HIGH POINT, N.C.--(BUSINESS WIRE)--Culp, Inc. (NYSE: CULP) (together with its consolidated subsidiaries, “CULP”) today reported financial and operating results for the second quarter ended October 31, 2021.
Fiscal 2022 Second Quarter Financial Summary
- Net sales were $74.6 million, down 3.0 percent over the prior-year period, with mattress fabrics sales up 2.1 percent and upholstery fabrics sales down 8.5 percent compared with the second quarter of last year.
- Income from operations (operating income) was $1.6 million, compared with income from operations of $4.5 million for the prior-year period.
- Net income was $851,000, or $0.07 per diluted share, compared with net income of $2.4 million, or $0.19 per diluted share, for the prior-year period.
- The company’s financial position reflected total cash and investments of $36.6 million and no outstanding borrowings as of October 31, 2021. (See summary of cash and investments table at the back of this press release.)
- The company announced a five percent increase in its quarterly cash dividend to 11.5 cents per share, commencing in the third quarter of fiscal 2022. At an annual indicated dividend of 46 cents per share, the yield is 4.34 percent, based upon yesterday’s closing stock price of $10.61 per share. Notably, this is the company’s ninth straight year of increasing its annual dividend.
- The company repurchased 73,002 shares of CULP common stock during the second quarter of fiscal 2022, leaving approximately $3.2 million available under the company’s share repurchase program.
Financial Outlook
- The company continues to navigate uncertainty in the macroeconomic environment related to customer supply chain disruption for non-fabric components, significant inflationary pressures, a challenging labor market, and fluctuation in foreign currency exchange rates. Although CULP is well positioned over the long term with its product-driven strategy and flexible global platform, the current headwinds are expected to continue pressuring results throughout the second half of fiscal 2022, especially during the third quarter. The third and fourth quarters will also be affected by the timing of the Chinese New Year holiday, which begins at the end of the third quarter and continues into the beginning of the fourth quarter.
- Due to the uncertain and rapidly changing inflationary environment, the lack of visibility relating to the duration and magnitude of customer supply chain disruptions, and uncertainty relating to the impact of the new Omicron variant of the coronavirus, the company is withdrawing its previously issued annual guidance for fiscal 2022 and is only providing a limited outlook for the third and fourth quarters until the current volatility stabilizes.
- The company’s net sales and consolidated operating income (income from operations) for the third quarter of fiscal 2022 are expected to be sequentially comparable to the second quarter of fiscal 2022. The company expects a strong improvement in net sales and operating income for the fourth quarter of fiscal 2022, as compared to both the third quarter of fiscal 2022 and the fourth quarter of fiscal 2021.
- The company’s expectations for the third and fourth quarters of fiscal 2022 are based on information available at the time of this press release and reflect certain assumptions by management regarding the company’s business and trends and the projected impact of the ongoing headwinds. The outlook assumes there will be no further pandemic-related shutdowns or material disruption, including because of the new Omicron variant, and further assumes no greater-than-expected changes in freight and raw material costs, foreign currency exchange rates, labor availability, recent consumer trends, world events, or other circumstances beyond the company’s control.
Commenting on the results, Iv Culp, president and chief executive officer of Culp, Inc., said, “As previously announced, our results for the second quarter reflected lower than expected sales, primarily for our upholstery fabrics segment. Several external factors affected our sales results for the quarter, particularly COVID-related shutdowns in Vietnam and customer supply chain constraints for non-fabric components, while profitability remained pressured in both of our businesses by the continued rapid rise in freight, raw material, and labor costs.
“Despite the challenging macroeconomic environment, I am extremely proud of how our global platform and our associates have responded over the last 18 months to build a more robust supply chain that has kept pace with demand and met the delivery needs of our valued customers. Looking ahead, we are pleased that the shutdowns in Vietnam have been lifted, but the rapidly rising costs and the disruption throughout the industry’s supply chains continue, and many of our customers have delayed their previously planned rollouts and new product launches. We also believe that many customers have excess inventory for fabric and cover products that were purchased to support their expanding backlogs as they wait for their supply chain issues to subside. As a result, we expect it could take some time for customers to work through their existing fabric and cover inventory levels. Additionally, we have some concern that inflationary pressures are causing some slowing in new business, leading to lower demand once customers fulfill their existing backlogs. Based on these factors, we expect that current headwinds will continue to pressure results during the second half of fiscal 2022, especially during the third quarter, but we expect to see a meaningful rebound in our business beginning in the fourth quarter and continuing into fiscal 2023.
“As market conditions evolve, CULP is well positioned for the long term, and we are confident in our ability to improve our market reach. Notably, if we meet our expectations for the third and fourth quarters, then for the full fiscal 2022 year, we will sustain the significant sales gains we have achieved as compared to pre-COVID sales levels of fiscal 2020. We are implementing further pricing actions during the third quarter to help offset current inflationary pressures. We also expect to open our new Haiti facility during the third quarter, which will increase our capacity for cut and sewn upholstery kits. Our strong global platform, together with our long-term supplier relationships, continues to provide a distinct competitive advantage, allowing us to quickly respond to the evolving needs of our customers. We also remain focused on innovation and creative designs in both of our businesses, and we are confident in our product-driven strategy. The recent opening of our new innovation campus in downtown High Point, North Carolina, has been extremely well received by our customers, providing them with a hands-on, first-class experience for viewing the scope of our products, from fabric to sewn cover.
“Importantly, we have the financial strength to support our business in the current environment, and we look forward to the opportunities to deliver value for our customers, employees, and shareholders in fiscal 2022 and beyond,” added Culp.
Segment Update
Mattress Fabrics Segment
Sales for this segment were $40.9 million for the second quarter, up 2.1 percent compared with sales of $40.0 million in the second quarter of fiscal 2021.
“While mattress fabrics sales for the second quarter were in line with our expectations, revenue was affected somewhat by our customers’ supply chain constraints for non-fabric components and existing inventory levels for mattress fabrics and covers,” said Sandy Brown, president of the company’s mattress fabrics division. “This caused our customers to temporarily delay taking some orders and push some new product launches into subsequent quarters while working through these limitations. However, we expect these pressures will be alleviated over the medium term.
“Our operating performance for the second quarter of fiscal 2022, was negatively affected by higher freight, raw material, and labor costs; inefficiencies due to ongoing labor shortages in the U.S. and Canada; unfavorable foreign currency fluctuations in China and Canada; and product mix. The price increase and freight surcharge implemented during the first half of fiscal 2022 have helped us offset a portion of the current inflationary pressures we are facing. However, the lag in price realization, as well as some competitive market pressures that limit us from immediately passing on all of our cost increases, are expected to continue affecting our operating performance in the near term, and we may need to consider further pricing actions if operating costs continue to rise.
“Despite the challenging environment during the second quarter, we relied on our proven product-driven strategy with a relentless focus on design creativity and innovation, supported by the utilization of our resilient manufacturing and sourcing platform to service the needs of our customers. Our on-shore, near-shore, and off-shore supply chain strategy, as well as our fabric-to-cover model, remains a preferred platform for our sewn mattress cover customers.
“Looking ahead, our market position remains solid, with strong new placements and product developments for fiscal 2023. Rising costs continue to pressure our profitability, but our team remains committed to ongoing efforts to control internal costs, improve efficiencies, and take reasonable pricing actions to mitigate and manage inflation. Over the long term, we are well positioned to sustain our competitive advantage and leverage our compelling business model to further expand our market reach, especially as our customers’ supply chain disruption and inventory positions begin to normalize,” added Brown.
Upholstery Fabrics Segment
Sales for this segment were $33.7 million for the second quarter, down 8.5 percent compared with sales of $36.8 million in the second quarter of fiscal 2021.
“Our second quarter results were disappointing, largely driven by lower sales in our residential business due to COVID-19-related shutdowns of our sourcing partners and customers in Vietnam throughout most of the quarter,” said Boyd Chumbley, president of the company’s upholstery fabrics division. “These shutdowns were expected to be short term, but instead lasted significantly longer than anticipated and limited our ability to ship orders both within and outside of Asia. Residential sales were also pressured by our customers’ supply chain constraints and labor shortages at their U.S. facilities, which significantly reduced our ability to ship prepared fabric orders.
“Our operating performance for the second quarter of fiscal 2022 was primarily affected by the lower sales in our residential business, as well as higher freight and raw material costs, start-up costs for our new Haiti facility, unfavorable foreign currency fluctuations in China, and lower contribution from our Read Window Products business. We implemented a freight surcharge during the second quarter to help offset rising freight costs, but due to the continued rapid increase in operating costs and raw material costs, we are instituting an additional price increase during the third quarter to help cover a portion of these inflationary pressures.
“Despite the headwinds in our residential business, we were encouraged by the recovery in our hospitality business during the second quarter, led by our hospitality/contract fabric business. We also saw a measurable improvement in our Read Window Products business during the last month of the quarter. We are pleased the shutdowns that affected our Vietnam customers and sourcing partners during the quarter have now been lifted, and we have resumed shipping at normalized capacity. Additionally, we expect to begin production at our new facility in Haiti during the third quarter, which will expand our capacity for cut and sewn upholstery kits and mitigate some risk with near-shore capabilities that complement our strong Asian platform.
“Looking ahead, there are lingering near-term challenges related to our customers’ supply chain constraints and existing levels of fabric inventory for our residential business. Also, while we believe demand trends remain favorable for the home furnishings industry, there is an expected slowdown in new business from the peak experienced during the post-COVID stay-at-home surge. Despite these external conditions, our business is well positioned for the long term with our product-driven strategy and innovative product offerings, including our popular portfolio of LiveSmart® performance products, as well as our flexible Asian platform, our long-term supplier relationships, and our expanded capacity in Haiti. We are also encouraged by the recent Showtime fabric market, where our products received favorable reaction and strong support from customers. Above all, we remain focused on meeting the changing needs of our valued customers,” added Chumbley.
