Exhibit 99(b)
Page 1 of 7
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||
CONSOLIDATED STATEMENTS OF NET INCOME (LOSS) | ||||||||||||||
FOR THE THREE MONTHS AND TWELVE MONTHS ENDED APRIL 27, 2008 AND APRIL 29, 2007 | ||||||||||||||
(UNAUDITED) | ||||||||||||||
(Amounts in Thousands, Except for Per Share Data) | ||||||||||||||
THREE MONTHS ENDED | ||||||||||||||
Amounts | Percent of Sales | |||||||||||||
April 27, | April 29, | % Over | April 27, | April 29, | ||||||||||
2008 | 2007 | (Under) | 2008 | 2007 | ||||||||||
Net sales | $ | 63,998 | $ | 73,196 | (12.6) | % | 100.0 | % | 100.0 | % | ||||
Cost of sales | 55,093 | 62,753 | (12.2) | % | 86.1 | % | 85.7 | % | ||||||
Gross profit | 8,905 | 10,443 | (14.7) | % | 13.9 | % | 14.3 | % | ||||||
Selling, general and | ||||||||||||||
administrative expenses | 6,698 | 7,790 | (14.0) | % | 10.5 | % | 10.6 | % | ||||||
Restructuring expense | 127 | 1,792 | (92.9) | % | 0.2 | % | 2.4 | % | ||||||
Income from operations | 2,080 | 861 | 141.6 | % | 3.3 | % | 1.2 | % | ||||||
Interest expense | 595 | 940 | (36.7) | % | 0.9 | % | 1.3 | % | ||||||
Interest income | (57) | (60) | (5.0) | % | (0.1) | % | (0.1) | % | ||||||
Other expense | 112 | 166 | (32.5) | % | 0.2 | % | 0.2 | % | ||||||
Income (loss) before income taxes | 1,430 | (185) | N.M. | 2.2 | % | (0.3) | % | |||||||
Income taxes* | (647) | (145) | 346.2 | % | (45.2) | % | 78.4 | % | ||||||
Net income (loss) | $ | 2,077 | $ | (40) | N.M. | 3.2 | % | (0.1) | % | |||||
Net income (loss) per share-basic | $0.16 | $0.00 | 100.0 | % | ||||||||||
Net income (loss) per share-diluted | $0.16 | $0.00 | 100.0 | % | ||||||||||
Net income per share, diluted, excluding restructuring | ||||||||||||||
and related charges (see proforma statement on page 6) | $0.18 | $0.14 | 28.6 | % | ||||||||||
Average shares outstanding-basic | 12,642 | 12,559 | 0.7 | % | ||||||||||
Average shares outstanding-diluted | 12,729 | 12,559 | 1.4 | % |
TWELVE MONTHS ENDED | ||||||||||||||
Amounts | Percent of Sales | |||||||||||||
April 27, | April 29, | % Over | April 27, | April 29, | ||||||||||
2008 | 2007 (1) | (Under) | 2008 | 2007 | ||||||||||
Net sales | $ | 254,046 | $ | 250,533 | 1.4 | % | 100.0 | % | 100.0 | % | ||||
Cost of sales | 220,887 | 219,328 | 0.7 | % | 86.9 | % | 87.5 | % | ||||||
Gross profit | 33,159 | 31,205 | 6.3 | % | 13.1 | % | 12.5 | % | ||||||
Selling, general and | ||||||||||||||
administrative expenses | 23,973 | 27,030 | (11.3) | % | 9.4 | % | 10.8 | % | ||||||
Restructuring expense | 886 | 3,534 | (74.9) | % | 0.3 | % | 1.4 | % | ||||||
Income from operations | 8,300 | 641 | N.M. | 3.3 | % | 0.3 | % | |||||||
Interest expense | 2,975 | 3,781 | (21.3) | % | 1.2 | % | 1.5 | % | ||||||
Interest income | (254) | (207) | 22.7 | % | (0.1) | % | (0.1) | % | ||||||
Other expense | 736 | 68 | 982.4 | % | 0.3 | % | 0.0 | % | ||||||
Income (loss) before income taxes | 4,843 | (3,001) | N.M. | 1.9 | % | (1.2) | % | |||||||
Income taxes* | (542) | (1,685) | (67.8) | % | (11.2) | % | 56.1 | % | ||||||
Net income (loss) | $ | 5,385 | $ | (1,316) | N.M. | 2.1 | % | (0.5) | % | |||||
Net income (loss) per share-basic | $0.43 | ($0.11) | N.M. | |||||||||||
Net income (loss) per share-diluted | $0.42 | ($0.11) | N.M. | |||||||||||
