Culp, Inc. (NYSE: CULP) (together with its consolidated
subsidiaries, “CULP”) today reported financial and operating
results for the fourth quarter and fiscal year ended April 28,
2024.
Fiscal 2024 Fourth Quarter Financial Summary
- Net sales for the fourth quarter of fiscal 2024 were $49.5
million, down 19.4 percent compared with the prior-year period,
with mattress fabrics sales down 16.1 percent, and upholstery
fabrics sales down 22.6 percent.
- Loss from operations was $(4.2) million (which included
$204,000 in restructuring expense during the period), compared with
a loss from operations of $(4.0) million for the prior-year period
(which included $70,000 in restructuring expense during the
period).
- Net loss was $(4.9) million, or $(0.39) per diluted share,
compared with a net loss of $(4.7) million, or $(0.38) per diluted
share, for the prior-year period. The effective tax rate for the
fourth quarter was negative (19.8) percent, reflecting the
company’s mix of taxable income between its U.S. and foreign
jurisdictions during the period.
- The company maintained a solid financial position, with its
balance sheet reflecting $10.0 million of total cash and no
outstanding borrowings as of April 28, 2024. Total liquidity as of
April 28, 2024, was $32.5 million (consisting of $10.0 million in
cash and $22.5 million in borrowing availability under the
company's domestic and foreign credit facilities).
Fiscal 2024 Full Year Financial Summary
- Net sales for fiscal 2024 were $225.3 million, down 4.1 percent
from the prior year, with mattress fabrics sales up 4.8 percent and
upholstery fabrics sales down 12.1 percent.
- Loss from operations was $(11.3) million (which included
$676,000 in restructuring and related expenses during the period),
compared with a loss from operations of $(28.5) million for the
prior year (which included approximately $9.9 million relating to
certain inventory impairment and other charges and restructuring
and related expenses during the period).
- Net loss was $(13.8) million, or $(1.11) per diluted share,
compared with a net loss of $(31.5) million, or $(2.57) per diluted
share, for the prior year. The effective tax rate for fiscal 2024
was negative (28.3) percent, reflecting the company's mix of
taxable income between its U.S. and foreign jurisdictions during
the period.
Restructuring Plan Update
The restructuring plan announced on May 1, 2024, primarily
focused on the company's mattress fabrics segment, is progressing
as planned.
- Expect to achieve $10.0 - $11.0 million in annualized savings
and operating improvements after restructuring initiatives are
fully implemented by the end of the calendar year, with most of the
restructuring benefit realized during the second half of fiscal
2025.
- Expect a return to break-even operating results at currently
depressed industry demand levels post restructuring.
- Expect to incur cash restructuring and restructuring-related
costs and charges of approximately $2.5 million, the majority of
which are anticipated to be incurred in the first half of fiscal
2025. The company expects to fund these cash costs primarily with
the sale of excess manufacturing equipment.
- Expect to receive at least $10.0 - $12.0 million in cash
proceeds (net of all taxes and commissions) from the sale of real
estate associated with the restructuring plan.
- Also expect to incur non-cash restructuring and
restructuring-related costs and charges of approximately $5.4
million (excluding any gain from the sale of real estate).
- Assuming the completion of all restructuring actions and the
sale of associated real estate by the end of fiscal 2025, the
company currently projects its cash as of the end of fiscal 2025 to
be higher than its $10.0 million in cash as of the end of fiscal
2024.
CEO Commentary
Commenting on the results, Iv Culp, president and chief
executive officer of Culp, Inc., said, “Our sales and operating
results for the fourth quarter were in line with our expectations
announced on May 1, 2024. These results reflected weakness in
industry demand in both of our businesses, driven primarily by
ongoing macro-economic headwinds. Our sales performance for the
fourth quarter was also affected to some degree by the timing of
orders, as many of our larger customers experienced extremely slow
conditions beginning in January. We posted solid year-over-year
sales gains in both businesses during our fiscal third quarter, and
we were making progress towards our stated improvement goals.
However, we faced a significant decline in order levels during our
fourth quarter, related to demand pressures our customers faced
early in the calendar year.
"This impact on fourth quarter revenue, along with ongoing
macro-challenges, led us to take aggressive action to bring our
manufacturing costs and capacity in line with current and expected
demand. We announced a major restructuring plan in early May, with
a primary focus on our mattress fabrics segment, and we are making
steady progress on the execution of this restructuring initiative.
The announced adjustments, once fully implemented, will enable us
to grow more efficiently and profitably with a lower level of fixed
costs. Importantly, these strategic steps do not limit our ability
to grow the business, but instead allow us to better optimize our
global mix of manufacturing capabilities and long-term sourcing
partners. Also, we are extremely grateful for the support we have
received from our valued customers, suppliers, and employees, and
we are confident that the strength of these relationships will help
drive our recovery.
“Despite the headwinds, there were some positive indicators
within CULP’s business during fiscal 2024, including (1)
significant year-over-year operating improvement (though still a
loss and below intended targets); (2) consistent operating profits
in our upholstery fabrics business; (3) year-over-year sales growth
in our mattress fabrics segment; and (4) strong product innovation
and placements in both segments, positioning us for a return to
higher sales growth as macro conditions improve. We are encouraged
by our solid market position in both businesses, and with our
restructuring actions well underway, we believe we are on track to
return to profitability post-restructuring even if market
conditions remain at their currently depressed levels.
“We also maintained a solid balance sheet during the fourth
quarter, with a focus on prudent financial management, and we are
taking proactive steps to ensure the long-term success of our
business. We are diligently focused on executing our restructuring
initiatives, and therefore strengthening our balance sheet,
optimizing our operations and cost structure, and supporting our
customers, while also continuing to win new placements with our
innovative product portfolio.
"As we look ahead to fiscal 2025, we expect industry conditions
will remain pressured for some time, but we believe our fiscal 2024
fourth quarter revenue levels represented a bottom point for CULP.
We believe the strategic actions we are taking will position us for
profitable growth opportunities, and we remain committed to
delivering sustainable results and enhancing value for our
shareholders over the long term," added Culp.
Business Segment Highlights
Mattress Fabrics Segment (“CHF”) Summary
- Sales for this segment were $25.8 million for the fourth
quarter, down 16.1 percent compared with sales of $30.7 million in
the fourth quarter of fiscal 2023.
- Sales were pressured during the quarter by further weakness in
the domestic mattress industry, driven by a challenging
macro-economic environment that is affecting consumer discretionary
spending and housing markets.