Balance Sheet
“Maintaining a strong financial position during these uncertain times continues to be one of the company’s top priorities,” added Ken Bowling, executive vice president and chief financial officer of Culp, Inc. “As of October 31, 2021, we reported $36.6 million in total cash and investments and no outstanding debt, compared with $46.9 million in total cash and investments and no outstanding debt as of the end of fiscal 2021. Our cash flow from operations and free cash flow was $(1.3) million and $(5.8) million, respectively, for the first six months of fiscal 2022. (See reconciliation table at the back of this press release.) As we continue to invest in our business, our cash flow from operations and free cash flow during the first half of this fiscal year were affected by the following uses of cash: (i) increased inventory purchases to support our valued customers, to get ahead of rising raw material costs, and to strategically improve our in-stock position ahead of the Chinese New Year holiday; (ii) $3.9 million investment in capital expenditures, including expenditures for machinery, equipment, and IT investments, as well as expenditures related to our new innovation campus; (iii) $1.4 million in payments for the new building lease and startup expenses associated with our Haiti upholstery cut and sew operation; and (iv) increased accounts payable payments related to our return to normal credit terms as opposed to the extended terms previously granted in response to the COVID-19 pandemic. Additionally, during the first six months of fiscal 2022, we paid $2.7 million in regular quarterly dividends and spent $1.8 million on share repurchases,” added Bowling.
Dividends and Share Repurchases
The company announced that its Board of Directors has approved a five percent increase in the company’s quarterly cash dividend to 11.5 cents per share, marking the ninth straight year of increasing the annual dividend. At an annual indicated dividend of 46 cents per share, the yield is 4.34 percent, based upon yesterday’s closing stock price of $10.61 per share. The next quarterly payment will be made on January 19, 2022, to shareholders of record as of January 11, 2022.
During the second quarter of fiscal 2022, the company repurchased 73,002 shares of CULP common stock in the open market under its existing share repurchase authorization, leaving approximately $3.2 million available under the current share repurchase program. Shares may be repurchased under the program, at the company’s discretion, from time to time in the open market or in privately negotiated transactions. Pursuant to its capital allocation strategy, the company seeks to opportunistically repurchase shares at a price that reflects a discount to the company’s calculated intrinsic value per share.
Conference Call
Culp, Inc. will hold a conference call to discuss financial results for the second quarter of fiscal 2022 on December 2, 2021, at 11:00 a.m. Eastern Time. A live webcast of this call can be accessed on the investor relations section of the company’s website, www.culp.com. A replay of the webcast will be available for 30 days on the investor relations section of the company’s website, beginning at 2:00 p.m. Eastern Time on December 2, 2021.
About the Company
Culp, Inc. is one of the world’s largest marketers of mattress fabrics for bedding and upholstery fabrics for residential and commercial furniture. The company markets a variety of fabrics to its global customer base of leading bedding and furniture companies, including fabrics produced at Culp’s manufacturing facilities and fabrics sourced through other suppliers. Culp has manufacturing and sourcing capabilities located in the United States, Canada, China, Haiti, Turkey, and Vietnam.
Forward Looking Statements
This release contains “forward-looking statements” within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995 (Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934). Such statements are inherently subject to risks and uncertainties that may cause actual events and results to differ materially from such statements. Further, forward looking statements are intended to speak only as of the date on which they are made, and we disclaim any duty to update such statements to reflect any changes in management’s expectations or any change in the assumptions or circumstances on which such statements are based, whether due to new information, future events, or otherwise. Forward-looking statements are statements that include projections, expectations, or beliefs about future events or results or otherwise are not statements of historical fact. Such statements are often but not always characterized by qualifying words such as “expect,” “believe,” “anticipate,” “estimate,” “intend,” “plan,” “project,” and their derivatives, and include but are not limited to statements about expectations for our future operations, production levels, new product launches, sales, profit margins, profitability, operating income, capital expenditures, working capital levels, income taxes, SG&A or other expenses, pre-tax income, earnings, cash flow, and other performance or liquidity measures, as well as any statements regarding potential acquisitions, future economic or industry trends, public health epidemics, or future developments. There can be no assurance that we will realize these expectations or meet our guidance, or that these beliefs will prove correct.
Factors that could influence the matters discussed in such statements include the level of housing starts and sales of existing homes, consumer confidence, trends in disposable income, and general economic conditions. Decreases in these economic indicators could have a negative effect on our business and prospects. Likewise, increases in interest rates, particularly home mortgage rates, and increases in consumer debt or the general rate of inflation, could affect us adversely. The future performance of our business depends in part on our success in conducting and finalizing acquisition negotiations and integrating acquired businesses into our existing operations. Changes in consumer tastes or preferences toward products not produced by us could erode demand for our products. Changes in tariffs or trade policy, or changes in the value of the U.S. dollar versus other currencies, could affect our financial results because a significant portion of our operations are located outside the United States. Strengthening of the U.S. dollar against other currencies could make our products less competitive on the basis of price in markets outside the United States, and strengthening of currencies in Canada and China can have a negative impact on our sales of products produced in those places. Also, economic or political instability in international areas could affect our operations or sources of goods in those areas, as well as demand for our products in international markets. The impact of public health epidemics on employees, customers, suppliers, and the global economy, such as the global coronavirus pandemic currently affecting countries around the world, could also adversely affect our operations and financial performance. In addition, the impact of potential goodwill or intangible asset impairments could affect our financial results. Increases in freight costs, labor costs, and raw material prices, including increases in market prices for petrochemical products, can also significantly affect the prices we pay for shipping, labor, and raw materials, respectively, and in turn, increase our operating costs and decrease our profitability. Finally, disruption in our customers’ supply chains for non-fabric components may cause declines in new orders and/or delayed shipping of existing orders while our customers wait for other components, which could adversely affect our financial results. Further information about these factors, as well as other factors that could affect our future operations or financial results and the matters discussed in forward-looking statements, is included in Item 1A “Risk Factors” in our most recent Form 10-K and Form 10-Q reports filed with the Securities and Exchange Commission. A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur.
