NORTH CAROLINA
|
56-1001967
|
(State or other jurisdiction of
|
(I.R.S. Employer Identification No.)
|
incorporation or other organization)
|
1823 Eastchester Drive
|
|
High Point, North Carolina
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27265-1402
|
(Address of principal executive offices)
|
(zip code)
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Large accelerated filer
|
Accelerated filer x
|
Non-accelerated filer
|
Page
|
|||
Part I - Financial Statements
|
|||
Item 1. Financial Statements: (Unaudited)
|
|||
I-1
|
|||
I-2
|
|||
I-3
|
|||
I-4
|
|||
I-5
|
|||
I-6
|
|||
I-26
|
|||
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations |
I-27
|
||
Item 3. Quantitative and Qualitative Disclosures About Market Risk |
I-43
|
||
Item 4. Controls and Procedures |
I-43
|
||
Part II - Other Information
|
|||
Item 1. Legal Proceedings | II-1 | ||
Item 1A. Risk Factors |
II-1
|
||
Item 2. Unregistered Sales of Equity Securities and Use of Sales Proceeds | II-1 | ||
Item 6. Exhibits | II-2 | ||
Signatures | II-3 |
CULP, INC. | ||||||||
CONSOLIDATED STATEMENTS OF NET INCOME
|
||||||||
FOR THE THREE AND NINE MONTHS ENDED JANUARY 27, 2013 AND JANUARY 29, 2012
|
||||||||
UNAUDITED
|
||||||||
(Amounts in Thousands, Except for Per Share Data)
|
||||||||
THREE MONTHS ENDED
|
||||||||
January 27,
|
January 29,
|
|||||||
2013
|
2012
|
|||||||
Net sales | $ | 63,695 | 60,450 | |||||
Cost of sales
|
52,010 | 51,939 | ||||||
Gross profit
|
11,685 | 8,511 | ||||||
Selling, general and
|
||||||||
administrative expenses
|
6,822 | 5,518 | ||||||
Income from operations
|
4,863 | 2,993 | ||||||
Interest expense
|
145 | 181 | ||||||
Interest income
|
(105 | ) | (148 | ) | ||||
Other expense
|
300 | 83 | ||||||
Income before income taxes
|
4,523 | 2,877 | ||||||
Income taxes
|
1,700 | 1,075 | ||||||
Net income
|
$ | 2,823 | 1,802 | |||||
Net income per share, basic
|
$ | 0.23 | 0.14 | |||||
Net income per share, diluted
|
0.23 | 0.14 | ||||||
Average shares outstanding, basic
|
12,095 | 12,536 | ||||||
Average shares outstanding, diluted
|
12,290 | 12,677 | ||||||
NINE MONTHS ENDED
|
||||||||
January 27,
|
January 29,
|
|||||||
2013 | 2012 | |||||||
Net sales | $ | 198,439 | 178,733 | |||||
Cost of sales
|
161,757 | 152,698 | ||||||
Gross profit
|
36,682 | 26,035 | ||||||
Selling, general and
|
||||||||
administrative expenses
|
21,672 | 16,995 | ||||||
Income from operations
|
15,010 | 9,040 | ||||||
Interest expense
|
491 | 590 | ||||||
Interest income
|
(328 | ) | (387 | ) | ||||
Other expense
|
421 | 132 | ||||||
Income before income taxes
|
14,426 | 8,705 | ||||||
Income taxes
|
(188 | ) | (1,168 | ) | ||||
Net income
|
$ | 14,614 | 9,873 | |||||
Net income per share, basic
|
$ | 1.19 | 0.77 | |||||
Net income per share, diluted
|
1.17 | 0.76 | ||||||
Average shares outstanding, basic
|
12,279 | 12,777 | ||||||
Average shares outstanding, diluted
|
12,467 | 12,918 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
||||||||
FOR THE THREE AND NINE MONTHS ENDED JANUARY 27, 2013 AND JANUARY 29, 2012
|
||||||||
(UNAUDITED)
|
||||||||
(AMOUNTS IN THOUSANDS)
|
||||||||
THREE MONTHS ENDED
|
||||||||
January 27,
|
January 29,
|
|||||||
2013
|
2012
|
|||||||
Net income
|
$ | 2,823 | $ | 1,802 | ||||
Other comprehensive loss
|
||||||||
Unrealized loss on short-term investments
|
(34 | ) | - | |||||
Total other comprehensive loss
|
(34 | ) | - | |||||
Comprehensive income
|
$ | 2,789 | $ | 1,802 | ||||
NINE MONTHS ENDED
|
||||||||
January 27,
|
January 29,
|
|||||||
2013 | 2012 | |||||||
Net income
|
$ | 14,614 | $ | 9,873 | ||||
Other comprehensive income
|
||||||||
Unrealized gain on short-term investments
|
10 | 7 | ||||||
Total other comprehensive income
|
10 | 7 | ||||||
Comprehensive income
|
$ | 14,624 | $ | 9,880 |
CONSOLIDATED BALANCE SHEETS
|
||||||||||||
JANUARY 27, 2013, JANUARY 29, 2012, AND APRIL 29, 2012
|
||||||||||||
UNAUDITED
|
||||||||||||
(Amounts in Thousands)
|
||||||||||||
January 27,
|
January 29,
|
* April 29,
|
||||||||||
2013
|
2012
|
2012
|
||||||||||
Current assets:
|
||||||||||||
Cash and cash equivalents
|
$ | 19,489 | 15,096 | 25,023 | ||||||||
Short-term investments
|
5,237 | 8,511 | 5,941 | |||||||||
Accounts receivable, net
|
24,257 | 22,012 | 25,055 | |||||||||
Inventories
|
42,177 | 32,910 | 36,373 | |||||||||
Deferred income taxes
|
4,098 | 2,767 | 2,467 | |||||||||
Assets held for sale
|
- | 45 | 15 | |||||||||
Other current assets
|
1,655 | 2,522 | 1,989 | |||||||||
Total current assets | 96,913 | 83,863 | 96,863 | |||||||||
Property, plant and equipment, net
|
30,055 | 30,285 | 31,279 | |||||||||
Goodwill
|
11,462 | 11,462 | 11,462 | |||||||||
Deferred income taxes
|
4,172 | 3,903 | 3,205 | |||||||||
Other assets
|
1,195 | 1,944 | 1,907 | |||||||||
Total assets | $ | 143,797 | 131,457 | 144,716 | ||||||||
Current liabilities:
|
||||||||||||
Current maturities of long-term debt
|
$ | 2,366 | 2,400 | 2,404 | ||||||||
Line of credit
|
576 | 875 | 889 | |||||||||
Accounts payable-trade
|
26,220 | 23,489 | 30,663 | |||||||||
Accounts payable - capital expenditures
|
- | 15 | 169 | |||||||||
Accrued expenses
|
12,823 | 7,594 | 9,321 | |||||||||
Accrued restructuring costs
|
- | 40 | 40 | |||||||||
Income taxes payable - current
|
395 | 208 | 642 | |||||||||
Total current liabilities | 42,380 | 34,621 | 44,128 | |||||||||
Income taxes payable - long-term
|
4,195 | 4,040 | 4,164 | |||||||||
Deferred income taxes
|
856 | 659 | 705 | |||||||||
Long-term debt, less current maturities
|
4,400 | 6,766 | 6,719 | |||||||||
Total liabilities | 51,831 | 46,086 | 55,716 | |||||||||
Commitments and Contingencies (Note 15)
|
||||||||||||
Shareholders' equity
|
91,966 | 85,371 | 89,000 | |||||||||
Total liabilities | ||||||||||||
and shareholders' equity | $ | 143,797 | 131,457 | 144,716 | ||||||||
Shares outstanding
|
12,225 | 12,693 | 12,703 |
CULP, INC. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
FOR THE NINE MONTHS ENDED JANUARY 27, 2013 AND JANUARY 29, 2012
|
||||||||
UNAUDITED
|
||||||||
(Amounts in Thousands)
|
||||||||
NINE MONTHS ENDED
|
||||||||
January 27,
|
January 29,
|
|||||||
2013
|
2012
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 14,614 | 9,873 | |||||
Adjustments to reconcile net income to net cash
|
||||||||
provided by operating activities:
|
||||||||
Depreciation
|
3,818 | 3,600 | ||||||
Amortization of other assets
|
178 | 183 | ||||||
Stock-based compensation
|
308 | 258 | ||||||
Excess tax benefit related to stock-based compensation
|
(77 | ) | (39 | ) | ||||
Deferred income taxes
