Exhibit 99(b)
Page 1 of 7
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||
CONSOLIDATED STATEMENTS OF NET INCOME (LOSS) | ||||||||||||||
FOR THE THREE MONTHS AND NINE MONTHS ENDED JANUARY 27, 2008 AND JANUARY 28, 2007 | ||||||||||||||
(UNAUDITED) | ||||||||||||||
(Amounts in Thousands, Except for Per Share Data) | ||||||||||||||
THREE MONTHS ENDED | ||||||||||||||
Amounts | Percent of Sales | |||||||||||||
January 27, | January 28, | % Over | January 27, | January 28, | ||||||||||
2008 | 2007 | (Under) | 2008 | 2007 | ||||||||||
Net sales | $ | 60,482 | 55,712 | 8.6 | % | 100.0 | % | 100.0 | % | |||||
Cost of sales | 53,706 | 51,001 | 5.3 | % | 88.8 | % | 91.5 | % | ||||||
Gross profit | 6,776 | 4,711 | 43.8 | % | 11.2 | % | 8.5 | % | ||||||
Selling, general and | ||||||||||||||
administrative expenses | 5,117 | 6,394 | (20.0) | % | 8.5 | % | 11.5 | % | ||||||
Restructuring expense | 412 | 1,275 | (67.7) | % | 0.7 | % | 2.3 | % | ||||||
Income (loss) from operations | 1,247 | (2,958) | 142.2 | % | 2.1 | % | (5.3) | % | ||||||
Interest expense | 753 | 952 | (20.9) | % | 1.2 | % | 1.7 | % | ||||||
Interest income | (77) | (50) | 54.0 | % | (0.1) | % | (0.1) | % | ||||||
Other income | (72) | (157) | (54.1) | % | (0.1) | % | (0.3) | % | ||||||
Income (loss) before income taxes | 643 | (3,703) | 117.4 | % | 1.1 | % | (6.6) | % | ||||||
Income taxes* | (260) | (1,482) | (82.5) | % | (40.4) | % | 40.0 | % | ||||||
Net income (loss) | $ | 903 | (2,221) | 140.7 | % | 1.5 | % | (4.0) | % | |||||
Net income (loss) per share-basic | $0.07 | ($0.19) | 136.8 | % | ||||||||||
Net income (loss) per share-diluted | $0.07 | ($0.19) | 136.8 | % | ||||||||||
Net income (loss) per share, diluted, excluding restructuring | ||||||||||||||
and related charges (see proforma statement on page 6) | $0.11 | ($0.01) | N.M. | |||||||||||
Average shares outstanding-basic | 12,635 | 11,773 | 7.3 | % | ||||||||||
Average shares outstanding-diluted | 12,738 | 11,773 | 8.2 | % | ||||||||||
NINE MONTHS ENDED | ||||||||||||||
Amounts | Percent of Sales | |||||||||||||
January 27, | January 28, | % Over | January 27, | January 28, | ||||||||||
2008 | 2007 | (Under) | 2008 | 2007 | ||||||||||
Net sales | $ | 190,048 | 177,337 | 7.2 | % | 100.0 | % | 100.0 | % | |||||
Cost of sales | 165,794 | 156,575 | 5.9 | % | 87.2 | % | 88.3 | % | ||||||
Gross profit | 24,254 | 20,762 | 16.8 | % | 12.8 | % | 11.7 | % | ||||||
Selling, general and | ||||||||||||||
administrative expenses | 17,275 | 19,240 | (10.2) | % | 9.1 | % | 10.8 | % | ||||||
Restructuring expense | 759 | 1,742 | (56.4) | % | 0.4 | % | 1.0 | % | ||||||
Income (loss) from operations | 6,220 | (220) | N.M. | 3.3 | % | (0.1) | % | |||||||
Interest expense | 2,380 | 2,841 | (16.2) | % | 1.3 | % | 1.6 | % | ||||||
Interest income | (197) | (147) | 34.0 | % | (0.1) | % | (0.1) | % | ||||||
Other expense (income) | 625 | (98) | N.M. | 0.3 | % | (0.1) | % | |||||||
Income (loss) before income taxes | 3,412 | (2,816) | 221.2 | % | 1.8 | % | (1.6) | % | ||||||
Income taxes* | 105 | (1,540) | (106.8) | % | 3.1 | % | 54.7 | % | ||||||
Net income (loss) | $ | 3,307 | (1,276) | 359.2 | % | 1.7 | % | (0.7) | % | |||||
Net income (loss) per share-basic | $0.26 | ($0.11) | 336.4 | % | ||||||||||
Net income (loss) per share-diluted | $0.26 | ($0.11) | 336.4 | % | ||||||||||
Net income per share, diluted, excluding restructuring | ||||||||||||||
and related charges (see proforma statement on page 7) | $0.39 | $0.18 | 116.7 | % | ||||||||||
Average shares outstanding-basic | 12,617 | 11,710 | 7.7 | % | ||||||||||
Average shares outstanding-diluted | 12,770 | 11,710 | 9.1 | % | ||||||||||
* Percent of sales column for income taxes is calculated as a % of income (loss) before income taxes. |