- Operating loss was $(2.9) million for the fourth quarter,
compared to an operating loss of $(2.5) million operating loss in
the prior-year period. Operating performance for the quarter was
primarily pressured by lower sales and operating
inefficiencies.
- For fiscal 2024, sales were $116.4 million, up 4.8 percent
compared with sales of $111.0 million for fiscal 2023. This
year-over-year increase was driven by higher sales for the first
nine months of fiscal 2024 (primarily due to new fabric and sewn
cover placements priced in line with current costs), partially
offset by lower sales during the fourth quarter of fiscal
2024.
- For the full year, operating loss was $(6.8) million for fiscal
2024, compared with an operating loss of ($18.7) million for fiscal
2023. The decrease in CHF's operating loss for fiscal 2024, as
compared to the prior-year period (which was negatively affected by
certain inventory impairment charges and losses from inventory
close out sales), was primarily due to higher sales through the
first nine months of fiscal 2024 as described above, along with
better inventory management. These factors were partially offset by
higher SG&A expense during fiscal 2024, as well as production
inefficiencies relating to certain new product launches.
Upholstery Fabrics Segment (“CUF”) Summary
- Sales for this segment were $23.8 million for the fourth
quarter, down 22.6 percent compared with sales of $30.7 million in
the fourth quarter of fiscal 2023.
- Sales for CUF's residential fabric business were lower than the
prior-year period, driven primarily by further deterioration in
residential home furnishing sales, as well as the timing of the
Chinese New Year holiday (which this year fell primarily in the
fourth quarter, rather than the third quarter). Additionally,
approximately 3.0 percent of the 22.6 percent decline in sales was
related to a one-time customer payment (based on newly negotiated
terms) received during the fourth quarter of fiscal 2023 that did
not recur during the fourth quarter of fiscal 2024.
- Demand remained solid for CUF’s hospitality/contract business
during the fourth quarter, with sales for this business accounting
for approximately 38.0 percent of CUF's total sales.
- Operating income was $975,000 for the fourth quarter, compared
with operating income of $1.6 million in the fourth quarter of
fiscal 2023. Operating margin for the fourth quarter of fiscal 2024
was 4.1 percent, compared with 5.2 percent for the fourth quarter
of fiscal 2023. Operating performance for the fourth quarter was
primarily pressured by lower sales and non-recurrence of the
one-time customer payment noted earlier. Excluding the one-time
non-recurring payment from the fourth quarter of fiscal 2023,
operating margin for the fourth quarter of fiscal 2024 would have
improved compared to the prior-year period.
- For fiscal 2024, sales were $109.0 million, down 12.1 percent
compared with sales of $123.9 million for fiscal 2023. This
decrease primarily reflects ongoing softness in the residential
home furnishings industry, where demand was pressured by a
challenging macro-economic environment. Sales during the prior year
were also positively affected by receipt of the one-time customer
payment noted earlier.
- For the full year, operating income was $5.8 million for fiscal
2024, a significant improvement compared with operating income of
2.0 million for fiscal 2023. Operating margin for fiscal 2024 was
5.3 percent, again a significant improvement compared to the prior
year.
- Operating performance for fiscal 2024, as compared to the prior
year (which was negatively affected by higher-than-normal inventory
markdowns and restructuring and related charges), was positively
affected by a more profitable mix of sales; better inventory
management; a more favorable foreign exchange rate in China; and
lower fixed costs. These factors were partially offset by lower
sales during the year.
Balance Sheet, Cash Flow, and Liquidity
- As of April 28, 2024, the company reported $10.0 million in
total cash and no outstanding debt.
- Cash flow from operations and free cash flow were negative
$(8.2) million and negative $(10.8) million, respectively, for
fiscal 2024. (See reconciliation table at the back of this press
release.) As expected, the company’s cash flow from operations and
free cash flow during the fiscal year were affected by operating
losses and planned strategic investments in capital expenditures
mostly related to the CHF transformation plan.
- Capital expenditures for fiscal 2024 were $3.7 million. The
company continues to manage capital investments, focusing on
projects that will increase efficiencies and improve quality,
especially for the CHF segment.
- As of April 28, 2024, the company had approximately $32.5
million in liquidity, consisting of $10.0 million in total cash and
$22.5 million in borrowing availability under the company's
domestic and foreign credit facilities.
- The company intends to utilize some borrowings under its
domestic and/or foreign credit facilities during fiscal 2025 in
connection with its restructuring activities and to fund working
capital to grow the business. Importantly, the company still
expects to maintain a positive net cash position and to fund most
of the cash costs associated with the restructuring from the
eventual sale of excess equipment.
- Assuming the completion of all restructuring actions and the
sale of associated real estate by the end of fiscal 2025, the
company currently projects its cash as of the end of fiscal 2025 to
be higher than its $10.0 million in cash as of the end of fiscal
2024.
Financial Outlook
- Due to the uncertainty in the macro-environment, as well as the
significant activity underway in connection with the company's
restructuring initiatives, the company is only providing limited
financial guidance at this time. While macro demand is expected to
remain challenged in the first quarter of fiscal 2025, pressuring
year-over-year sales results, the company does expect its
consolidated net sales for the first quarter to be moderately
higher as compared sequentially to the fourth quarter of fiscal
2024. The company will update progress on its restructuring
initiatives every quarter, and post restructuring, the company
expects to return to positive operating income (on a monthly basis)
sometime in the second half of fiscal 2025.
- The company’s expectations are based on information available
at the time of this press release and reflect certain assumptions
by management regarding the company’s business and trends and the
projected impact of the ongoing headwinds.
Conference Call
Culp, Inc. will hold a conference call to discuss financial
results for the fourth quarter and fiscal 2024 year on Friday, June
28, 2024, at 11:00 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 June 28, 2024.
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, Canada, 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. Further, forward looking
statements are intended to speak only as of the date on which they
are made, and we disclaim any duty to update such statements to
reflect any changes in management’s expectations or any change in
the assumptions or circumstances on which such statements are
based, whether due to new information, future events, or otherwise.
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,” “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, restructurings,
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, borrowing capacity,
investments, potential acquisitions, restructuring and
restructuring-related charges, expenses, and/or credits, 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, 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 currencies in Canada and China
can have a negative impact on our sales of products produced in
those places. 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 fabrics operation 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. 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 and financial results.
CULP, INC.