CULP, INC. |
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CONSOLIDATED STATEMENTS OF NET INCOME |
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FOR THREE MONTHS ENDED OCTOBER 31, 2021, AND NOVEMBER 1, 2020 |
||||||||||||||||||||
Unaudited |
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(Amounts in Thousands, Except for Per Share Data) |
||||||||||||||||||||
|
|
THREE MONTHS ENDED |
|
|||||||||||||||||
|
|
Amount |
|
|
|
|
|
|
Percent of Sales |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 31, |
|
|
November 1, |
|
|
% Over |
|
|
October 31, |
|
|
November 1, |
|
|||||
|
|
2021 |
|
|
2020 |
|
|
(Under) |
|
|
2021 |
|
|
2020 |
|
|||||
Net sales |
|
$ |
74,561 |
|
|
|
76,851 |
|
|
|
(3.0 |
)% |
|
|
100.0 |
% |
|
|
100.0 |
% |
Cost of sales |
|
|
(63,834 |
) |
|
|
(62,590 |
) |
|
|
2.0 |
% |
|
|
85.6 |
% |
|
|
81.4 |
% |
Gross profit |
|
|
10,727 |
|
|
|
14,261 |
|
|
|
(24.8 |
)% |
|
|
14.4 |
% |
|
|
18.6 |
% |
Selling, general and administrative expenses |
|
|
(9,087 |
) |
|
|
(9,743 |
) |
|
|
(6.7 |
)% |
|
|
12.2 |
% |
|
|
12.7 |
% |
Income from operations |
|
|
1,640 |
|
|
|
4,518 |
|
|
|
(63.7 |
)% |
|
|
2.2 |
% |
|
|
5.9 |
% |
Interest income |
|
|
59 |
|
|
|
59 |
|
|
|
— |
|
|
|
0.1 |
% |
|
|
0.1 |
% |
Other expense |
|
|
(404 |
) |
|
|
(680 |
) |
|
|
(40.6 |
)% |
|
|
0.5 |
% |
|
|
0.9 |
% |
Income before income taxes |
|
|
1,295 |
|
|
|
3,897 |
|
|
|
(66.8 |
)% |
|
|
1.7 |
% |
|
|
5.1 |
% |
Income tax expense (1) |
|
|
(444 |
) |
|
|
(1,613 |
) |
|
|
(72.5 |
)% |
|
|
34.3 |
% |
|
|
41.4 |
% |
Income from investment in unconsolidated joint venture |
|
|
— |
|
|
|
100 |
|
|
|
(100.0 |
)% |
|
|
0.0 |
% |
|
|
0.1 |
% |
Net income |
|
|
851 |
|
|
|
2,384 |
|
|
|
(64.3 |
)% |
|
|
1.1 |
% |
|
|
3.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share - basic |
|
$ |
0.07 |
|
|
$ |
0.19 |
|
|
|
(64.1 |
)% |
|
|
|
|
|
|
|
|
Net income per share - diluted |
|
$ |
0.07 |
|
|
$ |
0.19 |
|
|
|
(64.3 |
)% |
|
|
|
|
|
|
|
|
Average shares outstanding-basic |
|
|
12,223 |
|
|
|
12,298 |
|
|
|
(0.6 |
)% |
|
|
|
|
|
|
|
|
Average shares outstanding-diluted |
|
|
12,316 |
|
|
|
12,324 |
|
|
|
(0.1 |
)% |
|
|
|
|
|
|
|
|
Notes |
|
(1) Percent of sales column for income tax expense is calculated as a % of income before income taxes. |
CULP, INC. |
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CONSOLIDATED STATEMENTS OF NET INCOME (LOSS) |
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FOR SIX MONTHS ENDED OCTOBER 31, 2021, AND NOVEMBER 1, 2020 |
||||||||||||||||||||
Unaudited |
||||||||||||||||||||
(Amounts in Thousands, Except for Per Share Data) |
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|
|
SIX MONTHS ENDED |
|
|||||||||||||||||
|
|
Amount |
|
|
|
|
|
|
Percent of Sales |
|
||||||||||
|
|
|
|
|
|
(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 31, |
|
|
November 1, |
|
|
% Over |
|
|
October 31, |
|
|
November 1, |
|
|||||
|
|
2021 |
|
|
2020 |
|
|
(Under) |
|
|
2021 |
|
|
2020 |
|
|||||
Net sales |
|
$ |
157,608 |
|
|
|
141,315 |
|
|
|
11.5 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
Cost of sales |
|
|
(134,382 |
) |
|
|
(117,153 |
) |
|
|
14.7 |
% |
|
|
85.3 |
% |
|
|
82.9 |
% |
Gross profit |
|
|
23,226 |
|
|
|
24,162 |
|
|
|
(3.9 |
)% |
|
|
14.7 |
% |
|
|
17.1 |
% |
Selling, general and administrative expenses |
|
|
(18,268 |
) |
|
|
(17,761 |
) |
|
|
2.9 |
% |
|
|
11.6 |
% |
|
|
12.6 |
% |
Income from operations |
|
|
4,958 |
|
|
|
6,401 |
|
|
|
(22.5 |
)% |
|
|
3.1 |
% |
|
|
4.5 |
% |
Interest expense |
|
|
— |
|
|
|
(51 |
) |
|
|
(100.0 |
)% |
|
|
0.0 |
% |
|
|
0.0 |
% |
Interest income |
|
|
132 |
|
|
|
117 |
|
|
|
12.8 |
% |
|
|
0.1 |
% |
|
|
0.1 |
% |
Other expense |
|
|
(640 |
) |
|
|
(1,046 |
) |
|
|
(38.8 |
)% |
|
|
0.4 |
% |
|
|
0.7 |
% |
Income before income taxes |
|
|
4,450 |
|
|
|
5,421 |
|
|
|
(17.9 |
)% |
|
|
2.8 |
% |
|
|
3.8 |
% |
Income tax expense (1) |
|
|
(1,349 |
) |
|
|
(5,937 |
) |
|
|
(77.3 |
)% |
|
|
30.3 |
% |
|
|
109.5 |
% |
Income from investment in unconsolidated joint venture |
|
|
— |
|
|
|
167 |
|
|
|
(100.0 |
)% |
|
|
0.0 |
% |
|
|
0.1 |
% |
Net income (loss) |
|
|
3,101 |
|
|
|
(349 |
) |
|
N.M. |
|
|
|
2.0 |
% |
|
|
(0.2 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share - basic |
|
$ |
0.25 |
|
|
$ |
(0.03 |
) |
|
N.M |
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share - diluted |
|
$ |
0.25 |
|
|
$ |
(0.03 |
) |
|
N.M |
|
|
|
|
|
|
|
|
|
|
Average shares outstanding-basic |
|
|
12,268 |
|
|
|
12,293 |
|
|
|
(0.2 |
)% |
|
|
|
|
|
|
|
|
Average shares outstanding-diluted |
|
|
12,369 |
|
|
|
12,293 |
|
|
|
0.6 |
% |
|
|
|
|
|
|
|
|
Notes |
|
(1) Percent of sales column for income tax expense is calculated as a % of income before income taxes. |
|
(2) See back of this presentation for our Reconciliation of Selected Income Statement Information to Adjusted Results for the six-month period ending November 1, 2020, which includes certain adjustments to income tax expense. |
CULP, INC. |
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CONSOLIDATED BALANCE SHEETS |
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OCTOBER 31, 2021, NOVEMBER 1, 2020, AND MAY 2, 2021 |
||||||||||||||||||||
Unaudited |
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(Amounts in Thousands) |
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|
|
Amounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
(Condensed) |
|
|
(Condensed) |
|
|
|
|
|
|
|
|
|
|
(Condensed) |
|
|||
|
|
October 31, |
|
|
November 1, |
|
|
Increase (Decrease) |
|
|
* May 2, |
|
||||||||
|
|
2021 |
|
|
2020 |
|
|
Dollars |
|
|
Percent |
|
|
2021 |
|
|||||
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
16,956 |
|
|
|
45,288 |
|
|
|
(28,332 |
) |
|
|
(62.6 |
)% |
|
|
37,009 |
|
Short-term investments - Held-To-Maturity |
|
|
1,564 |
|
|
|
5,005 |
|
|
|
(3,441 |
) |
|
|
(68.8 |
)% |
|
|
3,161 |
|
Short-term investments - Available for Sale |
|
|
9,709 |
|
|
|
5,462 |
|
|
|
4,247 |
|
|
|
77.8 |
% |
|
|
5,542 |
|
Accounts receivable |
|
|
32,316 |
|
|
|
32,960 |
|
|
|
(644 |
) |
|
|
(2.0 |
)% |
|
|
37,726 |
|
Inventories |
|
|
63,781 |
|
|
|
47,726 |
|
|
|
16,055 |
|
|
|
33.6 |
% |
|
|
55,917 |
|
Current income taxes receivable |
|
|
613 |
|
|
|
— |
|
|
|
613 |
|
|
|
100.0 |
% |
|
|
— |
|
Other current assets |
|
|
3,811 |
|
|
|
3,509 |
|
|
|
302 |
|
|
|
8.6 |
% |
|
|
3,852 |
|
Total current assets |
|
|
128,750 |
|
|
|
139,950 |
|
|
|
(11,200 |
) |
|
|
(8.0 |
)% |
|
|
143,207 |
|
Property, plant & equipment, net |
|
|
43,265 |
|
|
|
41,599 |
|
|
|
1,666 |
|
|
|
4.0 |
% |
|
|
44,003 |
|
Right of use assets |
|
|
13,649 |
|
|
|
6,165 |
|
|
|
7,484 |
|
|
|
121.4 |
% |
|
|
11,730 |
|
