Exhibit 99.1
Investor Contact: |
| Kenneth R. Bowling |
| Media Contact: |
| Teresa A. Huffman |
|
| Chief Financial Officer |
|
|
| Chief Human Resources Officer |
|
| 336-881-5630 |
|
|
| 336-889-5161 |
CULP ANNOUNCES RESULTS FOR FOURTH QUARTER AND FISCAL 2023, ENDS YEAR
WITH QUARTERLY SALES AND OPERATING IMPROVEMENT AND HIGHER CASH POSITION
HIGH POINT, N.C. (June 28, 2023) ─ Culp, Inc. (NYSE: CULP) (together with its consolidated subsidiaries, “CULP”) today reported financial and operating results for the fourth quarter and fiscal year ended April 30, 2023.
Fiscal 2023 Fourth Quarter Financial Summary
Fiscal 2023 Full Year Financial Summary
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CULP Announces Results for Fourth Quarter and Fiscal 2023, Ends Year with Quarterly Sales and Operating Improvement and Higher Cash Position
Page 2
June 28, 2023
Financial Outlook
Commenting on the results, Iv Culp, president and chief executive officer of Culp, Inc., said, “Our sales and operating results for the fourth quarter were better than expected, with solid improvement despite ongoing demand softness in the domestic mattress and residential home furnishings industries. The strong sequential improvement in our mattress fabrics segment was driven primarily by the roll out of new customer programs during the period, which were priced in line with current costs and are expected to grow this segment's market position in fiscal 2024. The mattress fabrics business also began to benefit from some improvement in operational efficiencies and cost reduction initiatives across our locations. For the upholstery fabrics segment, demand remained solid in our hospitality/contract business, and our residential fabrics business improved due to a seasonal pick up following third-quarter shutdowns for the Chinese New Year holiday, as well as a non-recurring payment relating to newly negotiated terms with a customer.
"We are especially pleased with our continued focus on cash generation and working capital management, including inventory reductions, throughout the quarter. We ended the year with a higher cash position than the prior year, with $21.0 million in cash and no outstanding borrowings. We also generated cash flow from operations of $7.8 million and free cash flow of $6.9 million for fiscal 2023, a significant improvement compared to the prior fiscal year.
"We continue to diligently manage the aspects of our business we can control, taking necessary steps to withstand current market challenges and position our business for renewed growth. In our mattress fabrics segment, we are executing on our comprehensive business transformation plan, laying the foundation for steady, sequential improvement in this business with new leadership and a restructured management team. While the pace of this improvement could be affected by recovery in the overall macroeconomic environment, we believe we are gaining market share with new program rollouts, and we are optimistic about additional program launches expected during calendar 2023. In our upholstery fabrics segment, the residential home furnishings industry remains under pressure due to shifting consumer spending trends and inflation affecting overall consumer spending. However, for fiscal 2024, we expect to benefit from improved inventory management, a solid hospitality/contract fabric business, improvement in our Read Window business, and a rationalized cut and sew platform.
"Fiscal 2023 was a difficult year, but we navigated the challenges and maintained our balance sheet strength. Our strong balance sheet allows us to focus on investing in our global manufacturing platform and growing profitable sales. We are especially thankful for the hard work and perseverance of our associates around the world in executing our product-driven strategy and meeting the needs of our customers this year. While we expect demand softness in the mattress and residential home furnishings industries will continue, our market position is strong, and we are diligently focused on achieving sustainable improvement and returning to profitability in fiscal 2024. We are well positioned for the long term, and our innovative product offerings, creative designs, and global manufacturing and sourcing platform will support us into the future, especially when market conditions improve,” added Culp.
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CULP Announces Results for Fourth Quarter and Fiscal 2023, Ends Year with Quarterly Sales and Operating Improvement and Higher Cash Position
Page 3
June 28, 2023
Segment Update
Mattress Fabrics Segment (“CHF”) Summary
Upholstery Fabrics Segment (“CUF”) Summary
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CULP Announces Results for Fourth Quarter and Fiscal 2023, Ends Year with Quarterly Sales and Operating Improvement and Higher Cash Position
Page 4
June 28, 2023
Balance Sheet and Cash Flow
Dividends and Share Repurchases
To preserve liquidity and support future growth opportunities, the company’s Board of Directors suspended the company’s quarterly cash dividend on its common stock in June of 2022.
The company did not repurchase any shares during fiscal 2023, leaving approximately $3.2 million available under the current share repurchase program as of April 30, 2023. Despite the current share repurchase authorization, the company does not expect to repurchase any shares during the first quarter of fiscal 2024.
Conference Call
Culp, Inc. will hold a conference call to discuss financial results for the fourth quarter and fiscal 2023 year on June 29, 2023, at 11:00 a.m. Eastern Time. A live webcast of this call can be accessed on the “Upcoming Events” section on the investor relations page of the company’s website, www.culp.com. A replay of the webcast will be available for 30 days under the “Past Events” section on the investor relations page of the company’s website, beginning at 2:00 p.m. Eastern Time on June 29, 2023.
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
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CULP Announces Results for Fourth Quarter and Fiscal 2023, Ends Year with Quarterly Sales and Operating Improvement and Higher Cash Position
Page 5
June 28, 2023
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, projections, or trends for our future operations, strategic initiatives and plans, production levels, new product launches, sales, profit margins, profitability, operating income, capital expenditures, working capital levels, cost savings, 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 dividends, share repurchases, liquidity, use of cash and cash requirements, borrowing capacity, investments, 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, including changes in U.S. trade enforcement priorities, 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 asset impairments, including impairments of property, plant, and equipment, inventory, or intangible assets, as well as the impact of valuation allowances applied against our net deferred income tax assets, 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. Additional risks and uncertainties that we do not presently know about or that we currently consider to be immaterial may also affect our business operations and financial results.
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CULP Announces Results for Fourth Quarter and Fiscal 2023, Ends Year with Quarterly Sales and Operating Improvement and Higher Cash Position
Page 6
June 28, 2023
CULP, INC.
CONSOLIDATED STATEMENTS OF NET LOSS
FOR THREE MONTHS ENDED APRIL 30, 2023, AND MAY 1, 2022
Unaudited
(Amounts in Thousands, Except for Per Share Data)
|
| THREE MONTHS ENDED |
| |||||||||||||||||
|
| Amount |
|
|
|
|
| Percent of Sales |
| |||||||||||
|
| (3) |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
| April 30, |
|
| May 1, |
|
| % Over |
|
| April 30, |
|
| May 1, |
| |||||
|
| 2023 |
|
| 2022 |
|
| (Under) |
|
| 2023 |
|
| 2022 |
| |||||
Net sales |
| $ | 61,426 |
|
| $ | 56,940 |
|
|
| 7.9 | % |
|
| 100.0 | % |
|
| 100.0 | % |
Cost of sales |
|
| (54,538 | ) |
|
| (53,183 | ) |
|
| 2.5 | % |
|
| 88.8 | % |
|
| 93.4 | % |
Gross profit |
|
| 6,888 |
|
|
| 3,757 |
|
|
| 83.3 | % |
|
| 11.2 | % |
|
| 6.6 | % |
Selling, general and administrative |
|
| (10,845 | ) |
|
| (9,140 | ) |
|
| 18.7 | % |
|
| 17.7 | % |
|
| 16.1 | % |
Restructuring expense (2) (3) |
|
| (70 | ) |
|
| — |
|
|
| 100.0 | % |
|
| 0.1 | % |
|
| — |
|
Loss from operations |
|
| (4,027 | ) |
|
| (5,383 | ) |
|
| (25.2 | )% |
|
| (6.6 | )% |
|
| (9.5 | )% |
Interest expense |
|
| — |
|
|
| (17 | ) |
|
| (100.0 | )% |
|
| — |
|
|
| (0.0 | )% |
Interest income |
|
| 239 |
|
|
| 26 |
|
|
| 819.2 | % |
|
| 0.4 | % |
|
| 0.0 | % |
Other expense |
|
| (95 | ) |
|
| (396 | ) |
|
| (76.0 | )% |
|
| (0.2 | )% |
|
| 0.7 | % |
Loss before income taxes |
|
| (3,883 | ) |
|
| (5,770 | ) |
|
| (32.7 | )% |
|
| (6.3 | )% |
|
| (10.1 | )% |
Income tax expense (1) |
|
| (798 | ) |
|
| (253 | ) |
|
| 215.4 | % |
|
| (20.6 | )% |
|
| (4.4 | )% |
Net loss |
| $ | (4,681 | ) |
| $ | (6,023 | ) |
|
| (22.3 | )% |
|
| (7.6 | )% |
|
| (10.6 | )% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net loss per share - basic |
| $ | (0.38 | ) |
| $ | (0.49 | ) |
|
| (22.9 | )% |
|
|
|
|
|
| ||
Net loss per share - diluted |
| $ | (0.38 | ) |
| $ | (0.49 | ) |
|
| (22.9 | )% |
|
|
|
|
|
| ||
Average shares outstanding-basic |
|
| 12,316 |
|
|
| 12,222 |
|
|
| 0.8 | % |
|
|
|
|
|
| ||
Average shares outstanding-diluted |
|
| 12,316 |
|
|
| 12,222 |
|
|
| 0.8 | % |
|
|
|
|
|
|
Notes
(1) Percent of sales column for income tax expense is calculated as a % of loss before income taxes.
