Exhibit 99(b)
Page 1 of 10
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||
CONSOLIDATED STATEMENTS OF NET INCOME | ||||||||||||||||||||
FOR THREE MONTHS ENDED OCTOBER 30, 2016 AND NOVEMBER 1, 2015 | ||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||
(Amounts in Thousands, Except for Per Share Data) | ||||||||||||||||||||
THREE MONTHS ENDED | ||||||||||||||||||||
Amounts | Percent of Sales | |||||||||||||||||||
October 30, | November 1, | % Over | October 30, | November 1, | ||||||||||||||||
2016 | 2015 | (Under) | 2016 | 2015 | ||||||||||||||||
Net sales | $ | 75,343 | 76,956 | (2.1 | )% | 100.0 | % | 100.0 | % | |||||||||||
Cost of sales | 58,442 | 61,223 | (4.5 | )% | 77.6 | % | 79.6 | % | ||||||||||||
Gross profit | 16,901 | 15,733 | 7.4 | % | 22.4 | % | 20.4 | % | ||||||||||||
Selling, general and | ||||||||||||||||||||
administrative expenses | 9,602 | 9,433 | 1.8 | % | 12.7 | % | 12.3 | % | ||||||||||||
Income from operations | 7,299 | 6,300 | 15.9 | % | 9.7 | % | 8.2 | % | ||||||||||||
Interest income | (15 | ) | (69 | ) | (78.3 | )% | (0.0 | )% | (0.1 | )% | ||||||||||
Other expense | 155 | 225 | (31.1 | )% | 0.2 | % | 0.3 | % | ||||||||||||
Income before income taxes | 7,159 | 6,144 | 16.5 | % | 9.5 | % | 8.0 | % | ||||||||||||
Income taxes* | 2,684 | 2,373 | 13.1 | % | 37.5 | % | 38.6 | % | ||||||||||||
Net income | $ | 4,475 | 3,771 | 18.7 | % | 5.9 | % | 4.9 | % | |||||||||||
Net income per share-basic | $ | 0.36 | $ | 0.31 | 16.1 | % | ||||||||||||||
Net income per share-diluted | $ | 0.36 | $ | 0.30 | 20.0 | % | ||||||||||||||
Average shares outstanding-basic | 12,308 | 12,343 | (0.3 | )% | ||||||||||||||||
Average shares outstanding-diluted | 12,507 | 12,484 | 0.2 | % | ||||||||||||||||
PRESENTATION OF ADJUSTED NET INCOME, ADJUSTED INCOME TAXES AND EARNINGS PER SHARE (1) | ||||||||||||||||||||
THREE MONTHS ENDED | ||||||||||||||||||||
Amounts | Percent of Sales | |||||||||||||||||||
October 30, | November 1, | % Over | October 30, | November 1, | ||||||||||||||||
2016 | 2015 | (Under) | 2016 | 2015 | ||||||||||||||||
Income before income taxes (see above) | $ | 7,159 | 6,144 | 16.5 | % | 9.5 | % | 8.0 | % | |||||||||||
Adjusted Income taxes (2)* | 1,274 | 965 | 32.0 | % | 17.8 | % | 15.7 | % | ||||||||||||
Adjusted net income | 5,885 | 5,179 | 13.6 | % | 7.8 | % | 6.7 | % | ||||||||||||
Adjusted net income per share-basic | $ | 0.48 | $ | 0.42 | 14.3 | % | ||||||||||||||
Adjusted net income per share-diluted | $ | 0.47 | $ | 0.41 | 14.6 | % | ||||||||||||||
Average shares outstanding-basic | 12,308 | 12,343 | (0.3 | )% | ||||||||||||||||
Average shares outstanding-diluted | 12,507 | 12,484 | 0.2 | % | ||||||||||||||||
(1) Culp, Inc. currently does not incur cash income tax expense in the US due to its $18.0 million in net operating loss carryforwards as of May 1, 2016. Therefore, | ||||||||||||||||||||
adjusted net income is calculated using only income tax expense for our subsidiaries located in Canada and China. See reconciliation on | ||||||||||||||||||||
page 10 of 10. | ||||||||||||||||||||
(2) Represents estimated income tax expense for our subsidiaries located in Canada and China. See reconciliation on page 10 of 10. | ||||||||||||||||||||
* Percent of sales column for income taxes is calculated as a % of income before income taxes. |
Page 2 of 10
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||
CONSOLIDATED STATEMENTS OF NET INCOME | ||||||||||||||||||||
FOR THE SIX MONTHS ENDED OCTOBER 30, 2016 AND NOVEMBER 1, 2015 | ||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||
(Amounts in Thousands, Except for Per Share Data) | ||||||||||||||||||||
SIX MONTHS ENDED | ||||||||||||||||||||
Amounts | Percent of Sales | |||||||||||||||||||
October 30, | November 1, | % Over | October 30, | November 1, | ||||||||||||||||
2016 | 2015 | (Under) | 2016 | 2015 | ||||||||||||||||
Net sales | $ | 156,026 | 157,141 | (0.7 | )% | 100.0 | % | 100.0 | % | |||||||||||
Cost of sales | 120,705 | 125,206 | (3.6 | )% | 77.4 | % | 79.7 | % | ||||||||||||
Gross profit | 35,321 | 31,935 | 10.6 | % | 22.6 | % | 20.3 | % | ||||||||||||
