EX-99 3 a5031355ex99b.txt EXHIBIT 99(B) Exhibit 99(b) Page 1 of 7 CULP, INC. FINANCIAL INFORMATION RELEASE CONSOLIDATED STATEMENTS OF NET LOSS FOR THE THREE MONTHS AND SIX MONTHS ENDED OCTOBER 30, 2005 AND OCTOBER 31, 2004 (UNAUDITED) (Amounts in Thousands, Except for Per Share Data)
THREE MONTHS ENDED ------------------------------------------------------------------------ Amounts Percent of Sales -------------------------- ---------------------------- October 30, October 31, % Over October 30, October 31, 2005 2004 (Under) 2005 2004 ------------ ------------ ------------ ------------- ------------- Net sales $ 67,006 75,406 (11.1)% 100.0 % 100.0 % Cost of sales 61,455 65,839 (6.7)% 91.7 % 87.3 % ------------ ------------ ------------ ------------- ------------- Gross profit 5,551 9,567 (42.0)% 8.3 % 12.7 % Selling, general and administrative expenses 6,526 8,838 (26.2)% 9.7 % 11.7 % Goodwill impairment 0 5,126 (100.0)% 0.0 % 6.8 % Restructuring expense 4,412 1,292 241.5 % 6.6 % 1.7 % ------------ ------------ ------------ ------------- ------------- Loss from operations (5,387) (5,689) 5.3 % (8.0)% (7.5)% Interest expense 942 937 0.5 % 1.4 % 1.2 % Interest income (19) (29) (34.5)% (0.0)% (0.0)% Other expense 214 173 23.7 % 0.3 % 0.2 % ------------ ------------ ------------ ------------- ------------- Loss before income taxes (6,524) (6,770) 3.6 % (9.7)% (9.0)% Income taxes* (2,372) (2,577) (8.0)% 36.4 % 38.1 % ------------ ------------ -- ------------- ------------- ---------- Net loss $ (4,152) (4,193) 1.0 % (6.2)% (5.6)% ============ ============ ============ ============= ============= Net loss per share-basic ($0.36) ($0.36) 0.0 % Net loss per share-diluted ($0.36) ($0.36) 0.0 % Net income (loss) per share, diluted, excluding restructuring ($0.03) $0.04 (175.0)% and related charges and goodwill impairment (see proforma statement on page 6) Average shares outstanding-basic 11,559 11,549 0.1 % Average shares outstanding-diluted 11,559 11,549 0.1 % SIX MONTHS ENDED ---------------------------------------------------------------------- Amounts Percent of Sales -------------------------- ---------------------------- October 30, October 31, % Over October 30, October 31, 2005 2004 (Under) 2005 2004 ------------ ------------ ------------ ------------- ------------- Net sales $ 129,348 143,255 (9.7)% 100.0 % 100.0 % Cost of sales 117,240 125,013 (6.2)% 90.6 % 87.3 % ------------ ------------ ------------ ------------- ------------- Gross profit 12,108 18,242 (33.6)% 9.4 % 12.7 % Selling, general and administrative expenses 16,382 18,118 (9.6)% 12.7 % 12.6 % Goodwill impairment 0 5,126 (100.0)% 0.0 % 3.6 % Restructuring expense 6,238 1,154 440.6 % 4.8 % 0.8 % ------------ ------------ ------------ ------------- ------------- Loss from operations (10,512) (6,156) (70.8)% (8.1)% (4.3)% Interest expense 1,892 1,877 0.8 % 1.5 % 1.3 % Interest income (35) (56) (37.5)% (0.0)% (0.0)% Other expense 347 387 (10.3)% 0.3 % 0.3 % ------------ ------------ ------------ ------------- ------------- Loss before income taxes (12,716) (8,364) (52.0)% (9.8)% (5.8)% Income taxes* (4,623) (3,119) 48.2 % 36.4 % 37.3 % ------------ ------------ ------------ ------------- ------------- Net loss $ (8,093) (5,245) (54.3)% (6.3)% (3.7)% ============ ============ ============ ============= ============= Net loss per share-basic ($0.70) ($0.45) 55.6 % Net loss per share-diluted ($0.70) ($0.45) 55.6 % Net loss per share, diluted, excluding restructuring ($0.08) ($0.05) 60.0 % and related charges and goodwill impairment (see proforma statement on page 7) Average shares outstanding-basic 11,555 11,548 0.1 % Average shares outstanding-diluted 11,555 11,548 0.1 % * Percent of sales column for income taxes is calculated as a % of loss before income taxes.