(2) Restructuring expense of $70,000 for the three-months ending April 30, 2023, represents employee termination benefits of $39,000 and other associated costs of $31,000 that related to the consolidation of certain leased facilities located in Ouanaminthe, Haiti.
(3) See page 13 for our Reconciliation of Selected Income Statement Information to Adjusted Results for the three-months ending April 30, 2023.
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CULP Announces Results for Fourth Quarter and Fiscal 2023, Ends Year with Quarterly Sales and Operating Improvement and Higher Cash Position
Page 7
June 28, 2023
CULP, INC.
CONSOLIDATED STATEMENTS OF NET LOSS
FOR TWELVE MONTHS ENDED APRIL 30, 2023, AND MAY 1, 2022
Unaudited
(Amounts in Thousands, Except for Per Share Data)
|
| TWELVE MONTHS ENDED |
| |||||||||||||||||
|
| Amount |
|
|
|
|
| Percent of Sales |
| |||||||||||
|
| (4) |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
| April 30, |
|
| May 1, |
|
| % Over |
|
| April 30, |
|
| May 1, |
| |||||
|
| 2023 |
|
| 2022 |
|
| (Under) |
|
| 2023 |
|
| 2022 |
| |||||
Net sales |
| $ | 234,934 |
|
| $ | 294,839 |
|
|
| (20.3 | )% |
|
| 100.0 | % |
|
| 100.0 | % |
Cost of sales (2) |
|
| (224,038 | ) |
|
| (258,746 | ) |
|
| (13.4 | )% |
|
| 95.4 | % |
|
| 87.8 | % |
Gross profit |
|
| 10,896 |
|
|
| 36,093 |
|
|
| (69.8 | )% |
|
| 4.6 | % |
|
| 12.2 | % |
Selling, general and administrative |
|
| (37,978 | ) |
|
| (35,415 | ) |
|
| 7.2 | % |
|
| 16.2 | % |
|
| 12.0 | % |
Restructuring expense (3) (4) |
|
| (1,396 | ) |
|
| — |
|
|
| 100.0 | % |
|
| 0.6 | % |
|
| — |
|
(Loss) income from operations |
|
| (28,478 | ) |
|
| 678 |
|
| N.M. |
|
|
| (12.1 | )% |
|
| 0.2 | % | |
Interest expense |
|
| — |
|
|
| (17 | ) |
|
| (100.0 | )% |
|
| — |
|
|
| (0.0 | )% |
Interest income |
|
| 531 |
|
|
| 373 |
|
|
| 42.4 | % |
|
| 0.2 | % |
|
| 0.1 | % |
Other expense |
|
| (443 | ) |
|
| (1,359 | ) |
|
| (67.4 | )% |
|
| 0.2 | % |
|
| 0.5 | % |
Loss before income taxes |
|
| (28,390 | ) |
|
| (325 | ) |
| N.M. |
|
|
| (12.1 | )% |
|
| (0.1 | )% | |
Income tax expense (1) |
|
| (3,130 | ) |
|
| (2,886 | ) |
|
| 8.5 | % |
|
| (11.0 | )% |
|
| (888.0 | )% |
Net loss |
| $ | (31,520 | ) |
| $ | (3,211 | ) |
| N.M. |
|
|
| (13.4 | )% |
|
| (1.1 | )% | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net loss per share - basic |
| $ | (2.57 | ) |
| $ | (0.26 | ) |
| N.M. |
|
|
|
|
|
|
| |||
Net loss per share - diluted |
| $ | (2.57 | ) |
| $ | (0.26 | ) |
| N..M |
|
|
|
|
|
|
| |||
Average shares outstanding-basic |
|
| 12,283 |
|
|
| 12,242 |
|
|
| 0.3 | % |
|
|
|
|
|
| ||
Average shares outstanding-diluted |
|
| 12,283 |
|
|
| 12,242 |
|
|
| 0.3 | % |
|
|
|
|
|
|
Notes
(1) Percent of sales column for income tax expense is calculated as a % of loss before income taxes.
(2) Cost of sales for the twelve-months ending April 30, 2023, includes restructuring related charges totaling $98,000 which pertained to a loss on disposal and markdowns of inventory related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China that occurred during the second quarter of fiscal 2023.
(3) Restructuring expense of $1.4 million for the twelve-months ending April 30, 2023, relates to both our restructuring activities for our cut and sew upholstery fabrics operations located in Shanghai, China, which occurred during the second quarter of fiscal 2023, and located in Ouanaminthe, Haiti, which occurred during the third and fourth quarters of fiscal 2023. Restructuring expense represents employee termination benefits of $507,000, lease termination costs of $481,000, impairment losses totaling $357,000 that relate to leasehold improvements and equipment, and $51,000 for other associated costs.
(4) See page 14 for our Reconciliation of Selected Income Statement Information to Adjusted Results for the twelve-months ending April 30, 2023.