Intangible assets |
|
|
2,816 |
|
|
|
3,192 |
|
|
|
(376 |
) |
|
|
(11.8 |
)% |
|
|
3,004 |
|
Long-term investments - Rabbi Trust |
|
|
9,036 |
|
|
|
8,060 |
|
|
|
976 |
|
|
|
12.1 |
% |
|
|
8,415 |
|
Long-term investments - Held-To-Maturity |
|
|
8,353 |
|
|
|
759 |
|
|
|
7,594 |
|
|
N.M. |
|
|
|
1,141 |
|
|
Deferred income taxes |
|
|
452 |
|
|
|
645 |
|
|
|
(193 |
) |
|
|
(29.9 |
)% |
|
|
545 |
|
Investment in unconsolidated joint venture |
|
|
— |
|
|
|
1,859 |
|
|
|
(1,859 |
) |
|
|
(100.0 |
)% |
|
|
— |
|
Other assets |
|
|
3,004 |
|
|
|
547 |
|
|
|
2,457 |
|
|
|
449.2 |
% |
|
|
2,035 |
|
Total assets |
|
$ |
209,325 |
|
|
|
202,776 |
|
|
|
6,549 |
|
|
|
3.2 |
% |
|
|
214,080 |
|
Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable - trade |
|
|
40,525 |
|
|
|
38,247 |
|
|
|
2,278 |
|
|
|
6.0 |
% |
|
|
42,540 |
|
Accounts payable - capital expenditures |
|
|
176 |
|
|
|
68 |
|
|
|
108 |
|
|
|
158.8 |
% |
|
|
348 |
|
Operating lease liability - current |
|
|
2,878 |
|
|
|
2,316 |
|
|
|
562 |
|
|
|
24.3 |
% |
|
|
2,736 |
|
Deferred revenue |
|
|
679 |
|
|
|
375 |
|
|
|
304 |
|
|
|
81.1 |
% |
|
|
540 |
|
Accrued expenses |
|
|
11,019 |
|
|
|
11,684 |
|
|
|
(665 |
) |
|
|
(5.7 |
)% |
|
|
14,839 |
|
Income taxes payable - current |
|
|
646 |
|
|
|
1,413 |
|
|
|
(767 |
) |
|
|
(54.3 |
)% |
|
|
229 |
|
Total current liabilities |
|
|
55,923 |
|
|
|
54,103 |
|
|
|
1,820 |
|
|
|
3.4 |
% |
|
|
61,232 |
|
Operating lease liability - long-term |
|
|
7,914 |
|
|
|
4,008 |
|
|
|
3,906 |
|
|
|
97.5 |
% |
|
|
6,821 |
|
Income taxes payable - long-term |
|
|
3,099 |
|
|
|
3,325 |
|
|
|
(226 |
) |
|
|
(6.8 |
)% |
|
|
3,326 |
|
Deferred income taxes |
|
|
4,918 |
|
|
|
6,089 |
|
|
|
(1,171 |
) |
|
|
(19.2 |
)% |
|
|
5,330 |
|
Deferred compensation |
|
|
9,017 |
|
|
|
8,000 |
|
|
|
1,017 |
|
|
|
12.7 |
% |
|
|
8,365 |
|
Total liabilities |
|
|
80,871 |
|
|
|
75,525 |
|
|
|
5,346 |
|
|
|
7.1 |
% |
|
|
85,074 |
|
Shareholders' equity |
|
|
128,454 |
|
|
|
127,251 |
|
|
|
1,203 |
|
|
|
0.9 |
% |
|
|
129,006 |
|
Total liabilities and shareholders' equity |
|
$ |
209,325 |
|
|
|
202,776 |
|
|
|
6,549 |
|
|
|
3.2 |
% |
|
|
214,080 |
|
Shares outstanding |
|
|
12,210 |
|
|
|
12,303 |
|
|
|
(93 |
) |
|
|
(0.8 |
)% |
|
|
12,313 |
|
* Derived from audited financial statements. |
CULP, INC. |
||||||||||||
SUMMARY OF CASH AND INVESTMENTS |
||||||||||||
OCTOBER 31, 2021, NOVEMBER 1, 2020, AND MAY 2, 2021 |
||||||||||||
Unaudited |
||||||||||||
(Amounts in Thousands) |
||||||||||||
|
|
Amounts |
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 31, |
|
|
November 1, |
|
|
May 2, |
|
|||
|
|
2021 |
|
|
2020 |
|
|
2021* |
|
|||
Cash and Investments |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
16,956 |
|
|
$ |
45,288 |
|
|
$ |
37,009 |
|
Short-term investments - Available for Sale |
|
|
9,709 |
|
|
|
5,462 |
|
|
|
5,542 |
|
Short-term investments - Held-To-Maturity |
|
|
1,564 |
|
|
|
5,005 |
|
|
|
3,161 |
|
Long-term investments - Held-To-Maturity |
|
|
8,353 |
|
|
|
759 |
|
|
|
1,141 |
|
Total Cash and Investments |
|
$ |
36,582 |
|
|
$ |
56,514 |
|
|
$ |
46,853 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Derived from audited financial statements. |
CULP, INC. |
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
FOR THE SIX MONTHS ENDED OCTOBER 31, 2021, AND NOVEMBER 1, 2020 |
||||||||
Unaudited |
||||||||
(Amounts in Thousands) |
||||||||
|
|
SIX MONTHS ENDED |
|
|||||
|
|
Amounts |
|
|||||
|
|
October 31, |
|
|
November 1, |
|
||
|
|
2021 |
|
|
2020 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
3,101 |
|
|
$ |
(349 |
) |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation |
|
|
3,471 |
|
|
|
3,538 |
|
Amortization |
|
|
267 |
|
|
|
235 |
|
Stock-based compensation |
|
|
709 |
|
|
|
474 |
|
Deferred income taxes |
|
|
(319 |
) |
|
|
4,419 |
|
Realized (gain) loss from the sale of short-term investments available for sale |
|
|
(4 |
) |
|
|
6 |
|
Income from investment in unconsolidated joint venture |
|
|
— |
|
|
|
(167 |
) |
Foreign currency exchange loss |
|
|
170 |
|
|
|
723 |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
5,441 |
|
|
|
(7,663 |
) |
Inventories |
|
|
(7,750 |
) |
|
|
602 |
|
Other current assets |
|
|
39 |
|
|
|
(1,175 |
) |
Other assets |
|
|
(987 |
) |
|
|
(40 |
) |
Accounts payable |
|
|
(2,269 |
) |
|
|
14,156 |
|
Deferred revenue |
|
|
139 |
|
|
|
(127 |
) |
Accrued expenses and deferred compensation |
|
|
(2,908 |
) |
|
|
6,019 |
|
Income taxes |
|
|
(428 |
) |
|
|
2,052 |
|
Net cash (used in) provided by operating activities |
|
|
(1,328 |
) |
|
|
22,703 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(3,901 |
) |
|
|
(2,041 |
) |
Proceeds from the sale of equipment |
|
|
— |
|
|
|
12 |
|
Investment in unconsolidated joint venture |
|
|
— |
|
|
|
(90 |
) |
Proceeds from the maturity of short-term investments (Held to Maturity) |
|
|
3,200 |
|
|
|
1,800 |
|
Purchase of short-term and long-term investments (Held to Maturity) |
|
|
(8,876 |
) |
|
|
(1,245 |
) |
Purchase of short-term investments (Available for Sale) |
|
|
(4,371 |
) |
|
|
(5,010 |
) |
Proceeds from the sale of short-term investments (Available for Sale) |
|
|
306 |
|
|
|
455 |
|
Proceeds from the sale of long-term investments (rabbi trust) |
|
|
— |
|
|
|
77 |
|
Purchase of long-term investments (rabbi trust) |
|
|
(580 |
) |
|
|
(257 |
) |
Net cash used in investing activities |
|
|
(14,222 |
) |
|
|
(6,299 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Payments associated with lines of credit |
|
|
— |
|
|
|
(30,772 |
) |
Payment associated with Paycheck Protection Program Loan |
|
|
— |
|
|
|
(7,606 |
) |
Dividends paid |
|
|
(2,699 |
) |
|
|
(2,583 |
) |
Common stock repurchased |
|
|
(1,752 |
) |
|
|
— |
|
Common stock surrendered for payment of withholding taxes payable |
|
|
(50 |
) |
|
|
(25 |
) |
Payments of debt issuance costs |
|
|
— |
|
|
|
(15 |
) |
Net cash used in financing activities |
|
|
(4,501 |
) |
|
|
(41,001 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
(2 |
) |
|
|
95 |
|
Decrease in cash and cash equivalents |
|
|
(20,053 |
) |
|
|
(24,502 |
) |
Cash and cash equivalents at beginning of year |
|
|
37,009 |
|
|
|
69,790 |
|
Cash and cash equivalents at end of period |
|
$ |
16,956 |
|
|
$ |
45,288 |
|
Free Cash Flow (1) |
|
$ |
(5,811 |
) |
|
$ |
20,499 |
|
Reconciliation of Free Cash Flow (1): |
||||||||
|
|
FY 2022 |
|
|
FY 2021 |
|
||
A) Net cash (used in) provided by operating activities |
|
$ |
(1,328 |
) |
|
|
22,703 |
|
B) Minus: Capital Expenditures |
|
|
(3,901 |
) |
|
|
(2,041 |
) |
C) Plus: Proceeds from the sale of equipment |
|
|
— |
|
|
|
12 |
|
D) Minus: Investment in unconsolidated joint venture |
|
|
— |
|
|
|
(90 |
) |
E) Plus: Proceeds from the sale of long-term investments (rabbi trust) |
|
|
— |
|
|
|
77 |
|
F) Minus: Purchase of long-term investments (rabbi trust) |
|
|
(580 |
) |
|
|
(257 |
) |
G) Effects of exchange rate changes on cash and cash equivalents |
|
|
(2 |
) |
|
|
95 |
|
Free Cash Flow |
|
$ |
(5,811 |
) |
|
|
20,499 |
|
CULP, INC. |
||||||||||||||||||||
STATEMENTS OF OPERATIONS BY SEGMENT |
||||||||||||||||||||
FOR THE THREE MONTHS ENDED OCTOBER 31, 2021, AND NOVEMBER 1, 2020 |
||||||||||||||||||||
Unaudited |
||||||||||||||||||||
(Amounts in Thousands) |
||||||||||||||||||||
|
|
THREE MONTHS ENDED |
|
|||||||||||||||||
|
|
Amounts |
|
|
|
|
|
|
Percent of Total Sales |
|
||||||||||
|
|
October 31, |
|
|
November 1, |
|
|
% Over |
|
|
October 31, |
|
|
