |
|
|
(153,067 |
) |
|
|
(3.9 |
)% |
|
|
89.4 |
% |
|
|
87.1 |
% |
Gross profit |
|
|
17,414 |
|
|
|
22,737 |
|
|
|
(23.4 |
)% |
|
|
10.6 |
% |
|
|
12.9 |
% |
Selling, general and administrative expenses |
|
|
(27,235 |
) |
|
|
(29,366 |
) |
|
|
(7.3 |
)% |
|
|
16.6 |
% |
|
|
16.7 |
% |
Restructuring expense (2) |
|
|
(6,317 |
) |
|
|
(432 |
) |
|
N.M. |
|
|
|
3.8 |
% |
|
|
0.2 |
% |
|
Loss from operations |
|
|
(16,138 |
) |
|
|
(7,061 |
) |
|
|
128.6 |
% |
|
|
(9.8 |
)% |
|
|
(4.0 |
)% |
Interest expense |
|
|
(121 |
) |
|
|
— |
|
|
|
100.0 |
% |
|
|
0.1 |
% |
|
|
— |
|
Interest income |
|
|
761 |
|
|
|
911 |
|
|
|
(16.5 |
)% |
|
|
0.5 |
% |
|
|
0.5 |
% |
Other expense |
|
|
(898 |
) |
|
|
(560 |
) |
|
|
60.4 |
% |
|
|
0.5 |
% |
|
|
0.3 |
% |
Loss before income taxes |
|
|
(16,396 |
) |
|
|
(6,710 |
) |
|
|
144.4 |
% |
|
|
(10.0 |
)% |
|
|
(3.8 |
)% |
Income tax expense (3) |
|
|
(635 |
) |
|
|
(2,244 |
) |
|
|
(71.7 |
)% |
|
|
(3.9 |
)% |
|
|
(33.4 |
)% |
Net loss |
|
$ |
(17,031 |
) |
|
$ |
(8,954 |
) |
|
|
90.2 |
% |
|
|
(10.4 |
)% |
|
|
(5.1 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net loss per share - basic |
|
$ |
(1.36 |
) |
|
$ |
(0.72 |
) |
|
|
88.9 |
% |
|
|
|
|
|
|
||
Net loss per share - diluted |
|
$ |
(1.36 |
) |
|
$ |
(0.72 |
) |
|
|
88.9 |
% |
|
|
|
|
|
|
||
Average shares outstanding-basic |
|
|
12,514 |
|
|
|
12,419 |
|
|
|
0.8 |
% |
|
|
|
|
|
|
||
Average shares outstanding-diluted |
|
|
12,514 |
|
|
|
12,419 |
|
|
|
0.8 |
% |
|
|
|
|
|
|
Notes | ||
(1) |
|
See page 16 for a Reconciliation of Selected Income Statement Information to Adjusted Results for the nine months ending January 26, 2025, and January 28, 2024. |
|
|
|
(2) |
|
See page 18 for a Summary of Restructuring Expense (Credit) for the nine months ending January 26, 2025, and January 28, 2024. |
|
|
|
(3) |
|
Percent of sales column for income tax expense is calculated as a percent of loss before income taxes. |
CONSOLIDATED BALANCE SHEETS |
||||||||||||||||||||
JANUARY 26, 2025, JANUARY 28, 2024, AND APRIL 28, 2024 |
||||||||||||||||||||
Unaudited |
||||||||||||||||||||
(Amounts in Thousands) |
||||||||||||||||||||
|
||||||||||||||||||||
|
|
Amounts |
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
(Condensed) |
|
|
(Condensed) |
|
|
|
|
|
|
|
|
(Condensed) |
|
|||||
|
|
January 26, |
|
|
January 28, |
|
|
Increase (Decrease) |
|
|
* April 28, |
|
||||||||
|
|
2025 |
|
|
2024 |
|
|
Dollars |
|
|
Percent |
|
|
2024 |
|
|||||
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents |
|
$ |
5,279 |
|
|
$ |
12,585 |
|
|
|
(7,306 |
) |
|
|
(58.1 |
)% |
|
$ |
10,012 |
|
Short-term investments - rabbi trust |
|
|
1,753 |
|
|
|
937 |
|
|
|
816 |
|
|
|
87.1 |
% |
|
|
903 |
|
Accounts receivable, net |
|
|
23,159 |
|
|
|
23,686 |
|
|
|
(527 |
) |
|
|
(2.2 |
)% |
|
|
21,138 |
|
Inventories |
|
|
48,599 |
|
|
|
46,877 |
|
|
|
1,722 |
|
|
|
3.7 |
% |
|
|
44,843 |
|
Short-term notes receivable |
|
|
526 |
|
|
|
260 |
|
|
|
266 |
|
|
|
102.3 |
% |
|
|
264 |
|
Current income taxes receivable |
|
|
1,137 |
|
|
|
476 |
|
|
|
661 |
|
|
|
138.9 |
% |
|
|
350 |
|
Assets held for sale |
|
|
2,214 |
|
|
|
— |
|
|
|
2,214 |
|
|
|
100.0 |
% |
|
|
— |
|
Other current assets |
|
|
2,619 |
|
|
|
4,237 |
|
|
|
(1,618 |
) |
|
|
(38.2 |
)% |
|
|
3,371 |
|
Total current assets |
|
|
85,286 |
|
|
|
89,058 |
|
|
|
(3,772 |
) |
|
|
(4.2 |
)% |
|
|
80,881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Property, plant & equipment, net |
|
|
25,939 |
|
|
|
34,021 |
|
|
|
(8,082 |
) |
|
|
(23.8 |
)% |
|
|
33,182 |
|
Right of use assets |
|
|
6,103 |
|
|
|
6,952 |
|
|
|
(849 |
) |
|
|
(12.2 |
)% |
|
|
6,203 |
|
Intangible assets |
|
|
1,594 |
|
|
|
1,970 |
|
|
|
(376 |
) |
|
|
(19.1 |
)% |
|
|
1,876 |
|
Long-term investments - rabbi trust |
|
|
6,250 |
|
|
|
7,083 |
|
|
|
(833 |
) |
|
|
(11.8 |
)% |
|
|
7,102 |
|
Long-term notes receivable |
|
|
1,254 |
|
|
|
1,530 |
|
|
|
(276 |
) |
|
|
(18.0 |
)% |
|
|
1,462 |
|
Deferred income taxes |
|
|
490 |
|
|
|
531 |
|
|
|
(41 |
) |
|
|
(7.7 |
)% |
|
|
518 |
|
Other assets |
|
|
639 |
|
|
|
853 |
|
|
|
(214 |
) |
|
|
(25.1 |
)% |
|
|
830 |
|
Total assets |
|
$ |
127,555 |
|
|
$ |
141,998 |
|
|
|
(14,443 |
) |
|
|
(10.2 |
)% |
|
$ |
132,054 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Lines of credit |
|
|
5,384 |
|
|
|
— |
|
|
|
5,384 |
|
|
|
100.0 |
% |
|
|
— |
|
Accounts payable - trade |
|
|
32,717 |
|
|
|
29,793 |
|
|
|
2,924 |
|
|
|
9.8 |
% |
|
|
25,607 |
|
Accounts payable - capital expenditures |
|
|
439 |
|
|
|
19 |
|
|
|
420 |
|
|
N.M. |
|
|
|
343 |
|
|
Operating lease liability - current |
|
|
2,025 |
|
|
|
2,524 |
|
|
|
(499 |
) |
|
|
(19.8 |
)% |
|
|
2,061 |
|
Deferred compensation - current |
|
|
1,753 |
|
|
|
937 |
|
|
|
816 |
|
|
|
87.1 |
% |
|
|
903 |
|
Deferred revenue |
|
|
697 |
|
|
|
1,798 |
|
|
|
(1,101 |
) |
|
|
(61.2 |
)% |
|
|
1,495 |
|
Accrued expenses |
|
|
6,079 |
|
|
|
7,300 |
|
|
|
(1,221 |
) |
|
|
(16.7 |
)% |
|
|
6,726 |
|
Accrued restructuring |
|
|
723 |
|
|
|
— |
|
|
|
723 |
|
|
|
100.0 |
% |
|
|
— |
|
Income taxes payable - current |
|
|
828 |
|
|
|
1,070 |
|
|
|
(242 |
) |
|
|
(22.6 |
)% |
|
|
972 |
|
Total current liabilities |
|
|
50,645 |
|
|
|
43,441 |
|
|
|
7,204 |
|
|
|
16.6 |
% |
|
|
38,107 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating lease liability - long-term |
|
|
3,127 |
|
|
|
2,656 |
|
|
|
471 |
|
|
|
17.7 |
% |
|
|
2,422 |
|
Income taxes payable - long-term |
|
|
1,400 |
|
|
|
2,072 |
|
|
|
(672 |
) |
|
|
(32.4 |
)% |
|
|
2,088 |
|
Deferred income taxes |
|
|
6,582 |
|
|
|
6,177 |
|
|
|
405 |
|
|
|
6.6 |
% |
|
|
6,379 |
|
Deferred compensation - long-term |
|
|
6,151 |
|
|
|
6,856 |
|
|
|
(705 |
) |
|
|
(10.3 |
)% |
|
|
6,929 |
|
Total liabilities |
|
|
67,905 |
|
|
|
61,202 |
|
|
|
6,703 |
|
|
|
11.0 |
% |
|
|
55,925 |
|
Shareholders' equity |
|
|
59,650 |
|
|
|
80,796 |
|
|
|
(21,146 |
) |
|
|
(26.2 |
)% |
|
|
76,129 |
|
Total liabilities and shareholders' equity |
|
$ |
127,555 |
|
|
$ |
141,998 |
|
|
|
(14,443 |
) |
|
|
(10.2 |
)% |
|
$ |
132,054 |
|
Shares outstanding |
|
|
12,559 |
|
|
|
12,470 |
|
|
|
89 |
|
|
|
0.7 |
% |
|
|
12,470 |
|
* Derived from audited financial statements. |
CULP, INC. |
||||||||||||
SUMMARY OF CASH AND DEBT |
||||||||||||