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CULP Announces Results for Fourth Quarter and Fiscal 2023, Ends Year with Quarterly Sales and Operating Improvement and Higher Cash Position
Page 8
June 28, 2023
CONSOLIDATED BALANCE SHEETS
APRIL 30 2023 AND MAY 1, 2022
Unaudited
(Amounts in Thousands)
|
| Amounts |
|
|
|
|
|
|
| |||||||
|
| (Condensed) |
|
| (Condensed) |
|
|
|
|
|
|
| ||||
|
| April 30, |
|
| * May 1, |
|
| Increase (Decrease) |
| |||||||
|
| 2023 |
|
| 2022 |
|
| Dollars |
|
| Percent |
| ||||
Current assets |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Cash and cash equivalents |
| $ | 20,964 |
|
|
| 14,550 |
|
|
| 6,414 |
|
|
| 44.1 | % |
Short-term investments - Rabbi Trust |
|
| 1,404 |
|
|
| — |
|
|
| 1,404 |
|
|
| 100.0 | % |
Accounts receivable |
|
| 24,778 |
|
|
| 22,226 |
|
|
| 2,552 |
|
|
| 11.5 | % |
Inventories |
|
| 45,080 |
|
|
| 66,557 |
|
|
| (21,477 | ) |
|
| (32.3 | )% |
Note receivable |
|
| 219 |
|
|
| — |
|
|
| 219 |
|
|
| 100.0 | % |
Current income taxes receivable |
|
| — |
|
|
| 857 |
|
|
| (857 | ) |
|
| (100.0 | )% |
Other current assets |
|
| 3,071 |
|
|
| 2,986 |
|
|
| 85 |
|
|
| 2.8 | % |
Total current assets |
|
| 95,516 |
|
|
| 107,176 |
|
|
| (11,660 | ) |
|
| (10.9 | )% |
Property, plant & equipment, net |
|
| 36,111 |
|
|
| 41,702 |
|
|
| (5,591 | ) |
|
| (13.4 | )% |
Right of use assets |
|
| 8,191 |
|
|
| 15,577 |
|
|
| (7,386 | ) |
|
| (47.4 | )% |
Intangible assets |
|
| 2,252 |
|
|
| 2,628 |
|
|
| (376 | ) |
|
| (14.3 | )% |
Long-term investments - Rabbi Trust |
|
| 7,067 |
|
|
| 9,357 |
|
|
| (2,290 | ) |
|
| (24.5 | )% |
Note receivable |
|
| 1,726 |
|
|
| — |
|
|
| 1,726 |
|
|
| 100.0 | % |
Deferred income taxes |
|
| 480 |
|
|
| 528 |
|
|
| (48 | ) |
|
| (9.1 | )% |
Other assets |
|
| 840 |
|
|
| 595 |
|
|
| 245 |
|
|
| 41.2 | % |
Total assets |
| $ | 152,183 |
|
|
| 177,563 |
|
|
| (25,380 | ) |
|
| (14.3 | )% |
Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Accounts payable - trade |
| $ | 29,442 |
|
|
| 20,099 |
|
|
| 9,343 |
|
|
| 46.5 | % |
Accounts payable - capital expenditures |
|
| 56 |
|
|
| 473 |
|
|
| (417 | ) |
|
| (88.2 | )% |
Operating lease liability - current |
|
| 2,640 |
|
|
| 3,219 |
|
|
| (579 | ) |
|
| (18.0 | )% |
Deferred compensation |
|
| 1,404 |
|
|
| — |
|
|
| 1,404 |
|
|
| 100.0 | % |
Deferred revenue |
|
| 1,192 |
|
|
| 520 |
|
|
| 672 |
|
|
| 129.2 | % |
Accrued expenses |
|
| 8,533 |
|
|
| 7,832 |
|
|
| 701 |
|
|
| 9.0 | % |
Income taxes payable - current |
|
| 753 |
|
|
| 413 |
|
|
| 340 |
|
|
| 82.3 | % |
Total current liabilities |
|
| 44,020 |
|
|
| 32,556 |
|
|
| 11,464 |
|
|
| 35.2 | % |
Operating lease liability - long-term |
|
| 3,612 |
|
|
| 7,062 |
|
|
| (3,450 | ) |
|
| (48.9 | )% |
Income taxes payable - long-term |
|
| 2,675 |
|
|
| 3,097 |
|
|
| (422 | ) |
|
| (13.6 | )% |
Deferred income taxes |
|
| 5,954 |
|
|
| 6,004 |
|
|
| (50 | ) |
|
| (0.8 | )% |
Deferred compensation |
|
| 6,842 |
|
|
| 9,343 |
|
|
| (2,501 | ) |
|
| (26.8 | )% |
Total liabilities |
|
| 63,103 |
|
|
| 58,062 |
|
|
| 5,041 |
|
|
| 8.7 | % |
Shareholders' equity |
|
| 89,080 |
|
|
| 119,501 |
|
|
| (30,421 | ) |
|
| (25.5 | )% |
Total liabilities and shareholders' |
| $ | 152,183 |
|
|
| 177,563 |
|
|
| (25,380 | ) |
|
| (14.3 | )% |
Shares outstanding |
|
| 12,327 |
|
|
| 12,229 |
|
|
| 98 |
|
|
| 0.8 | % |
* Derived from audited financial statements.
-MORE-
CULP Announces Results for Fourth Quarter and Fiscal 2023, Ends Year with Quarterly Sales and Operating Improvement and Higher Cash Position
Page 9
June 28, 2023
CULP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED APRIL 30, 2023, AND MAY 1, 2022
Unaudited
(Amounts in Thousands)
|
| TWELVE MONTHS ENDED |
| |||||
|
| Amounts |
| |||||
|
| April 30, |
|
| May 1, |
| ||
|
| 2023 |
|
| 2022 |
| ||
Cash flows from operating activities: |
|
|
|
|
|
| ||
Net loss |
| $ | (31,520 | ) |
| $ | (3,211 | ) |
Adjustments to reconcile net loss to net cash provided by |
|
|
|
|
|
| ||
Depreciation |
|
| 6,845 |
|
|
| 6,994 |
|
Non-cash inventory charges (2) (3) |
|
| 5,819 |
|
|
| 1,927 |
|
Amortization |
|
| 438 |
|
|
| 559 |
|
Stock-based compensation |
|
| 1,145 |
|
|
| 1,133 |
|
Deferred income taxes |
|
| (2 | ) |
|
| 691 |
|
Realized loss from the sale of investments |
|
| — |
|
|
| 450 |
|
Gain on sale of equipment |
|
| (314 | ) |
|
| — |
|
Non-cash restructuring expense |
|
| 791 |
|
|
| — |
|
Foreign currency exchange (gain) loss |
|
| (537 | ) |
|
| 16 |
|
Changes in assets and liabilities: |
|
|
|
|
|
| ||
Accounts receivable |
|
| (2,642 | ) |
|
| 15,416 |
|
Inventories |
|
| 15,370 |
|
|
| (12,714 | ) |
Other current assets |
|
| (297 | ) |
|
| 946 |
|
Other assets |
|
| 86 |
|
|
| (1,386 | ) |
Accounts payable |
|
| 10,274 |
|
|
| (22,131 | ) |
Deferred revenue |
|
| 672 |
|
|
| (20 | ) |
Accrued expenses and deferred compensation |
|
| 853 |
|
|
| (5,204 | ) |
Income taxes |
|
| 823 |
|
|
| (907 | ) |
Net cash provided by (used in) operating activities |
|
| 7,804 |
|
|
| (17,441 | ) |
Cash flows from investing activities: |
|
|
|
|
|
| ||
Capital expenditures |
|
| (2,108 | ) |
|
| (5,695 | ) |
Proceeds from the sale of equipment |
|
| 468 |
|
|
| — |
|
Proceeds from note receivable |
|
| 15 |
|
|
| — |
|
Proceeds from the sale and maturity of investments (Held to Maturity) |
|
| — |
|
|
| 13,486 |
|
Purchase of investments (Held to Maturity) |
|
| — |
|
|
| (9,751 | ) |
Purchase of short-term investments (Available for Sale) |
|
| — |
|
|
| (4,391 | ) |
Proceeds from the sale of short-term investments (Available for Sale) |
|
| — |
|
|
| 9,879 |
|
Proceeds from the sale of long-term investments (rabbi trust) |
|
| 2,058 |
|
|
| 56 |
|
Purchase of long-term investments (rabbi trust) |
|
| (1,185 | ) |
|
| (1,088 | ) |
Net cash (used in) provided by investing activities |
|
| (752 | ) |
|
| 2,496 |
|
Cash flows from financing activities: |
|
|
|
|
|
| ||
Payments associated with lines of credit |
|
| — |
|
|
| (9,000 | ) |
Proceeds associated with lines of credit |
|
| — |
|
|
| 9,000 |
|
Dividends paid |
|
| — |
|
|
| (5,511 | ) |
Common stock repurchased |
|
| — |
|
|
| (1,752 | ) |
Common stock surrendered for withholding taxes payable |
|
| (33 | ) |
|
| (50 | ) |
Payments of debt issuance costs |
|
| (403 | ) |
|
| (110 | ) |
Net cash used in financing activities |
|
| (436 | ) |
|
| (7,423 | ) |
Effect of exchange rate changes on cash and cash equivalents |
|
| (202 | ) |
|
| (91 | ) |
Increase (decrease) in cash and cash equivalents |
|
| 6,414 |
|
|
| (22,459 | ) |
Cash and cash equivalents at beginning of year |
|
| 14,550 |
|
|
| 37,009 |
|
Cash and cash equivalents at end of year |
| $ | 20,964 |
|
| $ | 14,550 |
|
Free Cash Flow (1) |
| $ | 6,850 |
|
| $ | (24,259 | ) |
(1) See next page for Reconciliation of Free Cash Flow for the twelve-month periods ending April 30, 2023, and May 1, 2022, respectively.
(2) The non-cash inventory charge of $5.8 million for the twelve-months ending April 30, 2023, represents a $2.9 million impairment charge associated with our mattress fabrics segment, $2.8 million related to markdowns of inventory estimated based on our policy for aged inventory, and $98,000 for the loss on disposal and markdowns of inventory related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China.
(3) The non-cash inventory charge of $1.9 million for the twelve-months ending May 1, 2022, represents markdowns of inventory estimated based on our policy for aged inventory.