|
(2,370 | ) | (2,751 | ) | ||||
Gain on sale of equipment
|
- | (157 | ) | |||||
Foreign currency exchange gains
|
153 | (196 | ) | |||||
Changes in assets and liabilities:
|
||||||||
Accounts receivable
|
776 | (1,769 | ) | |||||
Inventories
|
(5,794 | ) | (4,045 | ) | ||||
Other current assets
|
353 | (159 | ) | |||||
Other assets
|
(92 | ) | (49 | ) | ||||
Accounts payable - trade
|
(4,395 | ) | (1,709 | ) | ||||
Accrued expenses
|
3,526 | (1 | ) | |||||
Accrued restructuring
|
(40 | ) | (4 | ) | ||||
Income taxes
|
(141 | ) | (305 | ) | ||||
Net cash provided by operating activities
|
10,817 | 2,730 | ||||||
Cash flows from investing activities:
|
||||||||
Capital expenditures
|
(2,763 | ) | (3,715 | ) | ||||
Proceeds from the sale of equipment
|
- | 188 | ||||||
Proceeds from life insurance policies
|
626 | - | ||||||
Purchase of short-term investments
|
(84 | ) | (4,821 | ) | ||||
Proceeds from the sale of short-term investments
|
795 | 4,096 | ||||||
Net cash used in investing activities
|
(1,426 | ) | (4,252 | ) | ||||
Cash flows from financing activities:
|
||||||||
Proceeds from lines of credit
|
1,000 | 6,323 | ||||||
Payments on lines of credit
|
(1,325 | ) | (5,500 | ) | ||||
Payments on long-term debt
|
(2,350 | ) | (2,354 | ) | ||||
Proceeds from common stock issued
|
205 | 237 | ||||||
Common stock repurchased
|
(5,022 | ) | (5,384 | ) | ||||
Dividends paid
|
(7,226 | ) | - | |||||
Debt issuance costs
|
- | (26 | ) | |||||
Excess tax benefit related to stock-based compensation
|
77 | 39 | ||||||
Net cash used in financing activities
|
(14,641 | ) | (6,665 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents
|
(284 | ) | 102 | |||||
Decrease in cash and cash equivalents
|
(5,534 | ) | (8,085 | ) | ||||
Cash and cash equivalents at beginning of period
|
25,023 | 23,181 | ||||||
Cash and cash equivalents at end of period
|
$ | 19,489 | 15,096 |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
|
||||||||||||||||||||||||
UNAUDITED
|
||||||||||||||||||||||||
(Dollars in thousands, except share data)
|
||||||||||||||||||||||||
Capital
|
Accumulated
|
|||||||||||||||||||||||
Contributed
|
Other
|
Total
|
||||||||||||||||||||||
Common Stock |
in Excess
|
Accumulated
|
Comprehensive
|
Shareholders’
|
||||||||||||||||||||
Shares
|
Amount
|
of Par Value
|
Earnings
|
Income
|
Equity
|
|||||||||||||||||||
Balance, May 1, 2011 *
|
13,264,458 | $ | 663 | 50,681 | 28,997 | - | $ | 80,341 | ||||||||||||||||
Net income
|
- | - | - | 13,296 | - | 13,296 | ||||||||||||||||||
Stock-based compensation
|
- | - | 349 | - | - | 349 | ||||||||||||||||||
Unrealized gain on short-term investments
|
- | - | - | - | 16 | 16 | ||||||||||||||||||
Excess tax benefit related to stock
|
||||||||||||||||||||||||
based compensation
|
- | - | 64 | - | - | 64 | ||||||||||||||||||
Common stock repurchased
|
(624,127 | ) | (31 | ) | (5,353 | ) | (5,384 | ) | ||||||||||||||||
Fully vested common stock award
|
3,075 | - | - | - | - | - | ||||||||||||||||||
Common stock issued in connection
|
. | |||||||||||||||||||||||
with stock option plans
|
59,400 | 3 | 315 | - | - | 318 | ||||||||||||||||||
Balance, April 29, 2012 *
|
12,702,806 | 635 | 46,056 | 42,293 | 16 | 89,000 | ||||||||||||||||||
Net income
|
- | - | - | 14,614 | - | 14,614 | ||||||||||||||||||
Stock-based compensation
|
- | - | 308 | - | - | 308 | ||||||||||||||||||
Unrealized gain on short-term investments
|
- | - | - | - | 10 | 10 | ||||||||||||||||||
Excess tax benefit related to stock
|
||||||||||||||||||||||||
based compensation
|
- | - | 77 | - | - | 77 | ||||||||||||||||||
Common stock repurchased
|
(502,595 | ) | (25 | ) | (4,997 | ) | - | - | (5,022 | ) | ||||||||||||||
Fully vested common stock award
|
1,658 | - | - | - | - | - | ||||||||||||||||||
Common stock issued in connection
|
|
|||||||||||||||||||||||
with stock option plans
|
23,025 | 1 | 204 | - | - | 205 | ||||||||||||||||||
Dividends paid
|
- | - | (7,226 | ) | - | (7,226 | ) | |||||||||||||||||
Balance, January 27, 2013
|
12,224,894 | $ | 611 | 41,648 | 49,681 | 26 | $ | 91,966 |
Grant on October 8, 2012
|
||
Risk-free interest rate
|
0.67
|
% |
Dividend yield
|
3.00
|
% |
Expected volatility
|
61.70
|
% |
Expected term (in years)
|
5
|
(dollars in thousands)
|
January 27, 2013
|
April 29, 2012
|
||||||
Customers
|
$ | 25,533 | $ | 26,100 | ||||
Allowance for doubtful accounts
|
(696 | ) | (567 | ) | ||||
Reserve for returns and allowances and discounts
|
(580 | ) | (478 | ) | ||||
$ | 24,257 | $ | 25,055 |
Nine months ended
|
||||||||
(dollars in thousands)
|
January 27, 2013
|
January 29, 2012
|
||||||
Beginning balance
|
$ | (567 | ) | $ | (776 | ) | ||
Provision for bad debts
|
(193 | ) | 18 | |||||
Net write-offs, net of recoveries
|
64 | 197 | ||||||
Ending balance
|
$ | (696 | ) | $ | (561 | ) |
Nine months ended
|
||||||||
(dollars in thousands)
|
January 27, 2013
|
January 29, 2012
|
||||||
Beginning balance
|
$ | (478 | ) | $ | (577 | ) | ||
Provision for returns, allowances
|
||||||||
and discounts
|
(2,146 | ) | (1,929 | ) | ||||
Credits issued
|
2,044 | 1,966 | ||||||
Ending balance
|
$ | (580 | ) | $ | (540 | ) |
(dollars in thousands)
|
January 27, 2013
|
April 29, 2012
|
||||||
Raw materials
|
$ | 6,037 | $ | 5,534 | ||||
Work-in-process
|
2,772 | 3,631 | ||||||
Finished goods
|
33,368 | 27,208 | ||||||
$ | 42,177 | $ | 36,373 |
(dollars in thousands)
|
January 27, 2013
|
April 29, 2012
|
||||||
Cash surrender value – life insurance
|
$ | 700 | $ | 1,327 | ||||
Non-compete agreement, net
|
222 | 333 | ||||||
Other
|
273 | 247 | ||||||
$ | 1,195 | $ | 1,907 |
(dollars in thousands)
|
January 27, 2013
|
April 29, 2012
|
||||||
Compensation, commissions and related benefits
|
$ | 9,417 | $ | 7,293 | ||||
Interest
|
243 | 147 | ||||||
Other accrued expenses
|
3,163 | 1,881 | ||||||
$ | 12,823 | $ | 9,321 |
(dollars in thousands)
|
January 27, 2013
|
April 29, 2012
|
||||||
Unsecured senior term notes
|
$ | 6,600 | $ | 8,800 | ||||
Canadian government loan
|
166 | 323 | ||||||
6,766 | 9,123 | |||||||
Current maturities of long-term debt
|
(2,366 | ) | (2,404 | ) | ||||
Long-term debt, less current maturities of long-term debt
|
$ | 4,400 | $ | 6,719 |
Fair value measurements at January 27, 2013 using:
|
||||||||||||||||
Quoted prices in
active markets
for identical
assets
|
Significant other
observable inputs
|
Significant
unobservable
inputs
|
||||||||||||||
(amounts in thousands)
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Assets:
|
||||||||||||||||
Low Duration Bond Fund
|
