North Carolina
|
1-12597
|
56-1001967
|
||
(State or Other Jurisdiction
of Incorporation)
|
(Commission File Number)
|
(I.R.S. Employer
Identification No.)
|
1823 Eastchester Drive
High Point, North Carolina 27265
|
(Address of Principal Executive Offices)
(Zip Code)
|
(336) 889-5161
|
(Registrant’s Telephone Number, Including Area Code)
|
Not Applicable
|
(Former name or address, if changed from last report)
|
Page
|
|
Item 2.02 – Results of Operations and Financial Condition
|
3
|
Item 9.01(d) – Exhibits | 5 |
Signatures | 6 |
Exhibits
|
7
|
|
|
CULP, INC. |
|
|
(Registrant)
|
|
|
|
|
|
|
|
By:
|
/s/ Kenneth R. Bowling
|
|
|
Chief Financial Officer
|
|
|
(principal financial officer)
|
|
|
|
|
By:
|
/s/ Thomas B. Gallagher, Jr.
|
|
|
Corporate Controller
|
|
|
(principal accounting officer)
|
|
Exhibit Number
|
Exhibit
|
|
|
|
|
99(a)
|
News Release dated August 30, 2017
|
|
99(b)
|
Financial Information Release dated August 30, 2017
|
Investor Contact:
|
Kenneth R. Bowling
|
Media Contact:
|
Teresa A. Huffman
|
Chief Financial Officer
|
Vice President, Human Resources
|
||
336-881-5630
|
336-889-5161
|
§
|
Net sales were $79.5 million, down 1.4 percent over the prior year, with mattress fabrics sales down 4.2 percent and upholstery fabrics sales up 3.2 percent.
|
§
|
Pre-tax income was $6.7 million, compared with $8.5 million for the prior year period, which was an exceptionally strong quarter.
|
§
|
Net income was $5.0 million, or $0.40 per diluted share, compared with net income of $5.3 million, or $0.43 per diluted share, in the prior year period.
|
§
|
The company’s financial position remained strong with total cash and investments of $51.7 million and $5.0 million outstanding on the company’s line of credit as of July 30, 2017, for a net cash position of $46.7 million. (See summary of cash and investments table on page 6.)
|
§
|
The company paid a regular quarterly cash dividend of $0.08 per share and a special cash dividend of $0.21 per share during the quarter, totaling $3.6 million. Since June 2011, the company has returned a total of approximately $50 million to shareholders in the form of regular quarterly and special dividends and share repurchases.
|
§
|
The company has signed a non-binding letter of intent to acquire a mattress fabrics business located in China.
|
§
|
The projection for the second quarter of fiscal 2018 is for overall sales to be comparable to the same period last year. Pre-tax income is expected to be in the range of $5.4 million to $6.1 million. Pre-tax income for the second quarter of fiscal 2017 was $7.2 million.
|
§
|
The company’s performance for the second half of fiscal 2018 is currently expected to be more in line with the results achieved during the second half of last fiscal year, excluding any impact from acquisitions.
|
Three Months Ended
|
||||||||
July 30,
|
July 31,
|
|||||||
2017
|
2016
|
|||||||
Net sales
|
$
|
79,533,000
|
$
|
80,682,000
|
||||
Income before income taxes
|
$
|
6,742,000
|
$
|
8,546,000
|
||||
Net income
|
$
|
4,984,000
|
$
|
5,313,000
|
||||
Net income per share:
|
||||||||
Basic
|
$
|
0.40
|
$
|
0.43
|
||||
Diluted
|
$
|
0.40
|
$
|
0.43
|
||||
Average shares outstanding:
|
||||||||
Basic
|
12,399,000
|
12,286,000
|
||||||
Diluted
|
12,590,000
|
12,463,000
|
Amounts
|
||||||||||||
July 30,
|
July 31,
|
April 30,
|
||||||||||
2017
|
2016
|
2017* | ||||||||||
Cash and cash equivalents
|
$
|
18,322
|
$
|
45,549
|
$
|
20,795
|
||||||
Short-term investments
|
2,469
|
2,434
|
2,443
|
|||||||||
Long-term investments (Held-To-Maturity)
|
30,907
|
-
|
30,945
|
|||||||||
Total Cash and Investments
|
$
|
51,698
|
$
|
47,983
|
$
|
54,183
|
THREE MONTHS ENDED
|
||||||||||
Amounts | ||||||||||
July 30,
|
July 31,
|
|||||||||
2017
|
2016
|
|||||||||
Consolidated Effective GAAP Income Tax Rate
|
(1)
|
|
24.3
|
%
|
37.8
|
%
|
||||
Non-Cash U.S. Income Tax Expense
|
(17.0
|
)%
|
(19.6
|
)%
|
||||||
Excess income tax benefits related to stock-based compensation
|
8.2
|
%
|
-
|
|||||||
Other Non-Cash Foreign Income Tax Expense
|
-
|
(0.4
|
)%
|
|||||||
Consolidated Adjusted Effective Income Tax Rate
|
(2)
|
|
15.5
|
%
|
17.8
|
%
|
(1) | Calculated by dividing consolidated income tax expense by consolidated income before income taxes. |
(2)
|
Represents estimated cash income tax expense for our subsidiaries located in Canada and China divided by consolidated income before income taxes.