Net income per share, diluted, excluding restructuring | ||||||||||||||
and related charges (see proforma statement on page 7) | $0.57 | $0.32 | 78.1 | % | ||||||||||
Average shares outstanding-basic | 12,624 | 11,922 | 5.9 | % | ||||||||||
Average shares outstanding-diluted | 12,765 | 11,922 | 7.1 | % | ||||||||||
* Percent of sales column for income taxes is calculated as a % of income (loss) before income taxes. |
(1) Derived from audited financial statements. |
Page 2 of 7
CULP, INC. FINANCIAL INFORMATION RELEASE | |||||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||||
APRIL 27, 2008 AND APRIL 29, 2007 | |||||||||||
Unaudited | |||||||||||
(Amounts in Thousands) | |||||||||||
Amounts | Increase | ||||||||||
April 27, | * April 29, | (Decrease) | |||||||||
2008 | 2007 | Dollars | Percent | ||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 4,914 | $ | 10,169 | (5,255) | (51.7) | % | ||||
Accounts receivable | 27,073 | 29,290 | (2,217) | (7.6) | % | ||||||
Inventories | 35,394 | 40,630 | (5,236) | (12.9) | % | ||||||
Deferred income taxes | 4,380 | 5,376 | (996) | (18.5) | % | ||||||
Assets held for sale | 5,610 | 2,499 | 3,111 | 124.5 | % | ||||||
Income taxes receivable | 438 | - | 438 | 100.0 | % | ||||||
Other current assets | 1,328 | 1,824 | (496) | (27.2) | % | ||||||
Total current assets | 79,137 | 89,788 | (10,651) | (11.9) | % | ||||||
Property, plant and equipment, net | 32,939 | 37,773 | (4,834) | (12.8) | % | ||||||
Goodwill | 4,114 | 4,114 | - | 0.0 | % | ||||||
Deferred income taxes | 29,430 | 25,683 | 3,747 | 14.6 | % | ||||||
Other assets | 2,409 | 2,588 | (179) | (6.9) | % | ||||||
Total assets | $ | 148,029 | $ | 159,946 | (11,917) | (7.5) | % | ||||
Current liabilities | |||||||||||
Current maturities of long-term debt | $ | 7,375 | $ | 16,046 | (8,671) | (54.0) | % | ||||
Lines of credit | - | 2,593 | (2,593) | (100.0) | % | ||||||
Accounts payable - trade | 21,103 | 22,027 | (924) | (4.2) | % | ||||||
Accounts payable - capital expenditures | 1,547 | 1,558 | (11) | (0.7) | % | ||||||
Accrued expenses | 8,300 | 8,670 | (370) | (4.3) | % | ||||||
Accrued restructuring | 1,432 | 3,282 | (1,850) | (56.4) | % | ||||||
Income taxes payable - current (1) | 150 | 4,579 | (4,429) | (96.7) | % | ||||||
Total current liabilities | 39,907 | 58,755 | (18,848) | (32.1) | % | ||||||
Accounts payable - capital expenditures | 1,449 | - | 1,449 | 100.0 | % | ||||||
Income taxes payable - long-term (1) | 4,802 | - | 4,802 | 100.0 | % | ||||||
Deferred income taxes | 1,464 | - | 1,464 | 100.0 | % | ||||||
Long-term debt , less current maturities | 14,048 | 22,114 | (8,066) | (36.5) | % | ||||||
Total liabilities | 61,670 | 80,869 | (19,199) | (23.7) | % | ||||||
Shareholders' equity | 86,359 | 79,077 | 7,282 | 9.2 | % | ||||||
Total liabilities and | |||||||||||
shareholders' equity | $ | 148,029 | $ | 159,946 | (11,917) | (7.5) | % | ||||
Shares outstanding | 12,648 | 12,569 | 79 | 0.6 | % | ||||||
* Derived from audited financial statements | |||||||||||
(1) Amounts as of April 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 TWELVE MONTHS ENDED APRIL 27, 2008 AND APRIL 29, 2007 | ||||||||||
Unaudited | ||||||||||
(Amounts in Thousands) | ||||||||||