$ | 2,066 | N/A | N/A | $ | 2,066 | ||||||||||
Limited Term Bond Fund
|
2,070 | N/A | N/A | 2,070 | ||||||||||||
Intermediate Term Bond Fund
|
1,101 | N/A | N/A | 1,101 |
Fair value measurements at April 29, 2012 using:
|
||||||||||||||||
Quoted prices in
active markets
for identical
assets
|
Significant other
observable inputs
|
Significant
unobservable
inputs
|
||||||||||||||
(amounts in thousands)
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Assets:
|
||||||||||||||||
Low Duration Bond Fund
|
$ | 2,049 | N/A | N/A | $ | 2,049 | ||||||||||
Limited Term Bond Fund
|
2,037 | N/A | N/A | 2,037 | ||||||||||||
Intermediate Term Bond Fund
|
1,058 | N/A | N/A | 1,058 |
Nine months ended
|
||||||||
(dollars in thousands)
|
January 27, 2013
|
January 29, 2012
|
||||||
Interest
|
$ | 395 | $ | 449 | ||||
Net income tax payments
|
2,305 | 1,886 |
Three months ended
|
||||||||
(amounts in thousands)
|
January 27, 2013
|
January 29, 2012
|
||||||
Weighted average common shares outstanding, basic
|
12,095 | 12,536 | ||||||
Dilutive effect of stock-based compensation
|
195 | 141 | ||||||
Weighted average common shares outstanding, diluted
|
12,290 | 12,677 |
Nine months ended
|
||||||||
(amounts in thousands)
|
January 27, 2013
|
January 29, 2012
|
||||||
Weighted average common shares outstanding, basic
|
12,279 | 12,777 | ||||||
Dilutive effect of stock-based compensation
|
188 | 141 | ||||||
Weighted average common shares outstanding, diluted
|
12,467 | 12,918 |
Three months ended
|
||||||||
(dollars in thousands) |
January 27, 2013
|
January 29, 2012
|
||||||
Net sales: | ||||||||
Mattress Fabrics
|
$ | 35,513 | $ | 34,719 | ||||
Upholstery Fabrics
|
28,182 | 25,731 | ||||||
$ | 63,695 | $ | 60,450 | |||||
Gross profit: | ||||||||
Mattress Fabrics
|
$ | 6,548 | $ | 5,104 | ||||
Upholstery Fabrics
|
5,137 | 3,407 | ||||||
$ | 11,685 | $ | 8,511 | |||||
Selling, general, and administrative expenses: | ||||||||
Mattress Fabrics
|
$ | 2,382 | $ | 1,970 | ||||
Upholstery Fabrics
|
3,360 | 2,653 | ||||||
Total segment selling, general, and
|
||||||||
administrative expenses
|
5,742 | 4,623 | ||||||
Unallocated corporate expenses
|
1,080 | 895 | ||||||
$ | 6,822 | $ | 5,518 | |||||
Income form operations: | ||||||||
Mattress Fabrics
|
$ | 4,166 | $ | 3,134 | ||||
Upholstery Fabrics
|
1,777 | 754 | ||||||
Total segment income from operations
|
5,943 | 3,888 | ||||||
Unallocated corporate expenses
|
(1,080 | ) | (895 | ) | ||||
Total income from operations
|
4,863 | 2,993 | ||||||
Interest expense
|
(145 | ) | (181 | ) | ||||
Interest income
|
105 | 148 | ||||||
Other expense
|
(300 | ) | (83 | ) | ||||
Income before income taxes
|
$ | 4,523 | $ | 2,877 |
Nine months ended
|
||||||||
(dollars in thousands)
|
January 27, 2013
|
January 29, 2012
|
||||||
Net sales:
|
||||||||
Mattress Fabrics
|
$ | 113,175 | $ | 102,130 | ||||
Upholstery Fabrics
|
85,264 | 76,603 | ||||||
$ | 198,439 | $ | 178,733 | |||||
Gross profit:
|
||||||||
Mattress Fabrics
|
$ | 21,708 | $ | 16,180 | ||||
Upholstery Fabrics
|
14,974 | 9,932 | ||||||
Total segment gross profit
|
$ | 36,682 | $ | 26,112 | ||||
Other non-recurring charges
|
- | (77 | ) (1) | |||||
$ | 36,682 | $ | 26,035 | |||||
Selling, general, and administrative expenses:
|
||||||||
Mattress Fabrics
|
$ | 7,197 | $ | 6,094 | ||||
Upholstery Fabrics
|
9,857 | 8,186 | ||||||
Total segment selling, general, and
|
||||||||
administrative expenses
|
17,054 | 14,280 | ||||||
Unallocated corporate expenses
|
4,618 | 2,715 | ||||||
$ | 21,672 | $ | 16,995 | |||||
Income from operations:
|
||||||||
Mattress Fabrics
|
$ | 14,512 | $ | 10,087 | ||||
Upholstery Fabrics
|
5,116 | 1,745 | ||||||
Total segment income from operations
|
19,628 | 11,832 | ||||||
Unallocated corporate expenses
|
(4,618 | ) | (2,715 | ) | ||||
Other non-recurring charges
|
- | (77 | ) (1) | |||||
Total income from operations
|
15,010 | 9,040 | ||||||
Interest expense
|
(491 | ) | (590 | ) | ||||
Interest income
|
328 | 387 | ||||||
Other expense
|
(421 | ) | (132 | ) | ||||
Income before income taxes
|
$ | 14,426 | $ | 8,705 |
(1)
|
Other non-recurring charges represent employee termination benefits associated with our Anderson, SC plant facility. This non-recurring charges relates to the Upholstery Fabrics segment.
|
(dollars in thousands)
|
January 27, 2013
|
April 29, 2012
|
||||||
Segment assets:
|
||||||||
Mattress Fabrics
|
||||||||
Current assets (1)
|
$ | 34,595 | $ | 29,909 | ||||
Assets held for sale
|
- | 15 | ||||||
Non-compete agreements, net
|
222 | 333 | ||||||
Goodwill
|
11,462 | 11,462 | ||||||
Property, plant and equipment (2)
|
28,116 | 29,237 | ||||||
Total mattress fabrics assets
|
74,395 | 70,956 | ||||||
Upholstery Fabrics
|
||||||||
Current assets (1)
|
31,839 | 31,519 | ||||||
Property, plant and equipment (3)
|
1,147 | 1,124 | ||||||
Total upholstery fabrics assets
|
32,986 | 32,643 | ||||||
Total segment assets
|
107,381 | 103,599 | ||||||
Non-segment assets:
|
||||||||
Cash and cash equivalents
|
19,489 | 25,023 | ||||||
Short-term investments
|
5,237 | 5,941 | ||||||
Deferred income taxes
|
8,270 | 5,672 | ||||||
Other current assets
|
1,655 | 1,989 | ||||||
Property, plant and equipment (4)
|
792 | 918 | ||||||
Other assets
|
973 | 1,574 | ||||||
Total assets
|
$ | 143,797 | $ | 144,716 |
Nine months ended | ||||||||
(dollars in thousands)
|
January 27, 2013
|
January 29, 2012
|
||||||
Capital expenditures (5):
|
||||||||
Mattress Fabrics
|
$ | 2,223 | $ | 2,761 | ||||
Upholstery Fabrics
|
222 | 481 | ||||||
Unallocated Corporate
|
149 | 351 | ||||||
Total capital expenditures
|
$ | 2,594 | $ | 3,593 | ||||
Depreciation expense:
|
||||||||
Mattress Fabrics
|
$ | 3,344 | $ | 3,163 | ||||
Upholstery Fabrics
|
474 | 437 | ||||||
Total depreciation expense
|
$ | 3,818 | $ | 3,600 |
(1)
|
Current assets represent accounts receivable and inventory for the respective segment.
|
(2)
|
The $28.1 million at January 27, 2013, represents property, plant, and equipment of $20.6 million and $7.5 million located in the U.S. and Canada, respectively. The $29.2 million at April 29, 2012, represents property, plant, and equipment of $21.2 million and $8.0 million located in the U.S. and Canada, respectively.
|
(3)
|
The $1.1 million at January 27, 2013, represents property, plant, and equipment located in the U.S. of $906, located in China of $155, and located in Poland of $86. The $1.1 million at April 29, 2012, represents property, plant, and equipment located in the U.S. of $837, located in China of $183, and located in Poland of $104.