CONSOLIDATED STATEMENTS OF NET
LOSS
FOR THE THREE MONTHS ENDED
APRIL 28, 2024, AND APRIL 30, 2023
Unaudited
(Amounts in Thousands, Except
for Per Share Data)
THREE MONTHS ENDED
Amount
Percent of Sales
(1)
(1)
April 28,
April 30,
% Over
April 28,
April 30,
2024
2023
(Under)
2024
2023
Net sales
$
49,528
$
61,426
(19.4
)%
100.0
%
100.0
%
Cost of sales
(44,327
)
(54,538
)
(18.7
)%
89.5
%
88.8
%
Gross profit
5,201
6,888
(24.5
)%
10.5
%
11.2
%
Selling, general and administrative
expenses
(9,245
)
(10,845
)
(14.8
)%
18.7
%
17.7
%
Restructuring expense (2) (3)
(204
)
(70
)
191.4
%
0.4
%
0.1
%
Loss from operations
(4,248
)
(4,027
)
5.5
%
(8.6
)%
(6.6
)%
Interest expense
(11
)
—
100.0
%
(0.0
)%
—
Interest income
263
239
10.0
%
0.5
%
0.4
%
Other expense
(64
)
(95
)
(32.6
)%
(0.1
)%
(0.2
)%
Loss before income taxes
(4,060
)
(3,883
)
4.6
%
(8.2
)%
(6.3
)%
Income tax expense (4)
(805
)
(798
)
0.9
%
(19.8
)%
(20.6
)%
Net loss
$
(4,865
)
$
(4,681
)
3.9
%
(9.8
)%
(7.6
)%
Net loss per share - basic
$
(0.39
)
$
(0.38
)
2.6
%
Net loss per share - diluted
$
(0.39
)
$
(0.38
)
2.6
%
Average shares outstanding-basic
12,470
12,316
1.3
%
Average shares outstanding-diluted
12,470
12,316
1.3
%
Notes
(1) See page 14 for a Reconciliation of
Selected Income Statement Information to Adjusted Results for the
three months ending April 28, 2024, and April 30, 2023.
(2) Restructuring expense of $204,000 for
the three months ending April 28, 2024, represents employee
termination benefits related to the rationalization of the
upholstery fabrics finishing operation located in Shanghai,
China.
(3) Restructuring expense of $70,000 for
the three months ending April 30, 2023, represents employee
termination benefits of $39,000 and other associated costs $31,000
related to the consolidation of certain leased facilities located
in Ouanaminthe, Haiti.
(4) 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 TWELVE MONTHS ENDED
APRIL 28, 2024, AND APRIL 30, 2023
Unaudited
(Amounts in Thousands, Except
for Per Share Data)
TWELVE MONTHS ENDED
Amount
Percent of Sales
(1)
(1)
April 28,
April 30,
% Over
April 28,
April 30,
2024
2023
(Under)
2024
2023
Net sales
$
225,333
$
234,934
(4.1
)%
100.0
%
100.0
%
Cost of sales (2) (3)
(197,394
)
(224,038
)
(11.9
)%
87.6
%
95.4
%
Gross profit
27,939
10,896
156.4
%
12.4
%
4.6
%
Selling, general and administrative
expenses
(38,611
)
(37,978
)
1.7
%
17.1
%
16.2
%
Restructuring expense (4) (5)
(636
)
(1,396
)
(54.4
)%
0.3
%
0.6
%
Loss from operations
(11,308
)
(28,478
)
(60.3
)%
(5.0
)%
(12.1
)%
Interest expense
(11
)
—
100.0
%
—
%
—
Interest income
1,174
531
121.1
%
0.5
%
0.2
%
Other expense
(625
)
(443
)
41.1
%
0.3
%
0.2
%
Loss before income taxes
(10,770
)
(28,390
)
(62.1
)%
(4.8
)%
(12.1
)%
Income tax expense (6)
(3,049
)
(3,130
)
(2.6
)%
(28.3
)%
(11.0
)%
Net loss
$
(13,819
)
$
(31,520
)
(56.2
)%
(6.1
)%
(13.4
)%
Net loss per share - basic
$
(1.11
)
$
(2.57
)
(56.8
)%
Net loss per share - diluted
$
(1.11
)
$
(2.57
)
(56.8
)%
Average shares outstanding-basic
12,432
12,283
1.2
%
Average shares outstanding-diluted
12,432
12,283
1.2
%
Notes
(1) See page 15 for the Reconciliation of
Selected Income Statement Information to Adjusted Results for the
twelve months ending April 28, 2024, and April 30, 2023.
(2) Cost of sales for the twelve months
ending April 28, 2024, includes a restructuring related charge
totaling $40,000 representing markdowns of inventory related to the
discontinuation of production of cut and sewn upholstery kits at
the company's facility in Ouanaminthe, Haiti.
(3) Cost of sales for the twelve months
ending April 30, 2023, includes a restructuring related charge
totaling $98,000, which pertained to a loss on disposal and
markdowns of inventory related to the exit of the company's cut and
sew upholstery fabrics operation located in Shanghai, China.
(4) Restructuring expense of $636,000 for
the twelve months ending April 28, 2024, represents impairment
charges related to equipment of $329,000 and employee termination
benefits of $103,000 related to the discontinuation of production
of cut and sewn upholstery kits at the company's facility in
Ouanaminthe, Haiti. In addition, during the fourth quarter of
fiscal 2024, restructuring expense of $204,000 was incurred for
employee termination benefits related to the rationalization of the
upholstery fabrics finishing operation located in Shanghai,
China.
(5) Restructuring expense of $1.4 million
for the twelve months ending April 30, 2023, relates to
restructuring activities for both the company's cut and sew
upholstery fabrics operations located in Shanghai, China, which
occurred during the second quarter of fiscal 2023, and located in
Ouananminthe, Haiti, which occurred during the third and fourth
quarters of fiscal 2023. Restructuring expense represents employee
termination benefits of $507,000, lease termination costs of
$481,000, impairment losses totaling $357,000 that relate to
leasehold improvements and equipment, and $51,000 for other
associated costs.
(6) Percent of sales column for income tax
expense is calculated as a percent of loss before income taxes.