Page 2 of 7
CULP, INC. FINANCIAL INFORMATION RELEASE | |||||||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||||||
JANUARY 27, 2008, JANUARY 28, 2007 AND APRIL 29, 2007 | |||||||||||||
Unaudited | |||||||||||||
(Amounts in Thousands) | |||||||||||||
Amounts | Increase | ||||||||||||
January 27, | January 28, | (Decrease) | * April 29, | ||||||||||
2008 | 2007 | Dollars | Percent | 2007 | |||||||||
Current assets | |||||||||||||
Cash and cash equivalents | $ | 15,500 | 10,675 | 4,825 | 45.2 | % | 10,169 | ||||||
Accounts receivable | 23,370 | 23,755 | (385) | (1.6) | % | 29,290 | |||||||
Inventories | 37,923 | 42,717 | (4,794) | (11.2) | % | 40,630 | |||||||
Deferred income taxes | 5,376 | 7,120 | (1,744) | (24.5) | % | 5,376 | |||||||
Assets held for sale | 4,972 | 1,231 | 3,741 | 303.9 | % | 2,499 | |||||||
Income taxes receivable | 423 | - | 423 | 100.0 | % | - | |||||||
Other current assets | 995 | 2,710 | (1,715) | (63.3) | % | 1,824 | |||||||
Total current assets | 88,559 | 88,208 | 351 | 0.4 | % | 89,788 | |||||||
Property, plant and equipment, net | 32,218 | 40,784 | (8,566) | (21.0) | % | 37,773 | |||||||
Goodwill | 4,114 | 4,114 | - | 0.0 | % | 4,114 | |||||||
Deferred income taxes | 25,993 | 23,232 | 2,761 | 11.9 | % | 25,683 | |||||||
Other assets | 2,442 | 2,683 | (241) | (9.0) | % | 2,588 | |||||||
Total assets | $ | 153,326 | 159,021 | (5,695) | (3.6) | % | 159,946 | ||||||
Current liabilities | |||||||||||||
Current maturities of long-term debt | $ | 8,569 | 4,744 | 3,825 | 80.6 | % | 16,046 | ||||||
Lines of credit | 2,783 | - | 2,783 | 100.0 | % | 2,593 | |||||||
Accounts payable | 19,036 | 18,051 | 985 | 5.5 | % | 23,585 | |||||||
Accrued expenses | 10,422 | 7,704 | 2,718 | 35.3 | % | 8,670 | |||||||
Accrued restructuring | 1,875 | 3,490 | (1,615) | (46.3) | % | 3,282 | |||||||
Income taxes payable - current (1) | - | 4,136 | (4,136) | (100.0) | % | 4,579 | |||||||
Total current liabilities | 42,685 | 38,125 | 4,560 | 12.0 | % | 58,755 | |||||||
Income taxes payable - long-term (1) | 4,497 | - | 4,497 | 100.0 | % | - | |||||||
Long-term debt , less current maturities | 22,026 | 41,965 | (19,939) | (47.5) | % | 22,114 | |||||||
Total liabilities | 69,208 | 80,090 | (10,882) | (13.6) | % | 80,869 | |||||||
Shareholders' equity | 84,118 | 78,931 | 5,187 | 6.6 | % | 79,077 | |||||||
Total liabilities and | |||||||||||||
shareholders' equity | $ | 153,326 | 159,021 | (5,695) | (3.6) | % | 159,946 | ||||||
Shares outstanding | 12,635 | 12,555 | 80 | 0.6 | % | 12,569 | |||||||
* Derived from audited financial statements | |||||||||||||
(1) Amounts as of January 27, 2008 reflect the adoption of Financial Accounting Standards Board (FASB) | |||||||||||||
Interpretation No. 48, Accounting for Uncertainty in Income Taxes" during the first quarter of fiscal 2008. |
Page 3 of 7
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
FOR THE NINE MONTHS ENDED JANUARY 27, 2008 AND JANUARY 28, 2007 | ||||||||||
Unaudited | ||||||||||
(Amounts in Thousands) | ||||||||||
NINE MONTHS ENDED | ||||||||||
Amounts | ||||||||||
January 27, | January 28, | |||||||||
2008 | 2007 | |||||||||
Cash flows from operating activities: | ||||||||||
Net income (loss) | $ | 3,307 | (1,276) | |||||||
Adjustments to reconcile net income (loss) to net cash | ||||||||||
provided by operating activities: | ||||||||||
Depreciation | 4,264 | 5,651 | ||||||||
Amortization of other assets | 280 | 59 | ||||||||
Stock-based compensation | 520 | 406 | ||||||||
Excess tax benefit related to stock options exercised | (21) | - | ||||||||
Deferred income taxes | 73 | (3,056) | ||||||||
Loss on impairment of equipment | 256 | - | ||||||||