|
(4)
|
The $792 and $918 at January 27, 2013 and April 29, 2012, respectively, represent property, plant, and equipment associated with unallocated corporate departments and corporate departments shared by both the mattress and upholstery fabric segments. Property, plant, and equipment associated with corporate are located in the U.S.
|
(5)
|
Capital expenditure amounts are stated on the accrual basis. See Consolidated Statement of Cash Flows for capital expenditure amounts on a cash basis.
|
●
|
The income tax rate was reduced by 84% for a reduction in our valuation allowance associated with our U.S. net deferred income tax assets. This 84% reduction in our income tax rate is due to a change in judgment about the realization of our U.S. net deferred income tax assets in future years. Since the realization of our U.S. net deferred income tax assets is a result of a change in judgment about future years we recorded an income tax benefit of $12.1 million that represents a discrete event in which the full tax effects were recorded for the nine month period ending January 27, 2013.
|
●
|
The income tax rate was increased by 46% for the establishment of a deferred tax liability for U.S. income taxes that will be paid upon repatriation of undistributed earnings from our foreign subsidiaries located in Canada and China. This 46% increase in our income tax rate is due to a change in judgment in which our prior years' accumulated earnings and profits associated with our subsidiaries located in Canada and China are no longer considered indefinitely reinvested. Since the establishment of our deferred tax liability is a result of a change in judgment about prior years' accumulated earnings and profits we recorded an income tax charge of $6.6 million that represents a discrete event in which the full tax effects were recorded for the nine month period ending January 27, 2013.
|
●
|
The income tax rate was reduced by 6% for taxable income subject to lower statutory income tax rates in foreign jurisdictions (Canada and China) compared with the statutory income tax rate of 34% for the United States.
|
●
|
The income tax rate was increased by 5% for an increase in unrecognized tax benefits.
|
●
|
The income tax rate was increased by 1% for the establishment of a valuation allowance against our net deferred tax assets associated with our Culp Europe operation located in Poland.
|
●
|
The income tax rate was increased by 2.7% for stock-based compensation and other miscellaneous items.
|
●
|
The income tax rate was reduced by 50% for a reduction in our valuation allowance associated with our U.S. net deferred income tax assets. This 50% reduction in our income tax rate is due to a change in judgment about the realization of our U.S. net deferred income tax assets in future years. Since the realization of our U.S. net deferred income tax assets is a result of a change in judgment about future years we recorded an income tax benefit of $4.4 million that represents a discrete event in which the full tax effects were recorded for nine month period ending January 29, 2012.
|
●
|
The income tax rate was reduced by 7% for taxable income subject to lower statutory income tax rates in foreign jurisdictions (Canada and China) compared with the statutory income tax rate of 34% for the United States.
|
●
|
The income tax rate was increased by 7% for an increase in unrecognized tax benefits.
|
●
|
The income tax rate was increased by 2.6% for stock-based compensation and other miscellaneous items.
|
CULP, INC.
|
|||||||||||||||||||||||
STATEMENTS OF OPERATIONS BY SEGMENT
|
|||||||||||||||||||||||
FOR THE THREE MONTHS ENDED JANUARY 27, 2013 AND JANUARY 29, 2012
|
|||||||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||||||
(Amounts in thousands)
|
|||||||||||||||||||||||
THREE MONTHS ENDED
|
|||||||||||||||||||||||
Amounts
|
Percent of Total Sales
|
||||||||||||||||||||||
January 27,
|
January 29,
|
% Over
|
January 27,
|
January 29,
|
|||||||||||||||||||
Net Sales by Segment
|
2013
|
2012
|
(Under)
|
2013
|
2012
|
||||||||||||||||||
Mattress Fabrics
|
$ | 35,513 | 34,719 | 2.3 | % | 55.8 |
%
|
57.4 | % | ||||||||||||||
Upholstery Fabrics
|
28,182 | 25,731 | 9.5 | % | 44.2 |
%
|
42.6 | % | |||||||||||||||
Net Sales
|
$ | 63,695 | 60,450 | 5.4 | % | 100.0 |
%
|
100.0 | % | ||||||||||||||
Gross Profit by Segment
|
Gross Profit Margin
|
||||||||||||||||||||||
Mattress Fabrics
|
$ | 6,548 | 5,104 | 28.3 | % | 18.4 |
%
|
14.7 | % | ||||||||||||||
Upholstery Fabrics
|
5,137 | 3,407 | 50.8 | % | 18.2 |
%
|
13.2 | % | |||||||||||||||
Gross Profit
|
$ | 11,685 | 8,511 | 37.3 | % | 18.3 |
%
|
14.1 | % | ||||||||||||||
Selling, General and Administrative expenses by Segment
|
|
Percent of Sales
|
|||||||||||||||||||||
Mattress Fabrics
|
$ | 2,382 | 1,970 | 20.9 | % | 6.7 |
%
|
5.7 | % | ||||||||||||||
Upholstery Fabrics
|
3,360 | 2,653 | 26.6 | % | 11.9 |
%
|
10.3 | % | |||||||||||||||
Unallocated Corporate expenses
|
1,080 | 895 | 20.7 | % | 1.7 |
%
|
1.5 | % | |||||||||||||||
Selling, General and Administrative expenses
|
6,822 | 5,518 | 23.6 | % | 10.7 |
%
|
9.1 | % | |||||||||||||||
Operating Income (loss) by Segment
|
Operating Income (Loss) Margin
|
||||||||||||||||||||||
Mattress Fabrics
|
$ | 4,166 | 3,134 | 32.9 | % | 11.7 |
%
|
9.0 | % | ||||||||||||||
Upholstery Fabrics
|
1,777 | 754 | 135.7 | % | 6.3 |
%
|
2.9 | % | |||||||||||||||
Unallocated corporate expenses
|
(1,080 | ) | (895 | ) | 20.7 | % | (1.7 | ) |
%
|
(1.5 | ) | % | |||||||||||
Operating income
|
$ | 4,863 | 2,993 | 62.5 | % | 7.6 |
%
|
5.0 | % | ||||||||||||||
Depreciation by Segment
|
|||||||||||||||||||||||
Mattress Fabrics
|
$ | 1,125 | 1,081 | 4.1 | % | ||||||||||||||||||
Upholstery Fabrics
|
154 | 133 | 15.8 | % | |||||||||||||||||||
Consolidated
|
1,279 | 1,214 | 5.4 | % |
CULP, INC.