CONSOLIDATED BALANCE
SHEETS
APRIL 28, 2024, AND APRIL 30,
2023
Unaudited
(Amounts in Thousands)
Amounts
(Condensed)
(Condensed)
April 28,
*April 30,
Increase (Decrease)
2024
2023
Dollars
Percent
Current assets
Cash and cash equivalents
$
10,012
20,964
(10,952
)
(52.2
)%
Short-term investments - rabbi trust
903
1,404
(501
)
(35.7
)%
Accounts receivable, net
21,138
24,778
(3,640
)
(14.7
)%
Inventories
44,843
45,080
(237
)
(0.5
)%
Short-term note receivable
264
219
45
20.5
%
Current income taxes receivable
350
—
350
100.0
%
Other current assets
3,371
3,071
300
9.8
%
Total current assets
80,881
95,516
(14,635
)
(15.3
)%
Property, plant & equipment, net
33,182
36,111
(2,929
)
(8.1
)%
Right of use assets
6,203
8,191
(1,988
)
(24.3
)%
Intangible assets
1,876
2,252
(376
)
(16.7
)%
Long-term investments - rabbi trust
7,102
7,067
35
0.5
%
Long-term note receivable
1,462
1,726
(264
)
(15.3
)%
Deferred income taxes
518
480
38
7.9
%
Other assets
830
840
(10
)
(1.2
)%
Total assets
$
132,054
152,183
(20,129
)
(13.2
)%
Current liabilities
Accounts payable - trade
25,607
29,442
(3,835
)
(13.0
)%
Accounts payable - capital
expenditures
343
56
287
512.5
%
Operating lease liability - current
2,061
2,640
(579
)
(21.9
)%
Deferred compensation - current
903
1,404
(501
)
(35.7
)%
Deferred revenue
1,495
1,192
303
25.4
%
Accrued expenses
6,726
8,533
(1,807
)
(21.2
)%
Income taxes payable - current
972
753
219
29.1
%
Total current liabilities
38,107
44,020
(5,913
)
(13.4
)%
Operating lease liability - long-term
2,422
3,612
(1,190
)
(32.9
)%
Income taxes payable - long-term
2,088
2,675
(587
)
(21.9
)%
Deferred income taxes
6,379
5,954
425
7.1
%
Deferred compensation - long-term
6,929
6,842
87
1.3
%
Total liabilities
55,925
63,103
(7,178
)
(11.4
)%
Shareholders' equity
76,129
89,080
(12,951
)
(14.5
)%
Total liabilities and shareholders'
equity
$
132,054
152,183
(20,129
)
(13.2
)%
Shares outstanding
12,470
12,327
143
1.2
%
* Derived from audited financial
statements.
CULP, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
FOR THE TWELVE MONTHS ENDED
APRIL 28, 2024, AND APRIL 30, 2023
Unaudited
(Amounts in Thousands)
TWELVE MONTHS ENDED
Amounts
April 28,
April 30,
2024
2023
Cash flows from operating activities:
Net loss
$
(13,819
)
$
(31,520
)
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Depreciation
6,521
6,845
Non-cash inventory (credit) charge (1)
(2)
(1,628
)
5,819
Amortization
390
438
Stock-based compensation
915
1,145
Deferred income taxes
387
(2
)
Gain on sale of equipment
(299
)
(314
)
Non-cash restructuring expense
330
791
Foreign currency exchange gain
(593
)
(537
)
Changes in assets and liabilities:
Accounts receivable
3,559
(2,642
)
Inventories
1,593
15,370
Other current assets
(329
)
(297
)
Other assets
(115
)
86
Accounts payable
(2,926
)
10,274
Deferred revenue
303
672
Accrued expenses and deferred
compensation
(1,870
)
853
Income taxes
(643
)
823
Net cash (used in) provided by operating
activities
(8,224
)
7,804
Cash flows from investing activities:
Capital expenditures
(3,711
)
(2,108
)
Proceeds from the sale of equipment
385
468
Proceeds from note receivable
330
15
Proceeds from the sale of investments
(rabbi trust)
1,449
2,058
Purchase of investments (rabbi trust)
(884
)
(1,185
)
Net cash used in investing activities
(2,431
)
(752
)
Cash flows from financing activities:
Proceeds from line of credit - China
4,166
—
Payments associated with line of credit -
China
(4,146
)
—
Common stock surrendered for withholding
taxes payable
(146
)
(33
)
Payments of debt issuance costs
—
(403
)
Net cash used in financing activities
(126
)
(436
)
Effect of exchange rate changes on cash
and cash equivalents
(171
)
(202
)
(Decrease) increase in cash and cash
equivalents
(10,952
)
6,414
Cash and cash equivalents at beginning of
year
20,964
14,550
Cash and cash equivalents at end of
year
$
10,012
$
20,964
Free Cash Flow (3)
$
(10,826
)
$
6,850
(1) The non-cash inventory credit of $1.6
million for the twelve months ending April 28, 2024, mostly
represents adjustments for inventory markdowns based on the
company's policy for aged inventory. The $1.6 million is based on
inventory on hand as of April 28, 2024, and relates to both the
mattress fabrics and upholstery fabrics segments. In addition, the
$1.6 million includes a $40,000 charge associated with the
upholstery fabrics segment related to markdowns of inventory
associated with the discontinuation of production of cut and sewn
upholstery kits at the company's facility in Ouanaminthe,
Haiti.
(2) The non-cash inventory charge of $5.8
million for the twelve months ending April 28, 2023, represents a
$2.9 million charge for the write down of inventory to its net
realizable value associated with the mattress fabrics segment, $2.8
million related to markdowns of inventory estimated based on the
company's policy for aged inventory for both the mattress and
upholstery fabrics segments, and $98,000 for the loss on disposal
and markdowns of inventory related to the exit of the company's cut
and sew upholstery fabrics operation located in Shanghai,
China.
(3) See next page for Reconciliation of
Free Cash Flow for the twelve-month periods ending April 28, 2024,
and April 29, 2023.
CULP, INC.
RECONCILIATION OF FREE CASH
FLOW
FOR THE TWELVE MONTHS ENDED
APRIL 28, 2024, AND APRIL 30, 2023
Unaudited
(Amounts in Thousands)
TWELVE MONTHS ENDED
Amounts
April 28,
April 30,
2024
2023
A) Net cash (used in) provided by
operating activities
$
(8,224)
$
7,804
B) Minus: Capital expenditures
(3,711)
(2,108)
C) Plus: Proceeds from the sale of
equipment
385
468
D) Plus: Proceeds from note receivable
330
15
E) Plus: Proceeds from the sale of
investments (rabbi trust)
1,449
2,058
F) Minus: Purchase of investments (rabbi
trust)
(884)
(1,185)
G) Effects of exchange rate changes on
cash and cash equivalents
(171)
(202)
Free Cash Flow
$
(10,826)
$
6,850
CULP, INC.