|
Three Months Ended
|
Three Months Ended
|
|||||||
July 30, 2017
|
July 31, 2016
|
|||||||
Net cash provided by operating activities
|
$
|
2,404
|
$
|
6,199
|
||||
Minus: Capital Expenditures
|
(2,260
|
)
|
(3,139
|
)
|
||||
Minus: Investment in unconsolidated joint venture
|
(489
|
)
|
-
|
|||||
Minus: Payments on vendor-financed capital expenditures
|
(1,250
|
)
|
-
|
|||||
Plus: Proceeds from the sale of long-term investments (Rabbi Trust)
|
49
|
-
|
||||||
Minus: Purchase of long-term investments (Rabbi Trust)
|
(1,267
|
)
|
(559
|
)
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
90
|
(4
|
)
|
|||||
Free Cash Flow
|
$
|
(2,723
|
)
|
$
|
2,497
|
Three Months Ended
|
Three Months Ended
|
|||||||
July 30, 2017
|
July 31, 2016
|
|||||||
Consolidated Income from Operations
|
$
|
6,964
|
$
|
8,673
|
||||
Average Capital Employed (2)
|
103,326
|
92,478
|
||||||
Return on Average Capital Employed (1)
|
27.0
|
%
|
37.5
|
%
|
||||
Average Capital Employed
|
||||||||
July 30, 2017
|
April 30, 2017
|
|||||||
Total assets
|
$
|
207,904
|
$
|
205,634
|
||||
Total liabilities
|
(58,227
|
)
|
(57,004
|
)
|
||||
Subtotal
|
$
|
149,677
|
$
|
148,630
|
||||
Less:
|
||||||||
Cash and cash equivalents
|
(18,322
|
)
|
(20,795
|
)
|
||||
Short-term investments
|
(2,469
|
)
|
(2,443
|
)
|
||||
Long-term investments - Held-to-Maturity
|
(30,907
|
)
|
(30,945
|
)
|
||||
Long-term investments - Rabbi Trust
|
(6,714
|
)
|
(5,466
|
)
|
||||
Deferred income taxes - non-current
|
(436
|
)
|
(419
|
)
|
||||
Income taxes payable - current
|
884
|
287
|
||||||
Income taxes payable - long-term
|
487
|
467
|
||||||
Deferred income taxes - non-current
|
4,253
|
3,593
|
||||||
Line of credit
|
5,000
|
-
|
||||||
Deferred compensation
|
6,769
|
5,520
|
||||||
Total Capital Employed
|
$
|
108,222
|
$
|
98,429
|
||||
Average Capital Employed (2)
|
$
|
103,326
|
||||||
July 31, 2016
|
May 1, 2016
|
|||||||
Total assets
|
$
|
183,360
|
$
|
175,142
|
||||
Total liabilities
|
(51,925
|
)
|
(46,330
|
)
|
||||
Subtotal
|
$
|
131,435
|
$
|
128,812
|
||||
Less:
|
||||||||
Cash and cash equivalents
|
(45,549
|
)
|
(37,787
|
)
|
||||
Short-term investments
|
(2,434
|
)
|
(4,359
|
)
|
||||
Long-term investments - Rabbi Trust
|
(4,611
|
)
|
(4,025
|
)
|
||||
Income taxes receivable
|
-
|
(155
|
)
|
|||||
Deferred income taxes - non-current
|
(1,942
|
)
|
(2,319
|
)
|
||||
Income taxes payable - current
|
358
|
180
|
||||||
Income taxes payable - long-term
|
3,779
|
3,841
|
||||||
Deferred income taxes - non-current
|
1,532
|
1,483
|
||||||
Line of credit
|
7,000
|
-
|
||||||
Deferred compensation
|
5,031
|
4,686
|
||||||
Total Capital Employed
|
$
|
94,599
|
$
|
90,357
|
||||
Average Capital Employed (2)
|
$
|
92,478
|
Notes:
|
|
|
|
(1)
|
Return on average capital employed represents operating income for the three month periods ending July 30, 2017 and July 31, 2016 times four quarters to arrive at an annualized value then divided by average capital employed. Average capital employed does not include cash and cash equivalents, short-term investments, long-term investments (Held-To-Maturity), long-term investments (Rabbi Trust), noncurrent deferred income tax assets and liabilities, income taxes receivable and payable, line of credit, and deferred compensation. |
|
|
(2)
|
Average capital employed used for three months ending July 30, 2017 was computed using two quarterly periods ending July 30, 2017 and April 30, 2017.
Average capital employed used for three months ending July 31, 2016 was computed using two quarterly periods ending July 31, 2016 and May 1, 2016.