|
|||||||||||||||||||||||||
STATEMENTS OF OPERATIONS BY SEGMENT
|
|||||||||||||||||||||||||
FOR THE NINE MONTHS ENDED JANUARY 27, 2013 AND JANUARY 29, 2012
|
|||||||||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||||||||
(Amounts in thousands)
|
|||||||||||||||||||||||||
NINE MONTHS ENDED
|
|||||||||||||||||||||||||
Amounts
|
Percent of Total Sales
|
||||||||||||||||||||||||
January 27,
|
January 29,
|
% Over
|
January 27,
|
January 29,
|
|||||||||||||||||||||
Net Sales by Segment
|
2013
|
2012
|
(Under)
|
2013
|
2012
|
||||||||||||||||||||
Mattress Fabrics
|
$ | 113,175 | 102,130 | 10.8 | % | 57.0 | % | 57.1 | % | ||||||||||||||||
Upholstery Fabrics
|
85,264 | 76,603 | 11.3 | % | 43.0 | % | 42.9 | % | |||||||||||||||||
Net Sales
|
$ | 198,439 | 178,733 | 11.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||||
Gross Profit by Segment
|
Gross Profit Margin
|
||||||||||||||||||||||||
Mattress Fabrics
|
$ | 21,708 | 16,180 | 34.2 | % | 19.2 | % | 15.8 | % | ||||||||||||||||
Upholstery Fabrics
|
14,974 | 9,932 | 50.8 | % | 17.6 | % | 13.0 | % | |||||||||||||||||
Subtotal
|
36,682 | 26,112 | 40.5 | % | 18.5 | % | 14.6 | % | |||||||||||||||||
Other non-recurring charges
|
- | (77 | ) | (1) | (100.0 | ) | % | 0.0 | % | (0.0 | ) | % | |||||||||||||
Gross Profit
|
36,682 | 26,035 | 40.9 | % | 18.5 | % | 14.6 | % | |||||||||||||||||
Selling, General and Administrative expenses by Segment
|
Percent of Sales
|
||||||||||||||||||||||||
Mattress Fabrics
|
$ | 7,197 | 6,094 | 18.1 | % | 6.4 | % | 6.0 | % | ||||||||||||||||
Upholstery Fabrics
|
9,857 | 8,186 | 20.4 | % | 11.6 | % | 10.7 | % | |||||||||||||||||
Unallocated Corporate expenses
|
4,618 | 2,715 | 70.1 | % | 2.3 | % | 1.5 | % | |||||||||||||||||
Consolidated
|
21,672 | 16,995 | 27.5 | % | 10.9 | % | 9.5 | % | |||||||||||||||||
Operating Income (loss) by Segment
|
Operating Income (Loss) Margin
|
||||||||||||||||||||||||
Mattress Fabrics
|
$ | 14,512 | 10,087 | 43.9 | % | 12.8 | % | 9.9 | % | ||||||||||||||||
Upholstery Fabrics
|
5,116 | 1,745 | 193.2 | % | 6.0 | % | 2.3 | % | |||||||||||||||||
Unallocated corporate expenses
|
(4,618 | ) | (2,715 | ) | 70.1 | % | (2.3 | ) | % | (1.5 | ) | % | |||||||||||||
Subtotal
|
15,010 | 9,117 | 64.6 | % | 7.6 | % | 5.1 | % | |||||||||||||||||
Other non-recurring charges
|
- | (77 | ) | (1) | (100.0 | ) | % | 0.0 | % | (0.0 | ) | % | |||||||||||||
Operating income
|
$ | 15,010 | 9,040 | 66.0 | % | 7.6 | % | 5.1 | % | ||||||||||||||||
Depreciation by Segment
|
|||||||||||||||||||||||||
Mattress Fabrics
|
$ | 3,344 | 3,163 | 5.7 | % | ||||||||||||||||||||
Upholstery Fabrics
|
474 | 437 | 8.5 | % | |||||||||||||||||||||
Consolidated
|
3,818 | 3,600 | 6.1 | % |
●
|
The income tax rate was reduced by 84% for a reduction in our valuation allowance associated with our U.S. net deferred income tax assets. This 84% reduction in our income tax rate is due to a change in judgment about the realization of our U.S. net deferred income tax assets in future years. Since the realization of our U.S. net deferred income tax assets is a result of a change in judgment about future years we recorded an income tax benefit of $12.1 million that represents a discrete event in which the full tax effects were recorded for the nine month period ending January 27, 2013.
|
●
|
The income tax rate was increased by 46% for the establishment of a deferred tax liability for U.S. income taxes that will be paid upon repatriation of undistributed earnings from our foreign subsidiaries located in Canada and China. This 46% increase in our income tax rate is due to a change in judgment in which our prior years' accumulated earnings and profits associated with our subsidiaries located in Canada and China are no longer considered indefinitely reinvested. Since the establishment of our deferred tax liability is a result of a change in judgment about prior years' accumulated earnings and profits we recorded an income tax charge of $6.6 million that represents a discrete event in which the full tax effects were recorded for the nine month period ending January 27, 2013.
|
●
|
The income tax rate was reduced by 6% for taxable income subject to lower statutory income tax rates in foreign jurisdictions (Canada and China) compared with the statutory income tax rate of 34% for the United States.
|
●
|
The income tax rate was increased by 5% for an increase in unrecognized tax benefits.
|
●
|
The income tax rate was increased by 1% for the establishment of a valuation allowance against our net deferred tax assets associated with our Culp Europe operation located in Poland.
|
●
|
The income tax rate was increased by 2.7% for stock-based compensation and other miscellaneous items.
|
●
|
The income tax rate was reduced by 50% for a reduction in our valuation allowance associated with our U.S. net deferred income tax assets. This 50% reduction in our income tax rate is due to a change in judgment about the realization of our U.S. net deferred income tax assets in future years. Since the realization of our U.S. net deferred income tax assets is a result of a change in judgment about future years we recorded an income tax benefit of $4.4 million that represents a discrete event in which the full tax effects were recorded for nine month period ending January 29, 2012.
|
●
|
The income tax rate was reduced by 7% for taxable income subject to lower statutory income tax rates in foreign jurisdictions (Canada and China) compared with the statutory income tax rate of 34% for the United States.
|
●
|
The income tax rate was increased by 7% for an increase in unrecognized tax benefits.
|
●
|
The income tax rate was increased by 2.6% for stock-based compensation and other miscellaneous items.
|
Period
|
(a)
Total
Number of
Shares
Purchased
|
(b)
Average
Price Paid
per Share
|
(c)
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
|
(d)
Approximate
Dollar Value of
Shares that May
Yet Be Purchased
Under the Plans or
Programs (1)
|
October 29, 2012 to
December 2, 2012
|
-
|
-
|
-
|
$ 2,000,000
|
December 3, 2012 to
December 30, 2012
|
-
|
-
|
-
|
$ 2,000,000
|
December 31, 2012 to
January 27, 2013
|
-
|
-
|
-
|
$ 2,000,000
|
Total
|
-
|
-
|
-
|
$ 2,000,000
|
(1)
|
On June 13, 2012, we announced that our board of directors approved a new authorization for us to acquire up to $5.0 million of our common stock, and this authorization was reached through common stock repurchases through September 2, 2012. On August 29, 2012, we announced that our board of directors approved a new authorization for us to acquire up to $2.0 million of our common stock.
|
3(i) |
Articles of Incorporation of the company, as amended, were filed as Exhibit 3(i) to the company’s Form 10-Q for the quarter ended July 28, 2002, filed September 11, 2002 (Commission File No. 001-12597), and are incorporated herein by reference.
|
|
3 (ii) |
Restated and Amended Bylaws of the company, as amended November 12, 2007, were filed as Exhibit 3.1 to the company’s Form 8-K dated November 12, 2007, and incorporated herein by reference.
|
|
10.1 | Agreement dated December 27, 2012 between Culp Inc., Robert G. Culp III, and Robert G. Culp III Irrevocable Trust dated December 11, 2012, filed as Exhibit 10.1 to the company's Form 8-K filed December 28, 2012, and is incorporated herein by reference. | |
31.1 |
Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
|
|
31.2 |
Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
|
|
32.1 |
Certification of Chief Executive Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
|
|
32.2 |
Certification of Chief Financial Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
|
|
101.INS ** | XBRL Instance Document | |
101.SCH ** | XBRL Taxonomy Extension Schema Document | |
101.CAL ** | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.LAB ** | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE ** | XBRL Taxonomy Extension Presentation Linkbase Document | |
101.DEF ** | XBRL Taxonomy Extension Definition Linkbase Document |
CULP, INC.
|
||
(Registrant)
|
||
Date: March 8, 2013
|
By:
|
/s/ Kenneth R. Bowling
|
Kenneth R. Bowling
|
||
Vice President and Chief Financial Officer
|
||
(Authorized to sign on behalf of the registrant
|
||
and also signing as principal financial officer)
|
||
By:
|
/s/ Thomas B. Gallagher, Jr.
|
|
Thomas B. Gallagher, Jr.
|
||
Corporate Controller
|
||
(Authorized to sign on behalf of the registrant
|
||
and also signing as principal accounting officer)
|
Exhibit Number
|
Exhibit
|
31.1
|
Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification of Chief Executive Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
|
32.2
|
Certification of Chief Financial Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
1.
|
I have reviewed this Form 10-Q of Culp, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Franklin N. Saxon | |
Franklin N. Saxon
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
1.