Selling, general and | ||||||||||||||||||||
administrative expenses | 19,348 | 18,175 | 6.5 | % | 12.4 | % | 11.6 | % | ||||||||||||
Income from operations | 15,973 | 13,760 | 16.1 | % | 10.2 | % | 8.8 | % | ||||||||||||
Interest income | (40 | ) | (112 | ) | (64.3 | )% | (0.0 | )% | (0.1 | )% | ||||||||||
Other expense | 307 | 320 | (4.1 | )% | 0.2 | % | 0.2 | % | ||||||||||||
Income before income taxes | 15,706 | 13,552 | 15.9 | % | 10.1 | % | 8.6 | % | ||||||||||||
Income taxes* | 5,917 | 5,081 | 16.5 | % | 37.7 | % | 37.5 | % | ||||||||||||
Net income | $ | 9,789 | 8,471 | 15.6 | % | 6.3 | % | 5.4 | % | |||||||||||
Net income per share-basic | $ | 0.80 | $ | 0.69 | 15.9 | % | ||||||||||||||
Net income per share-diluted | $ | 0.78 | $ | 0.68 | 14.7 | % | ||||||||||||||
Average shares outstanding-basic | 12,297 | 12,310 | (0.1 | )% | ||||||||||||||||
Average shares outstanding-diluted | 12,495 | 12,481 | 0.1 | % | ||||||||||||||||
PRESENTATION OF ADJUSTED NET INCOME, ADJUSTED INCOME TAXES AND EARNINGS PER SHARE (1) | ||||||||||||||||||||
SIX MONTHS ENDED | ||||||||||||||||||||
Amounts | Percent of Sales | |||||||||||||||||||
October 30, | November 1, | % Over | October 30, | November 1, | ||||||||||||||||
2016 | 2015 | (Under) | 2016 | 2015 | ||||||||||||||||
Income before income taxes (see above) | $ | 15,706 | 13,552 | 15.9 | % | 10.1 | % | 8.6 | % | |||||||||||
Adjusted Income taxes (2)* | 2,796 | 2,128 | 31.4 | % | 17.8 | % | 15.7 | % | ||||||||||||
Adjusted net income | 12,910 | 11,424 | 13.0 | % | 8.3 | % | 7.3 | % | ||||||||||||
Adjusted net income per share-basic | $ | 1.05 | $ | 0.93 | 12.9 | % | ||||||||||||||
Adjusted net income per share-diluted | $ | 1.03 | $ | 0.92 | 12.0 | % | ||||||||||||||
Average shares outstanding-basic | 12,297 | 12,310 | (0.1 | )% | ||||||||||||||||
Average shares outstanding-diluted | 12,495 | 12,481 | 0.1 | % | ||||||||||||||||
(1) Culp, Inc. currently does not incur cash income tax expense in the US due to its $18.0 million in net operating loss carryforwards as of May 1, 2016. Therefore, | ||||||||||||||||||||
adjusted net income is calculated using only income tax expense for our subsidiaries located in Canada and China. See reconciliation on | ||||||||||||||||||||
page 10 of 10. | ||||||||||||||||||||
(2) Represents estimated income tax expense for our subsidiaries located in Canada and China. See reconciliation on page 10 of 10. | ||||||||||||||||||||
* Percent of sales column for income taxes is calculated as a % of income before income taxes. |
Page 3 of 10
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||
OCTOBER 30, 2016, NOVEMBER 1, 2015, AND MAY 1, 2016 | ||||||||||||||||||||
Unaudited | ||||||||||||||||||||
(Amounts in Thousands) | ||||||||||||||||||||
Amounts | Increase | |||||||||||||||||||
October 30, | November 1, | (Decrease) | * May 1, | |||||||||||||||||
2016 | 2015 | Dollars | Percent | 2016 | ||||||||||||||||
Current assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 13,910 | 31,176 | (17,266 | ) | (55.4 | )% | 37,787 | ||||||||||||
Short-term investments | 2,430 | 6,320 | (3,890 | ) | (61.6 | )% | 4,359 | |||||||||||||
Accounts receivable | 19,039 | 23,314 | (4,275 | ) | (18.3 | )% | 23,481 | |||||||||||||
Inventories | 45,954 | 46,479 | (525 | ) | (1.1 | )% | 46,531 | |||||||||||||
Income taxes receivable | - | 75 | (75 | ) | (100.0 | )% | 155 | |||||||||||||
Other current assets | 1,675 | 2,614 | (939 | ) | (35.9 | )% | 2,477 | |||||||||||||
Total current assets | 83,008 | 109,978 | (26,970 | ) | (24.5 | )% | 114,790 | |||||||||||||
Property, plant & equipment, net | 45,537 | 38,319 | 7,218 | 18.8 | % | 39,973 | ||||||||||||||
Goodwill | 11,462 | 11,462 | - | 0.0 | % | 11,462 | ||||||||||||||
Deferred income taxes | 581 | 3,415 | (2,834 | ) | (83.0 | )% | 2,319 | |||||||||||||
Long-term Investments - Held-To-Maturity | 31,050 | - | 31,050 | 100.0 | % | - | ||||||||||||||
Long-term Investments - Rabbi Trust | 4,994 | 3,279 | 1,715 | 52.3 | % | 4,025 | ||||||||||||||
Other assets | 2,495 | 2,494 | 1 | 0.0 | % | 2,573 | ||||||||||||||
Total assets | $ | 179,127 | 168,947 | 10,180 | 6.0 | % | 175,142 | |||||||||||||