|
CULP, INC. FINANCIAL INFORMATION RELEASE
|
||||||||||||||||||||
CONSOLIDATED STATEMENTS OF NET INCOME
|
||||||||||||||||||||
FOR THREE MONTHS ENDED JULY 30, 2017 AND JULY 31, 2016
|
||||||||||||||||||||
(UNAUDITED)
|
||||||||||||||||||||
(Amounts in Thousands, Except for Per Share Data)
|
||||||||||||||||||||
THREE MONTHS ENDED
|
||||||||||||||||||||
Amounts
|
Percent of Sales
|
|||||||||||||||||||
July 30,
|
July 31,
|
% Over
|
July 30,
|
July 31,
|
||||||||||||||||
2017
|
2016
|
(Under)
|
2017
|
2016
|
||||||||||||||||
Net sales
|
$
|
79,533
|
80,682
|
(1.4
|
)%
|
100.0
|
%
|
100.0
|
%
|
|||||||||||
Cost of sales
|
63,068
|
62,263
|
1.3
|
%
|
79.3
|
%
|
77.2
|
%
|
||||||||||||
Gross profit
|
16,465
|
18,419
|
(10.6
|
)%
|
20.7
|
%
|
22.8
|
%
|
||||||||||||
Selling, general and
|
||||||||||||||||||||
administrative expenses
|
9,501
|
9,746
|
(2.5
|
)%
|
11.9
|
%
|
12.1
|
%
|
||||||||||||
Income from operations
|
6,964
|
8,673
|
(19.7
|
)%
|
8.8
|
%
|
10.7
|
%
|
||||||||||||
Interest income
|
(131
|
)
|
(25
|
)
|
424.0
|
%
|
(0.2
|
)%
|
(0.0
|
)%
|
||||||||||
Other expense
|
353
|
152
|
132.2
|
%
|
0.4
|
%
|
0.2
|
%
|
||||||||||||
Income before income taxes
|
6,742
|
8,546
|
(21.1
|
)%
|
8.5
|
%
|
10.6
|
%
|
||||||||||||
Income taxes
|
1,640
|
3,233
|
(49.3
|
)%
|
24.3
|
%
|
37.8
|
%
|
||||||||||||
Loss from investment in unconsolidated joint venture
|
118
|
-
|
100.0
|
%
|
0.1
|
%
|
0.0
|
%
|
||||||||||||
Net income
|
$
|
4,984
|
5,313
|
(6.2
|
)%
|
6.3
|
%
|
6.6
|
%
|
|||||||||||
Net income per share-basic
|
$
|
0.40
|
$
|
0.43
|
(7.0
|
)%
|
||||||||||||||
Net income per share-diluted
|
$
|
0.40
|
$
|
0.43
|
(7.0
|
)%
|
||||||||||||||
Average shares outstanding-basic
|
12,399
|
12,286
|
0.9
|
%
|
||||||||||||||||
Average shares outstanding-diluted
|
12,590
|
12,463
|
1.0
|
%
|
CULP, INC. FINANCIAL INFORMATION RELEASE
|
||||||||||||||||||||
CONSOLIDATED BALANCE SHEETS
|
||||||||||||||||||||
JULY 30, 2017, JULY 31, 2016, AND APRIL 30, 2017
|
||||||||||||||||||||
Unaudited
|
||||||||||||||||||||
(Amounts in Thousands)
|
||||||||||||||||||||
|
||||||||||||||||||||
Amounts
|
Increase
|
|||||||||||||||||||
July 30,
|
July 31,
|
(Decrease)
|
* April 30,
|
|||||||||||||||||
2017
|
2016
|
Dollars
|
Percent
|
2017
|
||||||||||||||||
Current assets
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
18,322
|
45,549
|
(27,227
|
)
|
(59.8
|
)%
|
20,795
|
||||||||||||
Short-term investments
|
2,469
|
2,434
|
35
|
1.4
|
%
|
2,443
|
||||||||||||||
Accounts receivable
|
22,140
|
22,690
|
(550
|
)
|
(2.4
|
)%
|
24,577
|
|||||||||||||
Inventories
|
55,227
|
48,131
|
7,096
|
14.7
|
%
|
51,482
|
||||||||||||||
Other current assets
|
3,441
|
2,294
|
1,147
|
50.0
|
%
|
2,894
|
||||||||||||||
Total current assets
|
101,599
|
121,098
|
(19,499
|
)
|
(16.1
|
)%
|
102,191
|
|||||||||||||
Property, plant & equipment, net
|
52,912
|
41,745
|
11,167
|
26.8
|
%
|
51,651
|
||||||||||||||
Goodwill
|
11,462
|
11,462
|
-
|
0.0
|
%
|
11,462
|
||||||||||||||
Deferred income taxes
|
436
|
1,942
|
(1,506
|
)
|
(77.5
|
)%
|
419
|
|||||||||||||
Long-term Investments - Held-To-Maturity
|
30,907
|
-
|
30,907
|
100.0
|
%
|
30,945
|
||||||||||||||
Long-term Investments - Rabbi Trust
|
6,714
|
4,611
|
2,103
|
45.6
|
%
|
5,466
|
||||||||||||||
Investment in unconsolidated joint venture
|
1,477
|
-
|
1,477
|
100.0
|
%
|
1,106
|
||||||||||||||
Other assets
|
2,397
|
2,502
|
(105
|
)
|
(4.2
|
)%
|
2,394
|
|||||||||||||
Total assets
|
$
|
207,904
|
183,360
|
24,544
|
13.4
|
%
|
205,634
|
|||||||||||||
Current liabilities
|
||||||||||||||||||||
Accounts payable - trade
|
$
|
29,112
|
26,708
|
2,404
|
9.0
|
%
|
29,101
|
|||||||||||||
Accounts payable - capital expenditures
|
5,647
|
627
|
5,020
|
800.6
|
%
|
4,767
|
||||||||||||||
Accrued expenses
|
6,075
|
6,890
|
(815
|
)
|
(11.8
|
)%
|
11,947
|
|||||||||||||
Income taxes payable - current
|
884
|
358
|
526
|
146.9
|
%
|
287
|
||||||||||||||
Total current liabilities
|
41,718
|
34,583
|
7,135
|
20.6
|
%
|
46,102
|
||||||||||||||
Line of credit
|
5,000
|
7,000
|
(2,000
|
)
|
(28.6
|
)%
|
-
|
|||||||||||||
Accounts payable - capital expenditures
|
-
|
-