November 1, |
|
|||||
Net Sales by Segment |
|
2021 |
|
|
2020 |
|
|
(Under) |
|
|
2021 |
|
|
2020 |
|
|||||
Mattress Fabrics |
|
$ |
40,883 |
|
|
|
40,030 |
|
|
|
2.1 |
% |
|
|
54.8 |
% |
|
|
52.1 |
% |
Upholstery Fabrics |
|
|
33,678 |
|
|
|
36,821 |
|
|
|
(8.5 |
)% |
|
|
45.2 |
% |
|
|
47.9 |
% |
Net Sales |
|
$ |
74,561 |
|
|
|
76,851 |
|
|
|
(3.0 |
)% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit Margin |
|
|||||
Mattress Fabrics |
|
$ |
6,146 |
|
|
|
7,584 |
|
|
|
(19.0 |
)% |
|
|
15.0 |
% |
|
|
18.9 |
% |
Upholstery Fabrics |
|
|
4,581 |
|
|
|
6,677 |
|
|
|
(31.4 |
)% |
|
|
13.6 |
% |
|
|
18.1 |
% |
Gross Profit |
|
$ |
10,727 |
|
|
|
14,261 |
|
|
|
(24.8 |
)% |
|
|
14.4 |
% |
|
|
18.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, General and Administrative Expenses by Segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent of Sales |
|
|||||
Mattress Fabrics |
|
$ |
3,007 |
|
|
|
3,202 |
|
|
|
(6.1 |
)% |
|
|
7.4 |
% |
|
|
8.0 |
% |
Upholstery Fabrics |
|
|
3,553 |
|
|
|
3,390 |
|
|
|
4.8 |
% |
|
|
10.5 |
% |
|
|
9.2 |
% |
Unallocated Corporate expenses |
|
|
2,527 |
|
|
|
3,151 |
|
|
|
(19.8 |
)% |
|
|
3.4 |
% |
|
|
4.1 |
% |
Selling, General and Administrative Expenses |
|
$ |
9,087 |
|
|
|
9,743 |
|
|
|
(6.7 |
)% |
|
|
12.2 |
% |
|
|
12.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations by Segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income Margin |
|
|||||
Mattress Fabrics |
|
$ |
3,139 |
|
|
|
4,382 |
|
|
|
(28.4 |
)% |
|
|
7.7 |
% |
|
|
10.9 |
% |
Upholstery Fabrics |
|
|
1,028 |
|
|
|
3,287 |
|
|
|
(68.7 |
)% |
|
|
3.1 |
% |
|
|
8.9 |
% |
Unallocated corporate expenses |
|
|
(2,527 |
) |
|
|
(3,151 |
) |
|
|
(19.8 |
)% |
|
|
(3.4 |
)% |
|
|
(4.1 |
)% |
Income from Operations |
|
$ |
1,640 |
|
|
|
4,518 |
|
|
|
(63.7 |
)% |
|
|
2.2 |
% |
|
|
5.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation Expense by Segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mattress Fabrics |
|
$ |
1,550 |
|
|
|
1,501 |
|
|
|
3.3 |
% |
|
|
|
|
|
|
|
|
Upholstery Fabrics |
|
|
195 |
|
|
|
215 |
|
|
|
(9.3 |
)% |
|
|
|
|
|
|
|
|
Depreciation Expense |
|
$ |
1,745 |
|
|
|
1,716 |
|
|
|
1.7 |
% |
|
|
|
|
|
|
|
|
CULP, INC. |
||||||||||||||||||||
STATEMENTS OF OPERATIONS BY SEGMENT |
||||||||||||||||||||
FOR THE SIX MONTHS ENDED OCTOBER 31, 2021, AND NOVEMBER 1, 2020 |
||||||||||||||||||||
Unaudited |
||||||||||||||||||||
(Amounts in Thousands) |
||||||||||||||||||||
|
|
SIX MONTHS ENDED |
|
|||||||||||||||||
|
|
Amounts |
|
|
|
|
|
|
Percent of Total Sales |
|
||||||||||
|
|
October 31, |
|
|
November 1, |
|
|
% Over |
|
|
October 31, |
|
|
November 1, |
|
|||||
Net Sales by Segment |
|
2021 |
|
|
2020 |
|
|
(Under) |
|
|
2021 |
|
|
2020 |
|
|||||
Mattress Fabrics |
|
$ |
83,941 |
|
|
|
76,133 |
|
|
|
10.3 |
% |
|
|
53.3 |
% |
|
|
53.9 |
% |
Upholstery Fabrics |
|
|
73,667 |
|
|
|
65,182 |
|
|
|
13.0 |
% |
|
|
46.7 |
% |
|
|
46.1 |
% |
Net Sales |
|
$ |
157,608 |
|
|
|
141,315 |
|
|
|
11.5 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit by Segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit Margin |
|
|||||
Mattress Fabrics |
|
$ |
12,941 |
|
|
|
12,191 |
|
|
|
6.2 |
% |
|
|
15.4 |
% |
|
|
16.0 |
% |
Upholstery Fabrics |
|
|
10,285 |
|
|
|
11,971 |
|
|
|
(14.1 |
)% |
|
|
14.0 |
% |
|
|
18.4 |
% |
Gross Profit |
|
$ |
23,226 |
|
|
|
24,162 |
|
|
|
(3.9 |
)% |
|
|
14.7 |
% |
|
|
17.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, General, and Administrative Expenses by Segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent of Total Sales |
|
|||||
Mattress Fabrics |
|
$ |
6,191 |
|
|
|
5,964 |
|
|
|
3.8 |
% |
|
|
7.4 |
% |
|
|
7.8 |
% |
Upholstery Fabrics |
|
|
6,990 |
|
|
|
6,570 |
|
|
|
6.4 |
% |
|
|
9.5 |
% |
|
|
10.1 |
% |
Unallocated Corporate expenses |
|
|
5,087 |
|
|
|
5,227 |
|
|
|
(2.7 |
)% |
|
|
3.2 |
% |
|
|
3.7 |
% |
Selling, General, and Administrative Expenses |
|
$ |
18,268 |
|
|
$ |
17,761 |
|
|
|
2.9 |
% |
|
|
11.6 |
% |
|
|
12.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Operations by Segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income Margin |
|
|||||
Mattress Fabrics |
|
$ |
6,750 |
|
|
|
6,227 |
|
|
|
8.4 |
% |
|
|
8.0 |
% |
|
|
8.2 |
% |
Upholstery Fabrics |
|
|
3,295 |
|
|
|
5,401 |
|
|
|
(39.0 |
)% |
|
|
4.5 |
% |
|
|
8.3 |
% |
Unallocated corporate expenses |
|
|
(5,087 |
) |
|
|
(5,227 |
) |
|
|
(2.7 |
)% |
|
|
(3.2 |
)% |
|
|
(3.7 |
)% |
Income from operations |
|
$ |
4,958 |
|
|
|
6,401 |
|
|
|
(22.5 |
)% |
|
|
3.1 |
% |
|
|
4.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on Capital (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mattress Fabrics |
|
|
17.1 |
% |
|
|
7.6 |
% |
|
|
125.0 |
% |
|
|
|
|
|
|
|
|
Upholstery Fabrics |
|
|
60.2 |
% |
|
|
46.6 |
% |
|
|
29.2 |
% |
|
|
|
|
|
|
|
|
Unallocated Corporate |
|
N.M. |
|
|
N.M. |
|
|
N.M. |
|
|
|
|
|
|
|
|
|
|||
Consolidated |
|
|
11.8 |
% |
|
|
5.0 |
% |
|
|
136.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Employed (1) (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mattress Fabrics |
|
$ |
78,142 |
|
|
|
61,609 |
|
|
|
26.8 |
% |
|
|
|
|
|
|
|
|
Upholstery Fabrics |
|
|
17,732 |
|
|
|
16,980 |
|
|
|
4.4 |
% |
|
|
|
|
|
|
|
|
Unallocated Corporate |
|
|
3,577 |
|
|
|
2,270 |
|
|
|
57.6 |
% |
|
|
|
|
|
|
|
|
Consolidated |
|
$ |
99,451 |
|
|
|
80,859 |
|
|
|
23.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation Expense by Segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mattress Fabrics |
|
$ |
3,071 |
|
|
|
3,132 |
|
|
|
(1.9 |
)% |
|
|
|
|
|
|
|
|
Upholstery Fabrics |
|
|
400 |
|
|
|
406 |
|
|
|
(1.5 |
)% |
|
|
|
|
|
|
|
|
Depreciation Expense |
|
$ |
3,471 |
|
|
|
3,538 |
|
|
|
(1.9 |
)% |
|
|
|
|
|
|
|
|
Notes |
|
(1) See return on capital employed by segment pages at the back of this presentation for calculations. |
|
(2) The capital employed balances are as of October 31, 2021, and November 1, 2020. |
CULP, INC. |
||||||||||||
RECONCILIATION OF SELECTED INCOME STATEMENT INFORMATION TO ADJUSTED RESULTS |
||||||||||||
FOR THE SIX MONTHS ENDED NOVEMBER 1, 2020 |
||||||||||||
Unaudited |
||||||||||||
(Amounts in Thousands, Except for Per Share Data) |
||||||||||||
|
|
As Reported |
|
|
|
|
|
|
November 1, 2020 |
|
||
|
|
November 1, |
|
|
|
|
|
|
Adjusted |
|
||
|
|
2020 |
|
|
Adjustments |
|
|
Results |
|
|||
Income before income taxes |
|
$ |
5,421 |
|
|
|
— |
|
|
|
5,421 |
|
Income tax expense (1) |
|
|
(5,937 |
) |
|
|
4,099 |
|
|
|
(1,838 |
) |
Income from investment in unconsolidated joint venture |
|
167 |
|
|
|
— |
|
|
|
167 |
|
|
Net (loss) income |
|
$ |
(349 |
) |
|
|
4,099 |
|
|
|
3,750 |
|
Net (loss) income per share - basic |
|
$ |
(0.03 |
) |
|
|
|
|
|
$ |
0.31 |
|
Net (loss) income per share - diluted |
|
$ |
(0.03 |
) |
|
|
|
|
|
$ |
0.30 |
|
Average shares outstanding-basic |
|
|
12,293 |
|
|
|
|
|
|
|
12,293 |
|
Average shares outstanding-diluted |
|
|
12,293 |
|
|
|
|
|
|
|
12,305 |
|
Notes |
|
(1) The $4.1 million adjustment represents a $7.6 million non-cash income tax charge to record a full valuation allowance against the company’s U.S. net deferred income tax assets, partially offset by a $3.5 million non-cash income tax benefit resulting from the re-establishment of certain U.S. Federal net operating loss carryforwards in connection with U.S. Treasury regulations enacted during our first quarter of fiscal 2021 regarding Global Intangible Low Taxed Income (“GILTI”) tax provisions of the Tax Cuts and Jobs Act of 2017. |