STATEMENTS OF OPERATIONS BY
SEGMENT
FOR THE THREE MONTHS ENDED
APRIL 28, 2024, AND APRIL 30, 2023
Unaudited
(Amounts in Thousands)
THREE MONTHS ENDED
Amounts
Percent of Total Sales
April 28,
April 30,
% Over
April 28,
April 30,
Net Sales by Segment
2024
2023
(Under)
2024
2023
Mattress Fabrics
$
25,750
$
30,696
(16.1
)%
52.0
%
50.0
%
Upholstery Fabrics
23,778
30,730
(22.6
)%
48.0
%
50.0
%
Net Sales
$
49,528
$
61,426
(19.4
)%
100.0
%
100.0
%
Gross Profit
Gross Margin
Mattress Fabrics
$
292
$
591
(50.6
)%
1.1
%
1.9
%
Upholstery Fabrics
4,909
6,297
(22.0
)%
20.6
%
20.5
%
Total Gross Profit
5,201
6,888
(24.5
)%
10.5
%
11.2
%
Selling, General and Administrative
Expenses by Segment
Percent of Sales
Mattress Fabrics
$
3,221
$
3,121
3.2
%
12.5
%
10.2
%
Upholstery Fabrics
3,934
4,686
(16.0
)%
16.5
%
15.2
%
Unallocated Corporate Expenses
2,090
3,038
(31.2
)%
4.2
%
4.9
%
Selling, General and Administrative
Expenses
$
9,245
$
10,845
(14.8
)%
18.7
%
17.7
%
(Loss) Income from Operations by
Segment
Operating Margin
Mattress Fabrics
$
(2,929
)
$
(2,530
)
15.8
%
(11.4
)%
(8.2
)%
Upholstery Fabrics
975
1,611
(39.5
)%
4.1
%
5.2
%
Unallocated Corporate Expenses
(2,090
)
(3,038
)
(31.2
)%
(4.2
)%
(4.9
)%
Total Segment Loss from Operations
(4,044
)
(3,957
)
2.2
%
(8.2
)%
(6.4
)%
Restructuring Expense (1)
(204
)
(70
)
191.4
%
(0.4
)%
(0.1
)%
Loss from Operations
$
(4,248
)
$
(4,027
)
5.5
%
(8.6
)%
(6.6
)%
Depreciation Expense by Segment
Mattress Fabrics
$
1,461
$
1,426
2.5
%
Upholstery Fabrics
162
193
(16.1
)%
Depreciation Expense
$
1,623
$
1,619
0.2
%
Notes
(1) See page 14 for a Reconciliation of
Selected Income Statement Information to Adjusted Results for the
three months ending April 28, 2024, and April 30, 2023.
CULP, INC.
STATEMENTS OF OPERATIONS BY
SEGMENT
FOR THE TWELVE MONTHS ENDED
APRIL 28, 2024, AND APRIL 30, 2023
Unaudited
(Amounts in Thousands)
TWELVE MONTHS ENDED
Amounts
Percent of Total Sales
April 28,
April 30,
% Over
April 28,
April 30,
Net Sales by Segment
2024
2023
(Under)
2024
2023
Mattress Fabrics
$
116,370
$
110,995
4.8
%
51.6
%
47.2
%
Upholstery Fabrics
108,963
123,939
(12.1
)%
48.4
%
52.8
%
Net Sales
$
225,333
$
234,934
(4.1
)%
100.0
%
100.0
%
Gross Profit (Loss):
Gross Margin
Mattress Fabrics
$
6,289
$
(6,739
)
(193.3
)%
5.4
%
(6.1
)%
Upholstery Fabrics
21,690
17,733
22.3
%
19.9
%
14.3
%
Total Segment Gross Profit
27,979
10,994
154.5
%
12.4
%
4.7
%
Restructuring Related Charge (1)
(40
)
(98
)
(59.2
)%
(0.0
)%
(0.0
)%
Gross Profit
$
27,939
$
10,896
156.4
%
12.4
%
4.6
%
Selling, General and Administrative
Expenses by Segment
Percent of Sales
Mattress Fabrics
$
13,134
$
11,942
10.0
%
11.3
%
10.8
%
Upholstery Fabrics
15,903
15,739
1.0
%
14.6
%
12.7
%
Unallocated Corporate Expenses
9,574
10,297
(7.0
)%
4.2
%
4.4
%
Selling, General and Administrative
Expenses
$
38,611
$
37,978
1.7
%
17.1
%
16.2
%
(Loss) Income from Operations by
Segment
Operating Margin
Mattress Fabrics
$
(6,845
)
$
(18,681
)
(63.4
)%
(5.9
)%
(16.8
)%
Upholstery Fabrics
5,787
1,994
190.2
%
5.3
%
1.6
%
Unallocated Corporate Expenses
(9,574
)
(10,297
)
(7.0
)%
(4.2
)%
(4.4
)%
Total Segment Loss from Operations
(10,632
)
(26,984
)
(60.6
)%
(4.7
)%
(11.5
)%
Restructuring Related Charge (1)
(40
)
(98
)
(59.2
)%
(0.0
)%
(0.0
)%
Restructuring Expense (1)
(636
)
(1,396
)
(54.4
)%
(0.3
)%
(0.6
)%
Loss from Operations
$
(11,308
)
$
(28,478
)
(60.3
)%
(5.0
)%
(12.1
)%
Return on Capital Employed (2)
Mattress Fabrics
(10.8
)%
(25.8
)%
(58.1
)%
Upholstery Fabrics
62.5
%
11.2
%
458.0
%
Unallocated Corporate
N.M.
N.M.
N.M.
Consolidated
(13.9
)%
(28.7
)%
(51.6
)%
Capital Employed (2) (3)
Mattress Fabrics
$
62,257
$
64,107
(2.9
)%
Upholstery Fabrics
7,259
9,489
(23.5
)%
Unallocated Corporate
4,999
3,197
56.4
%
Consolidated
$
74,515
$
76,793
(3.0
)%
Depreciation Expense by Segment
Mattress Fabrics
$
5,883
$
6,050
(2.8
)%
Upholstery Fabrics
638
795
(19.7
)%
Depreciation Expense
$
6,521
$
6,845
(4.7
)%
Notes
(1) See page 15 for a Reconciliation of
Selected Income Statement Information to Adjusted Results for the
twelve months ending April 28, 2024, and April 30, 2023.