TWELVE MONTHS ENDED | ||||||||||
Amounts | ||||||||||
April 27, | * April 29, | |||||||||
2008 | 2007 | |||||||||
Cash flows from operating activities: | ||||||||||
Net income (loss) | $ | 5,385 | $ | (1,316) | ||||||
Adjustments to reconcile net income (loss) to net cash | ||||||||||
provided by operating activities: | ||||||||||
Depreciation | 5,548 | 7,849 | ||||||||
Amortization of other assets | 373 | 150 | ||||||||
Stock-based compensation | 618 | 525 | ||||||||
Excess tax benefit related to stock options exercised | (17) | - | ||||||||
Deferred income taxes | (919) | (3,763) | ||||||||
Loss on impairment of equipment | 289 | - | ||||||||
Restructuring expenses, net of gain on sale of related assets | 140 | 536 | ||||||||
Changes in assets and liabilities, net of effects of acquisition of assets: | ||||||||||
Accounts receivable | 2,242 | (241) | ||||||||
Inventories | 5,236 | 817 | ||||||||
Other current assets | 496 | 1,673 | ||||||||
Other assets | (188) | (42) | ||||||||
Accounts payable-trade | (924) | 3,133 | ||||||||
Accrued expenses | (445) | 825 | ||||||||
Accrued restructuring | (1,926) | (772) | ||||||||
Income taxes | 456 | 2,091 | ||||||||
Net cash provided by operating activities | 16,364 | 11,465 | ||||||||
Cash flows from investing activities: | ||||||||||
Capital expenditures | (4,846) | (3,762) | ||||||||
Acquisition of assets | - | (2,500) | ||||||||
Proceeds from the sale of buildings and equipment | 2,723 | 3,315 | ||||||||
Net cash used in investing activities | (2,123) | (2,947) | ||||||||
Cash flows from financing activities: | ||||||||||
Proceeds from lines of credit | 1,339 | 2,593 | ||||||||
Payments on lines of credit | (3,932) | - | ||||||||
Payments on vendor-financed capital expenditures | (642) | (1,356) | ||||||||
Payments on long-term debt | (16,737) | (12,062) | ||||||||
Proceeds from the issuance of long-term debt | - | 2,500 | ||||||||
Proceeds from common stock issued | 459 | 262 | ||||||||
Excess tax benefit related to stock options exercised | 17 | - | ||||||||
Net cash used in financing activities | (19,496) | (8,063) | ||||||||
(Decrease) increase in cash and cash equivalents | (5,255) | 455 | ||||||||
Cash and cash equivalents at beginning of year | 10,169 | 9,714 | ||||||||
Cash and cash equivalents at end of year | $ | 4,914 | $ | 10,169 | ||||||
Free Cash Flow (1) | $ | 13,616 | $ | 9,662 | ||||||
(1) Free Cash Flow reconciliation is as follows: | ||||||||||
FY 2008 | FY 2007 | |||||||||
A) | Net cash provided by operating activities | $ | 16,364 | $ | 11,465 | |||||
B) | Minus: Capital Expenditures | (4,846) | (3,762) | |||||||
C) | Add: Proceeds from the sale of buildings and equipment | 2,723 | 3,315 | |||||||
D) | Minus: Payments on vendor-financed capital expenditures | (642) | (1,356) | |||||||
E) | Add: Excess tax benefit related to stock options exercised | 17 | - | |||||||
$ | 13,616 | $ | 9,662 | |||||||
* Derived from audited financial statements. |
Page 4 of 7
CULP, INC. FINANCIAL INFORMATION RELEASE | |||||||||||||
SALES, GROSS PROFIT AND OPERATING INCOME (LOSS) BY SEGMENT | |||||||||||||
FOR THE THREE MONTHS ENDED APRIL 27, 2008 AND APRIL 29, 2007 | |||||||||||||
(Amounts in thousands) | |||||||||||||