Page 2 of 7 CULP, INC. FINANCIAL INFORMATION RELEASE CONSOLIDATED BALANCE SHEETS OCTOBER 30, 2005, OCTOBER 31, 2004 AND MAY 1, 2005 Unaudited (Amounts in Thousands)
Amounts Increase ------------------------------------ (Decrease) October 30, October 31, ------------------------------- * May 1, 2005 2004 Dollars Percent 2005 ------------------- --------------- --------------- ------------ ----------- Current assets Cash and cash equivalents $ 12,883 16,505 (3,622) (21.9)% 5,107 Accounts receivable 26,919 26,590 329 1.2 % 28,824 Inventories 43,449 48,528 (5,079) (10.5)% 50,499 Deferred income taxes 7,054 4,980 2,074 41.6 % 7,054 Other current assets 1,846 3,100 (1,254) (40.5)% 2,691 ------------------- --------------- --------------- ------------ ----------- Total current assets 92,151 99,703 (7,552) (7.6)% 94,175 Property, plant & equipment, net 54,212 76,062 (21,850) (28.7)% 66,032 Goodwill 4,114 4,114 0 0.0 % 4,114 Deferred income taxes 14,541 834 13,707 100.0 % 10,086 Other assets 1,521 1,327 194 14.6 % 1,716 ------------------- --------------- --------------- ------------ ----------- Total assets $ 166,539 182,040 (15,501) (8.5)% 176,123 =================== =============== =============== ============ =========== Current liabilities Current maturities of long-term debt $ 8,346 594 7,752 1,305.1 % 8,110 Accounts payable 16,613 15,192 1,421 9.4 % 22,852 Accrued expenses 10,669 11,962 (1,293) (10.8)% 9,556 Accrued restructuring 5,486 5,458 28 0.5 % 5,850 Income taxes payable 1,023 0 1,023 (100.0)% 1,544 ------------------- --------------- --------------- ------------ ----------- Total current liabilities 42,137 33,206 8,931 26.9 % 47,912 Long-term debt , less current maturities 46,584 50,569 (3,985) (7.9)% 42,440 ------------------- --------------- --------------- ------------ ----------- Total liabilities 88,721 83,775 4,946 5.9 % 90,352 Shareholders' equity 77,818 98,265 (20,447) (20.8)% 85,771 ------------------- --------------- --------------- ------------ ----------- Total liabilities and shareholders' equity $ 166,539 182,040 (15,501) (8.5)% 176,123 =================== =============== =============== ============ =========== Shares outstanding 11,559 11,550 9 0.1 % 11,551 =================== =============== =============== ============ =========== * Derived from audited financial statements
Page 3 of 7 CULP, INC. FINANCIAL INFORMATION RELEASE CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED OCTOBER 30, 2005 AND OCTOBER 31, 2004 Unaudited (Amounts in Thousands)
SIX MONTHS ENDED -------------------------------- Amounts -------------------------------- October 30, October 31, 2005 2004 --------------- -------------- Cash flows from operating activities: Net loss $ (8,093) (5,245) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 9,836 6,900 Amortization of other assets 51 70 Stock-based compensation 104 104 Goodwill impairment 0 5,126 Deferred income taxes (4,455) (696) Restructuring expense 6,238 1,154 Changes in assets and liabilities: Accounts receivable 1,905 4,129 Inventories 7,050 517 Other current assets 845 (1,466) Other assets 149 153 Accounts payable (5,623) 1,228 Accrued expenses 1,113 (1,066) Accrued restructuring (3,510) (440) Income taxes payable (521) (1,850) --------------- -------------- Net cash provided by operating activities 5,089 8,618 --------------- -------------- Cash flows from investing activities: Capital expenditures (4,875) (5,556) Proceeds from the sale of buildings and equipment 3,950 0 --------------- -------------- Net cash used in investing activities (925) (5,556) --------------- -------------- Cash flows from financing activities: Payments on vendor-financed capital expenditures (799) (1,273) Proceeds from issuance of long-term debt 4,380 133 Proceeds from common stock issued 31 15 --------------- -------------- Net cash provided by (used in) financing activities 3,612 (1,125) --------------- -------------- Increase in cash and cash equivalents 7,776 1,937 Cash and cash equivalents at beginning of period 5,107 14,568 --------------- -------------- Cash and cash equivalents at end of