(2) See pages 17 through 20 for
calculation of Return on Capital Employed by Segment for the twelve
months ending April 28, 2024, and April 30, 2023, and a
reconciliation to information from our U.S. GAAP financial
statements.
(3) The capital employed balances are as
of April 28, 2024, and April 30, 2023.
CULP, INC.
RECONCILIATION OF SELECTED
INCOME STATEMENT INFORMATION TO ADJUSTED RESULTS
FOR THREE MONTHS ENDED APRIL
28, 2024, AND APRIL 30, 2023
Unaudited
(Amounts in Thousands)
As Reported
Adjusted Results
April 28,
April 28,
2024
Adjustments
2024
Net sales
$
49,528
—
$
49,528
Cost of sales
(44,327
)
—
(44,327
)
Gross profit
5,201
—
5,201
Selling, general and administrative
expenses
(9,245
)
—
(9,245
)
Restructuring expense (1)
(204
)
204
—
Loss from operations
$
(4,248
)
204
$
(4,044
)
Notes
(1) Restructuring expense of $204,000 for
the three months ending April 28, 2024, represents employee
termination benefits related to the rationalization of the
upholstery fabrics finishing operation located in Shanghai,
China.
As Reported
Adjusted Results
April 30,
April 30,
2023
Adjustments
2023
Net sales
$
61,426
—
$
61,426
Cost of sales
(54,538
)
—
(54,538
)
Gross profit
6,888
—
6,888
Selling, general and administrative
expenses
(10,845
)
—
(10,845
)
Restructuring expense (1)
(70
)
70
—
Loss from operations
$
(4,027
)
70
$
(3,957
)
Notes
(1) Restructuring expense of $70,000 for
the three-months ending April 30, 2023, represents employee
termination benefits of $39,000 and other associated costs of
$31,000 that related to the consolidation of certain leased
facilities located in Ouanaminthe, Haiti.
CULP, INC.
RECONCILIATION OF SELECTED
INCOME STATEMENT INFORMATION TO ADJUSTED RESULTS
FOR TWELVE MONTHS ENDED APRIL
28, 2024, AND APRIL 30, 2023
Unaudited
(Amounts in Thousands)
As Reported
Adjusted Results
April 28,
April 28,
2024
Adjustments
2024
Net sales
$
225,333
—
$
225,333
Cost of sales (1)
(197,394
)
40
(197,354
)
Gross profit
27,939
40
27,979
Selling, general and administrative
expenses
(38,611
)
—
(38,611
)
Restructuring expense (2)
(636
)
636
—
Loss from operations
$
(11,308
)
676
$
(10,632
)
Notes
(1) Cost of sales for the twelve months
ending April 28, 2024, includes a restructuring related charge
totaling $40,000 representing markdowns of inventory related to the
discontinuation of production of cut and sewn upholstery kits at
the company's facility in Ouanaminthe, Haiti.
(2) Restructuring expense of $636,000 for
the twelve months ending April 28, 2024, represents impairment
charges related to equipment of $329,000 and employee termination
benefits of $103,000 related to the discontinuation of production
of cut and sewn upholstery kits at the company's facility in
Ouanaminthe, Haiti. In addition, during the fourth quarter of
fiscal 2024, restructuring expense of $204,000 was incurred for
employee termination benefits related to the rationalization of the
upholstery fabrics finishing operation located in Shanghai,
China.
As Reported
Adjusted Results
April 30,
April 30,
2023
Adjustments
2023
Net sales
$
234,934
—
$
234,934
Cost of sales (1)
(224,038
)
98
(223,940
)
Gross profit
10,896
98
10,994
Selling, general and administrative
expenses
(37,978
)
—
(37,978
)
Restructuring expense (2)
(1,396
)
1,396
—
Loss from operations
$
(28,478
)
1,494
$
(26,984
)
Notes
(1) Cost of sales for the twelve months
ending April 28, 2024, includes a restructuring related charge
totaling $98,000, which pertained to a loss on disposal and
markdowns of inventory related to the exit of the company's cut and
sew upholstery fabrics operation located in Shanghai, China.
(2) Restructuring expense of $1.4 million
for the twelve months ending April 30, 2023, relates to
restructuring activities for both the company's cut and sew
upholstery fabrics operations located in Shanghai, China, which
occurred during the second quarter of fiscal 2023, and located in
Ouananminthe, Haiti, which occurred during the third and fourth
quarters of fiscal 2023. Restructuring expense represents employee
termination benefits of $507,000, lease termination costs of
$481,000, impairment losses totaling $357,000 that relate to
leasehold improvements and equipment, and $51,000 for other
associated costs.
CULP, INC.
CONSOLIDATED STATEMENTS OF
ADJUSTED EBITDA
FOR THE TWELVE MONTHS ENDED
APRIL 28, 2024, AND APRIL 30, 2023
Unaudited
(Amounts in Thousands)
Quarter Ended
Quarter Ended
Quarter Ended
Quarter Ended
Trailing 12 Months
July 30,
October 29,
January 28,
April 28,
April 28,
2023
2023
2024
2024
2024
Net loss
$
(3,342
)
$
(2,424
)
$
(3,188
)
$
(4,865
)
$
(13,819
)
Income tax expense
701
516
1,027
805
3,049
Interest income, net
(345
)
(282
)
(284
)
(252
)
(1,163
)
Depreciation expense
1,635
1,617
1,646
1,623
6,521
Restructuring expense (credit)
338
144
(50
)
204
636
Restructuring related charge
(credit)
179
(78
)
(61
)
—
40
Amortization expense
96
97
98
99
390
Stock based compensation
322
163
262
168
915
Adjusted EBITDA
$
(416
)
$
(247
)
$
(550
)
$
(2,218
)
$
(3,431
)
% Net Sales
(0.7
)%
(0.4
)%
(0.9
)%
(4.5
)%
(1.5
)%
Quarter Ended
Quarter Ended
Quarter Ended
Quarter Ended
Trailing 12 Months
July 31,
October 30,
January 29,
April 30,
April 30,
2022
2022
2023
2023
2023
Net loss (1)
$
(5,698
)
$
(12,173
)
$
(8,968
)
$
(4,681
)
$
(31,520
)
Income tax expense
896
1,150
286
798
3,130
Interest income, net
(17
)
(79
)
(196
)
(239
)
(531
)
Depreciation expense
1,768
1,719
1,739
1,619
6,845
Restructuring expense
—
615
711
70
1,396
Restructuring related charge
—
98
—
—
98
Amortization expense
105
109
109
115
438
Stock based compensation
252
313
322
258
1,145
Adjusted EBITDA (1)
$
(2,694
)
$
(8,248
)
$
(5,997
)
$
(2,060
)
$
(18,999
)
% Net Sales
(4.3
)%
(14.1
)%
(11.4
)%
(3.4
)%
(8.1
)%
% Over (Under)
(84.6
)%
(97.0
)%
(90.8
)%
7.7
%
(81.9
)%
(1) Net loss and adjusted EBITDA for the
quarter ended October 30, 2022, and the twelve-month period ending
April 30, 2023, includes a non-cash charge totaling $5.2 million,
which represents a $2.9 million charge for the write down of
inventory to its net realizable value associated with the mattress
fabrics segment and $2.3 million related to markdowns of inventory
estimated based on the company's policy for aged inventory for both
the mattress and upholstery fabrics segments.