THREE MONTHS ENDED (UNAUDITED) | |||||||||||||
Amounts | Percent of Total Sales | ||||||||||||
April 27, | April 29, | % Over | April 27, | April 29, | |||||||||
Net Sales by Segment | 2008 | 2007 | (Under) | 2008 | 2007 | ||||||||
Mattress Fabrics | $ | 34,638 | 38,062 | (9.0) | % | 54.1 | % | 52.0 | % | ||||
Upholstery Fabrics | 29,360 | 35,134 | (16.4) | % | 45.9 | % | 48.0 | % | |||||
Net Sales | $ | 63,998 | 73,196 | (12.6) | % | 100.0 | % | 100.0 | % | ||||
Gross Profit by Segment | Gross Profit Margin | ||||||||||||
Mattress Fabrics | $ | 6,533 | 6,730 | (2.9) | % | 18.9 | % | 17.7 | % | ||||
Upholstery Fabrics | 2,907 | 4,707 | (38.2) | % | 9.9 | % | 13.4 | % | |||||
Subtotal | 9,440 | 11,437 | (17.5) | % | 14.8 | % | 15.6 | % | |||||
Loss on impairment of equipment | (33) | (1) | - | (100.0) | % | (0.1) | % | 0.0 | % | ||||
Restructuring related charges | (502) | (2) | (994) | (4) | (49.5) | % | (0.8) | % | (1.4) | % | |||
Gross Profit | $ | 8,905 | 10,443 | (14.7) | % | 13.9 | % | 14.3 | % | ||||
Selling, General and Administrative expenses by Segment | Percent of Sales | ||||||||||||
Mattress Fabrics | $ | 2,679 | 2,813 | (4.8) | % | 7.7 | % | 7.4 | % | ||||
Upholstery Fabrics | 2,773 | 3,845 | (27.9) | % | 9.4 | % | 10.9 | % | |||||
Unallocated Corporate expenses | 1,242 | 1,132 | 9.7 | % | 1.9 | % | 1.5 | % | |||||
$ | 6,694 | 7,790 | (14.1) | % | 10.5 | % | 10.6 | % | |||||
Restructuring related charges | 4 | (2) | - | 100.0 | % | 0.0 | % | 0.0 | % | ||||
Selling, General and Administrative expenses | $ | 6,698 | 7,790 | (14.0) | % | 10.5 | % | 10.6 | % | ||||
Operating Income (loss) by Segment | Operating Income (Loss) Margin | ||||||||||||
Mattress Fabrics | $ | 3,854 | 3,916 | (1.6) | % | 11.1 | % | 10.3 | % | ||||
Upholstery Fabrics | 134 | 863 | (84.5) | % | 0.5 | % | 2.5 | % | |||||
Unallocated corporate expenses | (1,242) | (1,132) | (9.7) | % | (1.9) | % | (1.5) | % | |||||
Subtotal | 2,746 | 3,647 | (24.7) | % | 4.3 | % | 5.0 | % | |||||
Loss on impairment of equipment | (33) | (1) | - | (100.0) | % | (0.1) | % | 0.0 | % | ||||
Restructuring expense and restructuring related charges | (633) | (3) | (2,786) | (5) | (77.3) | % | (1.0) | % | (3.8) | % | |||
Operating income | $ | 2,080 | 861 | 141.6 | % | 3.3 | % | 1.2 | % | ||||
Depreciation by Segment | |||||||||||||
Mattress Fabrics | $ | 776 | 908 | (14.5) | % | ||||||||
Upholstery Fabrics | 507 | 704 | (28.0) | % | |||||||||
Subtotal | 1,283 | 1,612 | (20.4) | % | |||||||||
Accelerated Depreciation | - | 584 | (100.0) | % | |||||||||
Total Depreciation | $ | 1,283 | 2,196 | (41.6) | % | ||||||||
Notes: | |||||||||||||
(1) The $33 represents an impairment loss on older and existing equipment that is being replaced | |||||||||||||
by newer and more efficient equipment. This impairment loss pertains to the mattress fabrics | |||||||||||||
segment. | |||||||||||||
(2) The $502 restructuring related charge represents $469 for inventory markdowns and $33 | |||||||||||||
for other operating costs with closed plant facilities. The $4 restructuring related charge | |||||||||||||
represents other operating costs associated with closed plant facilities. | |||||||||||||
(3) The $633 restructuring and related charge represents $469 for inventory markdowns, | |||||||||||||