|
-
|
0.0
|
%
|
1,322
|
||||||||||||||
Income taxes payable - long-term
|
487
|
3,779
|
(3,292
|
)
|
(87.1
|
)%
|
467
|
|||||||||||||
Deferred income taxes
|
4,253
|
1,532
|
2,721
|
177.6
|
%
|
3,593
|
||||||||||||||
Deferred compensation
|
6,769
|
5,031
|
1,738
|
34.5
|
%
|
5,520
|
||||||||||||||
Total liabilities
|
58,227
|
51,925
|
6,302
|
12.1
|
%
|
57,004
|
||||||||||||||
Shareholders' equity
|
149,677
|
131,435
|
18,242
|
13.9
|
%
|
148,630
|
||||||||||||||
Total liabilities and
|
||||||||||||||||||||
shareholders' equity
|
$
|
207,904
|
183,360
|
24,544
|
13.4
|
%
|
205,634
|
|||||||||||||
Shares outstanding
|
12,441
|
12,307
|
134
|
1.1
|
%
|
12,357
|
CULP, INC. FINANCIAL INFORMATION RELEASE
|
||||||||||||
SUMMARY OF CASH AND INVESTMENTS | ||||||||||||
JULY 30, 2017 AND JULY 31, 2016, AND APRIL 30, 2017
|
||||||||||||
Unaudited
|
||||||||||||
(Amounts in Thousands)
|
||||||||||||
Amounts
|
||||||||||||
July 30,
|
July 31,
|
April 30,
|
||||||||||
2017
|
2016
|
2017* | ||||||||||
Cash and cash equivalents
|
$
|
18,322
|
$
|
45,549
|
$
|
20,795
|
||||||
Short-term investments
|
2,469
|
2,434
|
2,443
|
|||||||||
Long-term investments (Held-To-Maturity)
|
30,907
|
-
|
30,945
|
|||||||||
Total Cash and Investments
|
$
|
51,698
|
$
|
47,983
|
$
|
54,183
|
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||||
FOR THE THREE MONTHS ENDED JULY 30, 2017 AND JULY 31, 2016
|
||||||||||
Unaudited
|
||||||||||
(Amounts in Thousands)
|
||||||||||
THREE MONTHS ENDED
|
||||||||||
Amounts
|
||||||||||
July 30,
|
July 31,
|
|||||||||
2017
|
2016
|
|||||||||
Cash flows from operating activities:
|
||||||||||
Net income
|
$
|
4,984
|
5,313
|
|||||||
Adjustments to reconcile net income to net cash
|
||||||||||
provided by operating activities:
|
||||||||||
Depreciation
|
1,807
|
1,761
|
||||||||
Amortization of assets
|
82
|
52
|
||||||||
Stock-based compensation
|
757
|
761
|
||||||||
Deferred income taxes
|
643
|
593
|
||||||||
Realized loss on sale of short-term investments
|
-
|
12
|
||||||||
Loss on sale of equipment
|
-
|
9
|
||||||||
Loss from investment in unconsolidated joint venture
|
118
|
-
|
||||||||
Foreign currency exchange loss (gain)
|
35
|
(62
|
)
|
|||||||
Changes in assets and liabilities:
|
||||||||||
Accounts receivable
|
2,524
|
611
|
||||||||
Inventories
|
(3,539
|
)
|
(1,808
|
)
|
||||||
Other current assets
|
(467
|
)
|
158
|
|||||||
Other assets
|
(47
|
)
|
19
|
|||||||
Accounts payable
|
(397
|
)
|
3,036
|
|||||||
Accrued expenses and deferrred compensation
|
(4,704
|
)
|
(4,631
|
)
|
||||||
Income taxes
|
608
|
375
|
||||||||
Net cash provided by operating activities
|
2,404
|
6,199
|
(2
|
)
|
||||||
Cash flows from investing activities:
|
||||||||||
Capital expenditures
|
(2,260
|
)
|
(3,139
|
)
|
||||||
Investment in unconsolidated joint venture
|
(489
|
)
|
-
|
|||||||
Proceeds from the sale of short-term investments
|
-
|
2,000
|
||||||||
Purchase of short-term investments
|
(12
|
)
|
(21
|
)
|
||||||
Proceeds from the sale of long-term investments (Rabbi Trust)
|
49
|
-
|
||||||||
Purchase of long-term investments (Rabbi Trust)
|
(1,267
|
)
|
(559
|
)
|
||||||
Net cash used in investing activities
|
(3,979
|
)
|
(1,719
|
)
|
||||||
Cash flows from financing activities:
|
||||||||||
Proceeds from line of credit
|
5,000
|
7,000
|
||||||||
Payments on vendor-financed capital expenditures
|
(1,250
|
)
|
-
|
|||||||
Dividends paid
|
(3,608
|
)
|
(3,445
|
)
|
||||||
Common stock surrendered for withholding taxes payable
|
(1,135
|
)
|
(280
|
)
|
||||||
Proceeds from common stock issued
|
5
|
11
|
||||||||
Net cash (used in) provided by financing activities
|
(988
|
)
|
3,286
|
(2
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
90
|
(4
|
)
|
|||||||
(Decrease) increase in cash and cash equivalents
|
(2,473
|
)
|
7,762
|
|||||||
Cash and cash equivalents at beginning of period
|
20,795
|
37,787
|
||||||||
Cash and cash equivalents at end of period
|
$
|
18,322
|
45,549
|
|||||||
Free Cash Flow (1)
|
$
|
(2,723
|
)
|
2,497
|
(2
|
)
|
||||
(1) Free Cash Flow reconciliation is as follows:
|
||||||||||
FY 2018
|
FY 2017
|
|||||||||
