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Culp Announces Results For Fourth Quarter And Fiscal 2010

Culp, Inc. (NYSE: CFI) today reported financial and operating results for the fourth quarter and fiscal year ended May 2, 2010.

Fiscal 2010 fourth quarter highlights:

  • Net sales were $57.2 million, up 20 percent from the fourth quarter of last year, with mattress fabric segment sales up 26 percent and upholstery fabrics segment sales up 13 percent.
  • Pre-tax income was $5.0 million, compared with $2.2 million in the prior year period.
  • Net income was $5.4 million, or $0.41 per diluted share, compared with net income of $1.7 million, or $0.13 per diluted share, in the prior year. A tax benefit of $0.4 million was recorded in this quarter due to various factors.
  • The company increased its total cash position by $2.3 million, while incurring $3.2 million in capital expenditures and lowering its total debt from $16.4 million to $11.7 million, a reduction of $4.7 million, or 29 percent.

Fiscal 2010 full year highlights:

  • Net sales were $206.4 million, up 1.2 percent over the prior year. Mattress fabric segment sales were even with the prior year while upholstery fabric sales were up 3.4 percent. This marks the first annual sales gain for upholstery fabrics in ten years.
  • Pre-tax income was $14.3 million, compared with a pre-tax loss of $6.9 million in the prior year period. Restructuring and related (credits) charges were ($0.3) million in the current year and $13.1 million in the prior year.
  • Net income was $13.2 million, or $1.01 per diluted share, compared with a net loss of $38.8 million, or $3.07 per diluted share, in the prior year period. Fiscal 2009 included a $27.2 million charge for the establishment of a valuation allowance against the company’s net deferred tax assets.
  • Cash flow from operations was $21.6 million, driven primarily by net income plus depreciation and amortization, totaling $17.7 million.
  • The company’s financial position strengthened considerably during the year with cash and cash equivalents and short-term investments totaling $21.3 million at year end, exceeding total debt of $11.7 million. The company increased its total cash position by $9.5 million during the year, while incurring $7.4 million in capital expenditures and reducing debt by $4.8 million.
  • The projection for the first quarter of fiscal 2011 is for overall sales to increase 11 to 16 percent over the prior year period. Mattress fabric sales are expected to be up 15 to 20 percent and upholstery fabrics sales are expected to be up 5 to 10 percent compared with the prior year. Pre-tax income for the first quarter of fiscal 2011 is expected to be in the range of $3.6 to $4.0 million. Pre-tax income for the first quarter of fiscal 2009 was $1.8 million.

Overview

For the three months ended May 2, 2010, net sales were $57.2 million, a 20 percent increase compared with $47.8 million a year ago. The company reported net income of $5.4 million, or $0.41 per diluted share, for the fourth quarter of fiscal 2010, compared with net income of $1.7 million, or $0.13 per diluted share, for the fourth quarter of fiscal 2009. Net sales for fiscal 2010 were $206.4 million, compared with net sales of $203.9 million in fiscal 2009. Net income for fiscal 2010 was $13.2 million, or $1.01 per diluted share, compared with a net loss of $38.8 million, or $(3.07) per share, in fiscal 2009. The results for fiscal 2009 included a $27.2 million non-cash charge for the establishment of a valuation allowance against substantially all of the company’s net deferred tax assets.

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