Restructuring expenses, net of gain on sale of related assets | 123 | (546) | ||||||||
Changes in assets and liabilities: | ||||||||||
Accounts receivable | 6,140 | 5,294 | ||||||||
Inventories | 2,707 | (1,270) | ||||||||
Other current assets | 829 | 787 | ||||||||
Other assets | (128) | (46) | ||||||||
Accounts payable | (3,716) | (2,507) | ||||||||
Accrued expenses | 1,651 | (141) | ||||||||
Accrued restructuring | (1,483) | (564) | ||||||||
Income taxes | 16 | 1,648 | ||||||||
Net cash provided by operating activities | 14,818 | 4,439 | ||||||||
Cash flows from investing activities: | ||||||||||
Capital expenditures | (4,303) | (2,492) | ||||||||
Acquisition of assets | - | (2,500) | ||||||||
Proceeds from the sale of buildings and equipment | 2,336 | 3,260 | ||||||||
Net cash used in investing activities | (1,967) | (1,732) | ||||||||
Cash flows from financing activities: | ||||||||||
Net proceeds from lines of credit | 190 | - | ||||||||
Payments on vendor-financed capital expenditures | (571) | (927) | ||||||||
Payments on long-term debt | (7,565) | (3,513) | ||||||||
Proceeds from the issuance of long-term debt | - | 2,500 | ||||||||
Proceeds from common stock issued | 405 | 194 | ||||||||
Excess tax benefit related to stock options exercised | 21 | - | ||||||||
Net cash used in financing activities | (7,520) | (1,746) | ||||||||
Increase in cash and cash equivalents | 5,331 | 961 | ||||||||
Cash and cash equivalents at beginning of period | 10,169 | 9,714 | ||||||||
Cash and cash equivalents at end of period | $ | 15,500 | 10,675 | |||||||
Free Cash Flow (1) | $ | 12,301 | 4,280 | |||||||
(1) Free Cash Flow reconciliation is as follows: | 3rd Qtr | 3rd Qtr | ||||||||
FY 2008 | FY 2007 | |||||||||
A) | Net cash provided by operating activities | $ | 14,818 | 4,439 | ||||||
B) | Minus: Capital Expenditures | (4,303) | (2,492) | |||||||
C) | Add: Proceeds from the sale of buildings and equipment | 2,336 | 3,260 | |||||||
D) | Minus: Payments on vendor-financed capital expenditures | (571) | (927) | |||||||
E) | Add: Excess tax benefit related to stock options exercised | 21 | - | |||||||
$ | 12,301 | 4,280 |
Page 4 of 7
CULP, INC. FINANCIAL INFORMATION RELEASE | |||||||||||||
SALES, GROSS PROFIT AND OPERATING INCOME (LOSS) BY SEGMENT | |||||||||||||
FOR THE THREE MONTHS ENDED JANUARY 27, 2008 AND JANUARY 28, 2007 | |||||||||||||
(Amounts in thousands) | |||||||||||||
THREE MONTHS ENDED (UNAUDITED) | |||||||||||||
Amounts | Percent of Total Sales | ||||||||||||
January 27, | January 28, | % Over | January 27, | January 28, | |||||||||
Net Sales by Segment | 2008 | 2007 | (Under) | 2008 | 2007 | ||||||||
Mattress Fabrics | $ | 30,880 | 24,396 | 26.6 | % | 51.1 | % | 43.8 | % | ||||
Upholstery Fabrics | 29,602 | 31,316 | (5.5) | % | 48.9 | % | 56.2 | % | |||||
Net Sales | $ | 60,482 | 55,712 | 8.6 | % | 100.0 | % | 100.0 | % | ||||
Gross Profit by Segment | Gross Profit Margin | ||||||||||||
Mattress Fabrics | $ | 4,200 | 4,215 | (0.4) | % | 13.6 | % | 17.3 | % | ||||
Upholstery Fabrics | 3,181 | 3,269 | (2.7) | % | 10.7 | % | 10.4 | % | |||||
Subtotal | 7,381 | 7,484 | (1.4) | % | 12.2 | % | 13.4 | % | |||||
Loss on impairment of equipment | (256) | (1) | - | (100.0) | % | (0.4) | % | 0.0 | % | ||||
Restructuring related charges | (349) | (2) | (2,773) | (4) | (87.4) | % | (0.6) | % | (5.0) | % | |||
Gross Profit | $ | 6,776 | 4,711 | 43.8 | % | 11.2 | % | 8.5 | % | ||||
Selling, General and Administrative expenses by Segment | Percent of Sales | ||||||||||||
Mattress Fabrics | $ | 1,571 | 1,706 | (7.9) | % | 5.1 | % | 7.0 | % | ||||
Upholstery Fabrics | 2,787 | 3,765 | (26.0) | % | 9.4 | % | 12.0 | % | |||||
Unallocated Corporate expenses | 746 | 895 | (16.6) | % | 1.2 | % | 1.6 | % | |||||