JANUARY 26, 2025, JANUARY 28, 2024, AND APRIL 28, 2024 |
||||||||||||
Unaudited |
||||||||||||
(Amounts in Thousands) |
||||||||||||
|
||||||||||||
|
|
Amounts |
|
|
|
|
||||||
|
|
January 26, |
|
|
January 28, |
|
|
April 28, |
|
|||
|
|
2025 |
|
|
2024 |
|
|
2024* |
|
|||
Cash: |
|
|
|
|
|
|
|
|
|
|||
Cash and cash equivalents |
|
$ |
5,279 |
|
|
$ |
12,585 |
|
|
$ |
10,012 |
|
Less Debt: |
|
|
|
|
|
|
|
|
|
|||
Lines of credit |
|
|
5,384 |
|
|
|
— |
|
|
|
— |
|
Net (debt) cash position |
|
$ |
(105 |
) |
|
$ |
12,585 |
|
|
$ |
10,012 |
|
|
|
|
|
|
|
|
|
|
|
|||
* Derived from audited financial statements. |
CULP, INC. |
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
FOR THE NINE MONTHS ENDED JANUARY 26, 2025, AND JANUARY 28, 2024 |
||||||||
Unaudited |
||||||||
(Amounts in Thousands) |
||||||||
|
||||||||
|
|
NINE MONTHS ENDED |
|
|||||
|
|
Amounts |
|
|||||
|
|
January 26, |
|
|
January 28, |
|
||
|
|
2025 |
|
|
2024 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
(17,031 |
) |
|
$ |
(8,954 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Depreciation |
|
|
4,288 |
|
|
|
4,897 |
|
Non-cash inventory credit |
|
|
(1,022 |
) |
|
|
(1,978 |
) |
Amortization |
|
|
301 |
|
|
|
291 |
|
Stock-based compensation |
|
|
522 |
|
|
|
747 |
|
Deferred income taxes |
|
|
231 |
|
|
|
172 |
|
Gain on sale of equipment |
|
|
(27 |
) |
|
|
(284 |
) |
Non-cash restructuring expense |
|
|
2,143 |
|
|
|
330 |
|
Foreign currency exchange gain |
|
|
(97 |
) |
|
|
(347 |
) |
Changes in assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
(2,029 |
) |
|
|
1,040 |
|
Inventories |
|
|
(2,730 |
) |
|
|
— |
|
Other current assets |
|
|
737 |
|
|
|
(1,190 |
) |
Other assets |
|
|
98 |
|
|
|
(107 |
) |
Accounts payable - trade |
|
|
7,184 |
|
|
|
963 |
|
Deferred revenue |
|
|
(798 |
) |
|
|
606 |
|
Accrued restructuring |
|
|
753 |
|
|
|
— |
|
Accrued expenses and deferred compensation |
|
|
(335 |
) |
|
|
(1,437 |
) |
Income taxes |
|
|
(1,613 |
) |
|
|
(719 |
) |
Net cash used in operating activities |
|
|
(9,425 |
) |
|
|
(5,970 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
||
Capital expenditures |
|
|
(2,440 |
) |
|
|
(3,249 |
) |
Proceeds from the sale of equipment |
|
|
1,450 |
|
|
|
363 |
|
Proceeds from note receivable |
|
|
270 |
|
|
|
240 |
|
Proceeds from the sale of investments (rabbi trust) |
|
|
699 |
|
|
|
1,224 |
|
Purchase of investments (rabbi trust) |
|
|
(599 |
) |
|
|
(704 |
) |
Net cash used in investing activities |
|
|
(620 |
) |
|
|
(2,126 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from lines of credit |
|
|
7,898 |
|
|
|
— |
|
Payments on lines of credit |
|
|
(2,500 |
) |
|
|
— |
|
Common stock surrendered for withholding taxes payable |
|
|
(68 |
) |
|
|
(146 |
) |
Net cash provided by (used in) financing activities |
|
|
5,330 |
|
|
|
(146 |
) |
Effect of foreign currency exchange rate changes on cash and cash equivalents |
|
|
(18 |
) |
|
|
(137 |
) |
Decrease in cash and cash equivalents |
|
|
(4,733 |
) |
|
|
(8,379 |
) |
Cash and cash equivalents at beginning of year |
|
|
10,012 |
|
|
|
20,964 |
|
Cash and cash equivalents at end of period |
|
$ |
5,279 |
|
|
$ |
12,585 |
|
Free Cash Flow (1) |
|
$ |
(10,063 |
) |
|
$ |
(8,233 |
) |
(1) See next page for Reconciliation of Free Cash Flow for the nine months ending January 26, 2025, and January 28, 2024. |
CULP, INC. |
||||||||
RECONCILIATION OF FREE CASH FLOW |
||||||||
FOR THE NINE MONTHS ENDED JANUARY 26, 2025, AND JANUARY 28, 2024 |
||||||||
Unaudited |
||||||||
(Amounts in Thousands) |
||||||||
|
||||||||
|
|
NINE MONTHS ENDED |
|
|||||
|
|
Amounts |
|
|||||
|
|
January 26, |
|
|
January 28, |
|
||
|
|
2025 |
|
|
2024 |
|
||
A) Net cash used in operating activities |
|
$ |
(9,425 |
) |
|
$ |
(5,970 |
) |
B) Minus: Capital expenditures |
|
|
(2,440 |
) |
|
|
(3,249 |
) |
C) Plus: Proceeds from the sale of equipment |
|
|
1,450 |
|
|
|
363 |
|
D) Plus: Proceeds from note receivable |
|
|
270 |
|
|
|
240 |
|
E) Plus: Proceeds from the sale of investments (rabbi trust) |
|
|
699 |
|
|
|
1,224 |
|
F) Minus: Purchase of investments (rabbi trust) |
|
|
(599 |
) |
|
|
(704 |
) |
G) Effects of foreign currency exchange rate changes on cash and cash equivalents |
|
|
(18 |
) |
|
|
(137 |
) |
Free Cash Flow |
|
$ |
(10,063 |
) |
|
$ |
(8,233 |
) |
CULP, INC. |
||||||||||||||||||||
STATEMENTS OF OPERATIONS BY SEGMENT |
||||||||||||||||||||
FOR THE THREE MONTHS ENDED JANUARY 26, 2025, AND JANUARY 28, 2024 |
||||||||||||||||||||
Unaudited |
||||||||||||||||||||
(Amounts in Thousands) |
||||||||||||||||||||
|
||||||||||||||||||||
|
|
THREE MONTHS ENDED |
|
|||||||||||||||||
|
|
Amounts |
|
|
|
|
|
Percent of Total Sales |
|
|||||||||||
|
|
January 26, |
|
|
January 28, |
|
|
% Over |
|
|
January 26, |
|
|
January 28, |
|
|||||
Net Sales by Segment |
|
2025 |
|
|
2024 |
|
|
(Under) |
|
|
2025 |
|
|
2024 |
|
|||||
Mattress Fabrics |
|
$ |
28,642 |
|
|
$ |
30,021 |
|
|
|
(4.6 |
)% |
|
|
54.8 |
% |
|
|
49.7 |
% |
Upholstery Fabrics |
|
|
23,611 |
|
|
|
30,397 |
|
|
|
(22.3 |
)% |
|
|
45.2 |
% |
|
|
50.3 |
% |
Net Sales |
|
$ |
52,253 |
|
|
$ |
60,418 |
|
|
|
(13.5 |
)% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Gross Profit |
|
|
|
|
|
|
|
|
|
|
Gross Margin |
|
||||||||
Mattress Fabrics |
|
$ |
2,743 |
|
|
$ |
1,520 |
|
|
|
80.5 |
% |
|
|
9.6 |
% |
|
|
5.1 |
% |
Upholstery Fabrics |
|
|
4,228 |
|
|
|
6,122 |
|
|
|
(30.9 |
)% |
|
|
17.9 |
% |
|
|
20.1 |
% |
Total Segment Gross Profit |
|
|
6,971 |
|
|
|
7,642 |
|
|
|
(8.8 |
)% |
|
|
13.3 |
% |
|
|
12.6 |
% |
Restructuring Related (Charge) Credit (1) |
|
|
(624 |
) |
|
|
61 |
|
|
|
(1123.0 |
)% |
|
|
(1.2 |
)% |
|
|
0.1 |
% |
Gross Profit |
|
$ |
6,347 |
|
|
$ |
7,703 |
|
|
|
(17.6 |
)% |
|
|
12.1 |
% |
|
|
12.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Selling, General and Administrative Expenses by Segment |
|
|
|
|
|
|
|
|
|
|
Percent of Sales |
|
||||||||
Mattress Fabrics |
|
$ |
3,176 |
|
|
$ |
3,102 |
|
|
|
2.4 |
% |
|
|
11.1 |
% |
|
|
10.3 |
% |
Upholstery Fabrics |
|
|
3,549 |
|
|
|
4,030 |
|
|
|
(11.9 |
)% |
|
|
15.0 |
% |
|
|
13.3 |
% |
Unallocated Corporate Expenses |
|
|
1,854 |
|
|
|
2,361 |
|
|
|
(21.5 |
)% |
|
|
3.5 |
% |
|
|
3.9 |
% |
Selling, General and Administrative Expenses |