$183 for employee termination benefits, $37 for other operating costs associated with | |||||||||||||
closed plant facilities, $21 for a write-down of equipment, $5 for asset movement costs, | |||||||||||||
a credit of $3 for sales proceeds received on equipment with no carring value, and a | |||||||||||||
credit of $79 for lease termination and other exit costs. Of this total charge, $502 was | |||||||||||||
recorded in cost of sales, $4 was recorded in selling, general, and administrative | |||||||||||||
expenses, and $127 was recorded in restructuring expense. The total $633 restructuring | |||||||||||||
and related charge pertains to the upholstery fabrics segment. | |||||||||||||
(4) The $994 represents restructuring related charges of $582 for accelerated | |||||||||||||
depreciation and $412 for operating costs associated with closed plant facilities. | |||||||||||||
(5) The $2.8 million represents restructuring and related charges of $1.1 million for | |||||||||||||
write-downs of buildings and equipment, $582 for accelerated depreciation, $479 for | |||||||||||||
asset movement costs, $412 for other operating costs associated with closed plant | |||||||||||||
facilities, $312 for lease termination and other exit costs, a credit of $40 for sales | |||||||||||||
proceeds received on equipment with no carrying value, and a credit of $82 for employee | |||||||||||||
termination benefits. Of this total charge, $1.8 million and $994 are included in restructuring | |||||||||||||
expense and cost of sales, respectively. The total $2.8 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 TWELVE MONTHS ENDED APRIL 27, 2008 AND APRIL 29, 2007 | |||||||||||||
(Amounts in thousands) | |||||||||||||
TWELVE MONTHS ENDED (UNAUDITED) | |||||||||||||
Amounts | Percent of Total Sales | ||||||||||||
April 27, | * April 29, | % Over | April 27, | April 29, | |||||||||
Net Sales by Segment | 2008 | 2007 | (Under) | 2008 | 2007 | ||||||||
Mattress Fabrics | $ | 138,064 | 107,797 | 28.1 | % | 54.3 | % | 43.0 | % | ||||
Upholstery Fabrics | 115,982 | 142,736 | (18.7) | % | 45.7 | % | 57.0 | % | |||||
Net Sales | $ | 254,046 | 250,533 | 1.4 | % | 100.0 | % | 100.0 | % | ||||
Gross Profit by Segment | Gross Profit Margin | ||||||||||||
Mattress Fabrics | $ | 22,576 | 18,610 | 21.3 | % | 16.4 | % | 17.3 | % | ||||
Upholstery Fabrics | 12,829 | 17,397 | (26.3) | % | 11.1 | % | 12.2 | % | |||||
Subtotal | 35,405 | 36,007 | (1.7) | % | 13.9 | % | 14.4 | % | |||||
Loss on impairment of equipment | (289) | (1) | - | (100.0) | % | (0.1) | % | 0.0 | % | ||||
Restructuring related charges | (1,957) | (2) | (4,802) | (4) | (59.2) | % | (0.8) | % | (1.9) | % | |||
Gross Profit | $ | 33,159 | 31,205 | 6.3 | % | 13.1 | % | 12.5 | % | ||||
Selling, General and Administrative expenses by Segment | Percent of Sales | ||||||||||||
Mattress Fabrics | $ | 8,457 | 7,856 | 7.7 | % | 6.1 | % | 7.3 | % | ||||
Upholstery Fabrics | 11,650 | 15,065 | (22.7) | % | 10.0 | % | 10.6 | % | |||||
Unallocated Corporate expenses | 3,797 | 4,051 | (6.3) | % | 1.5 | % | 1.6 | % | |||||
Subtotal | 23,904 | 26,972 | (11.4) | % | 9.4 | % | 10.8 | % | |||||
Restructuring related charges | 69 | (2) | 58 | (4) | 19.0 | % | 0.0 | % | 0.0 | % | |||