5,104 | 6,366 | (19.8) | % | 8.4 | % | 11.4 | % | ||||||
Restructuring related charges | 13 | (2) | 28 | (4) | (53.6) | % | 0.0 | % | 0.1 | % | |||
Selling, General and Administrative expenses | $ | 5,117 | 6,394 | (20.0) | % | 8.5 | % | 11.5 | % | ||||
Operating Income (loss) by Segment | Operating Income (Loss) Margin | ||||||||||||
Mattress Fabrics | $ | 2,628 | 2,509 | 4.7 | % | 8.5 | % | 10.3 | % | ||||
Upholstery Fabrics | 395 | (496) | 179.6 | % | 1.3 | % | (1.6) | % | |||||
Unallocated corporate expenses | (746) | (895) | (16.6) | % | (1.2) | % | (1.6) | % | |||||
Subtotal | 2,277 | 1,118 | 103.7 | % | 3.8 | % | 2.0 | % | |||||
Loss on impairment of equipment | (256) | (1) | - | (100.0) | % | (0.4) | % | 0.0 | % | ||||
Restructuring expense and restructuring related charges | (774) | (3) | (4,076) | (5) | (81.0) | % | (1.3) | % | (7.3) | % | |||
Operating income (loss) | $ | 1,247 | (2,958) | 142.2 | % | 2.1 | % | (5.3) | % | ||||
Depreciation by Segment | |||||||||||||
Mattress Fabrics | $ | 874 | 912 | (4.2) | % | ||||||||
Upholstery Fabrics | 497 | 710 | (30.0) | % | |||||||||
Subtotal | 1,371 | 1,622 | (15.5) | % | |||||||||
Accelerated Depreciation | - | 665 | (100.0) | % | |||||||||
Total Depreciation | 1,371 | 2,287 | (40.1) | % | |||||||||
Notes: | |||||||||||||
(1) The $256 represents an impairment loss on older and existing equipment that was sold after | |||||||||||||
January 27, 2008 and is being replaced by newer and more efficient equipment. This impairment | |||||||||||||
loss pertains to the mattress fabrics segment. | |||||||||||||
(2) The $349 restructuring related charge represents $218 for other operating costs associated | |||||||||||||
with closed plant facilities and $131 for inventory markdowns. The $13 restructuring related | |||||||||||||
charge represents other operating costs associated with closed plant facilities. | |||||||||||||
(3) The $774 restructuring and related charge represents $238 for employee termination benefits, | |||||||||||||
$231 for other operating costs associated with closed plant facilities, $131 for inventory | |||||||||||||
markdowns, $93 for a write-down of a building, $68 for lease termination and other exit costs, | |||||||||||||
$57 for asset movement costs, and a credit of $44 for sales proceeds received on equipment | |||||||||||||
with no carrying value. Of this total charge, $349 was recorded in cost of sales, $13 was | |||||||||||||
recorded in selling, general, and administrative expenses, and $412 was recorded in | |||||||||||||
restructuring expense. The total $774 restructuring and related charge pertains to the | |||||||||||||
upholstery fabrics segment. | |||||||||||||
(4) The $2.8 million represents restructuring related charges of $2.2 million for inventory markdowns, | |||||||||||||
$665 for accelerated depreciation, and a credit of $52 for other operating costs associated with | |||||||||||||
closed plant facilities. The $28 restructuring related charge represents other operating costs | |||||||||||||
associated with closed plant facilities. | |||||||||||||
(5) The $4.1 million restructuring and related charge represents $2.2 million for inventory markdowns, | |||||||||||||
$1.2 million for employee termination benefits, $665 for accelerated depreciation, $272 for | |||||||||||||
write-downs of equipment, $181 for asset movement costs, $61 for lease termination and other | |||||||||||||
exit costs, a credit of $24 for other operating costs associated with closed plant facilities, and a credit | |||||||||||||
of $455 for sales proceeds received on equipment with no carrying value. Of this total charge, $2.8 | |||||||||||||