Current liabilities | ||||||||||||||||||||
Accounts payable - trade | $ | 20,183 | 25,221 | (5,038 | ) | (20.0 | )% | 23,994 | ||||||||||||
Accounts payable - capital expenditures | 3,000 | 1,269 | 1,731 | 136.4 | % | 224 | ||||||||||||||
Accrued expenses | 8,878 | 9,895 | (1,017 | ) | (10.3 | )% | 11,922 | |||||||||||||
Income taxes payable - current | 513 | 305 | 208 | 68.2 | % | 180 | ||||||||||||||
Total current liabilities | 32,574 | 36,690 | (4,116 | ) | (11.2 | )% | 36,320 | |||||||||||||
Income taxes payable - long-term | 3,734 | 3,655 | 79 | 2.2 | % | 3,841 | ||||||||||||||
Deferred income taxes | 1,699 | 1,206 | 493 | 40.9 | % | 1,483 | ||||||||||||||
Deferred compensation | 5,171 | 4,421 | 750 | 17.0 | % | 4,686 | ||||||||||||||
Total liabilities | 43,178 | 45,972 | (2,794 | ) | (6.1 | )% | 46,330 | |||||||||||||
Shareholders' equity | 135,949 | 122,975 | 12,974 | 10.6 | % | 128,812 | ||||||||||||||
Total liabilities and | ||||||||||||||||||||
shareholders' equity | $ | 179,127 | 168,947 | 10,180 | 6.0 | % | 175,142 | |||||||||||||
Shares outstanding | 12,312 | 12,350 | (38 | ) | (0.3 | )% | 12,265 | |||||||||||||
* Derived from audited financial statements. |
Page 4 of 10
CULP, INC. FINANCIAL INFORMATION RELEASE | |||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
FOR THE SIX MONTHS ENDED OCTOBER 30, 2016 AND NOVEMBER 1, 2015 | |||||||||
Unaudited | |||||||||
(Amounts in Thousands) | |||||||||
SIX MONTHS ENDED | |||||||||
Amounts | |||||||||
October 30, | November 1, | ||||||||
2016 | 2015 | ||||||||
Cash flows from operating activities: | |||||||||
Net income | $ | 9,789 | 8,471 | ||||||
Adjustments to reconcile net income to net cash | |||||||||
provided by operating activities: | |||||||||
Depreciation | 3,511 | 3,184 | |||||||
Amortization of other assets | 80 | 86 | |||||||
Stock-based compensation | 1,657 | 1,339 | |||||||
Deferred income taxes | 2,121 | 2,816 | |||||||
Realized loss on sale of short-term investments | 12 | 56 | |||||||
Loss (gain) on sale of equipment | 9 | (60 | ) | ||||||
Excess tax benefits related to stock-based compensation | (167 | ) | (838 | ) | |||||
Foreign currency exchange gains | (53 | ) | (13 | ) | |||||
Changes in assets and liabilities: | |||||||||
Accounts receivable | 4,142 | 4,892 | |||||||
Inventories | 219 | (4,135 | ) | ||||||
Other current assets | 751 | (302 | ) | ||||||
Other assets | - | 8 | |||||||
Accounts payable | (3,274 | ) | (2,921 | ) | |||||
Accrued expenses and deferrred compensation | (2,749 | ) | (1,547 | ) | |||||
Income taxes | 554 | 168 | |||||||
Net cash provided by operating activities | 16,602 | 11,204 | |||||||
Cash flows from investing activities: | |||||||||
Capital expenditures | (6,308 | ) | (5,255 | ) | |||||
Proceeds from the sale of equipment | - | 225 | |||||||
Proceeds from the sale of short-term investments | 2,000 | 3,612 | |||||||
Purchase of short-term investments | (23 | ) | (46 | ) | |||||
Purchase of long-term investments (Held-To-Maturity) | (31,050 | ) | - | ||||||
Purchase of long-term investments (Rabbi Trust) | (929 | ) | (864 | ) | |||||
Net cash used in investing activities | (36,310 | ) | (2,328 | ) | |||||
Cash flows from financing activities: | |||||||||
Proceeds from line of credit | 7,000 | - | |||||||
Payments on line of credit | (7,000 | ) | - | ||||||
Payments on long-term debt | - | (2,200 | ) | ||||||
Excess tax benefits related to stock-based compensation | 167 | 838 | |||||||
Dividends paid | (4,307 | ) | (6,417 | ) | |||||
Payments on debt issuance costs | (2 | ) | (43 | ) | |||||
Proceeds from common stock issued | 11 | 126 | |||||||
Net cash used in financing activities | (4,131 | ) | (7,696 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | (38 | ) | 271 | ||||||
(Decrease) increase in cash and cash equivalents | (23,877 | ) | 1,451 | ||||||
Cash and cash equivalents at beginning of period | 37,787 | 29,725 | |||||||
Cash and cash equivalents at end of period | $ | 13,910 | 31,176 | ||||||
Free Cash Flow (1) | $ | 9,494 | 6,419 |
(1) Free Cash Flow reconciliation is as follows: | |||||||||
FY 2017 | FY 2016 | ||||||||