period $ 12,883 16,505 =============== ============== Free Cash Flow (1) $ 3,365 1,789 =============== ============== ----------------------------------------------------------------------------------------------------------------------- (1) Free Cash Flow reconciliation is as follows: 2nd Qtr 2nd Qtr FY 2006 FY 2005 ----------------------------------- A) Net cash provided by operating activities $ 5,089 8,618 B) Minus: Capital Expenditures (4,875) (5,556) C) Add: Proceeds from the sale of buildings and equipment 3,950 0 D) Minus: Payments on vendor-financed capital expenditures (799) (1,273) --------------- -------------- $ 3,365 1,789 =============== ============== -----------------------------------------------------------------------------------------------------------------------
Page 4 of 7 CULP, INC. FINANCIAL INFORMATION RELEASE SALES, GROSS PROFIT AND OPERATING INCOME (LOSS) BY SEGMENT/DIVISION FOR THE THREE MONTHS ENDED OCTOBER 30, 2005 AND OCTOBER 31, 2004
(Amounts in thousands) THREE MONTHS ENDED (UNAUDITED) ------------------------------------------------------------------------- Amounts Percent of Total Sales --------------------------- ------------------------------ October 30, October 31, % Over October 30, October 31, Net Sales by Segment 2005 2004 (Under) 2005 2004 ------------------------------------------------ ------------- ----------- ---------- ------------- -------------- Mattress Fabrics $ 23,990 26,886 (10.8)% 35.8 % 35.7 % Upholstery Fabrics 43,016 48,520 (11.3)% 64.2 % 64.3 % ------------- ----------- ---------- ------------- -------------- Net Sales $ 67,006 75,406 (11.1)% 100.0 % 100.0 % ============= =========== ========== ============= ============== Gross Profit by Segment Gross Profit Margin ------------------------------------------------ ------------------------------ Mattress Fabrics $ 3,302 4,461 (26.0)% 13.8 % 16.6 % Upholstery Fabrics 4,000 6,230 (35.8)% 9.3 % 12.8 % ------------- ----------- ---------- ------------- -------------- Subtotal 7,302 10,691 (31.7)% 10.9 % 14.2 % Restructuring related charges (1,751)(1) (1,124) (2) (55.8)% (2.6)% (1.5)% ------------- ----------- ---------- ------------- -------------- Gross Profit $ 5,551 9,567 (42.0)% 8.3 % 12.7 % ============= =========== ========== ============= ============== Sales, General and Administrative expenses by Segment Percent of Sales ------------------------------------------------------ ------------------------------ Mattress Fabrics $ 1,636 1,784 (8.3)% 6.8 % 6.6 % Upholstery Fabrics 4,069 6,016 (32.4)% 9.5 % 12.4 % Unallocated Corporate expenses 821 1,038 (20.9)% 1.2 % 1.4 % ------------- ----------- ---------- ------------- -------------- Selling, General and Administrative expenses $ 6,526 8,838 (26.2) 9.7 % 11.7 % ============= =========== ======= ============= ============== Operating Income (loss) by Segment Operating Income (Loss) Margin ------------------------------------------------ ------------------------------ Mattress Fabrics $ 1,666 2,676 (37.7)% 6.9 % 10.0 % Upholstery Fabrics (69) 216 (131.9)% (0.2)% 0.4 % Unallocated corporate expenses (821) (1,039) 21.0 % (1.2)% (1.4)% ------------- ----------- ---------- ------------- -------------- Subtotal 776 1,853 (58.1)% 1.2 % 2.5 % Goodwill impairment 0 (5,126) (3)(100.0)% 0.0 % (6.8)% Restructuring and related charges (6,163)(1) (2,416) (2)(155.1)% (9.2)% (3.2)% ------------- ----------- ---------- ------------- -------------- Operating loss $ (5,387) (5,689) 5.3 % (8.0)% (7.5)% ============= =========== ========== ============= ============== Depreciation by Segment ------------------------------------------------ Mattress Fabrics $ 893 915 (2.4)% Upholstery Fabrics 1,417 2,408 (41.2)% ------------- ----------- ---------- Subtotal 2,310 3,323 (30.5)% Accelerated Depreciation 1,355 215 530.2 % ------------- ----------- ---------- Total Depreciation $ 3,665 3,538 3.6 % ============= =========== ==========