-MORE-
CULP Announces Results for Fourth Quarter and Fiscal 2023, Ends Year with Quarterly Sales and Operating Improvement and Higher Cash Position
Page 10
June 28, 2023
Reconciliation of Free Cash Flow:
|
| FY 2023 |
|
| FY 2022 |
| ||
A) Net cash provided by (used in) operating activities |
| $ | 7,804 |
|
| $ | (17,441 | ) |
B) Minus: Capital Expenditures |
|
| (2,108 | ) |
|
| (5,695 | ) |
C) Plus: Proceeds from the sale of equipment |
|
| 468 |
|
|
| — |
|
D) Plus: Proceeds from note receivable |
|
| 15 |
|
|
| — |
|
E) Plus: Proceeds from the sale of long-term investments (rabbi trust) |
|
| 2,058 |
|
|
| 56 |
|
F) Minus: Purchase of long-term investments (rabbi trust) |
|
| (1,185 | ) |
|
| (1,088 | ) |
G) Effects of exchange rate changes on cash and cash equivalents |
|
| (202 | ) |
|
| (91 | ) |
Free Cash Flow |
| $ | 6,850 |
|
| $ | (24,259 | ) |
-MORE-
CULP Announces Results for Fourth Quarter and Fiscal 2023, Ends Year with Quarterly Sales and Operating Improvement and Higher Cash Position
Page 11
June 28, 2023
CULP, INC.
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE THREE MONTHS ENDED APRIL 30, 2023, AND MAY 1, 2022
Unaudited
(Amounts in Thousands)
|
| THREE MONTHS ENDED |
| |||||||||||||||||
|
| Amounts |
|
|
|
|
| Percent of Total Sales |
| |||||||||||
|
| April 30, |
|
| May 1, |
|
| % Over |
|
| April 30, |
|
| May 1, |
| |||||
Net Sales by Segment |
| 2023 |
|
| 2022 |
|
| (Under) |
|
| 2023 |
|
| 2022 |
| |||||
Mattress Fabrics |
| $ | 30,696 |
|
| $ | 29,779 |
|
|
| 3.1 | % |
|
| 50.0 | % |
|
| 52.3 | % |
Upholstery Fabrics |
|
| 30,730 |
|
|
| 27,161 |
|
|
| 13.1 | % |
|
| 50.0 | % |
|
| 47.7 | % |
Net Sales |
| $ | 61,426 |
|
| $ | 56,940 |
|
|
| 7.9 | % |
|
| 100.0 | % |
|
| 100.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Gross Profit |
|
|
|
|
|
|
|
|
|
| Gross Margin |
| ||||||||
Mattress Fabrics |
| $ | 591 |
|
| $ | 355 |
|
|
| 66.5 | % |
|
| 1.9 | % |
|
| 1.2 | % |
Upholstery Fabrics |
|
| 6,297 |
|
|
| 3,402 |
|
|
| 85.1 | % |
|
| 20.5 | % |
|
| 12.5 | % |
Gross Profit |
| $ | 6,888 |
|
| $ | 3,757 |
|
|
| 83.3 | % |
|
| 11.2 | % |
|
| 6.6 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Selling, General and Administrative |
|
|
|
|
|
|
|
|
|
| Percent of Sales |
| ||||||||
Mattress Fabrics |
| $ | 3,121 |
|
| $ | 3,255 |
|
|
| (4.1 | )% |
|
| 10.2 | % |
|
| 10.9 | % |
Upholstery Fabrics |
|
| 4,686 |
|
|
| 3,519 |
|
|
| 33.2 | % |
|
| 15.2 | % |
|
| 13.0 | % |
Unallocated Corporate expenses |
|
| 3,038 |
|
|
| 2,366 |
|
|
| 28.4 | % |
|
| 4.9 | % |
|
| 4.2 | % |
Selling, General and Administrative |
| $ | 10,845 |
|
| $ | 9,140 |
|
|
| 18.7 | % |
|
| 17.7 | % |
|
| 16.1 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
(Loss) Income from Operations |
|
|
|
|
|
|
|
|
|
| Operating Margin |
| ||||||||
Mattress Fabrics |
| $ | (2,530 | ) |
| $ | (2,901 | ) |
|
| (12.8 | )% |
|
| (8.2 | )% |
|
| (9.7 | )% |
Upholstery Fabrics |
|
| 1,611 |
|
|
| (116 | ) |
| N.M. |
|
|
| 5.2 | % |
|
| (0.4 | )% | |
Unallocated corporate expenses |
|
| (3,038 | ) |
|
| (2,366 | ) |
|
| 28.4 | % |
|
| (4.9 | )% |
|
| (4.2 | )% |
Total Segment Loss from Operations |
|
| (3,957 | ) |
|
| (5,383 | ) |
|
| (26.5 | )% |
|
| (6.4 | )% |
|
| (9.5 | )% |
Restructuring Expense (1) |
|
| (70 | ) |
|
| — |
|
|
| 100.0 | % |
|
| (0.1 | )% |
|
| — |
|
Loss from Operations |
| $ | (4,027 | ) |
| $ | (5,383 | ) |
|
| (25.2 | )% |
|
| (6.6 | )% |
|
| (9.5 | )% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Depreciation Expense by Segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Mattress Fabrics |
| $ | 1,426 |
|
| $ | 1,587 |
|
|
| (10.1 | )% |
|
|
|
|
|
| ||
Upholstery Fabrics |
|
| 193 |
|
|
| 204 |
|
|
| (5.4 | )% |
|
|
|
|
|
| ||
Depreciation Expense |
| $ | 1,619 |
|
| $ | 1,791 |
|
|
| (9.6 | )% |
|
|
|
|
|
|
Notes
(1) See page 13 for our Reconciliation of Selected Income Statement Information to Adjusted Results for the three-months ending April 30, 2023.
-MORE-
CULP Announces Results for Fourth Quarter and Fiscal 2023, Ends Year with Quarterly Sales and Operating Improvement and Higher Cash Position
Page 12
June 28, 2023
CULP, INC.
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE TWELVE MONTHS ENDED APRIL 30, 2023, AND MAY 1, 2022
Unaudited
(Amounts in Thousands)
|
| TWELVE MONTHS ENDED |
| |||||||||||||||||
|
| Amounts |
|
|
|
|
| Percent of Total Sales |
| |||||||||||
|
| April 30, |
|
| May 1, |
|
| % Over |
|
| April 30, |
|
| May 1, |
| |||||
Net Sales by Segment |
| 2023 |
|
| 2022 |
|
| (Under) |
|
| 2023 |
|
| 2022 |
| |||||
Mattress Fabrics |
| $ | 110,995 |
|
| $ | 152,159 |
|
|
| (27.1 | )% |
|
| 47.2 | % |
|
| 51.6 | % |
Upholstery Fabrics |
|
| 123,939 |
|
|
| 142,680 |
|
|
| (13.1 | )% |
|
| 52.8 | % |
|
| 48.4 | % |
Net Sales |
| $ | 234,934 |
|
| $ | 294,839 |
|
|
| (20.3 | )% |
|
| 100.0 | % |
|
| 100.0 | % |
Gross (Loss) Profit |
|
|
|
|
|
|
|
|
|
| Gross Profit Margin |
| ||||||||
Mattress Fabrics |
| $ | (6,739 | ) |
| $ | 16,458 |
|
|
| (140.9 | )% |
|
| (6.1 | )% |
|
| 10.8 | % |
Upholstery Fabrics |
|
| 17,733 |
|
|
| 19,635 |
|
|
| (9.7 | )% |
|
| 14.3 | % |
|
| 13.8 | % |
Total Segment Gross Profit |
|
| 10,994 |
|
|
| 36,093 |
|
|
| (69.5 | )% |
|
| 4.7 | % |
|
| 12.2 | % |
Restructuring Related Charge (3) |
|
| (98 | ) |
|
| — |
|
|
| 100.0 | % |
|
| (0.0 | )% |
|
| — |
|
Gross Profit |
| $ | 10,896 |
|
| $ | 36,093 |
|
|
| (69.8 | )% |
|
| 4.6 | % |
|
| 12.2 | % |
Selling, General and Administrative |
|
|
|
|
|
|
|
|
|
| Percent of Sales |
| ||||||||
Mattress Fabrics |
| $ | 11,942 |
|
| $ | 12,246 |
|
|
| (2.5 | )% |
|
| 10.8 | % |
|
| 8.0 | % |
Upholstery Fabrics |