CULP, INC. |
||||||||||||||||||||
CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA |
||||||||||||||||||||
FOR THE TWELVE MONTHS ENDED OCTOBER 31, 2021, AND NOVEMBER 1, 2020 |
||||||||||||||||||||
Unaudited |
||||||||||||||||||||
(Amounts in Thousands) |
||||||||||||||||||||
|
|
Quarter Ended |
|
|
Quarter Ended |
|
|
Quarter Ended |
|
|
Quarter Ended |
|
|
Trailing 12 Months |
|
|||||
|
|
January 31, |
|
|
May 2, |
|
|
August 1, |
|
|
October 31, |
|
|
October 31, |
|
|||||
|
|
2021 |
|
|
2021 |
|
|
2021 |
|
|
2021 |
|
|
2021 |
|
|||||
Net income |
|
$ |
2,082 |
|
|
$ |
1,485 |
|
|
$ |
2,250 |
|
|
$ |
851 |
|
|
$ |
6,668 |
|
Income tax expense |
|
|
899 |
|
|
|
857 |
|
|
|
905 |
|
|
|
444 |
|
|
|
3,105 |
|
Interest income, net |
|
|
(90 |
) |
|
|
(36 |
) |
|
|
(74 |
) |
|
|
(59 |
) |
|
|
(259 |
) |
Gain on bargain purchase |
|
|
— |
|
|
|
(819 |
) |
|
|
— |
|
|
|
— |
|
|
|
(819 |
) |
Depreciation expense |
|
|
1,665 |
|
|
|
1,643 |
|
|
|
1,726 |
|
|
|
1,745 |
|
|
|
6,779 |
|
Amortization expense |
|
|
115 |
|
|
|
116 |
|
|
|
121 |
|
|
|
146 |
|
|
|
498 |
|
Stock based compensation |
|
|
292 |
|
|
|
485 |
|
|
|
274 |
|
|
|
435 |
|
|
|
1,486 |
|
Adjusted EBITDA |
|
$ |
4,963 |
|
|
$ |
3,731 |
|
|
$ |
5,202 |
|
|
$ |
3,562 |
|
|
$ |
17,458 |
|
% Net Sales |
|
|
6.3 |
% |
|
|
4.7 |
% |
|
|
6.3 |
% |
|
|
4.8 |
% |
|
|
5.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
Quarter Ended |
|
|
Quarter Ended |
|
|
Quarter Ended |
|
|
Trailing 12 Months |
|
|||||
|
|
February 2, |
|
|
May 3, |
|
|
August 2, |
|
|
November 1, |
|
|
November 1, |
|
|||||
|
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2020 |
|
|||||
Net (loss) income |
|
$ |
(4,207 |
) |
|
$ |
(27,825 |
) |
|
$ |
(2,733 |
) |
|
$ |
2,384 |
|
|
$ |
(32,381 |
) |
Loss before income taxes from discontinued operation |
|
|
7,824 |
|
|
|
8,698 |
|
|
|
— |
|
|
|
— |
|
|
|
16,522 |
|
Income tax expense (benefit) from continuing operations |
|
|
1,619 |
|
|
|
(2,237 |
) |
|
|
4,324 |
|
|
|
1,613 |
|
|
|
5,319 |
|
Interest income, net |
|
|
(258 |
) |
|
|
(37 |
) |
|
|
(7 |
) |
|
|
(59 |
) |
|
|
(361 |
) |
Asset impairments from continuing operations |
|
|
— |
|
|
|
13,712 |
|
|
|
— |
|
|
|
— |
|
|
|
13,712 |
|
Restructuring credit |
|
|
(35 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(35 |
) |
Depreciation expense - continuing operations |
|
|
1,891 |
|
|
|
1,882 |
|
|
|
1,822 |
|
|
|
1,716 |
|
|
|
7,311 |
|
Amortization expense - continuing operations |
|
|
102 |
|
|
|
117 |
|
|
|
118 |
|
|
|
117 |
|
|
|
454 |
|
Stock based compensation |
|
|
364 |
|
|
|
(199 |
) |
|
|
126 |
|
|
|
348 |
|
|
|
639 |
|
Adjusted EBITDA |
|
$ |
7,300 |
|
|
$ |
(5,889 |
) |
|
$ |
3,650 |
|
|
$ |
6,119 |
|
|
$ |
11,180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Net Sales |
|
|
10.7 |
% |
|
|
(12.4 |
)% |
|
|
5.7 |
% |
|
|
8.0 |
% |
|
|
4.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Over (Under) |
|
|
(32.0 |
)% |
|
N.M. |
|
|
|
42.5 |
% |
|
|
(41.8 |
)% |
|
|
56.2 |
% |
|
CULP, INC. |
|||||||||
RETURN ON CAPITAL EMPLOYED BY SEGMENT |
|||||||||
FOR THE TWELVE MONTHS ENDED OCTOBER 31, 2021 |
|||||||||
Unaudited |
|||||||||
(Amounts in Thousands) |
|||||||||
|
Adjusted |
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
|
|
|
|
|
Twelve Months |
|
Average |
|
Return on |
|
|||
|
Ended |
|
Capital |
|
Avg. Capital |
|
|||
|
October 31, 2021 (1) |
|
Employed (3) |
|
Employed (2) |
|
|||
Mattress Fabrics |
$ |
12,321 |
|
$ |
71,960 |
|
|
17.1 |
% |
Upholstery Fabrics |
|
9,771 |
|
|
16,223 |
|
|
60.2 |
% |
Unallocated Corporate |
|
(11,458 |
) |
|
1,737 |
|
N.M. |
|
|
Total |
$ |
10,634 |
|
$ |
89,919 |
|
|
11.8 |
% |
Average Capital Employed |
As of the three Months Ended October 31, 2021 |
|
|
As of the three Months Ended August 1, 2021 |
|
|
As of the three Months Ended May 2, 2021 |
|
||||||||||||||||||||||||||||||
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
|
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
|
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
|
|||||||||
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Total |
|
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Total |
|
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Total |
|
||||||||||||
Total assets (4) |
$ |
96,960 |
|
|
56,292 |
|
|
56,073 |
|
|
209,325 |
|
|
$ |
96,416 |
|
|
55,617 |
|
|
60,215 |
|
|
212,248 |
|
|
$ |
97,431 |
|
|
54,305 |
|
|
62,344 |
|
|
214,080 |
|
Total liabilities |
|
(18,818 |
) |
|
(38,560 |
) |
|
(23,493 |
) |
|
(80,871 |
) |
|
|
(21,298 |
) |
|
(39,983 |
) |
|
(21,418 |
) |
|
(82,699 |
) |
|
|
(22,410 |
) |
|
(38,709 |
) |
|
(23,955 |
) |
|
(85,074 |
) |
Subtotal |
$ |
78,142 |
|
$ |
17,732 |
|
$ |
32,580 |
|
$ |
128,454 |
|
|
$ |
75,118 |
|
$ |
15,634 |
|
$ |
38,797 |
|
$ |
129,549 |
|
|
$ |
75,021 |
|
$ |
15,596 |
|
$ |
38,389 |
|
$ |
129,006 |
|
Cash and cash equivalents |
|
— |
|
|
— |
|
|
(16,956 |
) |
|
(16,956 |
) |
|
|
— |
|
|
— |
|
|
(26,061 |
) |
|
(26,061 |
) |
|
|
— |
|
|
— |
|
|
(37,009 |
) |
|
(37,009 |
) |
Short-term investments - Available-For- Sale |
|
— |
|
|
— |
|
|
(9,709 |
) |
|
(9,709 |
) |
|
|
— |
|
|
— |
|
|
(9,698 |
) |
|
(9,698 |
) |
|
|
— |
|
|
— |
|
|
(5,542 |
) |
|
(5,542 |
) |
Short-term investments - Held-To- Maturity |
|
— |
|
|
— |
|
|
(1,564 |
) |
|
(1,564 |
) |
|
|
— |
|
|
— |
|
|
(1,661 |
) |
|
(1,661 |
) |
|
|
— |
|
|
— |
|
|
(3,161 |
) |
|
(3,161 |
) |
Current income taxes receivable |
|
— |
|
|
— |
|
|
(613 |
) |
|
(613 |
) |
|
|
— |
|
|
— |
|
|
(524 |
) |
|
(524 |
) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Long-term investments - Held-To-Maturity |
|
— |
|
|
— |
|
|
(8,353 |
) |
|
(8,353 |
) |
|
|
— |
|
|
— |
|
|
(6,629 |
) |
|
(6,629 |
) |
|
|
— |
|
|
— |
|
|
(1,141 |
) |
|
(1,141 |
) |
Long-term investments - Rabbi Trust |
|
— |
|
|
— |
|
|
(9,036 |
) |
|
(9,036 |
) |
|
|
— |
|
|
— |
|
|
(8,841 |
) |
|
(8,841 |
) |
|
|
— |
|
|
— |
|
|
(8,415 |
) |
|
(8,415 |
) |
Deferred income taxes - non-current |
|
— |
|
|
— |
|
|
(452 |
) |
|
(452 |
) |
|
|
— |
|
|
— |
|
|
(455 |
) |
|
(455 |
) |
|
|
— |
|
|
— |
|
|
(545 |
) |
|
(545 |
) |
Income taxes payable - current |
|
— |
|
|
— |
|
|
646 |
|
|
646 |
|
|
|
— |
|
|
— |
|
|
253 |
|
|
253 |
|
|
|
— |
|
|
— |
|
|
229 |
|
|
229 |
|
Income taxes payable - long-term |
|
— |
|
|
— |
|
|
3,099 |
|
|
3,099 |
|
|
|
— |
|
|
— |
|
|
3,365 |
|
|
3,365 |
|
|
|
— |
|
|
— |
|
|
3,326 |
|
|
3,326 |
|
Deferred income taxes - non-current |
|
— |
|
|
— |
|
|
4,918 |
|
|
4,918 |
|
|
|
— |
|
|
— |
|
|
4,917 |
|
|
4,917 |
|
|
|
— |
|
|
— |
|
|
5,330 |
|
|
5,330 |
|
Deferred compensation |
|
— |
|
|
— |
|
|
9,017 |
|
|
9,017 |
|
|
|
— |
|
|
— |
|
|
8,795 |
|
|
8,795 |
|
|
|
— |
|
|
— |
|
|
8,365 |
|
|
8,365 |
|
Total Capital Employed |
$ |
78,142 |
|
$ |
17,732 |
|
$ |
3,577 |
|
$ |
99,451 |
|
|
$ |
75,118 |
|
$ |
15,634 |
|
$ |
2,258 |
|
$ |
93,010 |
|
|
$ |
75,021 |
|
$ |
15,596 |
|
$ |
(174 |
) |
$ |
90,443 |
|
CULP, INC. |
|||||||||||||||||||||||||
RETURN ON CAPITAL EMPLOYED BY SEGMENT - CONTINUED |
|||||||||||||||||||||||||
FOR THE TWELVE MONTHS ENDED OCTOBER 31, 2021 |
|||||||||||||||||||||||||
Unaudited |
|||||||||||||||||||||||||
(Amounts in Thousands) |
|||||||||||||||||||||||||
|
As of the three Months Ended January 31, 2021 |
|
|
As of the three Months Ended November 1, 2020 |
|
||||||||||||||||||||
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
|
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
|
||||||
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Total |