(1) The $1.8 million represents restructuring related charges of $1.3 million of accelerated depreciation associated with the closing of the company's facility in Shelby, NC and consolidating the chenille yarn operations into the Lincolnton, NC facility, $331,000 for inventory markdowns, $104,000 for accelerated depreciation associated with the closing of the company's finishing facility located in Burlington, NC, and $65,000 for termination benefit expenses. The $6.2 million represents restructuring and related charges of $2.1 million for write-downs of buildings and equipment, $1.6 million for accrued termination benefits, $1.3 million of accelerated depreciation associated with the closing of the company's facility in Shelby, NC and consolidating the chenille yarn operations into the Lincolnton, NC facility, $395,000 for asset movement costs, $331,000 for inventory markdowns, $328,000 for lease termination costs, and $104,000 for accelerated depreciation associated with the closing of the company's finishing facility located in Burlington, NC. (2) The $1.1 million represents restructuring related charges of $910,000 and $215,000 for inventory markdowns and accelerated deprecation associated with the closing of the company's facility in Pageland, SC and consolidating those operations into the Graham, NC facility. The $2.4 million represents restructuring and related charges of $1.0 million for accrued termination benefits, $910,000 for inventory markdowns, $278,000 for write-downs of buildings and equipment, and $215,000 for accelerated depreciation associated with the closing of the company's facility in Pageland, SC and consolidating those operations into the Graham, NC facility. (3) The $5.1 million represents a goodwill impairment charge related to the Culp Decorative Fabrics division within the upholstery fabrics segment. Page 5 of 7 CULP, INC. FINANCIAL INFORMATION RELEASE SALES, GROSS PROFIT AND OPERATING INCOME (LOSS) BY SEGMENT/DIVISION FOR THE SIX MONTHS ENDED OCTOBER 30, 2005 AND OCTOBER 31, 2004 (Amounts in thousands)
SIX MONTHS ENDED (UNAUDITED) ------------------------------------------------------------------------ Amounts Percent of Total Sales --------------------------- ----------------------------- October 30, October 31, % Over October 30, October 31, Net Sales by Segment 2005 2004 (Under) 2005 2004 -------------------------------------------------- ------------- ----------- ---------- ------------- ------------- Mattress Fabrics $ 46,905 52,839 (11.2)% 36.3 % 36.9 % Upholstery Fabrics 82,443 90,416 (8.8)% 63.7 % 63.1 % ------------- ----------- ---------- ------------- ------------- Net Sales $ 129,348 143,255 (9.7)% 100.0 % 100.0 % ============= =========== ========== ============= ============= Gross Profit by Segment Gross Profit Margin -------------------------------------------------- ------------------------------ Mattress Fabrics $ 6,397 9,255 (30.9)% 13.6 % 17.5 % Upholstery Fabrics 7,957 10,186 (21.9)% 9.7 % 11.3 % ------------- ----------- ---------- ------------- ------------- Subtotal 14,354 19,441 (26.2)% 11.1 % 13.6 % Restructuring related charges (2,246)(1) (1,199) (4) (87.3)% (1.7)% (0.8)% ------------- ----------- ---------- ------------- ------------- Gross Profit $ 12,108 18,242 (33.6)% 9.4 % 12.7 % ============= =========== ========== ============= ============= Sales, General and Administrative expenses by Segment Percent of Sales ----------------------------------------------------------------- ----------------------------- Mattress Fabrics $ 3,373 3,679 (8.3)% 7.2 % 7.0 % Upholstery Fabrics 8,404 12,589 (33.2)% 10.2 % 13.9 % Unallocated Corporate expenses 1,583 1,850 (14.4)% 1.2 % 1.3 % ------------- ----------- ---------- ------------- ------------- Subtotal 13,360 18,118 (26.3) 10.3 12.6 % Restructuring related charges 3,022 (2) 0 100.0 % 2.3 % 0.0 % ------------- ----------- ---------- ------------- ------------- Selling, General and Administrative expenses $ 16,382 18,118 (9.6) 12.7 % 12.6 % ============= =========== ========== ============= ============= Operating Income (loss) by Segment Operating Income (Loss) Margin -------------------------------------------------- ------------------------------ Mattress Fabrics $ 3,024 5,575 (45.8)% 6.4 % 10.6 % Upholstery Fabrics (448) (2,403) 81.4 % (0.5)% (2.7)% Unallocated corporate expenses (1,582) (1,849) 14.4 % (1.2)% (1.3)% ------------- ----------- ---------- ------------- ------------- Subtotal 994 1,323 (24.9)% 0.8 % 0.9 % Goodwill impairment 0 (5,126) (5) (100.0)% 0.0 % (3.6)% Restructuring and related charges (11,506)(3) (2,353) (4) (389.0)% (8.9)% (1.6)% ------------- ----------- ---------- ------------- ------------- Operating loss $ (10,512) (6,156) (70.8)% (8.1)% (4.3)% ============= =========== ========== ============= ============= Depreciation by Segment -------------------------------------------------- Mattress Fabrics $ 1,749 1,831 (4.5)% Upholstery Fabrics 3,216 4,854 (33.7)% ------------- ----------- ---------- Subtotal 4,965 6,685 (25.7)% Accelerated Depreciation 4,871 215 2,165.6 % ------------- ----------- ---------- Total Depreciation $ 9,836 6,900 42.6 % ============= =========== ==========
(1) The $2.3 million represents restructuring related charges of $1.3 million of accelerated depreciation associated with the closing of the company's facility in Shelby, NC and consolidating the chenille yarn operations into the Lincolnton, NC facility, $495,000 for accelerated depreciation on equipment associated with the consolidation of the Burlington, NC and Anderson, SC manufacturing facilities within the CVP division, $331,000 for inventory markdowns, $104,000 for accelerated depreciation associated with the closing of the company's finishing facility located in Burlington, NC, and $65,000 for termination benefit expenses. (2) The $3.0 million represents accelerated depreciation associated with the design and distribution centers sold in June of 2005. (3) The $11.5 million represents restructuring and related charges of $3.5 million for accelerated depreciation associated with the design and distribution centers sold in June of 2005 and equipment associated with the consolidation of the Burlington, NC and Anderson, SC manufacturing facilities within the CVP division, $2.9 million for write-downs of buildings and equipment, $1.6 million for asset movement costs, $1.5 million for termination benefits, $1.3 million for accelerated depreciation associated with the closing of the company's facility in Shelby, NC and consolidating the chenille yarn operations into the Lincolnton, NC facility, $378,000 for lease termination costs, $331,000 for inventory markdowns, $104,000 for accelerated depreciation associated with the closing of the company's finishing facility located in Burlington, NC. (4) The $1.2 million represents restructuring related charges of $910,000 and $215,000 for inventory markdowns and accelerated depreciation associated with the closing of the company's facility in Pageland, SC and consolidating those operations into the Graham, NC facility, $75,000 for equipment dismantling charges related to the closing of the Lumberton, NC manufacturing facility. The $2.4 million represents restructuring and related charges of $910,000 for inventory markdowns, $876,000 for accrued termination benefits, $278,000 for write-downs of buildings and equipment, $215,000 for accelerated depreciation associated with the closing of the company's facility in Pageland, SC and consolidating those operations into the Graham, NC facility, and $75,000 for equipment dismantling charges related to the closing of the Lumberton, NC manufacturing facility. (5) The $5.1 million represents a goodwill impairment charge related to the Culp Decorative Fabrics division within the upholstery fabrics segment. Page 6 of 7 CULP, INC. PROFORMA CONSOLIDATED STATEMENTS OF INCOME (LOSS) FOR THE THREE MONTHS ENDED OCTOBER 30, 2005 AND OCTOBER 31, 2004 (Amounts in Thousands, Except for Per Share Data)