A) | Net cash provided by operating activities | $ | 16,602 | 11,204 | |||||
B) | Minus: Capital Expenditures | (6,308 | ) | (5,255 | ) | ||||
C) | Add: Proceeds from the sale of equipment | - | 225 | ||||||
D) | Add: Excess tax benefits related to stock-based compensation | 167 | 838 | ||||||
E) | Minus: Purchase of long-term investments (Rabbi Trust) | (929 | ) | (864 | ) | ||||
F) | Effects of exchange rate changes on cash and cash equivalents | (38 | ) | 271 | |||||
$ | 9,494 | 6,419 | |||||||
Page 5 of 10
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||
STATEMENTS OF OPERATIONS BY SEGMENT | ||||||||||||||||||||
FOR THE THREE MONTHS ENDED OCTOBER 30, 2016 AND NOVEMBER 1, 2015 | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||
THREE MONTHS ENDED | ||||||||||||||||||||
Amounts | Percent of Total Sales | |||||||||||||||||||
October 30, | November 1, | % Over | October 30, | November 1, | ||||||||||||||||
Net Sales by Segment | 2016 | 2015 | (Under) | 2016 | 2015 | |||||||||||||||
Mattress Fabrics | $ | 45,527 | 45,436 | 0.2 | % | 60.4 | % | 59.0 | % | |||||||||||
Upholstery Fabrics | 29,816 | 31,520 | (5.4 | )% | 39.6 | % | 41.0 | % | ||||||||||||
Net Sales | $ | 75,343 | 76,956 | (2.1 | )% | 100.0 | % | 100.0 | % | |||||||||||
Gross Profit by Segment | Gross Profit Margin | |||||||||||||||||||
Mattress Fabrics | $ | 10,756 | 9,456 | 13.7 | % | 23.6 | % | 20.8 | % | |||||||||||
Upholstery Fabrics | 6,145 | 6,277 | (2.1 | )% | 20.6 | % | 19.9 | % | ||||||||||||
Gross Profit | $ | 16,901 | 15,733 | 7.4 | % | 22.4 | % | 20.4 | % | |||||||||||
Selling, General and Administrative Expenses by Segment | Percent of Sales | |||||||||||||||||||
Mattress Fabrics | $ | 3,296 | 2,989 | 10.3 | % | 7.2 | % | 6.6 | % | |||||||||||
Upholstery Fabrics | 3,652 | 3,813 | (4.2 | )% | 12.2 | % | 12.1 | % | ||||||||||||
Unallocated Corporate expenses | 2,654 | 2,631 | 0.9 | % | 3.5 | % | 3.4 | % | ||||||||||||
Selling, General and Administrative Expenses | $ | 9,602 | 9,433 | 1.8 | % | 12.7 | % | 12.3 | % | |||||||||||
Operating Income (loss) by Segment | Operating Income (Loss) Margin | |||||||||||||||||||
Mattress Fabrics | $ | 7,460 | 6,467 | 15.4 | % | 16.4 | % | 14.2 | % | |||||||||||
Upholstery Fabrics | 2,493 | 2,464 | 1.2 | % | 8.4 | % | 7.8 | % | ||||||||||||
Unallocated corporate expenses | (2,654 | ) | (2,631 | ) | 0.9 | % | (3.5 | )% | (3.4 | )% | ||||||||||
Operating income | $ | 7,299 | 6,300 | 15.9 | % | 9.7 | % | 8.2 | % | |||||||||||
Depreciation by Segment | ||||||||||||||||||||
Mattress Fabrics | $ | 1,545 | 1,424 | 8.5 | % | |||||||||||||||
Upholstery Fabrics | 206 | 205 | 0.5 | % | ||||||||||||||||
Depreciation | $ | 1,751 | 1,629 | 7.5 | % |
Page 6 of 10
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||
STATEMENTS OF OPERATIONS BY SEGMENT | ||||||||||||||||||||
FOR THE SIX MONTHS ENDED OCTOBER 30, 2016 AND NOVEMBER 1, 2015 | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||
SIX MONTHS ENDED | ||||||||||||||||||||
Amounts | Percent of Total Sales | |||||||||||||||||||
October 30, | November 1, | % Over | October 30, | November 1, | ||||||||||||||||
Net Sales by Segment | 2016 | 2015 | (Under) | 2016 | 2015 | |||||||||||||||
Mattress Fabrics | $ | 96,057 | 93,245 | 3.0 | % | 61.6 | % | 59.3 | % | |||||||||||
Upholstery Fabrics | 59,969 | 63,896 | (6.1 | )% | 38.4 | % | 40.7 | % | ||||||||||||
Net Sales | $ | 156,026 | 157,141 | (0.7 | )% | 100.0 | % | 100.0 | % | |||||||||||
Gross Profit by Segment | Gross Profit Margin | |||||||||||||||||||
Mattress Fabrics | $ | 22,657 | 19,381 | 16.9 | % | 23.6 | % | 20.8 | % | |||||||||||
Upholstery Fabrics | 12,664 | 12,554 | 0.9 | % | 21.1 | % | 19.6 | % | ||||||||||||
Gross Profit | $ | 35,321 | 31,935 | 10.6 | % | 22.6 | % | 20.3 | % | |||||||||||
Selling, General and Administrative Expenses by Segment | Percent of Sales | |||||||||||||||||||
Mattress Fabrics | $ | 6,795 | 5,912 | 14.9 | % | 7.1 | % | 6.3 | % | |||||||||||
Upholstery Fabrics | 7,185 | 7,409 | (3.0 | )% | 12.0 | % | 11.6 | % | ||||||||||||
Unallocated Corporate expenses | 5,368 | 4,854 | 10.6 | % | 3.4 | % | 3.1 | % | ||||||||||||