|
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Total |
|
||||||||
Total assets (4) |
$ |
91,412 |
|
|
53,233 |
|
|
67,333 |
|
|
211,978 |
|
|
$ |
83,237 |
|
|
47,267 |
|
|
72,272 |
|
|
202,776 |
|
Total liabilities |
|
(21,503 |
) |
|
(38,061 |
) |
|
(24,052 |
) |
|
(83,616 |
) |
|
|
(21,628 |
) |
|
(30,287 |
) |
|
(23,610 |
) |
|
(75,525 |
) |
Subtotal |
$ |
69,909 |
|
$ |
15,172 |
|
$ |
43,281 |
|
$ |
128,362 |
|
|
$ |
61,609 |
|
$ |
16,980 |
|
$ |
48,662 |
|
$ |
127,251 |
|
Cash and cash equivalents |
|
— |
|
|
— |
|
|
(35,987 |
) |
|
(35,987 |
) |
|
|
— |
|
|
— |
|
|
(45,288 |
) |
|
(45,288 |
) |
Short-term investments - Available-For- Sale |
|
— |
|
|
— |
|
|
(5,548 |
) |
|
(5,548 |
) |
|
|
— |
|
|
— |
|
|
(5,462 |
) |
|
(5,462 |
) |
Short-term investments - Held-To- Maturity |
|
— |
|
|
— |
|
|
(9,785 |
) |
|
(9,785 |
) |
|
|
— |
|
|
— |
|
|
(5,005 |
) |
|
(5,005 |
) |
Long-term investments - Held-To-Maturity |
|
— |
|
|
— |
|
|
(512 |
) |
|
(512 |
) |
|
|
— |
|
|
— |
|
|
(759 |
) |
|
(759 |
) |
Long-term investments - Rabbi Trust |
|
— |
|
|
— |
|
|
(8,232 |
) |
|
(8,232 |
) |
|
|
— |
|
|
— |
|
|
(8,060 |
) |
|
(8,060 |
) |
Deferred income taxes - non-current |
|
— |
|
|
— |
|
|
(640 |
) |
|
(640 |
) |
|
|
— |
|
|
— |
|
|
(645 |
) |
|
(645 |
) |
Income taxes payable - current |
|
— |
|
|
— |
|
|
1,129 |
|
|
1,129 |
|
|
|
— |
|
|
— |
|
|
1,413 |
|
|
1,413 |
|
Income taxes payable - long-term |
|
— |
|
|
— |
|
|
3,325 |
|
|
3,325 |
|
|
|
— |
|
|
— |
|
|
3,325 |
|
|
3,325 |
|
Deferred income taxes - non-current |
|
— |
|
|
— |
|
|
5,543 |
|
|
5,543 |
|
|
|
— |
|
|
— |
|
|
6,089 |
|
|
6,089 |
|
Deferred compensation |
|
— |
|
|
— |
|
|
8,179 |
|
|
8,179 |
|
|
|
— |
|
|
— |
|
|
8,000 |
|
|
8,000 |
|
Total Capital Employed |
$ |
69,909 |
|
$ |
15,172 |
|
$ |
753 |
|
$ |
85,834 |
|
|
$ |
61,609 |
|
$ |
16,980 |
|
$ |
2,270 |
|
$ |
80,859 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average Capital Employed (3) |
$ |
71,960 |
|
$ |
16,223 |
|
$ |
1,737 |
|
$ |
89,919 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Notes | ||
|
||
(1) |
See last page of this presentation for calculation. |
|
|
||
(2) |
Return on average capital employed represents the last twelve months operating income as of October 31, 2021, divided by average capital employed. Average capital employed does not include cash and cash equivalents, short-term investments Available-For-Sale, and short-term and long-term investments Held-To-Maturity, long-term investments – Rabbi Trust, income taxes receivable and payable, noncurrent deferred income tax assets and liabilities, and deferred compensation. |
|
|
||
(3) |
Average capital employed was computed using the five quarterly periods ending October 31, 2021, August 1, 2021, May 2, 2021, January 31, 2021, and November 1, 2020. |
|
|
||
(4) |
Intangible assets are included in unallocated corporate for all periods presented and therefore, have no effect on capital employed and return on capital employed for our mattress fabrics and upholstery fabrics segments. |
|
CULP INC. |
|||||||||
RETURN ON CAPITAL EMPLOYED BY SEGMENT |
|||||||||
FOR THE TWELVE MONTHS ENDED NOVEMBER 1, 2020 |
|||||||||
Unaudited |
|||||||||
(Amounts in Thousands) |
|||||||||
|
Adjusted |
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
|
|
|
|
|
Twelve Months |
|
Average |
|
Return on |
|
|||
|
Ended |
|
Capital |
|
Avg. Capital |
|
|||
|
November 1, 2020 (1) |
|
Employed (3) |
|
Employed (2) |
|
|||
Mattress Fabrics |
$ |
5,241 |
|
$ |
69,290 |
|
|
7.6 |
% |
Upholstery Fabrics |
|
8,920 |
|
|
19,133 |
|
|
46.6 |
% |
Unallocated Corporate |
|
(9,353 |
) |
|
8,166 |
|
N.M. |
|
|
Total |
$ |
4,808 |
|
$ |
96,589 |
|
|
5.0 |
% |
Average Capital Employed |
As of the three Months Ended November 1, 2020 |
|
|
As of the three Months Ended August 2, 2020 |
|
|
As of the three Months Ended May 3, 2020 |
|
||||||||||||||||||||||||||||||
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
|
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
|
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
|
|||||||||
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Total |
|
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Total |
|
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Total |
|
||||||||||||
Total assets (4) |
$ |
83,237 |
|
|
47,267 |
|
|
72,272 |
|
|
202,776 |
|
|
$ |
79,016 |
|
|
41,239 |
|
|
64,332 |
|
|
184,587 |
|
|
$ |
82,060 |
|
|
38,517 |
|
|
94,507 |
|
|
215,084 |
|
Total liabilities (5) |
|
(21,628 |
) |
|
(30,287 |
) |
|
(23,610 |
) |
|
(75,525 |
) |
|
|
(14,444 |
) |
|
(23,644 |
) |
|
(20,630 |
) |
|
(58,718 |
) |
|
|
(9,239 |
) |
|
(20,908 |
) |
|
(55,239 |
) |
|
(85,386 |
) |
Subtotal |
$ |
61,609 |
|
$ |
16,980 |
|
$ |
48,662 |
|
$ |
127,251 |
|
|
$ |
64,572 |
|
$ |
17,595 |
|
$ |
43,702 |
|
$ |
125,869 |
|
|
$ |
72,821 |
|
$ |
17,609 |
|
$ |
39,268 |
|
$ |
129,698 |
|
Cash and cash equivalents |
|
— |
|
|
— |
|
|
(45,288 |
) |
|
(45,288 |
) |
|
|
— |
|
|
— |
|
|
(39,986 |
) |
|
(39,986 |
) |
|
|
— |
|
|
— |
|
|
(69,790 |
) |
|
(69,790 |
) |
Short-term investments – Available-For-Sale |
|
— |
|
|
— |
|
|
(5,462 |
) |
|
(5,462 |
) |
|
|
— |
|
|
— |
|
|
(983 |
) |
|
(983 |
) |
|
|
— |
|
|
— |
|
|
(923 |
) |
|
(923 |
) |
Short-term investments – Held-To-Maturity |
|
— |
|
|
— |
|
|
(5,005 |
) |
|
(5,005 |
) |
|
|
— |
|
|
— |
|
|
(5,092 |
) |
|
(5,092 |
) |
|
|
— |
|
|
— |
|
|
(4,271 |
) |
|
(4,271 |
) |
Current income taxes receivable |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
(782 |
) |
|
(782 |
) |
|
|
— |
|
|
— |
|
|
(1,585 |
) |
|
(1,585 |
) |
Long-term investments – Held-To-Maturity |
|
— |
|
|
— |
|
|
(759 |
) |
|
(759 |
) |
|
|
— |
|
|
— |
|
|
(1,314 |
) |
|
(1,314 |
) |
|
|
— |
|
|
— |
|
|
(2,076 |
) |
|
(2,076 |
) |
Long-term investments - Rabbi Trust |
|
— |
|
|
— |
|
|
(8,060 |
) |
|
(8,060 |
) |
|
|
— |
|
|
— |
|
|
(7,916 |
) |
|
(7,916 |
) |
|
|
— |
|
|
— |
|
|
(7,834 |
) |
|
(7,834 |
) |
Deferred income taxes - non-current |
|
— |
|
|
— |
|
|
(645 |
) |
|
(645 |
) |
|
|
— |
|
|
— |
|
|
(593 |
) |
|
(593 |
) |
|
|
— |
|
|
— |
|
|
(793 |
) |
|
(793 |
) |
Line of credit - China operations |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
1,015 |
|
|
1,015 |
|
Paycheck Protection Program Loan |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
7,606 |
|
|
7,606 |
|
Income taxes payable - current |
|
— |
|
|
— |
|
|
1,413 |
|
|
1,413 |
|
|
|
— |
|
|
— |
|
|
613 |
|
|
613 |
|
|
|
— |
|
|
— |
|
|
395 |
|
|
395 |
|
Line of credit - U.S. operations |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
29,750 |
|
|
29,750 |
|
Income taxes payable - long-term |
|
— |
|
|
— |
|
|
3,325 |
|
|
3,325 |
|
|
|
— |
|
|
— |
|
|
3,591 |
|
|
3,591 |
|
|
|
— |
|
|
— |
|
|
3,796 |
|
|
3,796 |
|
Deferred income taxes - non-current |
|
— |
|
|
— |
|
|
6,089 |
|
|
6,089 |
|
|
|
— |
|
|
— |
|
|
5,311 |
|
|
5,311 |
|
|
|
— |
|
|
— |
|
|
1,818 |
|
|
1,818 |
|
Deferred compensation |
|
— |
|
|
— |
|
|
8,000 |
|
|
8,000 |
|
|
|
— |
|
|
— |
|
|
7,869 |
|
|
7,869 |
|
|
|
— |
|
|
— |
|
|
7,720 |
|
|
7,720 |
|
Total Capital Employed |
$ |
61,609 |
|
$ |
16,980 |
|
$ |
2,270 |
|
$ |
80,859 |
|
|
$ |
64,572 |
|
$ |
17,595 |
|
$ |
4,420 |
|
$ |
86,587 |
|
|
$ |
72,821 |
|
$ |
17,609 |
|
$ |
4,096 |
|
$ |
94,526 |
|
CULP INC. |
|||||||||||||||||||||||||
RETURN ON CAPITAL EMPLOYED BY SEGMENT - CONTINUED |
|||||||||||||||||||||||||
FOR THE TWELVE MONTHS ENDED NOVEMBER 1, 2020 |
|||||||||||||||||||||||||