A) Net cash provided by operating activities
|
$
|
2,404
|
6,199
|
|||||||
B) Minus: Capital Expenditures
|
(2,260
|
)
|
(3,139
|
)
|
||||||
C) Minus: Investment in unconsolidated joint venture
|
(489
|
)
|
-
|
|||||||
D) Minus: Payments on vendor-financed capital expenditures
|
(1,250
|
)
|
-
|
|||||||
E) Plus: Proceeds from the sale of long-term investments (Rabbi Trust)
|
49
|
-
|
||||||||
F) Minus: Purchase of long-term investments (Rabbi Trust)
|
(1,267
|
)
|
(559
|
)
|
||||||
G) Effects of exchange rate changes on cash and cash equivalents
|
90
|
(4
|
)
|
|||||||
$
|
(2,723
|
)
|
2,497
|
|||||||
(2)
|
During the first quarter of fiscal 2018, we adopted ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." Accordingly, we reclassified certain amounts on our Statement of Cash Flows for the three months ended July 31, 2016 to conform to the current year's presentation. As a result, our net cash provided by operating activities increased by $447 which was fully offset by a corresponding decrease of $447 to our net cash provided by financing activities. Additionally, our free cash flow increased $280.
|
CULP, INC. FINANCIAL INFORMATION RELEASE
|
||||||||||||||||||||
STATEMENTS OF OPERATIONS BY SEGMENT
|
||||||||||||||||||||
FOR THE THREE MONTHS ENDED JULY 30, 2017 AND JULY 31, 2016
|
||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||
(Amounts in thousands)
|
||||||||||||||||||||
THREE MONTHS ENDED
|
||||||||||||||||||||
Amounts
|
Percent of Total Sales
|
|||||||||||||||||||
July 30,
|
July 31,
|
% Over
|
July 30,
|
July 31,
|
||||||||||||||||
Net Sales by Segment
|
2017
|
2016
|
(Under)
|
2017
|
2016
|
|||||||||||||||
Mattress Fabrics
|
$
|
48,429
|
50,530
|
(4.2
|
)%
|
60.9
|
%
|
62.6
|
%
|
|||||||||||
Upholstery Fabrics
|
31,104
|
30,152
|
3.2
|
%
|
39.1
|
%
|
37.4
|
%
|
||||||||||||
Net Sales
|
$
|
79,533
|
80,682
|
(1.4
|
)%
|
100.0
|
%
|
100.0
|
%
|
|||||||||||
Gross Profit by Segment
|
Gross Profit Margin
|
|||||||||||||||||||
Mattress Fabrics
|
$
|
9,760
|
11,901
|
(18.0
|
)%
|
20.2
|
%
|
23.6
|
%
|
|||||||||||
Upholstery Fabrics
|
6,705
|
6,518
|
2.9
|
%
|
21.6
|
%
|
21.6
|
%
|
||||||||||||
Gross Profit
|
$
|
16,465
|
18,419
|
(10.6
|
)%
|
20.7
|
%
|
22.8
|
%
|
|||||||||||
Selling, General and Administrative expenses by Segment
|
Percent of Sales
|
|||||||||||||||||||
Mattress Fabrics
|
$
|
3,391
|
3,499
|
(3.1
|
)%
|
7.0
|
%
|
6.9
|
%
|
|||||||||||
Upholstery Fabrics
|
3,811
|
3,534
|
7.8
|
%
|
12.3
|
%
|
11.7
|
%
|
||||||||||||
Unallocated Corporate expenses
|
2,299
|
2,713
|
(15.3
|
)%
|
2.9
|
%
|
3.4
|
%
|
||||||||||||
Selling, General and Administrative Expenses
|
$
|
9,501
|
9,746
|
(2.5
|
)%
|
11.9
|
%
|
12.1
|
%
|
|||||||||||
Operating Income (loss) by Segment
|
Operating Income (Loss) Margin
|
|||||||||||||||||||
Mattress Fabrics
|
$
|
6,368
|
8,402
|
(24.2
|
)%
|
13.1
|
%
|
16.6
|
%
|
|||||||||||
Upholstery Fabrics
|
2,895
|
2,984
|
(3.0
|
)%
|
9.3
|
%
|
9.9
|
%
|
||||||||||||
Unallocated corporate expenses
|
(2,299
|
)
|
(2,713
|
)
|
(15.3
|
)%
|
(2.9
|
)%
|
(3.4
|
)%
|
||||||||||
Operating Income
|
$
|
6,964
|
8,673
|
(19.7
|
)%
|
8.8
|
%
|
10.7
|
%
|
|||||||||||
Return on Capital (1)
|
||||||||||||||||||||
Mattress Fabrics
|
29.7
|
%
|
44.4
|
%
|
||||||||||||||||
Upholstery Fabrics
|
65.2
|
%
|
69.7
|
%
|
||||||||||||||||
Unallocated Corporate
|
N/A
|
N/A
|
||||||||||||||||||
Consolidated
|
27.0
|
%
|
37.5
|
%
|
||||||||||||||||
Capital Employed (2)
|
||||||||||||||||||||
Mattress Fabrics
|
$
|
87,835
|
76,646
|
14.6
|
%
|
|||||||||||||||
Upholstery Fabrics
|
19,508
|
17,221
|
13.3
|
%
|
||||||||||||||||
Unallocated Corporate
|
879
|
732
|
N/A
|
|||||||||||||||||
Consolidated
|
$
|
108,222
|
94,599
|
14.4
|
%
|
|||||||||||||||
Depreciation expense by Segment
|
||||||||||||||||||||
Mattress Fabrics
|
$
|
1,612
|
1,556
|
3.6
|
%
|
|||||||||||||||
Upholstery Fabrics
|
195
|
205
|
(4.9
|
)%
|
||||||||||||||||
Depreciation expense
|
$
|
1,807
|
1,761
|
2.6
|
%
|
Notes:
|
|
|
|
(1)
|
See pages 7 and 8 of this financial information release for calculations. |
|
|
(2)
|
The capital employed balances are as of July 30, 2017 and July 31, 2016.