Selling, General, and Administrative Expenses | $ | 19,348 | 18,175 | 6.5 | % | 12.4 | % | 11.6 | % | |||||||||||
Operating Income (loss) by Segment | Operating Income (Loss) Margin | |||||||||||||||||||
Mattress Fabrics | $ | 15,862 | 13,468 | 17.8 | % | 16.5 | % | 14.4 | % | |||||||||||
Upholstery Fabrics | 5,479 | 5,146 | 6.5 | % | 9.1 | % | 8.1 | % | ||||||||||||
Unallocated corporate expenses | (5,368 | ) | (4,854 | ) | 10.6 | % | (3.4 | )% | (3.1 | )% | ||||||||||
Operating income | $ | 15,973 | 13,760 | 16.1 | % | 10.2 | % | 8.8 | % | |||||||||||
Return on Capital (1) | ||||||||||||||||||||
Mattress Fabrics | 41.8 | % | 37.9 | % | ||||||||||||||||
Upholstery Fabrics | 62.7 | % | 61.7 | % | ||||||||||||||||
Unallocated Corporate | N/A | N/A | ||||||||||||||||||
Consolidated | 34.3 | % | 31.5 | % | ||||||||||||||||
Capital Employed (2) | ||||||||||||||||||||
Mattress Fabrics | 76,201 | 71,502 | 6.6 | % | ||||||||||||||||
Upholstery Fabrics | 18,181 | 17,058 | 6.6 | % | ||||||||||||||||
Unallocated Corporate | (281 | ) | (263 | ) | N/A | |||||||||||||||
Consolidated | 94,101 | 88,297 | 6.6 | % | ||||||||||||||||
Depreciation by Segment | ||||||||||||||||||||
Mattress Fabrics | $ | 3,101 | 2,783 | 11.4 | % | |||||||||||||||
Upholstery Fabrics | 410 | 401 | 2.2 | % | ||||||||||||||||
Depreciation | $ | 3,511 | 3,184 | 10.3 | % | |||||||||||||||
Notes: | ||||||||||||||||||||
(1) See pages 8 and 9 of this financial information release for calculations. | ||||||||||||||||||||
(2) The capital employed balances are as of October 30, 2016 and November 1, 2015. |
Page 7 of 10
CULP, INC. FINANCIAL INFORMATION RELEASE | |
CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA | |
FOR THE TWELVE MONTHS ENDED OCTOBER 30, 2016 AND NOVEMBER 1, 2015 | |
(UNAUDITED) | |
(AMOUNTS IN THOUSANDS) |
Quarter Ended | ||||||||||||||||||||
Trailing 12 | ||||||||||||||||||||
Months | ||||||||||||||||||||
1/31/2016 | 5/1/2016 | 7/31/2016 | 10/30/2016 | 10/30/2016 | ||||||||||||||||
Net income | $ | 4,862 | $ | 3,601 | $ | 5,313 | $ | 4,475 | $ | 18,251 | ||||||||||
Income taxes | 2,317 | 3,566 | 3,233 | 2,684 | 11,800 | |||||||||||||||
Interest income, net | (38 | ) | (26 | ) | (25 | ) | (15 | ) | (104 | ) | ||||||||||
Depreciation and amortization expense | 1,741 | 1,830 | 1,813 | 1,778 | 7,162 | |||||||||||||||
Stock based compensation | 625 | 778 | 761 | 896 | 3,060 | |||||||||||||||
Adjusted EBITDA | $ | 9,507 | $ | 9,749 | $ | 11,095 | $ | 9,818 | $ | 40,169 | ||||||||||
Quarter Ended | ||||||||||||||||||||
Trailing 12 | ||||||||||||||||||||
Months | ||||||||||||||||||||
2/1/2015 | 5/3/2015 | 8/2/2015 | 11/1/2015 | 11/1/2015 | ||||||||||||||||
Net income | $ | 3,812 | $ | 4,913 | $ | 4,701 | $ | 3,771 | $ | 17,197 | ||||||||||
Income taxes | 2,110 | 1,772 | 2,707 | 2,373 | 8,962 | |||||||||||||||
Interest income, net | (202 | ) | (128 | ) | (42 | ) | (69 | ) | (441 | ) | ||||||||||
Depreciation and amortization expense | 1,478 | 1,576 | 1,602 | 1,668 | 6,324 | |||||||||||||||
Stock based compensation | 191 | 304 | 265 | 1,074 | 1,834 | |||||||||||||||
Adjusted EBITDA | $ | 7,389 | $ | 8,437 | $ | 9,233 | $ | 8,817 | $ | 33,876 | ||||||||||
% Over (Under) | 28.7 | % | 15.6 | % | 20.2 | % | 11.4 | % | 18.6 | % |
Page 8 of 10
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||||||||||||||||||||
RETURN ON CAPITAL EMPLOYED BY SEGMENT | ||||||||||||||||||||||||||||||||||||||
FOR THE SIX MONTHS ENDED OCTOBER 30, 2016 | ||||||||||||||||||||||||||||||||||||||
(Amounts in Thousands) | ||||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||
Operating Income | ||||||||||||||||||||||||||||||||||||||
Six Months | Average | Return on | ||||||||||||||||||||||||||||||||||||
Ended | Capital | Avg. Capital | ||||||||||||||||||||||||||||||||||||
October 30, 2016 (1) | Employed (3) | Employed (2) | ||||||||||||||||||||||||||||||||||||
Mattress Fabrics | $ | 15,862 | $ | 75,828 | 41.8 | % | ||||||||||||||||||||||||||||||||
Upholstery Fabrics | 5,479 | 17,476 | 62.7 | % | ||||||||||||||||||||||||||||||||||
(less: Unallocated Corporate) | (5,368 | ) | (285 | ) | N/A | |||||||||||||||||||||||||||||||||