|
$ |
8,579 |
|
|
$ |
9,493 |
|
|
|
(9.6 |
)% |
|
|
16.4 |
% |
|
|
15.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
(Loss) Income from Operations by Segment |
|
|
|
|
|
|
|
|
|
|
Operating Margin |
|
||||||||
Mattress Fabrics |
|
$ |
(433 |
) |
|
$ |
(1,582 |
) |
|
|
(72.6 |
)% |
|
|
(1.5 |
)% |
|
|
(5.3 |
)% |
Upholstery Fabrics |
|
$ |
679 |
|
|
$ |
2,092 |
|
|
|
(67.5 |
)% |
|
|
2.9 |
% |
|
|
6.9 |
% |
Unallocated Corporate Expenses |
|
$ |
(1,854 |
) |
|
$ |
(2,361 |
) |
|
|
(21.5 |
)% |
|
|
(3.5 |
)% |
|
|
(3.9 |
)% |
Total Segment Loss from Operations |
|
|
(1,608 |
) |
|
|
(1,851 |
) |
|
|
(13.1 |
)% |
|
|
(3.1 |
)% |
|
|
(3.1 |
)% |
Restructuring Related (Charge) Credit (1) |
|
|
(624 |
) |
|
|
61 |
|
|
N.M |
|
|
|
(1.2 |
)% |
|
|
0.1 |
% |
|
Restructuring (Expense) Credit (2) |
|
|
(1,655 |
) |
|
|
50 |
|
|
N.M |
|
|
|
(3.2 |
)% |
|
|
0.1 |
% |
|
Loss from Operations |
|
$ |
(3,887 |
) |
|
$ |
(1,740 |
) |
|
|
123.4 |
% |
|
|
(7.4 |
)% |
|
|
(2.9 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Depreciation Expense by Segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Mattress Fabrics |
|
$ |
1,082 |
|
|
$ |
1,492 |
|
|
|
(27.5 |
)% |
|
|
|
|
|
|
||
Upholstery Fabrics |
|
|
131 |
|
|
|
154 |
|
|
|
(14.9 |
)% |
|
|
|
|
|
|
||
Depreciation Expense |
|
$ |
1,213 |
|
|
$ |
1,646 |
|
|
|
(26.3 |
)% |
|
|
|
|
|
|
Notes | ||
(1) |
|
See page 15 for a Reconciliation of Selected Income Statement Information to Adjusted Results for the three months ending January 26, 2025, and January 28, 2024. |
|
|
|
(2) |
|
See page 17 for a Summary of Restructuring Expense (Credit) for the three months ending January 26, 2025, and January 28, 2024. |
CULP, INC. |
||||||||||||||||||||
STATEMENTS OF OPERATIONS BY SEGMENT |
||||||||||||||||||||
FOR THE NINE MONTHS ENDED JANUARY 26, 2025, AND JANUARY 28, 2024 |
||||||||||||||||||||
Unaudited |
||||||||||||||||||||
(Amounts in Thousands) |
||||||||||||||||||||
|
||||||||||||||||||||
|
|
NINE MONTHS ENDED |
|
|||||||||||||||||
|
|
Amounts |
|
|
|
|
|
Percent of Total Sales |
|
|||||||||||
|
|
January 26, |
|
|
January 28, |
|
|
% Over |
|
|
January 26, |
|
|
January 28, |
|
|||||
Net Sales by Segment |
|
2025 |
|
|
2024 |
|
|
(Under) |
|
|
2025 |
|
|
2024 |
|
|||||
Mattress Fabrics |
|
$ |
86,792 |
|
|
$ |
90,619 |
|
|
|
(4.2 |
)% |
|
|
52.8 |
% |
|
|
51.5 |
% |
Upholstery Fabrics |
|
|
77,672 |
|
|
|
85,185 |
|
|
|
(8.8 |
)% |
|
|
47.2 |
% |
|
|
48.5 |
% |
Net Sales |
|
$ |
164,464 |
|
|
$ |
175,804 |
|
|
|
(6.5 |
)% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Gross Profit: |
|
|
|
|
|
|
|
|
|
|
Gross Margin |
|
||||||||
Mattress Fabrics |
|
$ |
4,862 |
|
|
$ |
5,997 |
|
|
|
(18.9 |
)% |
|
|
5.6 |
% |
|
|
6.6 |
% |
Upholstery Fabrics |
|
|
14,061 |
|
|
|
16,780 |
|
|
|
(16.2 |
)% |
|
|
18.1 |
% |
|
|
19.7 |
% |
Total Segment Gross Profit |
|
|
18,923 |
|
|
|
22,777 |
|
|
|
(16.9 |
)% |
|
|
11.5 |
% |
|
|
13.0 |
% |
Restructuring Related Charge (1) |
|
|
(1,509 |
) |
|
|
(40 |
) |
|
N.M. |
|
|
|
(0.9 |
)% |
|
|
(0.0 |
)% |
|
Gross Profit |
|
$ |
17,414 |
|
|
$ |
22,737 |
|
|
|
(23.4 |
)% |
|
|
10.6 |
% |
|
|
12.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Selling, General and Administrative Expenses by Segment |
|
|
|
|
|
|
|
|
|
|
Percent of Sales |
|
||||||||
Mattress Fabrics |
|
$ |
9,880 |
|
|
$ |
9,913 |
|
|
|
(0.3 |
)% |
|
|
11.4 |
% |
|
|
10.9 |
% |
Upholstery Fabrics |
|
|
11,056 |
|
|
|
11,969 |
|
|
|
(7.6 |
)% |
|
|
14.2 |
% |
|
|
14.1 |
% |
Unallocated Corporate Expenses |
|
|
6,299 |
|
|
|
7,484 |
|
|
|
(15.8 |
)% |
|
|
3.8 |
% |
|
|
4.3 |
% |
Selling, General and Administrative Expenses |
|
$ |
27,235 |
|
|
$ |
29,366 |
|
|
|
(7.3 |
)% |
|
|
16.6 |
% |
|
|
16.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(Loss) Income from Operations by Segment |
|
|
|
|
|
|
|
|
|
|
Operating Margin |
|
||||||||
Mattress Fabrics |
|
$ |
(5,018 |
) |
|
$ |
(3,916 |
) |
|
|
28.1 |
% |
|
|
(5.8 |
)% |
|
|
(4.3 |
)% |
Upholstery Fabrics |
|
$ |
3,005 |
|
|
|
4,811 |
|
|
|
(37.5 |
)% |
|
|
3.9 |
% |
|
|
5.6 |
% |
Unallocated Corporate Expenses |
|
$ |
(6,299 |
) |
|
|
(7,484 |
) |
|
|
(15.8 |
)% |
|
|
(3.8 |
)% |
|
|
(4.3 |
)% |
Total Segment Loss from Operations |
|
|
(8,312 |
) |
|
|
(6,589 |
) |
|
|
26.1 |
% |
|
|
(5.1 |
)% |
|
|
(3.7 |
)% |
Restructuring Related Charge (1) |
|
|
(1,509 |
) |
|
|
(40 |
) |
|
N.M. |
|
|
|
(0.9 |
)% |
|
|
(0.0 |
)% |
|
Restructuring Expense (2) |
|
|
(6,317 |
) |
|
|
(432 |
) |
|
N.M. |
|
|
|
(3.8 |
)% |
|
|
(0.2 |
)% |
|
Loss from Operations |
|
$ |
(16,138 |
) |
|
$ |
(7,061 |
) |
|
|
128.6 |
% |
|
|
(9.8 |
)% |
|
|
(4.0 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Return on Capital Employed (ttm) (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Mattress Fabrics |
|
|
(13.7 |
)% |
|
|
(10.1 |
)% |
|
|
35.6 |
% |
|
|
|
|
|
|
||
Upholstery Fabrics |
|
|
50.7 |
% |
|
|
58.9 |
% |
|
|
(13.9 |
)% |
|
|
|
|
|
|
||
Unallocated Corporate |
|
N.M. |
|
|
N.M. |
|
|
N.M. |
|
|
|
|
|
|
|
|||||
Consolidated |
|
|
(17.5 |
)% |
|
|
(13.5 |
)% |
|
|
29.6 |
% |
|
|
|
|
|
|
||
Capital Employed (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Mattress Fabrics |
|
$ |
50,540 |
|
|
$ |
67,338 |
|
|
|
(24.9 |
)% |
|
|
|
|
|
|
||
Upholstery Fabrics |
|
|
12,616 |
|
|
|
5,884 |
|
|
|
114.4 |
% |
|
|
|
|
|
|
||
Unallocated Corporate |
|
|
4,406 |
|
|
|
3,074 |
|
|
|
43.3 |
% |
|
|
|
|
|
|
||
Consolidated |
|
$ |
67,562 |
|
|
$ |
76,296 |
|
|
|
(11.4 |
)% |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Depreciation Expense by Segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Mattress Fabrics (4) |
|
$ |
5,166 |
|
|
$ |
4,422 |
|
|
|
16.8 |
% |
|
|
|
|
|
|
||
Upholstery Fabrics |
|
|
464 |
|
|
|
475 |
|
|
|
(2.3 |
)% |
|
|
|
|
|
|
||
Depreciation Expense |
|
$ |
5,630 |
|
|
$ |
4,897 |
|
|
|
15.0 |
% |
|
|
|
|
|
|
Notes | ||
(1) |
|
See page 16 for a Reconciliation of Selected Income Statement Information to Adjusted Results for the nine months ending January 26, 2025, and January 28, 2024. |
|
|
|
(2) |
|
See page 18 for a Summary of Restructuring Expense (Credit) for the nine months ending January 26, 2025, and January 28, 2024. |
(3) |
|