million was recorded in cost of sales, $28 was recorded in selling, general, and administrative | |||||||||||||
expenses and $1.3 million was recorded in restructuring expense. The total $4.1 million | |||||||||||||
restructuring and related charge pertains to the upholstery fabrics segment. |
Page 5 of 7
CULP, INC. FINANCIAL INFORMATION RELEASE | |||||||||||||
SALES, GROSS PROFIT AND OPERATING INCOME (LOSS) BY SEGMENT | |||||||||||||
FOR THE NINE MONTHS ENDED JANUARY 27, 2008 AND JANUARY 28, 2007 | |||||||||||||
(Amounts in thousands) | |||||||||||||
NINE MONTHS ENDED (UNAUDITED) | |||||||||||||
Amounts | Percent of Total Sales | ||||||||||||
January 27, | January 28, | % Over | January 27, | January 28, | |||||||||
Net Sales by Segment | 2008 | 2007 | (Under) | 2008 | 2007 | ||||||||
Mattress Fabrics | $ | 103,426 | 69,734 | 48.3 | % | 54.4 | % | 39.3 | % | ||||
Upholstery Fabrics | 86,622 | 107,603 | (19.5) | % | 45.6 | % | 60.7 | % | |||||
Net Sales | $ | 190,048 | 177,337 | 7.2 | % | 100.0 | % | 100.0 | % | ||||
Gross Profit by Segment | Gross Profit Margin | ||||||||||||
Mattress Fabrics | $ | 16,043 | 11,880 | 35.0 | % | 15.5 | % | 17.0 | % | ||||
Upholstery Fabrics | 9,922 | 12,691 | (21.8) | % | 11.5 | % | 11.8 | % | |||||
Subtotal | 25,965 | 24,571 | 5.7 | % | 13.7 | % | 13.9 | % | |||||
Loss on impairment of equipment | (256) | (1) | - | (100.0) | % | (0.1) | % | 0.0 | % | ||||
Restructuring related charges | (1,455) | (2) | (3,809) | (4) | (61.8) | % | (0.8) | % | (2.1) | % | |||
Gross Profit | $ | 24,254 | 20,762 | 16.8 | % | 12.8 | % | 11.7 | % | ||||
Selling, General and Administrative expenses by Segment | Percent of Sales | ||||||||||||
Mattress Fabrics | $ | 5,779 | 5,043 | 14.6 | % | 5.6 | % | 7.2 | % | ||||
Upholstery Fabrics | 8,877 | 11,219 | (20.9) | % | 10.2 | % | 10.4 | % | |||||
Unallocated Corporate expenses | 2,554 | 2,920 | (12.5) | % | 1.3 | % | 1.6 | % | |||||
Subtotal | 17,210 | 19,182 | (10.3) | % | 9.1 | % | 10.8 | % | |||||
Restructuring related charges | 65 | (2) | 58 | (4) | 12.1 | % | 0.0 | % | 0.0 | % | |||
Selling, General and Administrative expenses | $ | 17,275 | 19,240 | (10.2) | % | 9.1 | % | 10.8 | % | ||||
Operating Income (loss) by Segment | Operating Income (Loss) Margin | ||||||||||||
Mattress Fabrics | $ | 10,264 | 6,837 | 50.1 | % | 9.9 | % | 9.8 | % | ||||
Upholstery Fabrics | 1,045 | 1,472 | (29.0) | % | 1.2 | % | 1.4 | % | |||||
Unallocated corporate expenses | (2,554) | (2,920) | (12.5) | % | (1.3) | % | (1.6) | % | |||||
Subtotal | 8,755 | 5,389 | 62.5 | % | 4.6 | % | 3.0 | % | |||||
Loss on impairment of equipment | (256) | (1) | - | (100.0) | % | (0.1) | % | 0.0 | % | ||||
Restructuring expense and restructuring related charges | (2,279) | (3) | (5,609) | (5) | (59.4) | % | (1.2) | % | (3.2) | % | |||
Operating income (loss) | $ | 6,220 | (220) | N.M. | 3.3 | % | (0.1) | % | |||||
Depreciation by Segment | |||||||||||||
Mattress Fabrics | $ | 2,668 | 2,771 | (3.7) | % | ||||||||
Upholstery Fabrics | 1,596 | 2,215 | (27.9) | % | |||||||||
Subtotal | 4,264 | 4,986 | (14.5) | % | |||||||||
Accelerated Depreciation | - | 665 | (100.0) | % | |||||||||
Total Depreciation | 4,264 | 5,651 | (24.5) | % |
Notes: |
(1) The $256 represents an impairment loss on older and existing equipment that was sold after January 27, 2008 and is being |
replaced by newer and more efficient equipment. This impairment loss pertains to the mattress fabrics segment. |
(2) The $1.4 million restructuring related charge represents $920 for other operating costs associated with closed plant |
facilities and $535 for inventory markdowns. The $65 restructuring related charge represents other operating costs |
associated with plant facilities. |