|
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||
CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA
|
||||||||||||||||||||
FOR THE TWELVE MONTHS ENDED JULY 30, 2017 AND JULY 31, 2016
|
||||||||||||||||||||
(UNAUDITED)
|
||||||||||||||||||||
(AMOUNTS IN THOUSANDS)
|
||||||||||||||||||||
Quarter Ended
|
||||||||||||||||||||
Trailing 12
|
||||||||||||||||||||
Months
|
||||||||||||||||||||
10/30/2016
|
1/29/2017
|
4/30/2017
|
7/30/2017
|
7/30/2017
|
||||||||||||||||
Net income
|
$
|
4,475
|
$
|
6,347
|
$
|
6,198
|
$
|
4,984
|
$
|
22,004
|
||||||||||
Income taxes
|
2,684
|
643
|
778
|
1,640
|
5,745
|
|||||||||||||||
Interest income, net
|
(15
|
)
|
(124
|
)
|
(134
|
)
|
(131
|
)
|
(404
|
)
|
||||||||||
Depreciation and amortization expense
|
1,778
|
1,875
|
1,863
|
1,889
|
7,405
|
|||||||||||||||
Stock based compensation
|
896
|
962
|
739
|
757
|
3,354
|
|||||||||||||||
Adjusted EBITDA
|
$
|
9,818
|
$
|
9,703
|
$
|
9,444
|
$
|
9,139
|
$
|
38,104
|
||||||||||
Quarter Ended
|
||||||||||||||||||||
Trailing 12
|
||||||||||||||||||||
Months
|
||||||||||||||||||||
11/1/2015
|
1/31/2016
|
5/1/2016
|
7/31/2016
|
7/31/2016
|
||||||||||||||||
Net income
|
$
|
3,771
|
$
|
4,862
|
$
|
3,601
|
$
|
5,313
|
$
|
17,547
|
||||||||||
Income taxes
|
2,373
|
2,317
|
3,566
|
3,233
|
11,489
|
|||||||||||||||
Interest income, net
|
(69
|
)
|
(38
|
)
|
(26
|
)
|
(25
|
)
|
(158
|
)
|
||||||||||
Depreciation and amortization expense
|
1,668
|
1,741
|
1,830
|
1,813
|
7,052
|
|||||||||||||||
Stock based compensation
|
1,074
|
625
|
778
|
761
|
3,238
|
|||||||||||||||
Adjusted EBITDA
|
$
|
8,817
|
$
|
9,507
|
$
|
9,749
|
$
|
11,095
|
$
|
39,168
|
||||||||||
% Over (Under)
|
11.4
|
%
|
2.1
|
%
|
-3.1
|
%
|
-17.6
|
%
|
-2.7
|
%
|
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||||||||||||||
RETURN ON CAPITAL EMPLOYED BY SEGMENT
|
||||||||||||||||||||||||||||||||
FOR THE THREE MONTHS ENDED JULY 30, 2017
|
||||||||||||||||||||||||||||||||
(Amounts in Thousands)
|
||||||||||||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||||||||||
Operating Income
|
||||||||||||||||||||||||||||||||
Three
Months
|
Average
|
Return
on
|
||||||||||||||||||||||||||||||
Ended
|
Capital
|
Avg. Capital
|
||||||||||||||||||||||||||||||
July 30,
2017 (1)
|
Employed
(3)
|
Employed
(2)
|
||||||||||||||||||||||||||||||
Mattress Fabrics
|
$
|
6,368
|
$
|
85,629
|
29.7
|
%
|
||||||||||||||||||||||||||
Upholstery Fabrics
|
2,895
|
17,757
|
65.2
|
%
|
||||||||||||||||||||||||||||
(less: Unallocated Corporate)
|
(2,299
|
)
|
(60
|
)
|
N/A
|
|||||||||||||||||||||||||||
Total
|
$
|
6,964
|
$
|
103,326
|
27.0
|
%
|
||||||||||||||||||||||||||
Average Capital Employed
|
As of the three Months Ended July 30, 2017
|
As of the three Months Ended April 30, 2017
|
||||||||||||||||||||||||||||||
Mattress
|
Upholstery
|
Unallocated
|