See pages 20 through 23 for calculation of Return on Capital Employed by Segment for the trailing twelve months ending January 26, 2025, and January 28, 2024, and a reconciliation to information from our U.S. GAAP financial statements. The capital employed balances are as of January 26, 2025, and January 28, 2024. |
|
|
|
(4) |
|
During the nine-month period ending January 26, 2025, depreciation expense for the mattress fabrics segment included additional depreciation expense related to the shortening of useful lives of equipment associated with the gradual discontinuation of operations at our manufacturing facility located in Quebec, Canada. The amount of additional depreciation expense totaling $1.3 million was classified as restructuring expense in our Consolidated Statements of Net Loss. |
CULP, INC. |
||||||||||||
RECONCILIATION OF SELECTED INCOME STATEMENT INFORMATION TO ADJUSTED RESULTS |
||||||||||||
FOR THE THREE MONTHS ENDED JANUARY 26, 2025, AND JANUARY 28, 2024 |
||||||||||||
Unaudited |
||||||||||||
(Amounts in Thousands) |
||||||||||||
|
||||||||||||
|
|
As Reported |
|
|
|
|
|
Adjusted Results |
|
|||
|
|
January 26, |
|
|
|
|
|
January 26, |
|
|||
|
|
2025 |
|
|
Adjustments |
|
|
2025 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Net sales |
|
$ |
52,253 |
|
|
|
— |
|
|
$ |
52,253 |
|
Cost of sales (1) |
|
|
(45,906 |
) |
|
|
624 |
|
|
|
(45,282 |
) |
Gross profit |
|
|
6,347 |
|
|
|
624 |
|
|
|
6,971 |
|
Selling, general and administrative expenses |
|
|
(8,579 |
) |
|
|
— |
|
|
|
(8,579 |
) |
Restructuring expense (2) |
|
|
(1,655 |
) |
|
|
1,655 |
|
|
|
— |
|
Loss from operations |
|
$ |
(3,887 |
) |
|
|
2,279 |
|
|
$ |
(1,608 |
) |
Notes | ||
(1) |
|
During the three months ending January 26, 2025, cost of sales included restructuring related charges totaling $624,000 for losses on the disposal, valuation, and markdowns of inventory related to the gradual discontinuation of operations at our manufacturing facility located in Quebec, Canada. |
|
|
|
(2) |
|
See page 17 for a Summary of Restructuring Expense (Credit) for the three months ending January 26, 2025. |
|
|
As Reported |
|
|
|
|
|
Adjusted Results |
|
|||
|
|
January 28, |
|
|
|
|
|
January 28, |
|
|||
|
|
2024 |
|
|
Adjustments |
|
|
2024 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Net sales |
|
$ |
60,418 |
|
|
|
— |
|
|
$ |
60,418 |
|
Cost of sales (1) |
|
|
(52,715 |
) |
|
|
(61 |
) |
|
|
(52,776 |
) |
Gross profit |
|
|
7,703 |
|
|
|
(61 |
) |
|
|
7,642 |
|
Selling, general and administrative expenses |
|
|
(9,493 |
) |
|
|
— |
|
|
|
(9,493 |
) |
Restructuring credit (2) |
|
|
50 |
|
|
|
(50 |
) |
|
|
— |
|
Loss from operations |
|
$ |
(1,740 |
) |
|
|
(111 |
) |
|
$ |
(1,851 |
) |
Notes | ||
(1) |
|
During the three months ending January 28, 2024, cost of sales included a restructuring related credit totaling $61,000 for a gain on disposal of inventory related to the discontinuation of production of cut and sewn upholstery kits at the company's facility in Ouanaminthe, Haiti. |
|
|
|
(2) |
|
See page 17 for a Summary of Restructuring Expense (Credit) for the three months ending January 28, 2024. |
CULP, INC. |
||||||||||||
RECONCILIATION OF SELECTED INCOME STATEMENT INFORMATION TO ADJUSTED RESULTS |
||||||||||||
FOR THE NINE MONTHS ENDED JANUARY 26, 2025, AND JANUARY 28, 2024 |
||||||||||||
Unaudited |
||||||||||||
(Amounts in Thousands) |
||||||||||||
|
||||||||||||
|
|
As Reported |
|
|
|
|
|
Adjusted Results |
|
|||
|
|
January 26, |
|
|
|
|
|
January 26, |
|
|||
|
|
2025 |
|
|
Adjustments |
|
|
2025 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Net sales |
|
$ |
164,464 |
|
|
|
— |
|
|
$ |
164,464 |
|
Cost of sales (1) |
|
|
(147,050 |
) |
|
|
1,509 |
|
|
|
(145,541 |
) |
Gross profit |
|
|
17,414 |
|
|
|
1,509 |
|
|
|
18,923 |
|
Selling, general and administrative expenses |
|
|
(27,235 |
) |
|
|
— |
|
|
|
(27,235 |
) |
Restructuring expense (2) |
|
|
(6,317 |
) |
|
|
6,317 |
|
|
|
— |
|
Loss from operations |
|
$ |
(16,138 |
) |
|
|
7,826 |
|
|
$ |
(8,312 |
) |
Notes | ||
(1) |
|
During the nine months ending January 26, 2025, cost of sales included restructuring related charges totaling $1.5 million for losses on the disposal, valuation, and markdowns of inventory related to the gradual discontinuation of operations at our manufacturing facility located in Quebec, Canada. |
|
|
|
(2) |
|
See page 18 for a Summary of Restructuring Expense (Credit) for the nine months ending January 26, 2025. |
|
|
As Reported |
|
|
|
|
|
Adjusted Results |
|
|||
|
|
January 28, |
|
|
|
|
|
January 28, |
|
|||
|
|
2024 |
|
|
Adjustments |
|
|
2024 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Net sales |
|
$ |
175,804 |
|
|
|
— |
|
|
$ |
175,804 |
|
Cost of sales (1) |
|
|
(153,067 |
) |
|
|
40 |
|
|
|
(153,027 |
) |
Gross profit |
|
|
22,737 |
|
|
|
40 |
|
|
|
22,777 |
|
Selling, general and administrative expenses |
|
|
(29,366 |
) |
|
|
— |
|
|
|
(29,366 |
) |
Restructuring expense (2) |
|
|
(432 |
) |
|
|
432 |
|
|
|
— |
|
Loss from operations |
|
$ |
(7,061 |
) |
|
|
472 |
|
|
$ |
(6,589 |
) |
Notes | ||
(1) |
|
During the nine months ending January 28, 2024, cost of sales included restructuring related charges totaling $40,000 for markdowns of inventory related to discontinuing production of cut and sewn upholstery kits at the company's facility in Ouanaminthe, Haiti. |
|
|
|
(2) |
|
See page 18 for a Summary of Restructuring Expense (Credit) for the nine months ending January 28, 2024. |
CULP, INC. |
||||||||||||
SUMMARY OF RESTRUCTURING EXPENSE (CREDIT) |
||||||||||||
FOR THE THREE MONTHS ENDED JANUARY 26, 2025, AND JANUARY 28, 2024 |
||||||||||||
Unaudited |
||||||||||||
(Amounts in Thousands) |
||||||||||||
|
||||||||||||
The following summarizes restructuring expense (credit) for three-month period ending January 26, 2025: |
||||||||||||
|
||||||||||||
|
|
Upholstery |
|
|
Mattress |
|
|
|
|
|||
Description |
|
Fabrics |
|
|
Fabrics |
|
|
Total |
|
|||
Employee termination benefits |
|
$ |
— |
|
|
$ |
176 |
|
|
$ |
176 |
|
Impairment charges related to fixed assets |
|
|
— |
|
|
|
25 |
|
|
|
25 |
|
Gain on the sale of equipment |
|
|
— |
|
|
|
(58 |
) |
|
|
(58 |
) |
Facility consolidation and relocation expenses |
|
|
8 |
|
|
|
962 |
|
|
|
970 |
|
Cost incurred to ready a closed facility for sale |