THREE MONTHS ENDED --------------------------------------------------------------------------------------------------------------- October 30, 2005 October 31, 2004 As Reported Proforma As Reported Proforma Proforma October % of Adjust- % of Net of % of October % of Adjust- % of Net of % of % Over 30, 2005 Sales ments Sales Adjustments Sales 31, 2004 Sales ments Sales Adjustments Sales (Under) --------------- --------------- ------------------ --------------- -------------- ----------------- -------- Net sales $ 67,006 100.0% 0 67,006 100.0% 75,406 100.0% 0 75,406 100.0% -11.1% Cost of sales 61,455 91.7% (1,751) -2.6%(1) 59,704 89.1% 65,839 87.3% (1,124) -1.5%(3) 64,715 85.8% -7.7% --------------- --------------- ------------------ --------------- -------------- ---------------- -------- Gross profit 5,551 8.3% (1,751) -2.6% 7,302 10.9% 9,567 12.7% (1,124) -1.5% 10,691 14.2% -31.7% Selling, general and administrative expenses 6,526 9.7% 0 0.0% 6,526 9.7% 8,838 11.7% 0 0.0% 8,838 11.7% -26.2% Goodwill impairment 0 0.0% 0 0.0% 0 0.0% 5,126 6.8% (5,126) -6.8%(4) 0 0.0% 0.0% Restructuring expense 4,412 6.6% (4,412) -6.6%(2) 0 0.0% 1,292 1.7% (1,292) -1.7%(5) 0 0.0% 0.0% --------------- --------------- ------------------ --------------- -------------- ---------------- -------- Income (loss) from operations (5,387) -8.0% (6,163) -9.2% 776 1.2% (5,689) -7.5% (7,542) -10.0% 1,853 2.5% -58.1% Interest expense 942 1.4% 0 0.0% 942 1.4% 937 1.2% 0 0.0% 937 1.2% 0.5% Interest income (19) 0.0% 0 0.0% (19) 0.0% (29) 0.0% 0 0.0% (29) 0.0% -34.5% Other expense 214 0.3% 0 0.0% 214 0.3% 173 0.2% 0 0.0% 173 0.2% 23.7% --------------- --------------- ------------------ --------------- -------------- ---------------- -------- Income (loss) before income taxes (6,524) -9.7% (6,163) -9.2% (361) -0.5% (6,770) -9.0% (7,542) -10.0% 772 1.0% -146.8% Income taxes (6) (2,372) 36.4% (2,343) 38.0% (29) 8.0% (2,577) 38.1% (2,844) 37.7% 267 34.6% -110.9% --------------- --------------- ------------------ --------------- -------------- ---------------- -------- Net income (loss) $ (4,152) -6.2% (3,820) -5.7% (332) -0.5% (4,193) -5.6% (4,698) -6.2% 505 0.7% -165.8% =============== =============== ================== =============== ============== ================ ======== Net income (loss) per share-basic ($0.36) ($0.33) ($0.03) ($0.36) ($0.41) $0.04 Net income (loss) per share-diluted ($0.36) ($0.33) ($0.03) ($0.36) ($0.41) $0.04 Average shares outstanding-basic 11,559 11,559 11,559 11,549 11,549 11,549 Average shares outstanding -diluted 11,559 11,559 11,559 11,549 11,549 11,722
Notes: (1) The $1.8 million represents restructuring related charges of $1.3 million of accelerated depreciation associated with the closing of the company's facility in Shelby, NC and consolidating the chenille yarn operations into the Lincolnton, NC facility, $331,000 for inventory markdowns, $104,000 for accelerated depreciation associated with the closing of the company's finishing facility located in Burlington, NC, and $65,000 for termination benefits. (2) The $4.4 million represents restructuring charges of $2.1 million for write-downs of buildings and equipment, $1.5 million for accrued termination benefits, $395,000 for asset movement costs, and $328,000 for lease termination costs. (3) The $1.1 million represents restructuring related charges of $910,000 and $215,000 for inventory markdowns and accelerated depreciation associated with the closing of the company's facility in Pageland, SC and consolidating those operations into the Graham, NC facility. (4) The $5.1 million represents a goodwill impairment charge related to the Culp Decorative Fabrics division within the upholstery fabrics segment. (5) The $1.3 million represents restructuring charges of $1.0 million for accrued termination benefits and $278,000 for write-downs of buildings and equipment. (6) The percent of net sales column for income taxes is calculated as a % of income (loss) before income taxes. Page 7 of 7 CULP, INC. PROFORMA CONSOLIDATED STATEMENTS OF LOSS FOR THE SIX MONTHS ENDED OCTOBER 30, 2005 AND OCTOBER 31, 2004 (Amounts in Thousands, Except for Per Share Data)