(3) The $2.3 million represents $985 for other operating costs associated with closed plant facilities, $612 for lease |
termination and other exit costs, $535 for inventory markdowns, $482 for write-downs of buildings and equipment, |
$184 for asset movement costs, a credit of $160 for employee termination benefits, and a credit of $359 for sales |
proceeds received on equipment with no carrying value. Of this total charge, $1.4 million was recorded in cost of sales, |
$65 was recorded in selling, general, and administrative expenses, and $759 was recorded in restructuring expense. |
The total $2.3 million restructuring and related charge pertains to the upholstery fabrics segment. |
(4) The $3.8 million represents restructuring related charges of $2.3 million for inventory markdowns, $744 for other operating costs |
associated with the closed plant facilities, and $665 for accelerated depreciation. The $58 restructuring related charge represents |
other operating costs associated with closed plant facilities. |
(5) The $5.6 million represents restructuring and related charges of $2.3 million for inventory markdowns, $990 for employee termination |
benefits, $914 for asset movement costs, $802 for other operating costs associated with closed plant facilities, $665 for |
accelerated deprecation, $395 for lease termination and other exit costs, $334 for write-downs of buildings and equipment, |
and a credit of $890 for sales proceeds received on equipment with no carrying value. Of this total charge, $3.8 million was recorded |
in cost of sales, $58 was recorded in selling, general, and administrative expenses, and $1.7 million was recorded in restructuring |
expense. The total $5.6 million restructuring and related charge pertains to the upholstery fabrics segment. |
Page 6 of 7
CULP, INC. FINANCIAL INFORMATION RELEASE | |||||||||||||||||||||
PROFORMA CONSOLIDATED STATEMENTS OF NET INCOME (LOSS) | |||||||||||||||||||||
FOR THE THREE MONTHS ENDED JANUARY 27, 2008 AND JANUARY 28, 2007 | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
(Amounts in Thousands, Except for Per Share Data) | |||||||||||||||||||||
THREE MONTHS ENDED | |||||||||||||||||||||
As Reported | January 27, 2008 | As Reported | January 28, 2007 | Proforma | |||||||||||||||||
January 27, | % of | % of | Proforma Net | % of | January 28, | % of | % of | Proforma Net | % of | % Over | |||||||||||
2008 | Sales | Adjustments | Sales | of Adjustments | Sales | 2007 | Sales | Adjustments | Sales | of Adjustments | Sales | (Under) | |||||||||
Net sales | $ | 60,482 | 100.0% | - | 60,482 | 100.0% | 55,712 | 100.0% | - | 55,712 | 100.0% | 8.6% | |||||||||
Cost of sales | 53,706 | 88.8% | (349) | -0.6% | (1) | 53,357 | 88.2% | 51,001 | 91.5% | (2,773) | -5.0% | (3) | 48,228 | 86.6% | 10.6% | ||||||
Gross profit | 6,776 | 11.2% | (349) | -0.6% | 7,125 | 11.8% | 4,711 | 8.5% | (2,773) | -5.0% | 7,484 | 13.4% | -4.8% | ||||||||
Selling, general and | |||||||||||||||||||||
administrative expenses | 5,117 | 8.5% | (13) | 0.0% | (1) | 5,104 | 8.4% | 6,394 | 11.5% | (28) | -0.1% | (3) | 6,366 | 11.4% | -19.8% | ||||||
Restructuring expense | 412 | 0.7% | (412) | -0.7% | (2) | - | 0.0% | 1,275 | 2.3% | (1,275) | -2.3% | (4) | - | 0.0% | 0.0% | ||||||
Income (loss) from operations | 1,247 | 2.1% | (774) | -1.3% | 2,021 | 3.3% | (2,958) | -5.3% | (4,076) | -7.3% | 1,118 | 2.0% | 80.8% | ||||||||
Interest expense | 753 | 1.2% | - | 0.0% | 753 | 1.2% | 952 | 1.7% | - | 0.0% | 952 | 1.7% | -20.9% | ||||||||
Interest income | (77) | -0.1% | - | 0.0% | (77) | -0.1% | (50) | -0.1% | - | 0.0% | (50) | -0.1% | 54.0% | ||||||||
Other income | (72) | -0.1% | - | 0.0% | (72) | -0.1% | (157) | -0.3% | - | 0.0% | (157) | -0.3% | -54.1% | ||||||||