Total | $ | 15,973 | $ | 93,019 | 34.3 | % | ||||||||||||||||||||||||||||||||
Average Capital Employed | As of the three Months Ended October 30, 2016 | As of the three Months Ended July 31, 2016 | As of the three Months Ended May 1, 2016 | |||||||||||||||||||||||||||||||||||||||||||||
Mattress | Upholstery | Unallocated | Mattress | Upholstery | Unallocated | Mattress | Upholstery | Unallocated | ||||||||||||||||||||||||||||||||||||||||
Fabrics | Fabrics | Corporate | Total | Fabrics | Fabrics | Corporate | Total | Fabrics | Fabrics | Corporate | Total | |||||||||||||||||||||||||||||||||||||
Total assets | 94,700 | 29,361 | 55,066 | 179,127 | 92,959 | 33,550 | 56,851 | 183,360 | 94,878 | 29,463 | 50,801 | 175,142 | ||||||||||||||||||||||||||||||||||||
Total liabilities | (18,499 | ) | (11,180 | ) | (13,499 | ) | (43,178 | ) | (16,313 | ) | (16,329 | ) | (19,283 | ) | (51,925 | ) | (20,241 | ) | (12,438 | ) | (13,651 | ) | (46,330 | ) | ||||||||||||||||||||||||
Subtotal | $ | 76,201 | $ | 18,181 | $ | 41,567 | $ | 135,949 | $ | 76,646 | $ | 17,221 | $ | 37,568 | $ | 131,435 | $ | 74,637 | $ | 17,025 | $ | 37,150 | $ | 128,812 | ||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | - | - | (13,910 | ) | (13,910 | ) | - | - | (45,549 | ) | (45,549 | ) | - | - | (37,787 | ) | (37,787 | ) | ||||||||||||||||||||||||||||||
Short-term investments | - | - | (2,430 | ) | (2,430 | ) | - | - | (2,434 | ) | (2,434 | ) | - | - | (4,359 | ) | (4,359 | ) | ||||||||||||||||||||||||||||||
Long-term investments - Held-To-Maturity | - | - | (31,050 | ) | (31,050 | ) | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||
Long-term investments - Rabbi Trust | (4,994 | ) | (4,994 | ) | - | - | (4,611 | ) | (4,611 | ) | - | - | (4,025 | ) | (4,025 | ) | ||||||||||||||||||||||||||||||||
Income taxes receivable | - | - | - | - | - | - | - | - | - | - | (155 | ) | (155 | ) | ||||||||||||||||||||||||||||||||||
Deferred income taxes - non-current | - | - | (581 | ) | (581 | ) | - | - | (1,942 | ) | (1,942 | ) | - | - | (2,319 | ) | (2,319 | ) | ||||||||||||||||||||||||||||||
Income taxes payable - current | - | - | 513 | 513 | - | - | 358 | 358 | - | - | 180 | 180 | ||||||||||||||||||||||||||||||||||||
Income taxes payable - long-term | - | - | 3,734 | 3,734 | - | - | 3,779 | 3,779 | - | - | 3,841 | 3,841 | ||||||||||||||||||||||||||||||||||||
Deferred income taxes - non-current | - | - | 1,699 | 1,699 | - | - | 1,532 | 1,532 | - | - | 1,483 | 1,483 | ||||||||||||||||||||||||||||||||||||
Line of credit | - | - | - | - | - | - | 7,000 | 7,000 | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Deferred compensation | - | - | 5,171 | 5,171 | - | - | 5,031 | 5,031 | - | - | 4,686 | 4,686 | ||||||||||||||||||||||||||||||||||||
Total Capital Employed | $ | 76,201 | $ | 18,181 | $ | (281 | ) | $ | 94,101 | $ | 76,646 | $ | 17,221 | $ | 732 | $ | 94,599 | $ | 74,637 | $ | 17,025 | $ | (1,305 | ) | $ | 90,357 | ||||||||||||||||||||||
Mattress | Upholstery | Unallocated | ||||||||||||||||||||||||||||||||||||||||||||||
Fabrics | Fabrics | Corporate | Total | |||||||||||||||||||||||||||||||||||||||||||||
Average Capital Employed (3) | $ | 75,828 | $ | 17,476 | $ | (285 | ) | $ | 93,019 | |||||||||||||||||||||||||||||||||||||||
Notes: | ||||||||||||||||||||||||||||||||||||||||||||||||
(1) See reconciliation per page 6 of this financial information release. | ||||||||||||||||||||||||||||||||||||||||||||||||
(2) Return on average capital employed represents operating income for the six month period ending October 30, 2016 times two quarters | ||||||||||||||||||||||||||||||||||||||||||||||||
to arrive at an annualized value then divided by average capital employed. Average capital employed does not include cash and cash equivalents, | ||||||||||||||||||||||||||||||||||||||||||||||||
short-term investments, long-term investments - Held-To-Maturity, long-term investments - Rabbi Trust, noncurrent deferred tax assets and liabilities, | ||||||||||||||||||||||||||||||||||||||||||||||||
income taxes receivable and payable, line of credit, and deferred compensation. | ||||||||||||||||||||||||||||||||||||||||||||||||