Mattress
|
Upholstery
|
Unallocated
|
|||||||||||||||||||||||||||
Fabrics
|
Fabrics
|
Corporate
|
Total
|
Fabrics
|
Fabrics
|
Corporate
|
Total
|
|||||||||||||||||||||||||
Total assets
|
$
|
112,112
|
$
|
34,491
|
$
|
61,301
|
$
|
207,904
|
$
|
111,041
|
$
|
32,255
|
$
|
62,338
|
$
|
205,634
|
||||||||||||||||
Total liabilities
|
(24,277
|
)
|
(14,983
|
)
|
(18,967
|
)
|
(58,227
|
)
|
(27,619
|
)
|
(16,249
|
)
|
(13,136
|
)
|
(57,004
|
)
|
||||||||||||||||
Subtotal
|
$
|
87,835
|
$
|
19,508
|
$
|
42,334
|
$
|
149,677
|
$
|
83,422
|
$
|
16,006
|
$
|
49,202
|
$
|
148,630
|
||||||||||||||||
Less:
|
||||||||||||||||||||||||||||||||
Cash and cash equivalents
|
-
|
-
|
(18,322
|
)
|
(18,322
|
)
|
-
|
-
|
(20,795
|
)
|
(20,795
|
)
|
||||||||||||||||||||
Short-term investments
|
-
|
-
|
(2,469
|
)
|
(2,469
|
)
|
-
|
-
|
(2,443
|
)
|
(2,443
|
)
|
||||||||||||||||||||
Long-term investments (Held-To-Maturity)
|
(30,907
|
)
|
(30,907
|
)
|
(30,945
|
)
|
(30,945
|
)
|
||||||||||||||||||||||||
Long-term investments (Rabbi Trust)
|
-
|
-
|
(6,714
|
)
|
(6,714
|
)
|
-
|
-
|
(5,466
|
)
|
(5,466
|
)
|
||||||||||||||||||||
Deferred income taxes - non-current
|
-
|
-
|
(436
|
)
|
(436
|
)
|
-
|
-
|
(419
|
)
|
(419
|
)
|
||||||||||||||||||||
Income taxes payable - current
|
-
|
-
|
884
|
884
|
-
|
-
|
287
|
287
|
||||||||||||||||||||||||
Income taxes payable - long-term
|
-
|
-
|
487
|
487
|
-
|
-
|
467
|
467
|
||||||||||||||||||||||||
Deferred income taxes - non-current
|
-
|
-
|
4,253
|
4,253
|
-
|
-
|
3,593
|
3,593
|
||||||||||||||||||||||||
Line of credit
|
-
|
-
|
5,000
|
5,000
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Deferred compensation
|
-
|
-
|
6,769
|
6,769
|
-
|
-
|
5,520
|
5,520
|
||||||||||||||||||||||||
Total Capital Employed
|
$
|
87,835
|
$
|
19,508
|
$
|
879
|
$
|
108,222
|
$
|
83,422
|
$
|
16,006
|
$
|
(999
|
)
|
$
|
98,429
|
|||||||||||||||
Mattress
|
Upholstery
|
Unallocated
|
||||||||||||||||||||||||||||||
Fabrics
|
Fabrics
|
Corporate
|
Total
|
|||||||||||||||||||||||||||||
Average Capital Employed (3)
|
$
|
85,629
|
$
|
17,757
|
$
|
(60
|
)
|
$
|
103,326
|
Notes:
|
|
|
|
(1)
|
See reconciliation per page 5 of this financial information release. |
|
|
(2)
|
Return on average capital employed represents operating income for the three month period ending July 30, 2017 times four quarters to arrive at an annualized value then divided by average capital employed. Average capital employed does not include cash and cash equivalents, short-term investments, long-term investments (Held-To-Maturity), long-term investments (Rabbi Trust), noncurrent deferred income tax assets and liabilities, income taxes receivable and payable, line of credit, and deferred compensation.
|
|
|
(3)
|
Average capital employed was computed using the two periods ending July 30, 2017 and April 30, 2017.