Income (loss) before income taxes | 643 | 1.1% | (774) | -1.3% | (5) | 1,417 | 2.3% | (3,703) | -6.6% | (4,076) | -7.3% | (6) | 373 | 0.7% | 279.9% | ||||||
Income taxes (7) | (260) | -40.4% | (223) | 28.8% | (37) | -2.6% | (1,482) | 40.0% | (1,954) | 47.9% | 472 | 126.5% | 107.8% | ||||||||
Net income (loss) | $ | 903 | 1.5% | (551) | -0.9% | 1,454 | 2.4% | (2,221) | -4.0% | (2,122) | -3.8% | (99) | -0.2% | 1568.7% | |||||||
Net income (loss) per share-basic | $0.07 | ($0.04) | $0.11 | ($0.19) | ($0.18) | ($0.01) | |||||||||||||||
Net income (loss) per share-diluted | $0.07 | ($0.04) | $0.11 | ($0.19) | ($0.18) | ($0.01) | |||||||||||||||
Average shares outstanding-basic | 12,635 | 12,635 | 12,635 | 11,773 | 11,773 | 11,773 | |||||||||||||||
Average shares outstanding-diluted | 12,738 | 12,635 | 12,738 | 11,773 | 11,773 | 11,773 | |||||||||||||||
Notes: | |||||||||||||||||||||
(1) The $349 restructuring related charge represents $218 for other operating costs associated with closed plant facilities | |||||||||||||||||||||
and $131 for inventory markdowns. The $13 restructuring related charge represents other operating costs | |||||||||||||||||||||
associated with closed plant facilities. | |||||||||||||||||||||
(2) The $412 restructuring charge represents $238 for employee termination benefits, $93 for fixed asset write-downs, | |||||||||||||||||||||
$68 for lease termination and other exit costs, $57 for asset movement costs, and a credit of $44 for sales proceeds | |||||||||||||||||||||
received on equipment with no carrying value. | |||||||||||||||||||||
(3) The $2.8 million represents restructuring related charges of $2.2 million for inventory markdowns, $665 for accelerated | |||||||||||||||||||||
depreciation, and a credit of $52 for other operating costs associated with closed plant facilities. The $28 restructuring | |||||||||||||||||||||
related charge represents other operating costs associated with closed plant facilities. | |||||||||||||||||||||
(4) The $1.3 million restructuring charge represents $1.2 million for employee termination benefits, $272 for write-downs of | |||||||||||||||||||||
equipment, $181 for asset movement costs, $61 for lease termination and other exit costs, and a credit of $455 for sales | |||||||||||||||||||||
proceeds received on equipment with no carrying value. | |||||||||||||||||||||
(5) Of this total charge, $550 and $224 represent cash and non-cash charges, respectively. | |||||||||||||||||||||
(6) Of this total charge, $3.1 million and $1.0 million represent cash charges and non-cash charges, respectively. | |||||||||||||||||||||
(7)The percent of net sales column for income taxes is calculated as a % of income (loss) before income taxes. |
Page 7 of 7
CULP, INC. FINANCIAL INFORMATION RELEASE | |||||||||||||||||||||
PROFORMA CONSOLIDATED STATEMENTS OF NET INCOME (LOSS) | |||||||||||||||||||||
FOR THE NINE MONTHS ENDED JANUARY 27, 2008 AND JANUARY 28, 2007 | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
(Amounts in Thousands, Except for Per Share Data) | |||||||||||||||||||||
NINE MONTHS ENDED | |||||||||||||||||||||
As Reported | January 27, 2008 | As Reported | January 28, 2007 | Proforma | |||||||||||||||||
January 27, | % of | % of | Proforma Net | % of | January 28, | % of | % of | Proforma Net | % of | % Over | |||||||||||
2008 | Sales | Adjustments | Sales | of Adjustments | Sales | 2007 | Sales | Adjustments | Sales | of Adjustments | Sales | (Under) | |||||||||
Net sales | $ | 190,048 | 100.0% | - | 190,048 | 100.0% | 177,337 | 100.0% | - | 177,337 | 100.0% | 7.2% | |||||||||
Cost of sales | 165,794 | 87.2% | (1,455) | -0.8% | (1) | 164,339 | 86.5% | 156,575 | 88.3% | (3,809) | -2.1% | (3) | 152,766 | 86.1% | 7.6% | ||||||