|
| 15,739 |
|
|
| 14,009 |
|
|
| 12.3 | % |
|
| 12.7 | % |
|
| 9.8 | % |
Unallocated Corporate expenses |
|
| 10,297 |
|
|
| 9,160 |
|
|
| 12.4 | % |
|
| 4.4 | % |
|
| 3.1 | % |
Selling, General and Administrative |
| $ | 37,978 |
|
| $ | 35,415 |
|
|
| 7.2 | % |
|
| 16.2 | % |
|
| 12.0 | % |
(Loss) Income from Operations |
|
|
|
|
|
|
|
|
|
| Operating Margin |
| ||||||||
Mattress Fabrics |
| $ | (18,681 | ) |
| $ | 4,212 |
|
| N.M. |
|
|
| (16.8 | )% |
|
| 2.8 | % | |
Upholstery Fabrics |
|
| 1,994 |
|
|
| 5,626 |
|
|
| (64.6 | )% |
|
| 1.6 | % |
|
| 3.9 | % |
Unallocated corporate expenses |
|
| (10,297 | ) |
|
| (9,160 | ) |
|
| 12.4 | % |
|
| (4.4 | )% |
|
| (3.1 | )% |
Total Segment (Loss) Income from |
|
| (26,984 | ) |
|
| 678 |
|
| N.M. |
|
|
| (11.5 | )% |
|
| 0.2 | % | |
Restructuring Expense (3) |
|
| (1,396 | ) |
|
| — |
|
|
| 100.0 | % |
|
| (0.6 | )% |
|
| — |
|
Restructuring Related Charge (3) |
|
| (98 | ) |
|
| — |
|
|
| 100.0 | % |
|
| (0.0 | )% |
|
| — |
|
(Loss) Income from Operations |
| $ | (28,478 | ) |
|
| 678 |
|
| N.M. |
|
|
| (12.1 | )% |
|
| 0.2 | % | |
Return on Capital (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Mattress Fabrics |
|
| (25.8 | )% |
|
| 5.3 | % |
| N.M. |
|
|
|
|
|
|
| |||
Upholstery Fabrics |
|
| 11.2 | % |
|
| 29.7 | % |
|
| (62.3 | )% |
|
|
|
|
|
| ||
Unallocated Corporate |
| N.M. |
|
| N.M. |
|
| N.M. |
|
|
|
|
|
|
| |||||
Consolidated |
|
| (28.7 | )% |
|
| 0.7 | % |
| N.M. |
|
|
|
|
|
|
| |||
Capital Employed (1) (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Mattress Fabrics |
| $ | 64,107 |
|
| $ | 84,040 |
|
|
| (23.7 | )% |
|
|
|
|
|
| ||
Upholstery Fabrics |
|
| 9,489 |
|
|
| 25,209 |
|
|
| (62.4 | )% |
|
|
|
|
|
| ||
Unallocated Corporate |
|
| 3,197 |
|
|
| 3,817 |
|
|
| (16.2 | )% |
|
|
|
|
|
| ||
Consolidated |
| $ | 76,793 |
|
| $ | 113,066 |
|
|
| (32.1 | )% |
|
|
|
|
|
| ||
Depreciation Expense by Segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Mattress Fabrics |
| $ | 6,050 |
|
| $ | 6,200 |
|
|
| (2.4 | )% |
|
|
|
|
|
| ||
Upholstery Fabrics |
|
| 795 |
|
|
| 794 |
|
|
| 0.1 | % |
|
|
|
|
|
| ||
Depreciation Expense |
| $ | 6,845 |
|
| $ | 6,994 |
|
|
| (2.1 | )% |
|
|
|
|
|
|
Notes
(1) See return on capital pages at the back of this presentation.
(2) The capital employed balances are as of April 30, 2023, and May 1, 2022, respectively.
(3) See page 14 for our Reconciliation of Selected Income Statement Information to Adjusted Results for the twelve-months ending April 30, 2023.
-MORE-
CULP Announces Results for Fourth Quarter and Fiscal 2023, Ends Year with Quarterly Sales and Operating Improvement and Higher Cash Position
Page 13
June 28, 2023
CULP, INC.
RECONCILIATION OF SELECTED INCOME STATEMENT INFORMATION TO ADJUSTED RESULTS
FOR THREE MONTHS ENDED APRIL 30, 2023
Unaudited
(Amounts in Thousands)
|
| As Reported |
|
|
|
|
| April 30, 2023 |
| |||
|
| April 30, |
|
|
|
|
| Adjusted |
| |||
|
| 2023 |
|
| Adjustments |
|
| Results |
| |||
Net sales |
| $ | 61,426 |
|
|
| — |
|
| $ | 61,426 |
|
Cost of sales |
|
| (54,538 | ) |
|
| — |
|
|
| (54,538 | ) |
Gross profit |
|
| 6,888 |
|
|
| — |
|
|
| 6,888 |
|
Selling, general and administrative |
|
| (10,845 | ) |
|
| — |
|
|
| (10,845 | ) |
Restructuring expense (1) |
|
| (70 | ) |
| 70 |
|
|
| — |
| |
Loss from operations |
| $ | (4,027 | ) |
|
| 70 |
|
| $ | (3,957 | ) |
Notes
(1) Restructuring expense of $70,000 for the three-months ending April 30, 2023, represents employee termination benefits of $39,000 and other associated costs of $31,000 that related to the consolidation of certain leased facilities located in Ouanaminthe, Haiti.
-MORE-
CULP Announces Results for Fourth Quarter and Fiscal 2023, Ends Year with Quarterly Sales and Operating Improvement and Higher Cash Position
Page 14
June 28, 2023
CULP, INC.
RECONCILIATION OF SELECTED INCOME STATEMENT INFORMATION TO ADJUSTED RESULTS
FOR TWELVE MONTHS ENDED APRIL 30, 2023
Unaudited
(Amounts in Thousands)
|
| As Reported |
|
|
|
|
| April 30, 2023 |
| |||
|
| April 30, |
|
|
|
|
| Adjusted |
| |||
|
| 2023 |
|
| Adjustments |
|
| Results |
| |||
Net sales |
| $ | 234,934 |
|
|
| — |
|
| $ | 234,934 |
|
Cost of sales (1) |
|
| (224,038 | ) |
| 98 |
|
|
| (223,940 | ) | |
Gross profit |
|
| 10,896 |
|
|
| 98 |
|
|
| 10,994 |
|
Selling, general and administrative |
|
| (37,978 | ) |
|
| — |
|
|
| (37,978 | ) |
Restructuring expense (2) |
|
| (1,396 | ) |
|
| 1,396 |
|
|
| — |
|
Loss from operations |
| $ | (28,478 | ) |
|
| 1,494 |
|
| $ | (26,984 | ) |
Notes
(1) Cost of sales for the twelve-months ending April 30, 2023, includes restructuring related charges totaling $98,000 which pertained to a loss on disposal and markdowns of inventory related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China that occurred during the second quarter of fiscal 2023.
(2) Restructuring expense of $1.4 million for the twelve-months ending April 30, 2023, relates to both our restructuring activities for our cut and sew upholstery fabrics operations located in Shanghai, China, which occurred during the second quarter of fiscal 2023, and located in Ouanaminthe, Haiti, which occurred during the third and fourth quarters of fiscal 2023. Restructuring expense represents employee termination benefits of $507,000, lease termination costs of $481,000, impairment losses totaling $357,000 that relate to leasehold improvements and equipment, and $51,000 for other associated costs.
-MORE-
CULP Announces Results for Fourth Quarter and Fiscal 2023, Ends Year with Quarterly Sales and Operating Improvement and Higher Cash Position
Page 15
June 28, 2023
CULP, INC.
CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA
FOR THE TWELVE MONTHS ENDED APRIL 30, 2023, AND MAY 1, 2022
Unaudited
(Amounts in Thousands)
|
| Quarter |
|
| Quarter |
|
| Quarter |
|
| Quarter |
|
| Trailing |
| |||||
|
| July 31, |
|
| October 30, |
|
| January 29, |
|
| April 30, |
|
| April 30, |
| |||||
|
| 2022 |
|
| 2022 |
|
| 2023 |
|
| 2023 |
|
| 2023 |
| |||||
Net loss (1) |
| $ | (5,698 | ) |
| $ | (12,173 | ) |
| $ | (8,968 | ) |
| $ | (4,681 | ) |
| $ | (31,520 | ) |
Income tax expense |
|
| 896 |
|
|
| 1,150 |
|
|
| 286 |
|
|
| 798 |
|
|
| 3,130 |
|
Interest income, net |
|
| (17 | ) |
|
| (79 | ) |
|
| (196 | ) |
|
| (239 | ) |
|
| (531 | ) |
Depreciation expense |
|
| 1,768 |
|
|
| 1,719 |
|
|
| 1,739 |
|
|
| 1,619 |
|
|
| 6,845 |
|
Restructuring expense |
|
| — |
|
|
| 615 |
|
|
| 711 |
|
|
| 70 |
|
|
| 1,396 |
|
Restructuring related charge |
|
| — |
|
|
| 98 |
|
|
| — |
|
|
| — |
|
|
| 98 |
|
Amortization expense |
|
| 105 |
|
|
| 109 |
|
|
| 109 |
|
|
| 115 |
|
|
| 438 |
|
Stock based compensation |
|
| 252 |
|
|
| 313 |
|
|
| 322 |
|
|
| 258 |
|
|
| 1,145 |
|
Adjusted EBITDA (1) |
| $ | (2,694 | ) |
| $ | (8,248 | ) |
| $ | (5,997 | ) |
| $ | (2,060 | ) |
| $ | (18,999 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
% Net Sales |
|
| (4.3 | )% |
|
| (14.1 | )% |
|
| (11.4 | )% |
|
| (3.4 | )% |
|
| (8.1 | )% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
| Quarter |
|
| Quarter |
|
| Quarter |
|
| Quarter |
|
| Trailing |
| |||||
|
| August 1, |
|
| October 31, |
|
| January 30, |
|
| May 1, |
|
| May 1, |
| |||||
|
| 2021 |
|
| 2021 |
|
| 2022 |
|
| 2022 |
|
| 2022 |
| |||||
Net income (loss) |
| $ | 2,250 |
|
| $ | 851 |
|
| $ | (289 | ) |
| $ | (6,023 | ) |
| $ | (3,211 | ) |
Income tax expense |
|
| 905 |
|
|
| 444 |
|
|
| 1,284 |
|
|
| 253 |
|
|
| 2,886 |
|
Interest income, net |
|
| (74 | ) |
|
| (59 | ) |
|
| (214 | ) |
|
| (9 | ) |
|
| (356 | ) |
Depreciation expense |
|
| 1,726 |
|
|
| 1,745 |
|
|
| 1,732 |
|
|
| 1,791 |
|
|
| 6,994 |
|
Amortization expense |
|
| 121 |
|
|
| 146 |
|
|
| 150 |
|
|
| 142 |
|
|
| 559 |
|
Stock based compensation |
|
| 274 |
|
|
| 435 |
|
|
| 171 |
|
|
| 253 |
|
|
| 1,133 |
|
Adjusted EBITDA |
| $ | 5,202 |
|
| $ | 3,562 |
|
| $ | 2,834 |
|
| $ | (3,593 | ) |
| $ | 8,005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
% Net Sales |
|
| 6.3 | % |
|
| 4.8 | % |
|
| 3.5 | % |
|
| (6.3 | )% |
|
| 2.7 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
% Over (Under) |
|
| (151.8 | )% |
|
| (331.6 | )% |
|
| (311.6 | )% |
|
| (42.7 | )% |
|
| (337.3 | )% |
(1) Net loss and adjusted EBITDA for the quarter ended October 30, 2022, and the twelve month period ended April 30, 2023, includes a non-cash charge totaling $5.2 million, which represents a $2.9 million impairment charge associated with our mattress fabrics segment and $2.3 million related to markdowns of inventory estimated based on our policy for aged inventory.
-MORE-
CULP Announces Results for Fourth Quarter and Fiscal 2023, Ends Year with Quarterly Sales and Operating Improvement and Higher Cash Position
Page 16
June 28, 2023
CULP, INC.
RETURN ON CAPITAL EMPLOYED BY SEGMENT
FOR THE TWELVE MONTHS ENDED APRIL 30, 2023
Unaudited
(Amounts in Thousands)
| Adjusted Operating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
| Twelve Months |
| Average |
| Return on |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
| April 30, 2023 |
| Employed (2) |
| Employed (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Mattress Fabrics | $ | (18,681 | ) | $ | 72,282 |
|
| (25.8 | )% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Upholstery Fabrics |
| 1,994 |
|
| 17,853 |
|
| 11.2 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Unallocated Corporate |
| (10,297 | ) |
| 3,808 |
| N.M. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Total | $ | (26,984 | ) | $ | 93,943 |
|
| (28.7 | )% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Average Capital Employed | As of the three Months Ended April 30, 2023 |
|
| As of the three Months Ended January 29, 2023 |
|
| As of the three Months Ended October 30, 2022 |
| ||||||||||||||||||||||||||||||
| Mattress |
| Upholstery |
| Unallocated |
|
|
|
| Mattress |
| Upholstery |
| Unallocated |
|
|
|
| Mattress |
| Upholstery |
| Unallocated |
|
|
| ||||||||||||
| Fabrics |
| Fabrics |
| Corporate |
| Total |
|
| Fabrics |
| Fabrics |
| Corporate |
| Total |
|
| Fabrics |
| Fabrics |
| Corporate |
| Total |
| ||||||||||||
Total assets (3) | $ | 75,494 |
|
| 39,127 |
|
| 37,562 |
|
| 152,183 |
|
| $ | 75,393 |
|
| 39,817 |
|
| 35,388 |
|
| 150,598 |
|
| $ | 78,366 |
|
| 44,934 |
|
| 38,330 |
|
| 161,630 |
|
Total liabilities |
| (11,387 | ) |
| (29,638 | ) |
| (22,078 | ) |
| (63,103 | ) |
|
| (9,511 | ) |
| (24,367 | ) |
| (23,216 | ) |
| (57,094 | ) |
|
| (9,895 | ) |
| (26,108 | ) |
| (23,519 | ) |
| (59,522 | ) |
Subtotal | $ | 64,107 |
| $ | 9,489 |
| $ | 15,484 |
| $ | 89,080 |
|
| $ | 65,882 |
| $ | 15,450 |
| $ | 12,172 |
| $ | 93,504 |
|
| $ | 68,471 |
| $ | 18,826 |
| $ | 14,811 |
| $ | 102,108 |
|
Cash and cash equivalents |
| — |
|
| — |
|
| (20,964 | ) |
| (20,964 | ) |
|
| — |
|
| — |
|
| (16,725 | ) |
| (16,725 | ) |
|
| — |
|
| — |
|
| (19,137 | ) |
| (19,137 | ) |
Short-term investments - Rabbi Trust |
| — |
|
| — |
|
| (1,404 | ) |
| (1,404 | ) |
|
| — |
|
| — |
|
| (2,420 | ) |
| (2,420 | ) |
|
| — |
|
| — |
|
| (2,237 | ) |
| (2,237 | ) |
Current income taxes receivable |
| — |
|
| — |
|
| — |
|
| — |
|
|
| — |
|
| — |
|
| (238 | ) |
| (238 | ) |
|
| — |
|
| — |
|
| (510 | ) |
| (510 | ) |
Long-term investments - Rabbi Trust |
| — |
|
| — |
|
| (7,067 | ) |
| (7,067 | ) |
|
| — |
|
| — |
|
| (7,725 | ) |
| (7,725 | ) |
|
| — |
|
| — |
|
| (7,526 | ) |
| (7,526 | ) |
Deferred income taxes - non-current |
| — |
|
| — |
|
| (480 | ) |
| (480 | ) |
|
| — |
|
| — |
|
| (463 | ) |
| (463 | ) |
|
| — |
|
| — |
|
| (493 | ) |
| (493 | ) |
Deferred compensation - current |
| — |
|
| — |
|
| 1,404 |
|
| 1,404 |
|
|
| — |
|
| — |
|
| 2,420 |
|
| 2,420 |
|
|
| — |
|
| — |
|
| 2,237 |
|
| 2,237 |
|
Accrued restructuring |
| — |
|
| — |
|
| — |
|
| — |
|
|
| — |
|
| — |
|
| — |
|
| — |
|
|
| — |
|
| — |
|
| 33 |
|
| 33 |
|
Income taxes payable - current |
| — |
|
| — |
|
| 753 |
|
| 753 |
|
|
| — |
|
| — |
|
| 467 |
|
| 467 |
|
|
| — |
|
| — |
|
| 969 |
|
| 969 |
|
Income taxes payable - long-term |
| — |
|
| — |
|
| 2,675 |
|
| 2,675 |
|
|
| — |
|
| — |
|
| 2,648 |
|
| 2,648 |
|
|
| — |
|
| — |
|
| 2,629 |
|
| 2,629 |
|
Deferred income taxes - non-current |
| — |
|
| — |
|
| 5,954 |
|
| 5,954 |
|
|
| — |
|
| — |
|
| 6,089 |
|
| 6,089 |
|
|
| — |
|
| — |
|
| 5,700 |
|
| 5,700 |
|
Deferred compensation non-current |
| — |
|
| — |
|
| 6,842 |
|
| 6,842 |
|
|
| — |
|
| — |
|
| 7,590 |
|
| 7,590 |
|
|
| — |
|
| — |
|
| 7,486 |
|
| 7,486 |
|
Total Capital Employed | $ | 64,107 |
| $ | 9,489 |
| $ | 3,197 |
| $ | 76,793 |
|
| $ | 65,882 |
| $ | 15,450 |
| $ | 3,815 |
| $ | 85,147 |
|
| $ | 68,471 |
| $ | 18,826 |
| $ | 3,962 |
| $ | 91,259 |
|
-MORE-
CULP Announces Results for Fourth Quarter and Fiscal 2023, Ends Year with Quarterly Sales and Operating Improvement and Higher Cash Position
Page 17
June 28, 2023
CULP, INC.