Selling, General and Administrative expenses | $ | 23,973 | 27,030 | (11.3) | % | 9.4 | % | 10.8 | % | ||||
Operating Income (loss) by Segment | Operating Income (Loss) Margin | ||||||||||||
Mattress Fabrics | $ | 14,118 | 10,754 | 31.3 | % | 10.2 | % | 10.0 | % | ||||
Upholstery Fabrics | 1,180 | 2,332 | (49.4) | % | 1.0 | % | 1.6 | % | |||||
Unallocated corporate expenses | (3,797) | (4,051) | (6.3) | % | (1.5) | % | (1.6) | % | |||||
Subtotal | 11,501 | 9,035 | 27.3 | % | 4.5 | % | 3.6 | % | |||||
Loss on impairment of equipment | (289) | (1) | - | (100.0) | % | (0.1) | % | 0.0 | % | ||||
Restructuring expense and restructuring related charges | (2,912) | (3) | (8,394) | (5) | (65.3) | % | (1.1) | % | (3.4) | % | |||
Operating income | $ | 8,300 | 641 | N.M. | 3.3 | % | 0.3 | % | |||||
Depreciation by Segment | |||||||||||||
Mattress Fabrics | $ | 3,443 | 3,679 | (6.4) | % | ||||||||
Upholstery Fabrics | 2,105 | 2,923 | (28.0) | % | |||||||||
Subtotal | 5,548 | 6,602 | (16.0) | % | |||||||||
Accelerated Depreciation | - | 1,247 | (100.0) | % | |||||||||
Total Depreciation | $ | 5,548 | 7,849 | (29.3) | % | ||||||||
Notes: | |||||||||||||
(1) The $289 represents impairment losses on older and existing equipment that is being replaced | |||||||||||||
by newer and more efficient equipment. This impairment loss pertains to the mattress fabrics segment. | |||||||||||||
(2) The $1.9 million restructuring related charge represents $1.0 million for inventory markdowns and $954 | |||||||||||||
for other operating costs associated with closed plant facilities. The $69 restructuring related charge | |||||||||||||
represents other operating costs associated with closed plant facilities. | |||||||||||||
(3) The $2.9 million represents $1.0 million for inventory markdowns, $1.0 million for other operating costs | |||||||||||||
associated with closed plant facilities, $533 for lease termination and other exit costs, $503 for write-downs | |||||||||||||
of buildings and equipment, $189 for asset movement costs, $23 for employee termination benefits, and | |||||||||||||
a credit of $362 for sales proceeds received on equipment with no carrying value. Of this total charge, $1.9 | |||||||||||||
million was recorded in cost of sales, $69 was recorded in selling, general, and administrative expenses, and | |||||||||||||
$886 was recorded in restrucuturing expense. The total $2.9 restructuring and related charge pertains to | |||||||||||||
the upholstery fabrics segment. | |||||||||||||
(4) The $4.8 million represents restructuring related charges of $2.4 million for inventory markdowns, $1.2 | |||||||||||||
million for accelerated depreciation, and $1.2 million for other operating costs associated with closed | |||||||||||||
plant facilities. The $58 represents other operating costs associated with closed plant facilities. | |||||||||||||
(5) The $8.4 million represents restructuring and related charges of $2.4 million for inventory markdowns, $1.5 | |||||||||||||
million for write-downs and buildings and equipment, $1.4 million for asset movement costs, $1.2 million for | |||||||||||||
accelerated depreciation, $1.2 million for other operating costs associated with the closing of plant facilities, | |||||||||||||