CULP, INC.
RETURN ON CAPITAL EMPLOYED BY
SEGMENT
FOR THE TWELVE MONTHS ENDED
APRIL 28, 2024
Unaudited
(Amounts in Thousands)
Adjusted Operating (Loss)
Income
Twelve Months Ended
Average Capital
Return on Avg. Capital
April 28, 2024
Employed (2)
Employed (1)
Mattress Fabrics
$
(6,845
)
$
63,189
(10.8
)%
Upholstery Fabrics
5,787
9,263
62.5
%
Unallocated Corporate
(9,574
)
3,784
N.M.
Total
$
(10,632
)
$
76,235
(13.9
)%
Average Capital Employed
As of the three Months April
28, 2024
As of the three Months January
28, 2024
As of the three Months October
29, 2023
Mattress
Upholstery
Unallocated
Mattress
Upholstery
Unallocated
Mattress
Upholstery
Unallocated
Fabrics
Fabrics
Corporate
Total
Fabrics
Fabrics
Corporate
Total
Fabrics
Fabrics
Corporate
Total
Total assets (3)
$
72,060
32,629
27,365
132,054
$
75,572
38,085
28,341
141,998
$
75,924
35,082
31,154
142,160
Total liabilities
(9,803
)
(25,370
)
(20,752
)
(55,925
)
(8,234
)
(32,201
)
(20,767
)
(61,202
)
(14,739
)
(23,758
)
(20,035
)
(58,532
)
Subtotal
$
62,257
$
7,259
6,613
$
76,129
$
67,338
$
5,884
$
7,574
$
80,796
$
61,185
$
11,324
$
11,119
$
83,628
Cash and cash equivalents
—
—
(10,012
)
(10,012
)
—
—
(12,585
)
(12,585
)
—
—
(15,214
)
(15,214
)
Short-term investments - Rabbi
Trust
—
—
(903
)
(903
)
—
—
(937
)
(937
)
—
—
(937
)
(937
)
Current income taxes receivable
—
—
(350
)
(350
)
—
—
(476
)
(476
)
—
—
(340
)
(340
)
Long-term investments - Rabbi
Trust
—
—
(7,102
)
(7,102
)
—
—
(7,083
)
(7,083
)
—
—
(6,995
)
(6,995
)
Deferred income taxes -
non-current
—
—
(518
)
(518
)
—
—
(531
)
(531
)
—
—
(472
)
(472
)
Deferred compensation - current
—
—
903
903
—
—
937
937
—
—
937
937
Income taxes payable - current
—
—
972
972
—
—
1,070
1,070
—
—
998
998
Income taxes payable -
long-term
—
—
2,088
2,088
—
—
2,072
2,072
—
—
2,055
2,055
Deferred income taxes -
non-current
—
—
6,379
6,379
—
—
6,177
6,177
—
—
5,663
5,663
Deferred compensation
non-current
—
—
6,929
6,929
—
—
6,856
6,856
—
—
6,748
6,748
Total Capital Employed
$
62,257
$
7,259
$
4,999
$
74,515
$
67,338
$
5,884
$
3,074
$
76,296
$
61,185
$
11,324
$
3,562
$
76,071
CULP, INC.
RETURN ON CAPITAL EMPLOYED BY
SEGMENT - CONTINUED
FOR THE TWELVE MONTHS ENDED
APRIL 28, 2024
Unaudited
(Amounts in Thousands)
As of the three Months Ended
July 30, 2023
As of the three Months Ended
April 30, 2023
Mattress
Upholstery
Unallocated
Mattress
Upholstery
Unallocated
Fabrics
Fabrics
Corporate
Total
Fabrics
Fabrics
Corporate
Total
Total assets (3)
$
72,286
37,592
33,024
142,902
$
75,494
39,127
37,562
152,183
Total liabilities
(11,230
)
(25,235
)
(20,320
)
(56,785
)
(11,387
)
(29,638
)
(22,078
)
(63,103
)
Subtotal
$
61,056
$
12,357
$
12,704
$
86,117
$
64,107
$
9,489
$
15,484
$
89,080
Cash and cash equivalents
—
—
(16,812
)
(16,812
)
—
—
(20,964
)
(20,964
)
Short-term investments - Rabbi
Trust
—
—
(791
)
(791
)
—
—
(1,404
)
(1,404
)
Current income taxes receivable
—
—
(202
)
(202
)
—
—
-
-
Long-term investments - Rabbi
Trust
—
—
(7,204
)
(7,204
)
—
—
(7,067
)
(7,067
)
Deferred income taxes -
non-current
—
—
(476
)
(476
)
—
—
(480
)
(480
)
Deferred compensation - current
—
—
791
791
—
—
1,404
1,404
Accrued restructuring
—
—
10
10
—
—
—
—
Income taxes payable - current
—
—
526
526
—
—
753
753
Income taxes payable -
long-term
—
—
2,710
2,710
—
—
2,675
2,675
Deferred income taxes -
non-current
—
—
5,864
5,864
—
—
5,954
5,954
Deferred compensation
non-current
—
—
6,966
6,966
—
—
6,842
6,842
Total Capital Employed
$
61,056
$
12,357
$
4,086
$
77,499
$
64,107
$
9,489
$
3,197
$
76,793
Mattress
Upholstery
Unallocated
Fabrics
Fabrics
Corporate
Total
Average Capital Employed (3)
$
63,189
$
9,263
$
3,784
$
76,235
Notes
(1) Return on average capital employed
represents the twelve months operating (loss) income as of April
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.