SIX MONTHS ENDED ------------------------------------------------------------------------------------------------------------------ October 30, 2005 October 31, 2004 As Reported Proforma As Reported Proforma Proforma October % of Adjust- % of Net of % of October 31, % of Adjust- % of Net of % of % Over 30, 2005 Sales ments Sales Adjustments Sales 2004 Sales ments Sales Adjustments Sales (Under) --------------- --------------- ------------------ ----------------- -------------- ---------------- -------- Net sales $129,348 100.0% 0 129,348 100.0% 143,255 100.0% 0 143,255 100.0% -9.7% Cost of sales 117,240 90.6% (2,246) -1.7%(1) 114,994 88.9% 125,013 87.3% (1,199) -0.8%(4) 123,814 86.4% -7.1% --------------- --------------- ------------------ ----------------- -------------- ---------------- -------- Gross profit 12,108 9.4% (2,246) -1.7% 14,354 11.1% 18,242 12.7% (1,199) -0.8% 19,441 13.6% -26.2% Selling, general and administrative expenses 16,382 12.7% (3,022) -2.3%(2) 13,360 10.3% 18,118 12.6% 0 0.0% 18,118 12.6% -26.3% Goodwill impairment 0 0.0% 0 0.0% 0 0.0% 5,126 3.6% (5,126) -3.6%(6) 0 0.0% 0.0% Restructuring expense 6,238 4.8% (6,238) -4.8%(3) 0 0.0% 1,154 0.8% (1,154) -0.8%(5) 0 0.0% 0.0% --------------- --------------- ------------------ ----------------- -------------- ---------------- -------- Income (loss) from operations (10,512) -8.1% (11,506) -8.9% 994 0.8% (6,156) -4.3% (7,479) -5.2% 1,323 0.9% -24.9% Interest expense 1,892 1.5% 0 0.0% 1,892 1.5% 1,877 1.3% 0 0.0% 1,877 1.3% 0.8% Interest income (35) 0.0% 0 0.0% (35) 0.0% (56) 0.0% 0 0.0% (56) 0.0% -37.5% Other expense 347 0.3% 0 0.0% 347 0.3% 387 0.3% 0 0.0% 387 0.3% -10.3% --------------- --------------- ------------------ ----------------- -------------- ---------------- -------- Loss before income taxes (12,716) -9.8% (11,506) -8.9% (1,210) -0.9% (8,364) -5.8% (7,479) -5.2% (885) -0.6% 36.7% Income taxes (7) (4,623) 36.4% (4,373) 38.0% (250) 20.7% (3,119) 37.3% (2,823) 37.7% (296) 33.5% -15.7% --------------- --------------- ------------------ ----------------- -------------- ---------------- -------- Net loss $ (8,093) -6.3% (7,133) -5.5% (960) -0.7% (5,245) -3.7% (4,656) -3.3% (589) -0.4% 63.1% =============== =============== ================== ================= ============== ================ ======== Net loss per share-basic ($0.70) ($0.62) ($0.08) ($0.45) ($0.40) ($0.05) Net loss per share-diluted ($0.70) ($0.62) ($0.08) ($0.45) ($0.40) ($0.05) Average shares outstanding- basic 11,555 11,555 11,555 11,548 11,548 11,548 Average shares outstanding- diluted 11,555 11,555 11,555 11,548 11,548 11,548
Notes: (1) The $2.3 million represents restructuring related charges of $1.3 million of accelerated depreciation associated with the closing of the company's facility in Shelby, NC and consolidating the chenille yarn operations into the Lincolnton, NC facility, $495,000 for accelerated depreciation associated with the consolidation of the Burlington, NC and Anderson, SC manufacturing facilities within the CVP division, $331,000 for inventory markdowns, $104,000 for accelerated depreciation associated with the closing of the company's finishing facility located in Burlington, NC, and $65,000 for termination benefit expenses. (2) The $3.0 million represents accelerated depreciation associated with the design and distribution centers sold in June of 2005. (3) The $6.2 million represents restructuring expenses of $2.9 million for write- downs of buildings and equipment, $1.6 million for asset movement costs, $1.5 million for termination benefits, and $378,000 for lease termination costs. (4) The $1.2 million represents restructuring related charges of $910,000 and $215,000 for inventory markdowns and accelerated depreciation associated with the closing of the company's facility in Pageland, SC and consolidating those operations into the Graham, NC facility, and $75,000 for equipment dismantling charges related to the closing of the Lumberton, NC manufacturing facility. (5) The $1.2 million represents restructuring expenses of $876,000 for accrued termination benefits and $278,000 for write-downs of buildings and equipment. (6) The $5.1 million represents a goodwill impairment charge related to the Culp Decorative Fabrics division within the upholstery fabrics segment. (7) The percent of net sales column for income taxes is calculated as a % of loss before income taxes.