$909 for employee termination benefits, $706 for lease termination and other exit costs, and a credit of $930 | |||||||||||||
for sales proceeds received on equipment with no carrying value. Of this total charge, $4.8 million was recorded | |||||||||||||
in cost of sales, $58 was recorded in selling, general, and administrative expenses, and $3.5 million was recorded | |||||||||||||
in restructuring expense. The total $8.4 restructuring and related charge pertains to the upholstery fabrics segment. | |||||||||||||
* Derived from audited financial statements. |
Page 6 of 7
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||||
PROFORMA CONSOLIDATED STATEMENTS OF NET INCOME (LOSS) | ||||||||||||||||||||||
FOR THE THREE MONTHS ENDED APRIL 27, 2008 AND APRIL 29, 2007 | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
(Amounts in Thousands, Except for Per Share Data) | ||||||||||||||||||||||
THREE MONTHS ENDED | ||||||||||||||||||||||
As Reported April 27, 2008 | April 27, 2008 Proforma Net of Adjustments | As Reported April 29, 2007 | April 29, 2007 Proforma Net of Adjustments | Proforma % Over (Under) | ||||||||||||||||||
% of Sales | % of Sales | % of Sales | % of Sales | % of Sales | % of Sales | |||||||||||||||||
Adjustments | Adjustments | |||||||||||||||||||||
Net sales | $ | 63,998 | 100.0% | - | 63,998 | 100.0% | 73,196 | 100.0% | - | 73,196 | 100.0% | -12.6% | ||||||||||
Cost of sales | 55,093 | 86.1% | (502) | -0.8% | (1) | 54,591 | 85.3% | 62,753 | 85.7% | (994) | -1.4% | (3) | 61,759 | 84.4% | -11.6% | |||||||
Gross profit | 8,905 | 13.9% | (502) | -0.8% | 9,407 | 14.7% | 10,443 | 14.3% | (994) | -1.4% | 11,437 | 15.6% | -17.7% | |||||||||
Selling, general and | ||||||||||||||||||||||
administrative expenses | 6,698 | 10.5% | (4) | 0.0% | (1) | 6,694 | 10.5% | 7,790 | 10.6% | - | 0.0% | 7,790 | 10.6% | -14.1% | ||||||||
Restructuring expense | 127 | 0.2% | (127) | -0.2% | (2) | - | 0.0% | 1,792 | 2.4% | (1,792) | -2.4% | (4) | - | 0.0% | 0.0% | |||||||
Income from operations | 2,080 | 3.3% | (633) | -1.0% | 2,713 | 4.2% | 861 | 1.2% | (2,786) | -3.8% | 3,647 | 5.0% | -25.6% | |||||||||
Interest expense | 595 | 0.9% | - | 0.0% | 595 | 0.9% | 940 | 1.3% | - | 0.0% | 940 | 1.3% | -36.7% | |||||||||
Interest income | (57) | -0.1% | - | 0.0% | (57) | -0.1% | (60) | -0.1% | - | 0.0% | (60) | -0.1% | -5.0% | |||||||||
Other expense | 112 | 0.2% | - | 0.0% | 112 | 0.2% | 166 | 0.2% | - | 0.0% | 166 | 0.2% | -32.5% | |||||||||
Income (loss) before income taxes | 1,430 | 2.2% | (633) | -1.0% | (5) | 2,063 | 3.2% | (185) | -0.3% | (2,786) | -3.8% | (6) | 2,601 | 3.6% | -20.7% | |||||||
Income taxes (7) | (647) | -45.2% | (447) | 70.6% | (200) | -9.7% | (145) | 78.4% | (965) | 34.6% | 820 | 31.5% | 124.4% | |||||||||
Net income (loss) | $ | 2,077 | 3.2% | (186) | -0.3% | 2,263 | 3.5% | (40) | -0.1% | (1,821) | -2.5% | 1,781 | 2.4% | 27.1% | ||||||||
Net income (loss) per share-basic | $0.16 | ($0.01) | $0.18 | $0.00 | ($0.14) | $0.14 | ||||||||||||||||
Net income (loss) per share-diluted | $0.16 | ($0.01) | $0.18 | $0.00 | ($0.14) | $0.14 | ||||||||||||||||
Average shares outstanding-basic | 12,642 | 12,642 | 12,642 | 12,559 | 12,559 | 12,559 | ||||||||||||||||
