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Culp, Inc. (NYSE: CFI) today reported financial and operating results for the third quarter of fiscal 2012 ended January 29, 2012.
Highlights for the third quarter include the following:
Net sales were $60.5 million, a 17 percent increase compared with the third quarter of fiscal 2011, with mattress fabrics segment sales up 24 percent and upholstery fabric segment sales up nine percent over the same period a year ago.
Pre-tax income was $2.9 million, or 4.8 percent of sales, compared with $2.9 million, or 5.6 percent of sales, in the prior year period.
Net income was $1.8 million, or $0.14 per diluted share, compared with net income of $2.4 million, or $0.18 per diluted share, for the third quarter of fiscal 2011.
As of February 27, 2012, the company has repurchased 624,459 shares of Culp common stock for approximately $5.4 million, or 4.7 percent of shares outstanding at the beginning of its share repurchase program announced in June 2011.
The company’s financial position remained strong, with cash and cash equivalents and short term investments of $23.6 million and total debt of $10.1 million as of January 29, 2012, even with stock repurchases of $5.4 million, capital expenditures of $3.7 million and debt repayments of $2.4 million during this fiscal year.
Fiscal 2012 Year to Date Highlights
Year to date sales were $178.7 million, up 14 percent from the same period a year ago, with mattress fabrics segment sales up 17 percent and upholstery fabrics segment sales up 11 percent over the same period a year ago.
Year to date pre-tax income was $8.7 million, or 4.9 percent of sales, compared with $10.4 million, or 6.6 percent of sales for the same period last year.
Year to date net income was $9.9 million, or $0.76 per diluted share, compared with net income of $10.2 million, or $0.77 per diluted share, for the same period a year ago. Year to date net income included a $1.2 million income tax benefit, while net income for the previous year period included an income tax expense of $213,000.
Estimated year to date cash income tax rate was 18.2 percent and 15.3 percent through the first three quarters of fiscal 2012 and fiscal 2011, respectively.
The projection for fourth quarter fiscal 2012 is for overall sales to increase approximately 8 to 13 percent. Pre-tax income for the fourth quarter of fiscal 2012 is expected to be in the range of $4.5 million to $5.4 million. Pre-tax income for the fourth quarter of fiscal 2011 was $4.7 million.
Commenting on the results, Frank Saxon, chief executive officer of Culp, Inc., said, “We are very pleased with the continued momentum in our sales for the third quarter of fiscal 2012. This positive trend reflects both improved industry demand and the success of our sales and marketing initiatives, along with the benefits of our innovative designs and lean global manufacturing platform. Both of our businesses had a strong sales performance in what is typically a slower quarterly period due to scheduled holiday plant shutdowns. Overall, our operating margins have continued to be affected by higher raw material costs and a stronger Chinese currency compared with the same quarter a year ago.