|
I have reviewed this Form 10-Q of Culp, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Kenneth R. Bowling | |
Kenneth R. Bowling
|
|
Vice President and Chief Financial Officer
|
|
(Principal Financial Officer)
|
/s/ Franklin N. Saxon | |
Franklin N. Saxon
|
|
President and Chief Executive Officer
|
/s/ Kenneth R. Bowling | |
Kenneth R. Bowling
|
|
Vice President and Chief Financial Officer
|
Accounts Receivable - Allowance for Doubtful Accounts (Detail) (Allowance for doubtful accounts [Member], USD $)
In Thousands, unless otherwise specified |
9 Months Ended | |
---|---|---|
Jan. 27, 2013
|
Jan. 29, 2012
|
|
Allowance for doubtful accounts [Member]
|
||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Beginning balance | $ (567) | $ (776) |
Provision for bad debts | (193) | 18 |
Net write-offs, net of recoveries | 64 | 197 |
Ending balance | $ (696) | $ (561) |
Segment Information - Balance Sheet Information by Operating Segments (Detail) (USD $)
In Thousands, unless otherwise specified |
Jan. 27, 2013
|
Apr. 29, 2012
|
Jan. 29, 2012
|
May 01, 2011
|
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Segment Reporting Information [Line Items] | ||||||||||||||||
Assets held for sale | $ 15 | [1] | $ 45 | |||||||||||||
Goodwill | 11,462 | 11,462 | [1] | 11,462 | ||||||||||||
Property, plant and equipment | 30,055 | 31,279 | [1] | 30,285 | ||||||||||||
Total assets | 143,797 | 144,716 | [1] | 131,457 | ||||||||||||
Cash and cash equivalents | 19,489 | 25,023 | [1] | 15,096 | 23,181 | |||||||||||
Short-term investments | 5,237 | 5,941 | [1] | 8,511 | ||||||||||||
Other current assets | 1,655 | 1,989 | [1] | 2,522 | ||||||||||||
Other assets | 1,195 | 1,907 | [1] | 1,944 | ||||||||||||
Mattress Fabrics [Member]
|
||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Current assets | 34,595 | [2] | 29,909 | [2] | ||||||||||||
Assets held for sale | 15 | |||||||||||||||
Non-compete agreements, net | 222 | 333 | ||||||||||||||
Goodwill | 11,462 | 11,462 | ||||||||||||||
Property, plant and equipment | 28,116 | [3] | 29,237 | [3] | ||||||||||||
Total assets | 74,395 | 70,956 | ||||||||||||||
Upholstery Fabrics [Member]
|
||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Current assets | 31,839 | [2] | 31,519 | [2] | ||||||||||||
Property, plant and equipment | 1,147 | [4] | 1,124 | [4] | ||||||||||||
Total assets | 32,986 | 32,643 | ||||||||||||||
Unallocated Amount to Segment [Member]
|
||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Property, plant and equipment | 792 | [5] | 918 | [5] | ||||||||||||
Cash and cash equivalents | 19,489 | 25,023 | ||||||||||||||
Short-term investments | 5,237 | 5,941 | ||||||||||||||
Deferred income taxes | 8,270 | 5,672 | ||||||||||||||
Other current assets | 1,655 | 1,989 | ||||||||||||||
Other assets | 973 | 1,574 | ||||||||||||||
Total Reportable Segments [Member]
|
||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||
Total assets | $ 107,381 | $ 103,599 | ||||||||||||||
|
Segment Information - Capital Expenditures and Depreciation Expense by Operating Segments (Detail) (USD $)
In Thousands, unless otherwise specified |
9 Months Ended | |||||
---|---|---|---|---|---|---|
Jan. 27, 2013
|
Jan. 29, 2012
|
|||||
Segment Reporting Information [Line Items] | ||||||
Capital expenditures | $ 2,594 | [1] | $ 3,593 | [1] | ||
Depreciation expense | 3,818 | 3,600 | ||||
Mattress Fabrics [Member]
|
||||||
Segment Reporting Information [Line Items] | ||||||
Capital expenditures | 2,223 | 2,761 | ||||
Depreciation expense | 3,344 | 3,163 | ||||
Upholstery Fabrics [Member]
|
||||||
Segment Reporting Information [Line Items] | ||||||
Capital expenditures | 222 | 481 | ||||
Depreciation expense | 474 | 437 | ||||
Unallocated corporate expenses [Member]
|
||||||
Segment Reporting Information [Line Items] | ||||||
Capital expenditures | $ 149 | $ 351 | ||||
|
Long-Term Debt and Lines of Credit - Long-Term Debt Narrative (Detail) (USD $)
In Millions, unless otherwise specified |
0 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|---|---|
Jan. 27, 2013
|
Apr. 29, 2012
|
Aug. 11, 2012
Unsecured senior term notes [Member]
Bodet And Horst [Member]
|
Aug. 11, 2011
Unsecured senior term notes [Member]
Bodet And Horst [Member]
|
Jan. 27, 2013
Unsecured senior term notes [Member]
Bodet And Horst [Member]
|
Aug. 11, 2012
Unsecured senior term notes [Member]
Bodet And Horst [Member]
|
Aug. 11, 2008
Unsecured senior term notes [Member]
Bodet And Horst [Member]
|
Jan. 27, 2013
Government Of Quebec Term Loan [Member]
Installment
|
|
Debt Instrument [Line Items] | ||||||||
Issuance of unsecured term notes | $ 11.0 | |||||||
Fixed interest rate | 8.01% | |||||||
Term of the note agreement | Seven years | |||||||
Required amount of principal payment installments | 2.2 | |||||||
Date of first required principal payment | Aug. 11, 2011 | Dec. 01, 2009 | ||||||
Required debt payment frequency | Annual | Monthly | ||||||
Average term period for principal payments, in years | 2 years 6 months | |||||||
Maturity date | Aug. 11, 2015 | |||||||
Principal payment paid | 2.2 | 2.2 | 4.4 | |||||
Number of equal installment payments required from loan inception | 48 | |||||||
Principal payment requirements of long-term debt for the first year | 2.4 | |||||||
Principal payment requirements of long-term debt for the second year | 2.2 | |||||||
Principal payment requirements of long-term debt for the third year | 2.2 | |||||||
Long-term debt, fair value | $ 6.1 | $ 8.1 |
Net Income Per Share (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 27, 2013
|
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Schedule of Weighted Average Shares Used in the Computation of Basic and Diluted Net Income Per Share | Weighted
average shares used in the computation of basic and diluted net
income per share follows:
|
Income Taxes (Detail) (USD $)
|
3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 24 Months Ended | 3 Months Ended | 9 Months Ended | 36 Months Ended | 9 Months Ended | 9 Months Ended | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 27, 2013
|
Jan. 29, 2012
|
Jan. 27, 2013
|
Jan. 29, 2012
|
Oct. 28, 2012
|
Apr. 29, 2012
|
Jan. 27, 2013
Deferred Income Taxes Net Noncurrent [Member]
|
Jan. 27, 2013
Income Taxes Payable - Long-Term [Member]
|
Jan. 27, 2013
Mattress Fabrics [Member]
|
Oct. 28, 2012
Mattress Fabrics [Member]
|
Jan. 29, 2012
Mattress Fabrics [Member]
|
Oct. 30, 2011
Mattress Fabrics [Member]
|
Jan. 27, 2013
Mattress Fabrics [Member]
|
Jan. 29, 2012
Mattress Fabrics [Member]
|
Jan. 27, 2013
U.S. Tax Authorities and Poland Tax Authorities [Member]
Deferred Tax Asset Loss Carryforwards [Member]
|
Jan. 27, 2013
U.S. State Tax [Member]
|
Jan. 27, 2013
U.S. State Tax [Member]
Deferred Tax Asset Loss Carryforwards [Member]
|
Apr. 29, 2012
Poland [Member]
|
Jan. 27, 2013
Poland [Member]
Culp Europe [Member]
|
Oct. 28, 2012
Poland [Member]
Culp Europe [Member]
|
Jan. 27, 2013
Poland [Member]
Culp Europe [Member]
Deferred Tax Asset Loss Carryforwards [Member]
|
Oct. 28, 2012
U.S. Tax Authorities [Member]
|
Jan. 27, 2013
U.S. Tax Authorities [Member]
|
Jan. 29, 2012
U.S. Tax Authorities [Member]
|
Apr. 29, 2012
U.S. Tax Authorities [Member]
|
Jan. 27, 2013
U.S. Tax Authorities [Member]
Canada and China Subsidiaries [Member]
|
Jan. 27, 2013
China [Member]
|
Apr. 29, 2012
China [Member]
|
Jan. 27, 2013
Canada [Member]
|
Apr. 29, 2012
Canada [Member]
|
Jan. 27, 2013
Canada and China [Member]
|
Jan. 29, 2012
Canada and China [Member]
|
||||
Income Taxes [Line Items] | |||||||||||||||||||||||||||||||||||
Income tax rate | (1.30%) | (13.40%) | |||||||||||||||||||||||||||||||||
Income taxes | $ 1,700,000 | $ 1,075,000 | $ (188,000) | $ (1,168,000) | |||||||||||||||||||||||||||||||
Statutory rate | 34.00% | 34.00% | |||||||||||||||||||||||||||||||||
Increase (decrease) in effective income tax rate from the change of valuation allowance for net deferred income tax assets | (50.00%) | 1.00% | (84.00%) | (50.00%) | |||||||||||||||||||||||||||||||
Income tax expense (benefit) related to changes in the valuation allowance for deferred tax assets | (4,400,000) | 103,000 | 207,000 | (12,200,000) | (12,100,000) | (4,400,000) | |||||||||||||||||||||||||||||
Increase in effective income tax rate from the establishment of a deferred tax liability for undistributed earnings | 46.00% | 46.00% | |||||||||||||||||||||||||||||||||