|
|
— |
|
|
|
413 |
|
|
|
413 |
|
Other associated costs |
|
|
— |
|
|
|
129 |
|
|
|
129 |
|
Total restructuring expense (1) |
|
$ |
8 |
|
|
$ |
1,647 |
|
|
$ |
1,655 |
|
(1) |
|
During the three months ending January 26, 2025, restructuring expense of $1.7 million represents costs associated with (i) consolidating the company's North American mattress fabrics operations, including the gradual discontinuation of operations at the mattress fabrics manufacturing facility located in Quebec, Canada, and moving a portion of the knitting and finishing capacity from the company's manufacturing facility located in Quebec, Canada to the company's U.S. manufacturing facility located in Stokesdale, NC; (ii) consolidating two leased facilities related to the sewn mattress cover operation located in Ouanaminthe, Haiti, into one facility and reducing other operating expenses at this location; and (iii) moving equipment from our upholstery fabrics operation located in Knoxville, Tennessee to our upholstery fabrics distribution center located in Burlington, N.C. |
The following summarizes restructuring expense (credit) for three-month period ending January 28, 2024: |
||||
|
|
Upholstery |
|
|
Description |
|
Fabrics |
|
|
Gain on the disposal of equipment |
|
|
(50 |
) |
Total restructuring credit (1) |
|
$ |
(50 |
) |
(1) |
|
During the three months ending January 28, 2024, the restructuring credit of $50,000 represents gains on the sale of equipment associated with the discontinuance production of cut and sewn upholstery kits at our facility located in Ouanaminthe, Haiti. |
CULP, INC. |
||||||||||||
SUMMARY OF RESTRUCTURING EXPENSE (CREDIT) |
||||||||||||
FOR THE NINE MONTHS ENDED JANUARY 26, 2025, AND JANUARY 28, 2024 |
||||||||||||
Unaudited |
||||||||||||
(Amounts in Thousands) |
||||||||||||
|
||||||||||||
The following summarizes restructuring expense (credit) for nine-month period ending January 26, 2025: |
||||||||||||
|
||||||||||||
|
|
Upholstery |
|
|
Mattress |
|
|
|
|
|||
Description |
|
Fabrics |
|
|
Fabrics |
|
|
Total |
|
|||
Employee termination benefits |
|
$ |
102 |
|
|
$ |
1,326 |
|
|
$ |
1,428 |
|
Accelerated depreciation |
|
|
— |
|
|
|
1,339 |
|
|
|
1,339 |
|
Impairment charges related to fixed assets |
|
|
— |
|
|
|
131 |
|
|
|
131 |
|
Gain on the sale of equipment |
|
|
— |
|
|
|
(173 |
) |
|
|
(173 |
) |
Lease termination costs |
|
|
— |
|
|
|
849 |
|
|
|
849 |
|
Facility consolidation and relocation expenses |
|
|
53 |
|
|
|
2,063 |
|
|
|
2,116 |
|
Cost incurred to ready a closed facility for sale |
|
|
— |
|
|
|
428 |
|
|
|
428 |
|
Other associated costs |
|
|
14 |
|
|
|
185 |
|
|
|
199 |
|
Total restructuring expense (1) |
|
$ |
169 |
|
|
$ |
6,148 |
|
|
$ |
6,317 |
|
(1) |
|
During the nine months ending January 26, 2025, restructuring expense of $6.3 million represents costs associated with (i) consolidating the company's North American mattress fabrics operations, including the gradual discontinuation of operations at the mattress fabrics manufacturing facility located in Quebec, Canada, and moving a portion of the knitting and finishing capacity from the company's manufacturing facility located in Quebec, Canada to the company's U.S. manufacturing facility located in Stokesdale, NC; (ii) consolidating two leased facilities related to the sewn mattress cover operation located in Ouanaminthe, Haiti, into one facility and reducing other operating expenses at this location; and (iii) moving equipment from our upholstery fabrics operation located in Knoxville, Tennessee to our upholstery fabrics distribution center located in Burlington, N.C. |
The following summarizes restructuring expense (credit) for nine-month period ending January 28, 2024: |
||||
|
|
Upholstery |
|
|
Description |
|
Fabrics |
|
|
Employee termination benefits |
|
$ |
103 |
|
Impairment charges related to equipment |
|
|
329 |
|
Total restructuring expense (1) |
|
$ |
432 |
|
(1) |
|
During the nine months ending January 28, 2024, restructuring expense of $432,000 represents costs related to the discontinuance of production of cut and sewn upholstery kits at our facility located in Ouanaminthe, Haiti. |
CULP, INC. |
||||||||||||||||||||
CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA |
||||||||||||||||||||
FOR THE TWELVE MONTHS ENDED JANUARY 26, 2025, AND JANUARY 28, 2024 |
||||||||||||||||||||
Unaudited |
||||||||||||||||||||
(Amounts in Thousands) |
||||||||||||||||||||
|
||||||||||||||||||||
|
|
Quarter |
|
|
Quarter |
|
|
Quarter |
|
|
Quarter |
|
|
Trailing |
|
|||||
|
|
April 28, |
|
|
July 28, |
|
|
October 27, |
|
|
January 26, |
|
|
January 26, |
|
|||||
|
|
2024 |
|
|
2024 |
|
|
2024 |
|
|
2025 |
|
|
2025 |
|
|||||
Net loss |
|
$ |
(4,865 |
) |
|
$ |
(7,261 |
) |
|
$ |
(5,644 |
) |
|
$ |
(4,126 |
) |
|
$ |
(21,896 |
) |
Income tax expense (benefit) |
|
|
805 |
|
|
|
240 |
|
|
|
(50 |
) |
|
|
446 |
|
|
|
1,441 |
|
Interest income, net |
|
|
(252 |
) |
|
|
(235 |
) |
|
|
(214 |
) |
|
|
(192 |
) |
|
|
(893 |
) |
Depreciation expense |
|
|
1,623 |
|
|
|
1,581 |
|
|
|
1,496 |
|
|
|
1,211 |
|
|
|
5,911 |
|
Restructuring expense |
|
|
204 |
|
|
|
2,631 |
|
|
|
2,031 |
|
|
|
1,655 |
|
|
|
6,521 |
|
Restructuring related charge |
|
|
— |
|
|
|
116 |
|
|
|
769 |
|
|
|
624 |
|
|
|
1,509 |
|
Amortization expense |
|
|
99 |
|
|
|
99 |
|
|
|
101 |
|
|
|
101 |
|
|
|
400 |
|
Stock based compensation |
|
|
168 |
|
|
|
176 |
|
|
|
188 |
|
|
|
158 |
|
|
|
690 |
|
Adjusted EBITDA |
|
$ |
(2,218 |
) |
|
$ |
(2,653 |
) |
|
$ |
(1,323 |
) |
|
$ |
(123 |
) |
|
$ |
(6,317 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
% Net Sales |
|
|
(4.5 |
)% |
|
|
(4.7 |
)% |
|
|
(2.4 |
)% |
|
|
(0.2 |
)% |
|
|
(3.0 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Quarter |
|
|
Quarter |
|
|
Quarter |
|
|
Quarter |
|
|
Trailing |
|
|||||
|
|
April 30, |
|
|
July 30, |
|
|
October 29, |
|
|
January 28, |
|
|
January 28, |
|
|||||
|
|
2023 |
|
|
2023 |
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
|||||
Net loss |
|
$ |
(4,681 |
) |
|
$ |
(3,342 |
) |
|
$ |
(2,424 |
) |
|
$ |
(3,188 |
) |
|
$ |
(13,635 |
) |
Income tax expense |
|
|
798 |
|
|
|
701 |
|
|
|
516 |
|
|
|
1,027 |
|
|
|
3,042 |
|
Interest income, net |
|
|
(239 |
) |
|
|