RETURN ON CAPITAL EMPLOYED BY SEGMENT - CONTINUED
FOR THE TWELVE MONTHS ENDED APRIL 30, 2023
Unaudited
(Amounts in Thousands)
| As of the three Months Ended July 31, 2022 |
|
| As of the three Months Ended May 1, 2022 |
|
|
|
|
|
| ||||||||||||||||||||
| Mattress |
| Upholstery |
| Unallocated |
|
|
|
| Mattress |
| Upholstery |
| Unallocated |
|
|
|
|
|
|
|
| ||||||||
| Fabrics |
| Fabrics |
| Corporate |
| Total |
|
| Fabrics |
| Fabrics |
| Corporate |
| Total |
|
|
|
|
|
| ||||||||
Total assets (3) | $ | 90,842 |
|
| 51,053 |
|
| 38,595 |
|
| 180,490 |
|
| $ | 92,609 |
|
| 51,124 |
|
| 33,830 |
|
| 177,563 |
|
|
|
|
|
|
Total liabilities |
| (11,934 | ) |
| (30,762 | ) |
| (23,799 | ) |
| (66,495 | ) |
|
| (8,569 | ) |
| (25,915 | ) |
| (23,578 | ) |
| (58,062 | ) |
|
|
|
|
|
Subtotal | $ | 78,908 |
| $ | 20,291 |
| $ | 14,796 |
| $ | 113,995 |
|
| $ | 84,040 |
| $ | 25,209 |
| $ | 10,252 |
| $ | 119,501 |
|
|
|
|
|
|
Cash and cash equivalents |
| — |
|
| — |
|
| (18,874 | ) |
| (18,874 | ) |
|
| — |
|
| — |
|
| (14,550 | ) |
| (14,550 | ) |
|
|
|
|
|
Current income taxes receivable |
| — |
|
| — |
|
| (798 | ) |
| (798 | ) |
|
| — |
|
| — |
|
| (857 | ) |
| (857 | ) |
|
|
|
|
|
Long-term investments - Rabbi Trust |
| — |
|
| — |
|
| (9,567 | ) |
| (9,567 | ) |
|
| — |
|
| — |
|
| (9,357 | ) |
| (9,357 | ) |
|
|
|
|
|
Deferred income taxes - non-current |
| — |
|
| — |
|
| (546 | ) |
| (546 | ) |
|
| — |
|
| — |
|
| (528 | ) |
| (528 | ) |
|
|
|
|
|
Income taxes payable - current |
| — |
|
| — |
|
| 587 |
|
| 587 |
|
|
| — |
|
| — |
|
| 413 |
|
| 413 |
|
|
|
|
|
|
Income taxes payable - long-term |
| — |
|
| — |
|
| 3,118 |
|
| 3,118 |
|
|
| — |
|
| — |
|
| 3,097 |
|
| 3,097 |
|
|
|
|
|
|
Deferred income taxes - non-current |
| — |
|
| — |
|
| 6,007 |
|
| 6,007 |
|
|
| — |
|
| — |
|
| 6,004 |
|
| 6,004 |
|
|
|
|
|
|
Deferred compensation |
| — |
|
| — |
|
| 9,528 |
|
| 9,528 |
|
|
| — |
|
| — |
|
| 9,343 |
|
| 9,343 |
|
|
|
|
|
|
Total Capital Employed | $ | 78,908 |
| $ | 20,291 |
| $ | 4,251 |
| $ | 103,450 |
|
| $ | 84,040 |
| $ | 25,209 |
| $ | 3,817 |
| $ | 113,066 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
| Mattress |
| Upholstery |
| Unallocated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
| Fabrics |
| Fabrics |
| Corporate |
| Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Average Capital Employed (2) | $ | 72,282 |
| $ | 17,853 |
| $ | 3,808 |
| $ | 93,943 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
(1) Return on average capital employed represents the twelve months operating (loss) income as of April 30, 2023, divided by average capital employed. Average capital employed does not include cash and cash equivalents, short-term and long-term investments – Rabbi Trust, accrued restructuring, income taxes receivable and payable, noncurrent deferred income tax assets and liabilities, and current and non-current deferred compensation.
(2) Average capital employed was computed using the five quarterly periods ending April 30, 2023, January 29, 2023, October 30, 2022, July 31, 2022, and May 1, 2022.
(3) 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.
-MORE-
CULP Announces Results for Fourth Quarter and Fiscal 2023, Ends Year with Quarterly Sales and Operating Improvement and Higher Cash Position
Page 18
June 28, 2023
CULP INC.