Unaudited |
|||||||||||||||||||||||||
(Amounts in Thousands) |
|||||||||||||||||||||||||
|
As of the three Months Ended February 2, 2020 |
|
|
As of the three Months Ended November 3, 2019 |
|
||||||||||||||||||||
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
|
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
|
||||||
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Total |
|
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Total |
|
||||||||
Total assets (4) |
$ |
88,641 |
|
|
42,248 |
|
|
81,251 |
|
|
212,140 |
|
|
$ |
84,473 |
|
|
43,313 |
|
|
105,736 |
|
|
233,522 |
|
Total liabilities (5) |
|
(11,586 |
) |
|
(18,179 |
) |
|
(22,279 |
) |
|
(52,044 |
) |
|
|
(14,079 |
) |
|
(23,902 |
) |
|
(29,619 |
) |
|
(67,600 |
) |
Subtotal |
$ |
77,055 |
|
$ |
24,069 |
|
$ |
58,972 |
|
$ |
160,096 |
|
|
$ |
70,394 |
|
$ |
19,411 |
|
$ |
76,117 |
|
$ |
165,922 |
|
Cash and cash equivalents |
|
— |
|
|
— |
|
|
(21,640 |
) |
|
(21,640 |
) |
|
|
— |
|
|
— |
|
|
(46,955 |
) |
|
(46,955 |
) |
Short-term investments – Available for Sale |
|
— |
|
|
— |
|
|
(7,580 |
) |
|
(7,580 |
) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Short-term investments – Held-to-Maturity |
|
— |
|
|
— |
|
|
(3,171 |
) |
|
(3,171 |
) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Current income taxes receivable |
|
— |
|
|
— |
|
|
(776 |
) |
|
(776 |
) |
|
|
— |
|
|
— |
|
|
(776 |
) |
|
(776 |
) |
Current assets - Discontinued Operation |
|
— |
|
|
— |
|
|
(4,738 |
) |
|
(4,738 |
) |
|
|
— |
|
|
— |
|
|
(4,760 |
) |
|
(4,760 |
) |
Long-term investments – Held-to-Maturity |
|
— |
|
|
— |
|
|
(2,224 |
) |
|
(2,224 |
) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Long-term investments - Rabbi Trust |
|
— |
|
|
— |
|
|
(7,804 |
) |
|
(7,804 |
) |
|
|
— |
|
|
— |
|
|
(7,575 |
) |
|
(7,575 |
) |
Noncurrent income taxes receivable |
|
— |
|
|
— |
|
|
(733 |
) |
|
(733 |
) |
|
|
— |
|
|
— |
|
|
(733 |
) |
|
(733 |
) |
Deferred income taxes - non-current |
|
— |
|
|
— |
|
|
(920 |
) |
|
(920 |
) |
|
|
— |
|
|
— |
|
|
(511 |
) |
|
(511 |
) |
Long-term note receivable affiliated with discontinued operation |
|
— |
|
|
— |
|
|
(1,800 |
) |
|
(1,800 |
) |
|
|
— |
|
|
— |
|
|
(1,800 |
) |
|
(1,800 |
) |
Noncurrent assets - Discontinued Operation |
|
— |
|
|
— |
|
|
(9,241 |
) |
|
(9,241 |
) |
|
|
— |
|
|
— |
|
|
(22,950 |
) |
|
(22,950 |
) |
Current liabilities - Discontinued Operation |
|
— |
|
|
— |
|
|
2,094 |
|
|
2,094 |
|
|
|
— |
|
|
— |
|
|
1,907 |
|
|
1,907 |
|
Income taxes payable - current |
|
— |
|
|
— |
|
|
455 |
|
|
455 |
|
|
|
— |
|
|
— |
|
|
1,539 |
|
|
1,539 |
|
Contingent consideration affiliated with discontinued operation |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
6,006 |
|
|
6,006 |
|
Income taxes payable - long-term |
|
— |
|
|
— |
|
|
3,442 |
|
|
3,442 |
|
|
|
— |
|
|
— |
|
|
3,442 |
|
|
3,442 |
|
Deferred income taxes - non-current |
|
— |
|
|
— |
|
|
2,013 |
|
|
2,013 |
|
|
|
— |
|
|
— |
|
|
3,283 |
|
|
3,283 |
|
Deferred compensation |
|
— |
|
|
— |
|
|
7,637 |
|
|
7,637 |
|
|
|
— |
|
|
— |
|
|
7,429 |
|
|
7,429 |
|
Noncurrent liabilities - Discontinued Operation |
|
— |
|
|
— |
|
|
3,501 |
|
|
3,501 |
|
|
|
— |
|
|
— |
|
|
3,550 |
|
|
3,550 |
|
Non-controlling interest - Discontinued Operation |
|
— |
|
|
— |
|
|
(253 |
) |
|
(253 |
) |
|
|
— |
|
|
— |
|
|
(4,402 |
) |
|
(4,402 |
) |
Total Capital Employed |
$ |
77,055 |
|
$ |
24,069 |
|
$ |
17,234 |
|
$ |
118,358 |
|
|
$ |
70,394 |
|
$ |
19,411 |
|
$ |
12,811 |
|
$ |
102,616 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mattress |
|
Upholstery |
|
Unallocated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Fabrics |
|
Fabrics |
|
Corporate |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average Capital Employed (3) |
$ |
69,290 |
|
$ |
19,133 |
|
$ |
8,166 |
|
$ |
96,589 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Notes | ||
(1) |
See last page of this presentation for calculation. |
|
(2) |
Return on average capital employed represents the last twelve months operating income as of November 1, 2020 divided by average capital employed. Average capital employed does not include cash and cash equivalents, short-term investments Available-For-Sale, and short-term and long-term investments Held-To-Maturity, long-term investments–Rabbi Trust, income taxes receivable and payable, noncurrent deferred income tax assets and liabilities, deferred compensation, lines of credit associated with our U.S. and China operations, Paycheck Protection Program loan, long-term note receivable affiliated with discontinued operation, current and noncurrent assets–Discontinued Operation, current and non-current liabilities-Discontinued Operation, contingent consideration affiliated with discontinued operation, and non-controlling interest-Discontinued Operation. |
|
(3) |
Average capital employed was computed using the five quarterly periods ending November 1, 2020, August 2, 2020, May 3, 2020, February 2, 2020, and November 2, 2019. |
|
(4) |
Intangible assets and goodwill are included in unallocated corporate for all periods presented and therefore, have no effect on capital employed and return on capital employed for our mattress fabrics and upholstery fabrics segments. |
|
(5) |
Accrued restructuring costs and certain obligations associated with an acquisition are included in unallocated corporate for all periods presented and therefore, have no effect on capital employed and return on capital employed for our mattress fabrics and upholstery fabrics segments. |
|
CULP INC. |
||||||||||||||||||||
CONSOLIDATED STATEMENTS OF ADJUSTED OPERATING INCOME (LOSS) |
||||||||||||||||||||
FOR THE TWELVE MONTHS ENDED OCTOBER 31, 2021, AND NOVEMBER 1, 2020 |
||||||||||||||||||||
Unaudited |
||||||||||||||||||||
(Amounts in Thousands) |
||||||||||||||||||||
|
|
Quarter Ended |
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trailing 12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Months |
|
|
|
|
1/31/2021 |
|
|
5/2/2021 |
|
|
8/1/2021 |
|
|
10/31/2021 |
|
|
10/31/2021 |
|
|||||
Mattress Fabrics |
|
$ |
3,297 |
|
|
$ |
2,274 |
|
|
$ |
3,611 |
|
|
$ |
3,139 |
|
|
$ |
12,321 |
|
Upholstery Fabrics |
|
|
3,863 |
|
|
|
2,613 |
|
|
|
2,267 |
|
|
|
1,028 |
|
|
|
9,771 |
|
Unallocated Corporate |
|
|
(3,123 |
) |
|
|
(3,248 |
) |
|
|
(2,560 |
) |
|
|
(2,527 |
) |
|
|
(11,458 |
) |
Adjusted Operating income |
|
$ |
4,037 |
|
|
$ |
1,639 |
|
|
$ |
3,318 |
|
|
$ |
1,640 |
|
|
$ |
10,634 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trailing 12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Months |
|
|
|
|
2/2/2020 |
|
|
5/3/2020 |
|
|
8/2/2020 |
|
|
11/1/2020 |
|
|
11/1/2020 |
|
|||||
Mattress Fabrics |
|
$ |
1,778 |
|
|
$ |
(2,764 |
) |
|
$ |
1,845 |
|
|
$ |
4,382 |
|
|
$ |
5,241 |
|
Upholstery Fabrics |
|
|
3,030 |
|
|
|
490 |
|
|
|
2,113 |
|
|
|
3,287 |
|
|
|
8,920 |
|
Unallocated Corporate |
|
|
(2,119 |
) |
|
|
(2,008 |
) |
|
|
(2,075 |
) |
|
|
(3,151 |
) |
|
|
(9,353 |
) |
Subtotal |
|
$ |
2,689 |
|
|
$ |
(4,282 |
) |
|
$ |
1,883 |
|
|
$ |
4,518 |
|
|
$ |
4,808 |
|
Asset Impairments |
|
|
— |
|
|
|
(13,712 |
) |
|
|
— |
|
|
|
— |
|
|
|
(13,712 |
) |
Restructuring credit |
|
|
35 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
35 |
|
Adjusted Operating income (loss) |
|
$ |
2,724 |
|
|
$ |
(17,994 |
) |
|
$ |
1,883 |
|
|
$ |
4,518 |
|
|
$ |
(8,869 |
) |
% Over (Under) |
|
|
48.2 |
% |
|
|
(109.1 |
)% |
|
|
76.2 |
% |
|
|
(63.7 |
)% |
|
N.M. |
|
|
-