Income tax expense (benefit) from change in treatment of undistributed earnings | 6,600,000 | 6,600,000 | |||||||||||||||||||||||||||||||||
Reduction in income tax rate from the lower statutory income tax rates in foreign jurisdictions compared with the U.S statutory income tax rate | (6.00%) | (7.00%) | (6.00%) | (7.00%) | |||||||||||||||||||||||||||||||
Increase in income tax rate from an increase in unrecognized tax benefits | 5.00% | 7.00% | |||||||||||||||||||||||||||||||||
Increase in income tax rate for stock-based compensation and other miscellaneous items | 2.70% | 2.60% | |||||||||||||||||||||||||||||||||
Valuation allowance | 926,000 | 719,000 | 207,000 | 12,800,000 | |||||||||||||||||||||||||||||||
Operating loss carryforwards | 59,900,000 | ||||||||||||||||||||||||||||||||||
Income before income taxes | 4,523,000 | 2,877,000 | 14,426,000 | 8,705,000 | (1,100,000) | 3,400,000 | 11,900,000 | ||||||||||||||||||||||||||||
Net sales | 63,695,000 | 60,450,000 | 198,439,000 | 178,733,000 | 35,513,000 | 77,700,000 | 34,719,000 | 67,400,000 | 113,175,000 | 102,130,000 | |||||||||||||||||||||||||
Percentage increase in net sales | 15.00% | ||||||||||||||||||||||||||||||||||
Operating income | 4,863,000 | 2,993,000 | 15,010,000 | 9,040,000 | 4,166,000 | 10,300,000 | 3,134,000 | 7,000,000 | 14,512,000 | 10,087,000 | |||||||||||||||||||||||||
Percentage increase in operating income | 49.00% | ||||||||||||||||||||||||||||||||||
Undistributed earnings from our foreign subsidiaries that will be distributed to the parent company | 55,600,000 | ||||||||||||||||||||||||||||||||||
Accumulated earnings and profits from foreign subsidiaries | 56,300,000 | 56,300,000 | |||||||||||||||||||||||||||||||||
Domestic and foreign withholding taxes | 21,900,000 | 21,900,000 | |||||||||||||||||||||||||||||||||
Income tax credits | 15,100,000 | 15,100,000 | |||||||||||||||||||||||||||||||||
Operating loss carryforwards, expiration period | 5 years | ||||||||||||||||||||||||||||||||||
Deferred tax expense from expected future year losses of operating loss carryforwards | 115,000 | ||||||||||||||||||||||||||||||||||
Deferred tax expense from expected current year loss of operating loss carryforward | 92,000 | ||||||||||||||||||||||||||||||||||
Current deferred tax asset | 4,098,000 | 2,767,000 | 4,098,000 | 2,767,000 | 2,467,000 | [1] | 3,800,000 | 2,100,000 | 329,000 | 405,000 | |||||||||||||||||||||||||
Non-current deferred tax asset | 4,172,000 | 3,903,000 | 4,172,000 | 3,903,000 | 3,205,000 | [1] | 115,000 | 3,400,000 | 2,100,000 | 793,000 | 1,000,000 | ||||||||||||||||||||||||
Non-current deferred tax liability | 856,000 | 659,000 | 856,000 | 659,000 | 705,000 | [1] | 856,000 | 705,000 | |||||||||||||||||||||||||||
Unrecognized tax benefits | 13,100,000 | 13,100,000 | 8,900,000 | 4,200,000 | |||||||||||||||||||||||||||||||
Unrecognized tax benefits that would favorably impact effective income tax rate if recognized | 4,200,000 | 4,200,000 | |||||||||||||||||||||||||||||||||
Expected increase in unrecognized tax benefits related to double taxation under applicable tax treaties with foreign tax jurisdictions | $ 821,000 | $ 821,000 | |||||||||||||||||||||||||||||||||
|
Stock-Based Compensation (Tables)
|
9 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 27, 2013
|
||||||||||||||||
Schedule of Share-Based Payment Award Stock Options Valuation Assumptions |
|
Cash Flow Information (Detail) (USD $)
In Thousands, unless otherwise specified |
9 Months Ended | |
---|---|---|
Jan. 27, 2013
|
Jan. 29, 2012
|
|
Cash Flow Supplemental Disclosures [Line Items] | ||
Interest | $ 395 | $ 449 |
Net income tax payments | $ 2,305 | $ 1,886 |
Other Assets (Detail) (USD $)
In Thousands, unless otherwise specified |
Jan. 27, 2013
|
Apr. 29, 2012
|
Jan. 29, 2012
|
|||
---|---|---|---|---|---|---|
Other Assets Noncurrent [Line Items] | ||||||
Cash surrender value - life insurance | $ 700 | $ 1,327 | ||||
Non-compete agreement, net | 222 | 333 | ||||
Other | 273 | 247 | ||||
Other assets | $ 1,195 | $ 1,907 | [1] | $ 1,944 | ||
|
Stock-Based Compensation - Other Share-Based Arrangements - Narrative (Detail) (Stock Appreciation Rights (SARs) [Member], USD $)
|
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Jul. 29, 2012
|
Jan. 27, 2013
|
Jan. 29, 2012
|
|
Stock Appreciation Rights (SARs) [Member]
|
|||
Share-based Goods and Nonemployee Services Transaction [Line Items] | |||
Agreement date | May 02, 2011 | ||
Number of shares indexed | 70,000 | ||
Cash settlement | $ 35,000 | ||
Stock appreciation right value | 700,000 | ||
Closing price of common stock at the date of grant | $ 10 | ||
Ceiling price of common stock under stock appreciation right award | $ 12 | ||
Payment for fully vested award at fair value | 174,000 | ||
Compensation expense | $ 40,000 | $ 44,000 |
Net Income Per Share - Narrative (Detail)
|
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jan. 27, 2013
|
Jan. 29, 2012
|
Jan. 27, 2013
|
Jan. 29, 2012
|
|
Earnings Per Share Disclosure [Line Items] | ||||
Number of shares of common stock excluded from the computation of basic net income per share | 123,335 | 185,000 | 123,335 | 185,000 |
Stock Option Awards [Member]
|
||||
Earnings Per Share Disclosure [Line Items] | ||||
Number of common stock options excluded from the computation of diluted net income per share | 142,750 | 2,000 | 142,750 |
Dividend Program (Detail) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|---|---|---|---|---|
Jan. 27, 2013
|
Feb. 27, 2013
Quarterly dividends declared [Member]
|
Jan. 27, 2013
Quarterly Dividend [Member]
|
Oct. 28, 2012
Quarterly Dividend [Member]
|
Jul. 29, 2012
Quarterly Dividend [Member]
|
Jan. 27, 2013
Quarterly Dividend [Member]
|
Dec. 28, 2012
Special Dividend [Member]
|
Jan. 27, 2013
Special Dividend [Member]
|
Jan. 27, 2013
Special Dividend [Member]
|
|
Dividends [Line Items] | |||||||||
Cash dividend payment, per share | $ 0.03 | $ 0.03 | $ 0.03 | $ 0.50 | |||||
Dividend declared date | Jun. 13, 2012 | Jun. 13, 2012 | Jun. 13, 2012 | Nov. 27, 2012 | |||||
Cash dividends paid | $ 7,226 | $ 1,100 | $ 6,100 | ||||||
Quarterly cash dividend payment, per share | $ 0.03 | ||||||||
Date of payment to shareholders entitled to dividends | Apr. 15, 2013 | ||||||||
Date of record of shareholders entitled to dividends | Apr. 01, 2013 |
Long-Term Debt and Lines of Credit - Lines of Credit Narrative (Detail)
|
9 Months Ended | 9 Months Ended | 9 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 27, 2013
United States [Member]
Amended and Restated Credit Agreement [Member]
USD ($)
|
Apr. 29, 2012
United States [Member]
Amended and Restated Credit Agreement [Member]
USD ($)
|
Jan. 27, 2013
United States [Member]
Amended and Restated Credit Agreement [Member]
Revolving Credit Facility [Member]
USD ($)
|
Apr. 29, 2012
United States [Member]
Amended and Restated Credit Agreement [Member]
Revolving Credit Facility [Member]
USD ($)
|
Jan. 27, 2013
China [Member]
Revolving credit agreement [Member]
USD ($)
|
Jan. 27, 2013
China [Member]
Revolving credit agreement [Member]
CNY
|
Apr. 29, 2012
China [Member]
Revolving credit agreement [Member]
USD ($)
|
Jan. 27, 2013
Poland [Member]
Revolving credit agreement [Member]
USD ($)
|
Jan. 27, 2013
Poland [Member]
Revolving credit agreement [Member]
PLN
|
Apr. 29, 2012
Poland [Member]
Revolving credit agreement [Member]
USD ($)
|
Apr. 29, 2012
Poland [Member]
Revolving credit agreement [Member]
PLN
|
Jan. 17, 2012
Poland [Member]
Revolving credit agreement [Member]
PLN
|
|
Line of Credit Facility [Line Items] | ||||||||||||
Maximum borrowing capacity | $ 7,600,000 | $ 6,400,000 | 40,000,000 | $ 2,200,000 | 6,800,000 | 6,800,000 | ||||||
Expiration date | Aug. 25, 2013 | Sep. 02, 2013 | Sep. 02, 2013 | Aug. 25, 2013 | Aug. 25, 2013 | |||||||
Applicable interest rate at end of period | 1.80% | 6.00% | 6.00% | |||||||||
Interest rate description | This agreement provides for a pricing matrix to determine the interest rate payable on loans made under the agreement | This agreement has an interest rate determined by the Chinese government | This agreement has an interest rate determined by the Chinese government | This agreement bears interest at WIBOR (Warsaw Interbank Offered Rate) plus 2% | This agreement bears interest at WIBOR (Warsaw Interbank Offered Rate) plus 2% | |||||||