(3) Average capital employed was computed using the three periods ending October 30, 2016, July 31, 2016 and May 1, 2016. |
Page 9 of 10
CULP, INC. FINANCIAL INFORMATION RELEASE | |||||||||||||
RETURN ON CAPITAL EMPLOYED BY SEGMENT | |||||||||||||
FOR THE SIX MONTHS ENDED NOVEMBER 1, 2015 | |||||||||||||
(Amounts in Thousands) | |||||||||||||
(Unaudited) | |||||||||||||
Operating Income | |||||||||||||
Six Months | Average | Return on | |||||||||||
Ended | Capital | Avg. Capital | |||||||||||
November 1, 2015 (1) | Employed (3) | Employed (2) | |||||||||||
Mattress Fabrics | $ | 13,468 | $ | 71,108 | 37.9 | % | |||||||
Upholstery Fabrics | 5,146 | 16,677 | 61.7 | % | |||||||||
(less: Unallocated Corporate) | (4,854 | ) | (413 | ) | N/A | ||||||||
Total | $ | 13,760 | $ | 87,372 | 31.5 | % | |||||||
Average Capital Employed | As of the three Months Ended November 1, 2015 | As of the three Months Ended August 2, 2015 | As of the three Months Ended May 3, 2015 | |||||||||||||||||||||||||||||||||||||||||||||
Mattress | Upholstery | Unallocated | Mattress | Upholstery | Unallocated | Mattress | Upholstery | Unallocated | ||||||||||||||||||||||||||||||||||||||||
Fabrics | Fabrics | Corporate | Total | Fabrics | Fabrics | Corporate | Total | Fabrics | Fabrics | Corporate | Total | |||||||||||||||||||||||||||||||||||||
Total assets | 90,730 | 32,187 | 46,030 | 168,947 | 91,614 | 33,795 | 41,471 | 166,880 | 89,066 | 32,838 | 49,396 | 171,300 | ||||||||||||||||||||||||||||||||||||
Total liabilities | (19,228 | ) | (15,129 | ) | (11,615 | ) | (45,972 | ) | (20,265 | ) | (14,849 | ) | (13,041 | ) | (48,155 | ) | (18,594 | ) | (18,812 | ) | (14,467 | ) | (51,873 | ) | ||||||||||||||||||||||||
Subtotal | $ | 71,502 | $ | 17,058 | $ | 34,415 | $ | 122,975 | $ | 71,349 | $ | 18,946 | $ | 28,430 | $ | 118,725 | $ | 70,472 | $ | 14,026 | $ | 34,929 | $ | 119,427 | ||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | - | - | (31,176 | ) | (31,176 | ) | - | - | (25,933 | ) | (25,933 | ) | - | - | (29,725 | ) | (29,725 | ) | ||||||||||||||||||||||||||||||
Short-term investments | - | - | (6,320 | ) | (6,320 | ) | - | - | (6,336 | ) | (6,336 | ) | - | - | (10,004 | ) | (10,004 | ) | ||||||||||||||||||||||||||||||
Long-term investments- Rabbi Trust | - | - | (3,279 | ) | (3,279 | ) | - | - | (2,893 | ) | (2,893 | ) | - | - | (2,415 | ) | (2,415 | ) | ||||||||||||||||||||||||||||||
Income taxes receivable | - | - | (75 | ) | (75 | ) | - | - | (142 | ) | (142 | ) | - | - | (229 | ) | (229 | ) | ||||||||||||||||||||||||||||||
Deferred income taxes - non-current | - | - | (3,415 | ) | (3,415 | ) | - | - | (4,406 | ) | (4,406 | ) | - | - | (5,169 | ) | (5,169 | ) | ||||||||||||||||||||||||||||||
Current maturities of long-term debt | - | - | - | - | - | - | 2,200 | 2,200 | - | - | 2,200 | 2,200 | ||||||||||||||||||||||||||||||||||||
Income taxes payable - current | - | - | 305 | 305 | - | - | 392 | 392 | - | - | 325 | 325 | ||||||||||||||||||||||||||||||||||||
Income taxes payable - long-term | - | - | 3,655 | 3,655 | - | - | 3,634 | 3,634 | - | - | 3,792 | 3,792 | ||||||||||||||||||||||||||||||||||||
Deferred income taxes - non-current | - | - | 1,206 | 1,206 | - | - | 1,072 | 1,072 | - | - | 982 | 982 | ||||||||||||||||||||||||||||||||||||
Deferred compensation | - | - | 4,421 | 4,421 | - | - | 4,280 | 4,280 | - | - | 4,041 | 4,041 | ||||||||||||||||||||||||||||||||||||
Total Capital Employed | $ | 71,502 | $ | 17,058 | $ | (263 | ) | $ | 88,297 | $ | 71,349 | $ | 18,946 | $ | 298 | $ | 90,593 | $ | 70,472 | $ | 14,026 | $ | (1,273 | ) | $ | 83,225 | ||||||||||||||||||||||
Mattress | Upholstery | Unallocated | ||||||||||||||||||||||||||||||||||||||||||||||
Fabrics | Fabrics | Corporate | Total | |||||||||||||||||||||||||||||||||||||||||||||
Average Capital Employed (3) | $ | 71,108 | $ | 16,677 | $ | (413 | ) | $ | 87,372 | |||||||||||||||||||||||||||||||||||||||
Notes: | ||||||||||||||||||||||||||||||||||||||||||||||||
(1) See reconciliation per page 6 of this financial information release. | ||||||||||||||||||||||||||||||||||||||||||||||||