(345 |
) |
|
|
(282 |
) |
|
|
(284 |
) |
|
|
(1,150 |
) |
Depreciation expense |
|
|
1,619 |
|
|
|
1,634 |
|
|
|
1,617 |
|
|
|
1,646 |
|
|
|
6,516 |
|
Restructuring expense (credit) |
|
|
70 |
|
|
|
338 |
|
|
|
144 |
|
|
|
(50 |
) |
|
|
502 |
|
Restructuring related charge (credit) |
|
|
— |
|
|
|
179 |
|
|
|
(78 |
) |
|
|
(61 |
) |
|
|
40 |
|
Amortization expense |
|
|
115 |
|
|
|
96 |
|
|
|
97 |
|
|
|
98 |
|
|
|
406 |
|
Stock based compensation |
|
|
258 |
|
|
|
322 |
|
|
|
163 |
|
|
|
262 |
|
|
|
1,005 |
|
Adjusted EBITDA |
|
$ |
(2,060 |
) |
|
$ |
(417 |
) |
|
$ |
(247 |
) |
|
$ |
(550 |
) |
|
$ |
(3,274 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
% Net Sales |
|
|
(3.4 |
)% |
|
|
(0.7 |
)% |
|
|
(0.4 |
)% |
|
|
(0.9 |
)% |
|
|
(1.4 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
% Over (Under) |
|
|
7.7 |
% |
|
|
536.2 |
% |
|
|
435.6 |
% |
|
|
(77.6 |
)% |
|
|
92.9 |
% |
CULP, INC. |
||||||||||||||||||||||||||||||||||||||
RETURN ON CAPITAL EMPLOYED BY SEGMENT |
||||||||||||||||||||||||||||||||||||||
FOR THE TWELVE MONTHS ENDED JANUARY 26, 2025 |
||||||||||||||||||||||||||||||||||||||
Unaudited |
||||||||||||||||||||||||||||||||||||||
(Amounts in Thousands) |
||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||
|
Adjusted Operating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Twelve Months |
|
Average |
|
Return on |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
January 26, 2025 (1) |
|
Employed (2) |
|
Employed (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mattress Fabrics |
$ |
(7,948 |
) |
$ |
58,172 |
|
|
(13.7 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Upholstery Fabrics |
|
3,981 |
|
|
7,853 |
|
|
50.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Unallocated Corporate |
|
(8,389 |
) |
|
4,453 |
|
N.M. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated |
$ |
(12,356 |
) |
$ |
70,478 |
|
|
(17.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average Capital Employed |
As of the Three Months Ended January 26, 2025 |
|
|
As of the Three Months Ended October 27, 2024 |
|
|
As of the Three Months Ended July 28, 2024 |
|
||||||||||||||||||||||||||||||
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
||||||||||||
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Total |
|
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Total |
|
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Total |
|
||||||||||||
Total assets (4) |
$ |
70,877 |
|
|
33,697 |
|
|
22,981 |
|
|
127,555 |
|
|
$ |
69,261 |
|
|
31,385 |
|
|
28,341 |
|
|
128,987 |
|
|
$ |
66,713 |
|
|
31,763 |
|
|
30,663 |
|
|
129,139 |
|
Total liabilities |
|
(20,337 |
) |
|
(21,081 |
) |
|
(26,487 |
) |
|
(67,905 |
) |
|
|
(14,948 |
) |
|
(24,783 |
) |
|
(25,633 |
) |
|
(65,364 |
) |
|
|
(10,303 |
) |
|
(24,857 |
) |
|
(24,855 |
) |
|
(60,015 |
) |
Subtotal |
$ |
50,540 |
|
$ |
12,616 |
|
|
(3,506 |
) |
$ |
59,650 |
|
|
$ |
54,313 |
|
$ |
6,602 |
|
|
2,708 |
|
$ |
63,623 |
|
|
$ |
56,410 |
|
$ |
6,906 |
|
|
5,808 |
|
$ |
69,124 |
|
Cash and cash equivalents |
|
— |
|
|
— |
|
|
(5,279 |
) |
|
(5,279 |
) |
|
|
— |
|
|
— |
|
|
(10,531 |
) |
|
(10,531 |
) |
|
|
— |
|
|
— |
|
|
(13,472 |
) |
|
(13,472 |
) |
Short-term investments - Rabbi Trust |
|
— |
|
|
— |
|
|
(1,753 |
) |
|
(1,753 |
) |
|
|
— |
|
|
— |
|
|
(919 |
) |
|
(919 |
) |
|
|
— |
|
|
— |
|
|
(954 |
) |
|
(954 |
) |
Current income taxes receivable |
|
— |
|
|
— |
|
|
(1,137 |
) |
|
(1,137 |
) |
|
|
— |
|
|
— |
|
|
(979 |
) |
|
(979 |
) |
|
|
— |
|
|
— |
|
|
(532 |
) |
|
(532 |
) |
Long-term investments - Rabbi Trust |
|
— |
|
|
— |
|
|
(6,250 |
) |
|
(6,250 |
) |
|
|
— |
|
|
— |
|
|
(7,105 |
) |
|
(7,105 |
) |
|
|
— |
|
|
— |
|
|
(7,089 |
) |
|
(7,089 |
) |
Deferred income taxes - non-current |
|
— |
|
|
— |
|
|
(490 |
) |
|
(490 |
) |
|
|
— |
|
|
— |
|
|
(559 |
) |
|
(559 |
) |
|
|
— |
|
|
— |
|
|
(528 |
) |
|
(528 |
) |
Lines of credit |
|
— |
|
|
— |
|
|
5,384 |
|
|
5,384 |
|
|
|
— |
|
|
— |
|
|
4,074 |
|
|
4,074 |
|
|
|
— |
|
|
— |
|
|
4,017 |
|
|
4,017 |
|
Deferred compensation - current |
|
— |
|
|
— |
|
|
1,753 |
|
|
1,753 |
|
|
|
— |
|
|
— |
|
|
919 |
|
|
919 |
|
|
|
— |
|
|
— |
|
|
954 |
|
|
954 |
|
Accrued restructuring |
|
|
|
|
|
723 |
|
|
723 |
|
|
|
|
|
|
|
863 |
|
|
863 |
|
|
|
|
|
|
|
633 |
|
|
633 |
|
||||||
Income taxes payable - current |
|
— |
|
|
— |
|
|
828 |
|
|
828 |
|
|
|
— |
|
|
— |
|
|
1,165 |
|
|
1,165 |
|
|
|
— |
|
|
— |
|
|
759 |
|
|
759 |
|
Income taxes payable - long-term |
|
— |
|
|
— |
|
|
1,400 |
|
|
1,400 |
|
|
|
— |
|
|
— |
|
|
1,378 |
|
|
1,378 |
|
|
|
— |
|
|
— |
|
|
2,180 |
|
|
2,180 |
|
Deferred income taxes - non-current |
|
— |
|
|
— |
|
|
6,582 |
|
|
6,582 |
|
|
|
— |
|
|
— |
|
|
6,624 |
|
|
6,624 |
|
|
|
— |
|
|
— |
|
|
6,449 |
|
|
6,449 |
|
Deferred compensation non-current |
|
— |
|
|
— |
|
|
6,151 |
|
|
6,151 |
|
|
|
— |
|
|
— |
|
|
6,975 |
|
|
6,975 |
|
|
|
— |
|
|
— |
|
|
6,946 |
|
|
6,946 |
|
Total Capital Employed |
$ |
50,540 |
|
$ |
12,616 |
|
$ |
4,406 |
|
$ |
67,562 |
|
|
$ |
54,313 |
|
$ |
6,602 |
|
$ |
4,613 |
|
$ |
65,528 |
|
|
$ |
56,410 |
|
$ |
6,906 |
|
$ |
5,171 |
|
$ |
68,487 |
|
CULP, INC. |
|||||||||||||||||||||||||
RETURN ON CAPITAL EMPLOYED BY SEGMENT - CONTINUED |
|||||||||||||||||||||||||
FOR THE TWELVE MONTHS ENDED JANUARY 26, 2025 |
|||||||||||||||||||||||||
Unaudited |
|||||||||||||||||||||||||
(Amounts in Thousands) |
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
|
As of the Three Months Ended April 28, 2024 |
|
|
As of the Three Months Ended January 28, 2024 |
|
||||||||||||||||||||
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
||||||||
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Total |
|
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Total |
|
||||||||
Total assets (4) |
$ |
72,060 |
|
|
32,629 |
|
|
27,365 |
|
|
132,054 |
|
|
$ |
75,572 |
|
|
38,085 |
|
|
28,341 |
|
|
141,998 |
|
Total liabilities |
|
(9,803 |
) |
|
(25,370 |
) |
|
(20,752 |
) |
|
(55,925 |
) |
|
|
(8,234 |
) |
|
(32,201 |
) |
|
(20,767 |
) |
|
(61,202 |
) |
Subtotal |
$ |
62,257 |
|
$ |
7,259 |
|
|
6,613 |
|
$ |
76,129 |
|
|
$ |
67,338 |
|
$ |
5,884 |
|
$ |
7,574 |
|
$ |
80,796 |
|
Cash and cash equivalents |
|
— |
|
|
— |
|
|
(10,012 |
) |
|
(10,012 |
) |
|
|
— |
|