|
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||||||||||||||
RETURN ON CAPITAL EMPLOYED BY SEGMENT
|
||||||||||||||||||||||||||||||||
FOR THE THREE MONTHS ENDED JULY 31, 2016
|
||||||||||||||||||||||||||||||||
(Amounts in Thousands)
|
||||||||||||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||||||||||
Operating Income
|
||||||||||||||||||||||||||||||||
Three
Months
|
Average
|
Return
on
|
||||||||||||||||||||||||||||||
Ended
|
Capital
|
Avg. Capital
|
||||||||||||||||||||||||||||||
July 31,
2016 (1)
|
Employed
(3)
|
Employed
(2)
|
||||||||||||||||||||||||||||||
Mattress Fabrics
|
$
|
8,402
|
$
|
75,642
|
44.4
|
%
|
||||||||||||||||||||||||||
Upholstery Fabrics
|
2,984
|
17,123
|
69.7
|
%
|
||||||||||||||||||||||||||||
(less: Unallocated Corporate)
|
(2,713
|
)
|
(287
|
)
|
N/A
|
|||||||||||||||||||||||||||
Total
|
$
|
8,673
|
$
|
92,478
|
37.5
|
%
|
||||||||||||||||||||||||||
Average Capital Employed
|
As of the three Months Ended July 31, 2016
|
As of the three Months Ended May 1, 2016
|
||||||||||||||||||||||||||||||
Mattress
|
Upholstery
|
Unallocated
|
Mattress
|
Upholstery
|
Unallocated
|
|||||||||||||||||||||||||||
Fabrics
|
Fabrics
|
Corporate
|
Total
|
Fabrics
|
Fabrics
|
Corporate
|
Total
|
|||||||||||||||||||||||||
Total assets
|
$
|
92,959
|
$
|
33,550
|
$
|
56,851
|
$
|
183,360
|
$
|
94,878
|
$
|
29,463
|
$
|
50,801
|
$
|
175,142
|
||||||||||||||||
Total liabilities
|
(16,313
|
)
|
(16,329
|
)
|
(19,283
|
)
|
(51,925
|
)
|
(20,241
|
)
|
(12,438
|
)
|
(13,651
|
)
|
(46,330
|
)
|
||||||||||||||||
Subtotal
|
$
|
76,646
|
$
|
17,221
|
$
|
37,568
|
$
|
131,435
|
$
|
74,637
|
$
|
17,025
|
$
|
37,150
|
$
|
128,812
|
||||||||||||||||
Less:
|
||||||||||||||||||||||||||||||||
Cash and cash equivalents
|
-
|
-
|
(45,549
|
)
|
(45,549
|
)
|
-
|
-
|
(37,787
|
)
|
(37,787
|
)
|
||||||||||||||||||||
Short-term investments
|
-
|
-
|
(2,434
|
)
|
(2,434
|
)
|
-
|
-
|
(4,359
|
)
|
(4,359
|
)
|
||||||||||||||||||||
Long-term investments (Rabbi Trust)
|
-
|
-
|
(4,611
|
)
|
(4,611
|
)
|
-
|
-
|
(4,025
|
)
|
(4,025
|
)
|
||||||||||||||||||||
Income taxes receivable
|
-
|
-
|
-
|
-
|
-
|
-
|
(155
|
)
|
(155
|
)
|
||||||||||||||||||||||
Deferred income taxes - non-current
|
-
|
-
|
(1,942
|
)
|
(1,942
|
)
|
-
|
-
|
(2,319
|
)
|
(2,319
|
)
|
||||||||||||||||||||
Income taxes payable - current
|
-
|
-
|
358
|
358
|
-
|
-
|
180
|
180
|
||||||||||||||||||||||||
Income taxes payable - long-term
|
-
|
-
|
3,779
|
3,779
|
-
|
-
|
3,841
|
3,841
|
||||||||||||||||||||||||
Deferred income taxes - non-current
|
-
|
-
|
1,532
|
1,532
|
-
|
-
|
1,483
|
1,483
|
||||||||||||||||||||||||
Line of credit
|
-
|
-
|
7,000
|
7,000
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Deferred compensation
|
-
|
-
|
5,031
|
5,031
|
-
|
-
|
4,686
|
4,686
|
||||||||||||||||||||||||
Total Capital Employed
|
$
|
76,646
|
$
|
17,221
|
$
|
732
|
$
|
94,599
|
$
|
74,637
|
$
|
17,025
|
$
|
(1,305
|
)
|
$
|
90,357
|
|||||||||||||||
Mattress
|
Upholstery
|
Unallocated
|
||||||||||||||||||||||||||||||
Fabrics
|
Fabrics
|
Corporate
|
Total
|
|||||||||||||||||||||||||||||
Average Capital Employed (3)
|
$
|
75,642
|
$
|
17,123
|
$
|
(287
|
)
|
$
|
92,478
|
Notes:
|
|
|
|
(1)
|
See reconciliation per page 5 of this financial information release. |
|
|
(2)
|
Return on average capital employed represents operating income for the three month period ending July 31, 2016 times four quarters
to arrive at an annualized value then divided by average capital employed. Average capital employed does not include cash and cash equivalents,
short-term investments, long-term investments (Rabbi Trust), noncurrent deferred income tax assets and liabilities, income taxes receivable and payable,
line of credit, and deferred compensation.
|
|
|
(3)
|
Average capital employed was computed using the two periods ending July 31, 2016 and May 1, 2016.
|
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||
CONSOLIDATED ADJUSTED EFFECTIVE INCOME TAX RATE
|
||||||||||
FOR THE THREE MONTHS ENDED JULY 30, 2017 AND JULY 31, 2016
|
||||||||||
Unaudited | ||||||||||
(Amounts in Thousands)
|
||||||||||
THREE MONTHS ENDED
|
||||||||||
Amounts | ||||||||||
July 30,
|
July 31,
|
|||||||||
2017
|
2016
|
|||||||||
Consolidated Effective GAAP Income Tax Rate
|
(1)
|
|
24.3
|
%
|
37.8
|
%
|
||||
Non-Cash U.S. Income Tax Expense
|
(17.0
|
)%
|
(19.6
|
)%
|
||||||
Excess income tax benefits related to stock-based compensation
|
8.2
|
%
|
-
|
|||||||
Other Non-Cash Foreign Income Tax Expense
|
-
|
(0.4
|
)%
|
|||||||
Consolidated Adjusted Effective Income Tax Rate
|
(2)
|
|
15.5
|
%
|
17.8
|
%
|
(1) | Calculated by dividing consolidated income tax expense by consolidated income before income taxes. |
(2)
|
Represents estimated cash income tax expense for our subsidiaries located in Canada and China divided by consolidated income before income taxes.
|