(2) Return on average capital employed represents operating income for the six month period ending November 1, 2015 times two quarters | ||||||||||||||||||||||||||||||||||||||||||||||||
to arrive at an annualized value then divided by average capital employed. Average capital employed does not include cash and cash equivalents, | ||||||||||||||||||||||||||||||||||||||||||||||||
short-term investments, long-term investments - Rabbi Trust, current maturities of long-term debt, noncurrent deferred tax assets and liabilities, | ||||||||||||||||||||||||||||||||||||||||||||||||
income taxes receivable and payable, and deferred compensation. | ||||||||||||||||||||||||||||||||||||||||||||||||
�� | ||||||||||||||||||||||||||||||||||||||||||||||||
(3) Average capital employed was computed using the three periods ending November 1, 2015, August 2, 2015 and May 3, 2015. |
Page 10 of 10
CULP, INC. FINANCIAL INFORMATION RELEASE | |||||||||||||
CONSOLIDATED ADJUSTED EFFECTIVE INCOME TAX RATE, NET INCOME AND EARNINGS PER SHARE | |||||||||||||
FOR THE SIX MONTHS ENDED OCTOBER 30, 2016 AND NOVEMBER 1, 2015 | |||||||||||||
Unaudited | |||||||||||||
(Amounts in Thousands) | |||||||||||||
SIX MONTHS ENDED | |||||||||||||
Amounts | |||||||||||||
October 30, | November 1, | ||||||||||||
2016 | 2015 | ||||||||||||
Consolidated Effective GAAP Income Tax Rate | (1 | ) | 37.7 | % | 37.5 | % | |||||||
Non-Cash U.S. Income Tax Expense | (19.6 | )% | (21.5 | )% | |||||||||
Non-Cash Foreign Income Tax Expense | (0.3 | )% | (0.3 | )% | |||||||||
Consolidated Adjusted Effective Income Tax Rate | (2 | ) | 17.8 | % | 15.7 | % |
�� | ||||||||||||||||||||||||
THREE MONTHS ENDED | ||||||||||||||||||||||||
As reported | October 30, 2016 | As reported | November 1, 2015 | |||||||||||||||||||||
October 30, | Proforma Net | November 1, | Proforma Net | |||||||||||||||||||||
2016 | Adjustments | of Adjustments | 2015 | Adjustments | of Adjustments | |||||||||||||||||||
Income before income taxes | $ | 7,159 | $ | - | $ | 7,159 | $ | 6,144 | $ | 6,144 | ||||||||||||||
Income taxes (3) | 2,684 | $ | (1,410 | ) | 1,274 | 2,373 | $ | (1,408 | ) | 965 | ||||||||||||||
Net income | $ | 4,475 | $ | 1,410 | $ | 5,885 | $ | 3,771 | $ | 1,408 | $ | 5,179 | ||||||||||||
Net income per share-basic | $ | 0.36 | $ | 0.11 | $ | 0.48 | $ | 0.31 | $ | 0.11 | $ | 0.42 | ||||||||||||
Net income per share-diluted | $ | 0.36 | $ | 0.11 | $ | 0.47 | $ | 0.30 | $ | 0.11 | $ | 0.41 | ||||||||||||
Average shares outstanding-basic | 12,308 | 12,308 | 12,308 | 12,343 | 12,343 | 12,343 | ||||||||||||||||||
Average shares outstanding-diluted | 12,507 | 12,507 | 12,507 | 12,484 | 12,484 | 12,484 | ||||||||||||||||||
SIX MONTHS ENDED | ||||||||||||||||||||||||
As reported | October 30, 2016 | As reported | November 1, 2015 | |||||||||||||||||||||
October 30, | Proforma Net | November 1, | Proforma Net | |||||||||||||||||||||
2016 | Adjustments | of Adjustments | 2015 | Adjustments | of Adjustments | |||||||||||||||||||
Income before income taxes | $ | 15,706 | $ | - | $ | 15,706 | $ | 13,552 | $ | - | $ | 13,552 | ||||||||||||
Income taxes (3) | 5,917 | $ | (3,121 | ) | 2,796 | 5,081 | $ | (2,953 | ) | 2,128 | ||||||||||||||
Net income | $ | 9,789 | $ | 3,121 | $ | 12,910 | $ | 8,471 | $ | 2,953 | $ | 11,424 | ||||||||||||
Net income per share-basic | $ | 0.80 | $ | 0.25 | $ | 1.05 | $ | 0.69 | $ | 0.24 | $ | 0.93 | ||||||||||||
Net income per share-diluted | $ | 0.78 | $ | 0.25 | $ | 1.03 | $ | 0.68 | $ | 0.24 | $ | 0.92 | ||||||||||||
Average shares outstanding-basic | 12,297 | 12,297 | 12,297 | 12,310 | 12,310 | 12,310 | ||||||||||||||||||
Average shares outstanding-diluted | 12,495 | 12,495 | 12,495 | 12,481 | 12,481 | 12,481 | ||||||||||||||||||
(1) Calculated by dividing consolidated income tax expense by consolidated income before income taxes. | ||||||||||||||||||||||||
(2) Represents estimated cash income tax expense for our subsidiaries located in Canada and China divided by consolidated income before income taxes. | ||||||||||||||||||||||||
(3) Proforma income taxes calculated using the Consolidated Adjusted Effective Income Tax Rate as reflected above. |