|
— |
|
|
(12,585 |
) |
|
(12,585 |
) |
Short-term investments - Rabbi Trust |
|
— |
|
|
— |
|
|
(903 |
) |
|
(903 |
) |
|
|
— |
|
|
— |
|
|
(937 |
) |
|
(937 |
) |
Current income taxes receivable |
|
— |
|
|
— |
|
|
(350 |
) |
|
(350 |
) |
|
|
— |
|
|
— |
|
|
(476 |
) |
|
(476 |
) |
Long-term investments - Rabbi Trust |
|
— |
|
|
— |
|
|
(7,102 |
) |
|
(7,102 |
) |
|
|
— |
|
|
— |
|
|
(7,083 |
) |
|
(7,083 |
) |
Deferred income taxes - non-current |
|
— |
|
|
— |
|
|
(518 |
) |
|
(518 |
) |
|
|
— |
|
|
— |
|
|
(531 |
) |
|
(531 |
) |
Deferred compensation - current |
|
— |
|
|
— |
|
|
903 |
|
|
903 |
|
|
|
— |
|
|
— |
|
|
937 |
|
|
937 |
|
Income taxes payable - current |
|
— |
|
|
— |
|
|
972 |
|
|
972 |
|
|
|
— |
|
|
— |
|
|
1,070 |
|
|
1,070 |
|
Income taxes payable - long-term |
|
— |
|
|
— |
|
|
2,088 |
|
|
2,088 |
|
|
|
— |
|
|
— |
|
|
2,072 |
|
|
2,072 |
|
Deferred income taxes - non-current |
|
— |
|
|
— |
|
|
6,379 |
|
|
6,379 |
|
|
|
— |
|
|
— |
|
|
6,177 |
|
|
6,177 |
|
Deferred compensation non-current |
|
— |
|
|
— |
|
|
6,929 |
|
|
6,929 |
|
|
|
— |
|
|
— |
|
|
6,856 |
|
|
6,856 |
|
Total Capital Employed |
$ |
62,257 |
|
$ |
7,259 |
|
$ |
4,999 |
|
$ |
74,515 |
|
|
$ |
67,338 |
|
$ |
5,884 |
|
$ |
3,074 |
|
$ |
76,296 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
||||||||
Average Capital Employed (2) |
$ |
58,172 |
|
$ |
7,853 |
|
$ |
4,453 |
|
$ |
70,478 |
|
|
|
|
|
|
|
|
|
|
Notes
(1) See last page of this presentation for calculation.
(2) Average capital employed is calculated independently for each segment and on a consolidated basis using the five quarterly periods ending January 26, 2025, October 27, 2024, July 28, 2024, April 28, 2024, and January 28, 2024.
(3) Return on average capital employed represents the twelve months adjusted operating (loss) income as of January 26, 2025, divided by average capital employed. Average capital employed does not include cash and cash equivalents, short-term and long-term investments – rabbi trust, income taxes receivable and payable, accrued restructuring, lines of credit, non-current deferred income tax assets and liabilities, and current and non-current deferred compensation.
(4) Intangible assets are included in unallocated corporate for all periods presented and therefore, have no effect on capital employed and return on capital employed for our mattress fabrics and upholstery fabrics segments.
CULP INC.
RETURN ON CAPITAL EMPLOYED BY SEGMENT
FOR THE TWELVE MONTHS ENDED JANUARY 28, 2024
Unaudited
(Amounts in Thousands)
|
Adjusted Operating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Twelve Months |
|
Average |
|
Return on |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
January 28, 2024 (1) |
|
Employed (2) |
|
Employed (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mattress Fabrics |
$ |
(6,446 |
) |
$ |
63,914 |
|
|
(10.1 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Upholstery Fabrics |
|
6,422 |
|
|
10,901 |
|
|
58.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Unallocated Corporate |
|
(10,522 |
) |
|
3,547 |
|
N.M. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated |
$ |
(10,546 |
) |
$ |
78,361 |
|
|
(13.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average Capital Employed |
As of the Three months ended January 28, 2024 |
|
|
As of the Three months ended October 29, 2023 |
|
|
As of the Three Months Ended July 30, 2023 |
|
||||||||||||||||||||||||||||||
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
||||||||||||
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Total |
|
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Total |
|
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Total |
|
||||||||||||
Total assets (4) |
$ |
75,572 |
|
|
38,085 |
|
|
28,341 |
|
|
141,998 |
|
|
$ |
75,924 |
|
|
35,082 |
|
|
31,154 |
|
|
142,160 |
|
|
$ |
72,286 |
|
|
37,592 |
|
|
33,024 |
|
|
142,902 |
|
Total liabilities |
|
(8,234 |
) |
|
(32,201 |
) |
|
(20,767 |
) |
|
(61,202 |
) |
|
|
(14,739 |
) |
|
(23,758 |
) |
|
(20,035 |
) |
|
(58,532 |
) |
|
|
(11,230 |
) |
|
(25,235 |
) |
|
(20,320 |
) |
|
(56,785 |
) |
Subtotal |
$ |
67,338 |
|
$ |
5,884 |
|
$ |
7,574 |
|
$ |
80,796 |
|
|
$ |
61,185 |
|
$ |
11,324 |
|
$ |
11,119 |
|
$ |
83,628 |
|
|
$ |
61,056 |
|
$ |
12,357 |
|
$ |
12,704 |
|
$ |
86,117 |
|
Cash and cash equivalents |
|
— |
|
|
— |
|
|
(12,585 |
) |
|
(12,585 |
) |
|
|
— |
|
|
— |
|
|
(15,214 |
) |
|
(15,214 |
) |
|
|
— |
|
|
— |
|
|
(16,812 |
) |
|
(16,812 |
) |
Short-term investments - Rabbi Trust |
|
— |
|
|
— |
|
|
(937 |
) |
|
(937 |
) |
|
|
— |
|
|
— |
|
|
(937 |
) |
|
(937 |
) |
|
|
— |
|
|
— |
|
|
(791 |
) |
|
(791 |
) |
Current income taxes receivable |
|
— |
|
|
— |
|
|
(476 |
) |
|
(476 |
) |
|
|
— |
|
|
— |
|
|
(340 |
) |
|
(340 |
) |
|
|
— |
|
|
— |
|
|
(202 |
) |
|
(202 |
) |
Long-term investments - Rabbi Trust |
|
— |
|
|
— |
|
|
(7,083 |
) |
|
(7,083 |
) |
|
|
— |
|
|
— |
|
|
(6,995 |
) |
|
(6,995 |
) |
|
|
— |
|
|
— |
|
|
(7,204 |
) |
|
(7,204 |
) |
Deferred income taxes - non-current |
|
— |
|
|
— |
|
|
(531 |
) |
|
(531 |
) |
|
|
— |
|
|
— |
|
|
(472 |
) |
|
(472 |
) |
|
|
— |
|
|
— |
|
|
(476 |
) |
|
(476 |
) |
Deferred compensation - current |
|
— |
|
|
— |
|
|
937 |
|
|
937 |
|
|
|
— |
|
|
— |
|
|
937 |
|
|
937 |
|
|
|
— |
|
|
— |
|
|
791 |
|
|
791 |
|
Accrued restructuring |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
10 |
|
|
10 |
|
Income taxes payable - current |
|
— |
|
|
— |
|
|
1,070 |
|
|
1,070 |
|
|
|
— |
|
|
— |
|
|
998 |
|
|
998 |
|
|
|
— |
|
|
— |
|
|
526 |
|
|
526 |
|
Income taxes payable - long-term |
|
— |
|
|
— |
|
|
2,072 |
|
|
2,072 |
|
|
|
— |
|
|
— |
|
|
2,055 |
|
|
2,055 |
|
|
|
— |
|
|
— |
|
|
2,710 |
|
|
2,710 |
|
Deferred income taxes - non-current |
|
— |
|
|
— |
|
|
6,177 |
|
|
6,177 |
|
|
|
— |
|
|
— |
|
|
5,663 |
|
|
5,663 |
|
|
|
— |
|
|
— |
|
|
5,864 |
|
|
5,864 |
|
Deferred compensation - long-term |
|
— |
|
|
— |
|
|
6,856 |
|
|
6,856 |
|
|
|
— |
|
|
— |
|
|
6,748 |
|
|
6,748 |
|
|
|
— |
|
|
— |
|
|
6,966 |
|
|
6,966 |
|
Total Capital Employed |
$ |
67,338 |
|
$ |
5,884 |
|
$ |
3,074 |
|
$ |
76,296 |
|
|
$ |
61,185 |
|
$ |
11,324 |
|
$ |
3,562 |
|
$ |
76,071 |
|
|
$ |
61,056 |
|
$ |
12,357 |
|
$ |
4,086 |
|
$ |
77,499 |
|
CULP INC.