RETURN ON CAPITAL EMPLOYED BY SEGMENT
FOR THE TWELVE MONTHS ENDED MAY 1, 2022
Unaudited
(Amounts in Thousands)
| Adjusted Operating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
| Twelve Months |
| Average |
| Return on |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
| May 1, 2022 |
| Employed (2) |
| Employed (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Mattress Fabrics | $ | 4,212 |
| $ | 80,088 |
|
| 5.3 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Upholstery Fabrics |
| 5,626 |
|
| 18,911 |
|
| 29.7 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Unallocated Corporate |
| (9,160 | ) |
| 2,682 |
| N.M. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Total | $ | 678 |
| $ | 101,681 |
|
| 0.7 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Average Capital Employed | As of the three Months Ended May 1, 2022 |
|
| As of the three Months Ended January 30, 2022 |
|
| As of the three Months Ended October 31, 2021 |
| ||||||||||||||||||||||||||||||
| Mattress |
| Upholstery |
| Unallocated |
|
|
|
| Mattress |
| Upholstery |
| Unallocated |
|
|
|
| Mattress |
| Upholstery |
| Unallocated |
|
|
| ||||||||||||
| Fabrics |
| Fabrics |
| Corporate |
| Total |
|
| Fabrics |
| Fabrics |
| Corporate |
| Total |
|
| Fabrics |
| Fabrics |
| Corporate |
| Total |
| ||||||||||||
Total assets (3) | $ | 92,609 |
|
| 51,124 |
|
| 33,830 |
|
| 177,563 |
|
| $ | 103,370 |
|
| 67,272 |
|
| 40,925 |
|
| 211,567 |
|
| $ | 97,390 |
|
| 55,862 |
|
| 56,073 |
|
| 209,325 |
|
Total liabilities |
| (8,569 | ) |
| (25,915 | ) |
| (23,578 | ) |
| (58,062 | ) |
|
| (16,540 | ) |
| (45,596 | ) |
| (22,697 | ) |
| (84,833 | ) |
|
| (18,818 | ) |
| (38,560 | ) |
| (23,493 | ) |
| (80,871 | ) |
Subtotal | $ | 84,040 |
| $ | 25,209 |
| $ | 10,252 |
| $ | 119,501 |
|
| $ | 86,830 |
| $ | 21,676 |
| $ | 18,228 |
| $ | 126,734 |
|
| $ | 78,572 |
| $ | 17,302 |
| $ | 32,580 |
| $ | 128,454 |
|
Cash and cash equivalents |
| — |
|
| — |
|
| (14,550 | ) |
| (14,550 | ) |
|
| — |
|
| — |
|
| (11,780 | ) |
| (11,780 | ) |
|
| — |
|
| — |
|
| (16,956 | ) |
| (16,956 | ) |
Short-term investments - |
| — |
|
| — |
|
| — |
|
| — |
|
|
| — |
|
| — |
|
| (438 | ) |
| (438 | ) |
|
| — |
|
| — |
|
| (9,709 | ) |
| (9,709 | ) |
Short-term investments - |
| — |
|
| — |
|
| — |
|
| — |
|
|
| — |
|
| — |
|
| (1,315 | ) |
| (1,315 | ) |
|
| — |
|
| — |
|
| (1,564 | ) |
| (1,564 | ) |
Current income taxes receivable |
| — |
|
| — |
|
| (857 | ) |
| (857 | ) |
|
| — |
|
| — |
|
| (367 | ) |
| (367 | ) |
|
| — |
|
| — |
|
| (613 | ) |
| (613 | ) |
Long-term investments - |
| — |
|
| — |
|
| — |
|
| — |
|
|
| — |
|
| — |
|
| (8,677 | ) |
| (8,677 | ) |
|
| — |
|
| — |
|
| (8,353 | ) |
| (8,353 | ) |
Long-term investments - Rabbi Trust |
| — |
|
| — |
|
| (9,357 | ) |
| (9,357 | ) |
|
| — |
|
| — |
|
| (9,223 | ) |
| (9,223 | ) |
|
| — |
|
| — |
|
| (9,036 | ) |
| (9,036 | ) |
Deferred income taxes - non-current |
| — |
|
| — |
|
| (528 | ) |
| (528 | ) |
|
| — |
|
| — |
|
| (500 | ) |
| (500 | ) |
|
| — |
|
| — |
|
| (452 | ) |
| (452 | ) |
Income taxes payable - current |
| — |
|
| — |
|
| 413 |
|
| 413 |
|
|
| — |
|
| — |
|
| 240 |
|
| 240 |
|
|
| — |
|
| — |
|
| 646 |
|
| 646 |
|
Income taxes payable - long-term |
| — |
|
| — |
|
| 3,097 |
|
| 3,097 |
|
|
| — |
|
| — |
|
| 3,099 |
|
| 3,099 |
|
|
| — |
|
| — |
|
| 3,099 |
|
| 3,099 |
|
Deferred income taxes - non-current |
| — |
|
| — |
|
| 6,004 |
|
| 6,004 |
|
|
| — |
|
| — |
|
| 5,484 |
|
| 5,484 |
|
|
| — |
|
| — |
|
| 4,918 |
|
| 4,918 |
|
Deferred compensation |
| — |
|
| — |
|
| 9,343 |
|
| 9,343 |
|
|
| — |
|
| — |
|
| 9,180 |
|
| 9,180 |
|
|
| — |
|
| — |
|
| 9,017 |
|
| 9,017 |
|
Total Capital Employed | $ | 84,040 |
| $ | 25,209 |
| $ | 3,817 |
| $ | 113,066 |
|
| $ | 86,830 |
| $ | 21,676 |
| $ | 3,931 |
| $ | 112,437 |
|
| $ | 78,572 |
| $ | 17,302 |
| $ | 3,577 |
| $ | 99,451 |
|
-MORE-
CULP Announces Results for Fourth Quarter and Fiscal 2023, Ends Year with Quarterly Sales and Operating Improvement and Higher Cash Position
Page 19
June 28, 2023
CULP INC.
RETURN ON CAPITAL EMPLOYED BY SEGMENT - CONTINUED
FOR THE TWELVE MONTHS ENDED MAY 1, 2022
Unaudited
(Amounts in Thousands)
| As of the three Months Ended August 1, 2021 |
|
| As of the three Months Ended May 2, 2021 |
|
|
|
|
|
| ||||||||||||||||||||
| Mattress |
| Upholstery |
| Unallocated |
|
|
|
| Mattress |
| Upholstery |
| Unallocated |
|
|
|
|
|
|
|
| ||||||||
| Fabrics |
| Fabrics |
| Corporate |
| Total |
|
| Fabrics |
| Fabrics |
| Corporate |
| Total |
|
|
|
|
|
| ||||||||
Total assets (3) | $ | 96,846 |
|
| 55,187 |
|
| 60,215 |
|
| 212,248 |
|
| $ | 97,861 |
|
| 53,875 |
|
| 62,344 |
|
| 214,080 |
|
|
|
|
|
|
Total liabilities |
| (21,298 | ) |
| (39,983 | ) |
| (21,418 | ) |
| (82,699 | ) |
|
| (22,410 | ) |
| (38,709 | ) |
| (23,955 | ) |
| (85,074 | ) |
|
|
|
|
|
Subtotal | $ | 75,548 |
| $ | 15,204 |
| $ | 38,797 |
| $ | 129,549 |
|
| $ | 75,451 |
| $ | 15,166 |
| $ | 38,389 |
| $ | 129,006 |
|
|
|
|
|
|
Cash and cash equivalents |
| — |
|
| — |
|
| (26,061 | ) |
| (26,061 | ) |
|
| — |
|
| — |
|
| (37,009 | ) |
| (37,009 | ) |
|
|
|
|
|
Short-term investments - |
| — |
|
| — |
|
| (9,698 | ) |
| (9,698 | ) |
|
| — |
|
| — |
|
| (5,542 | ) |
| (5,542 | ) |
|
|
|
|
|
Short-term investments - |
| — |
|
| — |
|
| (1,661 | ) |
| (1,661 | ) |
|
| — |
|
| — |
|
| (3,161 | ) |
| (3,161 | ) |
|
|
|
|
|
Current income taxes receivable |
| — |
|
| — |
|
| (524 | ) |
| (524 | ) |
|
| — |
|
| — |
|
| — |
|
| — |
|
|
|
|
|
|
Long-term investments - |
| — |
|
| — |
|
| (6,629 | ) |
| (6,629 | ) |
|
| — |
|
| — |
|
| (1,141 | ) |
| (1,141 | ) |
|
|
|
|
|
Long-term investments - Rabbi Trust |
| — |
|
| — |
|
| (8,841 | ) |
| (8,841 | ) |
|
| — |
|
| — |
|
| (8,415 | ) |
| (8,415 | ) |
|
|
|
|
|
Deferred income taxes - non-current |
| — |
|
| — |
|
| (455 | ) |
| (455 | ) |
|
| — |
|
| — |
|
| (545 | ) |
| (545 | ) |
|
|
|
|
|
Income taxes payable - current |
| — |
|
| — |
|
| 253 |
|
| 253 |
|
|
| — |
|
| — |
|
| 229 |
|
| 229 |
|
|
|
|
|
|
Income taxes payable - long-term |
| — |
|
| — |
|
| 3,365 |
|
| 3,365 |
|
|
| — |
|
| — |
|
| 3,326 |
|
| 3,326 |
|
|
|
|
|
|
Deferred income taxes - non-current |
| — |
|
| — |
|
| 4,917 |
|
| 4,917 |
|
|
| — |
|
| — |
|
| 5,330 |
|
| 5,330 |
|
|
|
|
|
|
Deferred compensation |
| — |
|
| — |
|
| 8,795 |
|
| 8,795 |
|
|
| — |
|
| — |
|
| 8,365 |
|
| 8,365 |
|
|
|
|
|
|
Total Capital Employed | $ | 75,548 |
| $ | 15,204 |
| $ | 2,258 |
| $ | 93,010 |
|
| $ | 75,451 |
| $ | 15,166 |
| $ | (174 | ) | $ | 90,443 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
| Mattress |
| Upholstery |
| Unallocated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
| Fabrics |
| Fabrics |
| Corporate |
| Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Average Capital Employed (2) | $ | 80,088 |
| $ | 18,911 |
| $ | 2,682 |
| $ | 101,681 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
(1) Return on average capital employed represents the last twelve months operating income (loss) as of May 1, 2022, divided by average capital employed. Average capital employed does not include cash and cash equivalents, short-term investments Available-For-Sale, 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.
(2) Average capital employed was computed using the five quarterly periods ending May 1, 2022, January 30, 2022, October 31, 2021, August 1, 2021, and May 2, 2021.
(3) 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.
-END-