Gross profit | 24,254 | 12.8% | (1,455) | -0.8% | 25,709 | 13.5% | 20,762 | 11.7% | (3,809) | -2.1% | 24,571 | 13.9% | 4.6% | ||||||||
Selling, general and | |||||||||||||||||||||
administrative expenses | 17,275 | 9.1% | (65) | 0.0% | (1) | 17,210 | 9.1% | 19,240 | 10.8% | (58) | 0.0% | (3) | 19,182 | 10.8% | -10.3% | ||||||
Restructuring expense | 759 | 0.4% | (759) | -0.4% | (2) | - | 0.0% | 1,742 | 1.0% | (1,742) | -1.0% | (4) | - | 0.0% | 0.0% | ||||||
Income (loss) from operations | 6,220 | 3.3% | (2,279) | -1.2% | 8,499 | 4.5% | (220) | -0.1% | (5,609) | -3.2% | 5,389 | 3.0% | 57.7% | ||||||||
Interest expense | 2,380 | 1.3% | - | 0.0% | 2,380 | 1.3% | 2,841 | 1.6% | - | 0.0% | 2,841 | 1.6% | -16.2% | ||||||||
Interest income | (197) | -0.1% | - | 0.0% | (197) | -0.1% | (147) | -0.1% | - | 0.0% | (147) | -0.1% | 34.0% | ||||||||
Other expense (income) | 625 | 0.3% | - | 0.0% | 625 | 0.3% | (98) | -0.1% | - | 0.0% | (98) | -0.1% | -737.8% | ||||||||
Income (loss) before income taxes | 3,412 | 1.8% | (2,279) | -1.2% | (5) | 5,691 | 3.0% | (2,816) | -1.6% | (5,609) | -3.2% | (6) | 2,793 | 1.6% | 103.8% | ||||||
Income taxes (7) | 105 | 3.1% | (603) | 26.5% | 708 | 12.4% | (1,540) | 54.7% | (2,269) | 40.5% | 729 | 26.1% | -2.9% | ||||||||
Net income (loss) | $ | 3,307 | 1.7% | (1,676) | -0.9% | 4,983 | 2.6% | (1,276) | -0.7% | (3,340) | -1.9% | 2,064 | 1.2% | 141.4% | |||||||
Net income (loss) per share-basic | $0.26 | ($0.13) | $0.39 | ($0.11) | ($0.29) | $0.18 | |||||||||||||||
Net income (loss) per share-diluted | $0.26 | ($0.13) | $0.39 | ($0.11) | ($0.29) | $0.18 | |||||||||||||||
Average shares outstanding-basic | 12,617 | 12,617 | 12,617 | 11,710 | 11,710 | 11,710 | |||||||||||||||
Average shares outstanding-diluted | 12,770 | 12,617 | 12,770 | 11,710 | 11,710 | 11,713 | |||||||||||||||
Notes: | |||||||||||||||||||||
(1) The $1.4 million restructuring related charge represents $920 for other operating costs associated with closed plant facilities | |||||||||||||||||||||
and $535 for inventory markdowns. The $65 restructuring related charge represents other operating costs associated with | |||||||||||||||||||||
closed plant facilities. | |||||||||||||||||||||
(2) The $759 restructuring charge represents $612 for lease termination and other exit costs, $482 for write-downs of buildings | |||||||||||||||||||||
and equipment, $184 for asset movement costs, a credit of $160 for employee termination benefits, and a credit of $359 | |||||||||||||||||||||
for sales proceeds received on equipment with no carrying value. | |||||||||||||||||||||
(3) The $3.8 million represents restructuring related charges of $2.3 million for inventory markdowns, $744 for other operating | |||||||||||||||||||||
costs associated with closed plant facilities, and $665 for accelerated depreciation. The $58 restructuring related charge | |||||||||||||||||||||
represents other operating costs associated with closed plant facilities. | |||||||||||||||||||||
(4) The $1.7 million restructuring charge represents $990 for employee termination benefits, $913 for asset movement costs, | |||||||||||||||||||||
$395 for lease termination and other exit costs, $334 for write-downs of buildings and equipment, and a credit of $890 for | |||||||||||||||||||||
sales proceeds received on equipment with no carrying value. | |||||||||||||||||||||
(5) Of this total charge, $1.3 million and $1.0 million represent cash and non-cash charges, respectively. | |||||||||||||||||||||
(6) Of this total charge, $2.3 million and $3.3 million represent cash and non-cash charges, respectively. | |||||||||||||||||||||
(7) The percent of net sales column for income taxes is calculated as a % of income (loss) before income taxes. |