RETURN ON CAPITAL EMPLOYED BY SEGMENT - CONTINUED
FOR THE TWELVE MONTHS ENDED JANUARY 28, 2024
Unaudited
(Amounts in Thousands)
|
As of the Three Months Ended April 30, 2023 |
|
|
As of the Three Months Ended January 29, 2023 |
|
||||||||||||||||||||
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
||||||||
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Total |
|
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Total |
|
||||||||
Total assets (4) |
$ |
75,494 |
|
|
39,127 |
|
|
37,562 |
|
|
152,183 |
|
|
$ |
75,393 |
|
|
39,817 |
|
|
35,388 |
|
|
150,598 |
|
Total liabilities |
|
(11,387 |
) |
|
(29,638 |
) |
|
(22,078 |
) |
|
(63,103 |
) |
|
|
(9,511 |
) |
|
(24,367 |
) |
|
(23,216 |
) |
|
(57,094 |
) |
Subtotal |
$ |
64,107 |
|
$ |
9,489 |
|
$ |
15,484 |
|
$ |
89,080 |
|
|
$ |
65,882 |
|
$ |
15,450 |
|
$ |
12,172 |
|
$ |
93,504 |
|
Cash and cash equivalents |
|
— |
|
|
— |
|
|
(20,964 |
) |
|
(20,964 |
) |
|
|
— |
|
|
— |
|
|
(16,725 |
) |
|
(16,725 |
) |
Short-term investments - Rabbi Trust |
|
— |
|
|
— |
|
|
(1,404 |
) |
|
(1,404 |
) |
|
|
— |
|
|
— |
|
|
(2,420 |
) |
|
(2,420 |
) |
Current income taxes receivable |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
(238 |
) |
|
(238 |
) |
Long-term investments - Rabbi Trust |
|
— |
|
|
— |
|
|
(7,067 |
) |
|
(7,067 |
) |
|
|
— |
|
|
— |
|
|
(7,725 |
) |
|
(7,725 |
) |
Deferred income taxes - non-current |
|
— |
|
|
— |
|
|
(480 |
) |
|
(480 |
) |
|
|
— |
|
|
— |
|
|
(463 |
) |
|
(463 |
) |
Deferred compensation - current |
|
— |
|
|
— |
|
|
1,404 |
|
|
1,404 |
|
|
|
— |
|
|
— |
|
|
2,420 |
|
|
2,420 |
|
Income taxes payable - current |
|
— |
|
|
— |
|
|
753 |
|
|
753 |
|
|
|
— |
|
|
— |
|
|
467 |
|
|
467 |
|
Income taxes payable - long-term |
|
— |
|
|
— |
|
|
2,675 |
|
|
2,675 |
|
|
|
— |
|
|
— |
|
|
2,648 |
|
|
2,648 |
|
Deferred income taxes - non-current |
|
— |
|
|
— |
|
|
5,954 |
|
|
5,954 |
|
|
|
— |
|
|
— |
|
|
6,089 |
|
|
6,089 |
|
Deferred compensation - long-term |
|
— |
|
|
— |
|
|
6,842 |
|
|
6,842 |
|
|
|
— |
|
|
— |
|
|
7,590 |
|
|
7,590 |
|
Total Capital Employed |
$ |
64,107 |
|
$ |
9,489 |
|
$ |
3,197 |
|
$ |
76,793 |
|
|
$ |
65,882 |
|
$ |
15,450 |
|
$ |
3,815 |
|
$ |
85,147 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
||||||||
Average Capital Employed (2) |
$ |
63,914 |
|
$ |
10,901 |
|
$ |
3,547 |
|
$ |
78,361 |
|
|
|
|
|
|
|
|
|
|
Notes | ||
(1) |
|
See last page of this presentation for calculation. |
|
|
|
(2) |
|
Average capital employed is calculated independently for each segment and on a consolidated basis using the five quarterly periods ending January 28, 2024, October 29, 2023, July 30, 2023, April 30, 2023, and January 29, 2023. |
|
|
|
(3) |
|
Return on average capital employed represents the last twelve months adjusted operating (loss) income as of January 28, 2024, divided by average capital employed. Average capital employed does not include cash and cash equivalents, short-term and long-term investments – rabbi trust, income taxes receivable and payable, accrued restructuring, noncurrent deferred income tax assets and liabilities, and current and non-current deferred compensation. |
|
|
|
(4) |
|
Intangible assets are included in unallocated corporate for all periods presented and therefore, have no effect on capital employed and return on capital employed for our mattress fabrics and upholstery fabrics segments. |
CULP INC. |
||||||||||||||||||||
CONSOLIDATED STATEMENTS OF ADJUSTED OPERATING (LOSS) INCOME |
||||||||||||||||||||
FOR THE TWELVE MONTHS ENDED JANUARY 26, 2025, AND JANUARY 28, 2024 |
||||||||||||||||||||
Unaudited |
||||||||||||||||||||
(Amounts in Thousands) |
||||||||||||||||||||
|
||||||||||||||||||||
|
|
Quarter Ended |
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trailing 12 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Months |
|
|||||
|
|
04/28/2024 |
|
|
07/28/2024 |
|
|
10/27/2024 |
|
|
01/26/2025 |
|
|
01/26/2025 |
|
|||||
Mattress Fabrics |
|
$ |
(2,929 |
) |
|
$ |
(3,549 |
) |
|
$ |
(1,037 |
) |
|
$ |
(433 |
) |
|
$ |
(7,948 |
) |
Upholstery Fabrics |
|
|
975 |
|
|
|
1,712 |
|
|
|
615 |
|
|
|
679 |
|
|
|
3,981 |
|
Unallocated Corporate |
|
|
(2,090 |
) |
|
|
(2,267 |
) |
|
|
(2,178 |
) |
|
|
(1,854 |
) |
|
|
(8,389 |
) |
Adjusted operating loss |
|
$ |
(4,044 |
) |
|
$ |
(4,104 |
) |
|
$ |
(2,600 |
) |
|
$ |
(1,608 |
) |
|
$ |
(12,356 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Quarter Ended |
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trailing 12 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Months |
|
|||||
|
|
4/30/2023 |
|
|
7/30/2023 |
|
|
10/29/2023 |
|
|
1/28/2024 |
|
|
1/28/2024 |
|
|||||
Mattress Fabrics |
|
$ |
(2,530 |
) |
|
$ |
(1,398 |
) |
|
$ |
(936 |
) |
|
$ |
(1,582 |
) |
|
$ |
(6,446 |
) |
Upholstery Fabrics |
|
|
1,611 |
|
|
|
1,328 |
|
|
|
1,391 |
|
|
|
2,092 |
|
|
|
6,422 |
|
Unallocated Corporate |
|
|
(3,038 |
) |
|
|
(2,495 |
) |
|
|
(2,628 |
) |
|
|
(2,361 |
) |
|
|
(10,522 |
) |
Adjusted operating loss |
|
$ |
(3,957 |
) |
|
$ |
(2,565 |
) |
|
$ |
(2,173 |
) |
|
$ |
(1,851 |
) |
|
$ |
(10,546 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
% Over (Under) |
|
|
2.2 |
% |
|
|
60.0 |
% |
|
|
19.7 |
% |
|
|
(13.1 |
)% |
|
|
17.2 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20250305916120/en/
NYSE:CULP (6/4/2025, 8:16:57 PM)
4.18
-0.02 (-0.48%)
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