(2) Average capital employed was computed
using the five quarterly periods ending April 28, 2024, January 28,
2024, October 29, 2023, July 30, 2023, and April 30, 2023.
(3) 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
APRIL 30, 2023
Unaudited
(Amounts in Thousands)
Adjusted Operating (Loss)
Income
Twelve Months Ended
Average Capital
Return on Avg. Capital
April 30, 2023
Employed (2)
Employed (1)
Mattress Fabrics
$
(18,681
)
$
72,282
(25.8
)%
Upholstery Fabrics
1,994
17,853
11.2
%
Unallocated Corporate
(10,297
)
3,808
N.M.
Total
$
(26,984
)
$
93,943
(28.7
)%
Average Capital Employed
As of the three Months Ended
April 30, 2023
As of the three Months Ended
January 29, 2023
As of the three Months Ended
October 30, 2022
Mattress
Upholstery
Unallocated
Mattress
Upholstery
Unallocated
Mattress
Upholstery
Unallocated
Fabrics
Fabrics
Corporate
Total
Fabrics
Fabrics
Corporate
Total
Fabrics
Fabrics
Corporate
Total
Total assets (3)
$
75,494
39,127
37,562
152,183
$
75,393
39,817
35,388
150,598
$
78,366
44,934
38,330
161,630
Total liabilities
(11,387
)
(29,638
)
(22,078
)
(63,103
)
(9,511
)
(24,367
)
(23,216
)
(57,094
)
(9,895
)
(26,108
)
(23,519
)
(59,522
)
Subtotal
$
64,107
$
9,489
$
15,484
$
89,080
$
65,882
$
15,450
$
12,172
$
93,504
$
68,471
$
18,826
$
14,811
$
102,108
Cash and cash equivalents
—
—
(20,964
)
(20,964
)
—
—
(16,725
)
(16,725
)
—
—
(19,137
)
(19,137
)
Short-term investments - Rabbi
Trust
—
—
(1,404
)
(1,404
)
—
—
(2,420
)
(2,420
)
—
—
(2,237
)
(2,237
)
Current income taxes receivable
—
—
—
—
—
—
(238
)
(238
)
—
—
(510
)
(510
)
Long-term investments - Rabbi
Trust
—
—
(7,067
)
(7,067
)
—
—
(7,725
)
(7,725
)
—
—
(7,526
)
(7,526
)
Deferred income taxes -
non-current
—
—
(480
)
(480
)
—
—
(463
)
(463
)
—
—
(493
)
(493
)
Deferred compensation - current
—
—
1,404
1,404
—
—
2,420
2,420
—
—
2,237
2,237
Accrued restructuring
—
—
—
—
—
—
—
—
—
—
33
33
Income taxes payable - current
—
—
753
753
—
—
467
467
—
—
969
969
Income taxes payable -
long-term
—
—
2,675
2,675
—
—
2,648
2,648
—
—
2,629
2,629
Deferred income taxes -
non-current
—
—
5,954
5,954
—
—
6,089
6,089
—
—
5,700
5,700
Deferred compensation -
long-term
—
—
6,842
6,842
—
—
7,590
7,590
—
—
7,486
7,486
Total Capital Employed
$
64,107
$
9,489
$
3,197
$
76,793
$
65,882
$
15,450
$
3,815
$
85,147
$
68,471
$
18,826
$
3,962
$
91,259
CULP INC.
RETURN ON CAPITAL EMPLOYED BY
SEGMENT - CONTINUED
FOR THE TWELVE MONTHS ENDED
APRIL 30, 2023
Unaudited
(Amounts in Thousands)
As of the three Months Ended
July 31, 2022
As of the three Months Ended
May 1, 2022
Mattress
Upholstery
Unallocated
Mattress
Upholstery
Unallocated
Fabrics
Fabrics
Corporate
Total
Fabrics
Fabrics
Corporate
Total
Total assets (3)
$
90,842
51,053
38,595
180,490
$
92,609
51,124
33,830
177,563
Total liabilities
(11,934
)
(30,762
)
(23,799
)
(66,495
)
(8,569
)
(25,915
)
(23,578
)
(58,062
)
Subtotal
$
78,908
$
20,291
$
14,796
$
113,995
$
84,040
$
25,209
$
10,252
$
119,501
Cash and cash equivalents
—
—
(18,874
)
(18,874
)
—
—
(14,550
)
(14,550
)
Current income taxes receivable
—
—
(798
)
(798
)
—
—
(857
)
(857
)
Long-term investments - Rabbi
Trust
—
—
(9,567
)
(9,567
)
—
—
(9,357
)
(9,357
)
Deferred income taxes -
non-current
—
—
(546
)
(546
)
—
—
(528
)
(528
)
Income taxes payable - current
—
—
587
587
—
—
413
413
Income taxes payable -
long-term
—
—
3,118
3,118
—
—
3,097
3,097
Deferred income taxes -
non-current
—
—
6,007
6,007
—
—
6,004
6,004
Deferred compensation -
long-term
—
—
9,528
9,528
—
—
9,343
9,343
Total Capital Employed
$
78,908
$
20,291
$
4,251
$
103,450
$
84,040
$
25,209
$
3,817
$
113,066
Mattress
Upholstery
Unallocated
Fabrics
Fabrics
Corporate
Total
Average Capital Employed (3)
$
72,282
$
17,853
$
3,808
$
93,943
Notes
(1) Return on average capital employed
represents the last twelve months operating (loss) income as of
April 30, 2023, divided by average capital employed. Average
capital employed does not include cash and cash equivalents,
short-term and long-term investments – Rabbi Trust, accrued
restructuring, income taxes receivable and payable, noncurrent
deferred income tax assets and liabilities, and current and
non-current deferred compensation.
(2) Average capital employed was computed
using the five quarterly periods ending April 30, 2023, January 29,
2023, October 30, 2022, July 31, 2022, and May 1, 2022.
(3) 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240627649838/en/
Investor Relations Contact Ken Bowling, Executive Vice
President, Chief Financial Officer, and Treasurer (336) 881-5630
krbowling@culp.com
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