Letter of credit, outstanding amount | 195,000 | 0 | ||||||||||
Outstanding amount | $ 0 | $ 0 | $ 0 | $ 0 | $ 576,000 | 1,800,000 | $ 889,000 | 2,800,000 | ||||
Percent added to reference rate in effect from time to time to set the interest rate | 2.00% | 2.00% | ||||||||||
Reference rate on which the interest rate is based | Warsaw Interbank Offered Rate | Warsaw Interbank Offered Rate |
Stock-Based Compensation
|
9 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 27, 2013
|
||||||||||||||||
Stock-Based Compensation |
3. Stock-Based Compensation
Incentive Stock Option Awards
On
October 8, 2012, we granted to an outside director 2,000 options to
purchase shares of common stock at the fair market value on the
date of grant. These options vested immediately and expire ten
years after the date of grant. The fair value of this option award
was estimated on the date of grant using the Black-Scholes option
pricing model. The fair value of stock options granted to this
outside director during the nine month period ended January 27,
2013 was $ 5.03 per share using the following
assumptions.
The
assumptions utilized in the model are evaluated and revised, as
necessary, to reflect market conditions, actual historical
experience, and groups of employees that have similar exercise
patterns that are considered separately for valuation purposes. The
risk-free interest rate for periods within the contractual life of
the option was based on the U.S. Treasury yield curve in effect at
the time of grant. The dividend yield rate is based on historical
experience and future dividend yields in effect at the time of
grant. The expected volatility was derived using a term structure
based on historical volatility and the volatility implied by
exchange-traded options on the company’s common stock. The
expected term of the options is based on the contractual term of
the stock option award and expected participant exercise
trends.
At
January 27, 2013, options to purchase 182,825 shares of common
stock were outstanding, had a weighted average exercise price of
$6.99 per share, and a weighted average contractual term of 4.6
years. At January 27, 2013, the aggregate intrinsic value for
options outstanding was $1.8 million.
At
January 27, 2013, outstanding options to purchase 169,825 shares of
common stock were exercisable, had a weighted average exercise
price of $7.23 per share, and a weighted average contractual term
of 4.6 years. At January 27, 2013, the aggregate intrinsic value
for options exercisable was $1.6 million.
The
aggregate intrinsic value for options exercised for the nine months
ended January 27, 2013 and January 29, 2012, was $90,000 and
$196,000, respectively.
The
remaining unrecognized compensation cost related to incentive stock
option awards at January 27, 2013, was $19,000 which is expected to
be recognized over a weighted average period of 0.7
years.
We
recorded $53,000 and $101,000 of compensation expense on incentive
stock option grants within selling, general, and administrative
expense for the nine months ended January 27, 2013, and January 29,
2012, respectively.
Common Stock Awards
On
October 8, 2012, we granted a total of 1,658 shares of common stock
to certain outside directors. These shares of common stock vested
immediately and were measured at $12.13 per share, which represents
the closing price of the company's common stock at the date of
grant.
On
October 1, 2011, we granted a total of 3,075 shares of common stock
to our board of directors. These shares of common stock vested
immediately and were measured at $8.45 per share, which represents
the closing price of the company's common stock at the date of
grant.
We
recorded $20,000 and $26,000 of compensation expense within
selling, general, and administrative expense for these common stock
awards for the nine month period ending January 27, 2013 and
January 29, 2012, respectively.
Time Vested Restricted Stock Awards
We
did not grant any time vested restricted stock awards through the
third quarter of fiscal 2013.
We
recorded $116,000 and $131,000 of compensation expense within
selling, general, and administrative expense for time vested
restricted stock awards for the nine month periods ending January
27, 2013, and January 29, 2012, respectively.
At
January 27, 2013, there were 123,335 shares of time vested
restricted stock outstanding and unvested. Of the 123,335 shares
outstanding and unvested, 70,000 shares (granted on January 7,
2009) vest in equal installments on May 1, 2013 and 2014,
respectively. The remaining 53,335 shares (granted on July 1, 2009)
vest in equal installments on July 1, 2013, and 2014, respectively.
At January 27, 2013, the weighted average fair value of these
outstanding and unvested shares was $4.06 per share.
During
the nine month period ended January 27, 2013, 61,665 shares of time
vested restricted stock vested and had a weighted average fair
value of $232,000 or $3.76 per share. During the nine month period
ended January 29, 2012, 10,000 shares of time vested restricted
stock vested and had a weighted average fair value of $18,800 or
$1.88 per share.
At
January 27, 2013, the remaining unrecognized compensation cost
related to the unvested restricted stock awards was $86,000, which
is expected to be recognized over a weighted average vesting period
of 1.1 years.
Performance Based Restricted Stock Units
On
July 11, 2012, certain key members of management were granted
performance based restricted common stock units which could earn up
to 120,000 shares of common stock if certain performance targets
are met as defined in the related restricted stock unit agreement.
These awards were valued based on the fair market value on the date
of grant. The fair value of these awards was $10.21, which
represents the closing price of our common stock on the date of
grant. The vesting of these awards is over the requisite service
period of three years.
The
company recorded compensation expense of $119,000 within selling,
general, and administrative expense for performance based
restricted stock units for the nine month period ending January 27,
2013. No compensation expense was recorded for performance based
restricted stock units for the nine month period ending January 29,
2012, as the performance based restricted stock units granted in
fiscal 2009 were fully vested in fiscal 2011 and no performance
based restricted stock units were granted in fiscal years 2010
through 2012. Compensation cost is recorded based on an assessment
each reporting period of the probability if certain performance
goals will be met during the vesting period. If performance goals
are not probable of occurrence, no compensation cost will be
recognized and any recognized compensation cost would be
reversed.
As
of January 27, 2013, the remaining unrecognized compensation cost
related to the performance based restricted stock units was
$493,000, which is expected to be recognized over a weighted
average vesting period of 2.4 years.
Other Share-Based Arrangements
Effective
May 2, 2011, we entered into an agreement in which we granted a
non-employee a stock appreciation right that is indexed on 70,000
shares of our common stock. This agreement requires us to settle in
cash an amount equal to $35,000, plus the excess, if any, over a
stock appreciation right value of $700,000 at May 2, 2011. This
stock appreciation right value of $700,000 represents the 70,000
indexed shares of common stock noted above measured at the closing
price per share of $10 at May 2, 2011. The cash settlement in
connection with the stock appreciation right value would represent
the difference between a stock appreciation right value that is
indexed on the 70,000 shares of common stock noted above and based
on the highest closing price per share of our common stock for the
period May 2, 2011 through June 30, 2012 (limited to $12 per share)
and the $700,000 stock appreciation right value at May 2, 2011.
During the first quarter of fiscal 2013, this award fully vested
and was paid out at a fair value totaling $174,000.
Compensation
expense associated with this agreement was $40,000 and $44,000 for
the nine months ended January 27, 2013, and January 29, 2012,
respectively.
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