Average shares outstanding-diluted | 12,729 | 12,642 | 12,729 | 12,559 | 12,559 | 12,566 | ||||||||||||||||
Notes: | ||||||||||||||||||||||
(1) The $502 restructuring related charge represents $469 for inventory markdowns and $33 for other operating | ||||||||||||||||||||||
costs associated with closed plant facilities. The $4 restructuring related charge represents other operating | ||||||||||||||||||||||
costs associated with closed plant facilties. | ||||||||||||||||||||||
(2) The $127 restructuring charge represents $183 for employee termination benefits, $21 for a write-down of | ||||||||||||||||||||||
equipment, $5 for asset movement costs, a credit of $3 for sales proceeds received on equipment with no | ||||||||||||||||||||||
carrying value, and a credit of $79 for lease termination and other exit costs. | ||||||||||||||||||||||
(3) The $994 represents restructuring related charges of $582 for accelerated depreciation and $412 for other | ||||||||||||||||||||||
operating costs associated with closed plant facilities. | ||||||||||||||||||||||
(4) The $1.8 million restructuring charge represents $1.1 million for write-downs of buildings and equipment, $479 | ||||||||||||||||||||||
for asset movement costs, $312 for lease termination and other exit costs, a credit of $40 for sales | ||||||||||||||||||||||
proceeds received on equipment with no carrying value, and a credit of $82 for employee termination benefits. | ||||||||||||||||||||||
(5) Of this total charge, $143 and $490 represent cash and non-cash charges, respectively. | ||||||||||||||||||||||
(6) Of this total charge, $1.1 million and $1.7 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 TWELVE MONTHS ENDED APRIL 27, 2008 AND APRIL 29, 2007 | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
(Amounts in Thousands, Except for Per Share Data) | ||||||||||||||||||||||
TWELVE MONTHS ENDED | ||||||||||||||||||||||
As Reported April 27, 2008 | April 27, 2008 Proforma Net of Adjustments | As Reported April 29, 2007 | April 29, 2007 Proforma Net of Adjustments | Proforma % Over (Under) | ||||||||||||||||||
% of Sales | % of Sales | % of Sales | % of Sales | % of Sales | % of Sales | |||||||||||||||||
Adjustments | Adjustments | |||||||||||||||||||||
Net sales | $ | 254,046 | 100.0% | - | 254,046 | 100.0% | 250,533 | 100.0% | - | 250,533 | 100.0% | 1.4% | ||||||||||
Cost of sales | 220,887 | 86.9% | (1,957) | -0.8% | (1) | 218,930 | 86.2% | 219,328 | 87.5% | (4,802) | -1.9% | (3) | 214,526 | 85.6% | 2.1% | |||||||
Gross profit | 33,159 | 13.1% | (1,957) | -0.8% | 35,116 | 13.8% | 31,205 | 12.5% | (4,802) | -1.9% | 36,007 | 14.4% | -2.5% | |||||||||
Selling, general and | ||||||||||||||||||||||
administrative expenses | 23,973 | 9.4% | (69) | 0.0% | (1) | 23,904 | 9.4% | 27,030 | 10.8% | (58) | 0.0% | (3) | 26,972 | 10.8% | -11.4% | |||||||
Restructuring expense | 886 | 0.3% | (886) | -0.3% | (2) | - | 0.0% | 3,534 | 1.4% | (3,534) | -1.4% | (4) | - | 0.0% | 0.0% | |||||||
Income from operations | 8,300 | 3.3% | (2,912) | -1.1% | 11,212 | 4.4% | 641 | 0.3% | (8,394) | -3.4% | 9,035 | 3.6% | 24.1% | |||||||||
Interest expense | 2,975 | 1.2% | - | 0.0% | 2,975 | 1.2% | 3,781 | 1.5% | - | 0.0% | 3,781 | 1.5% | -21.3% | |||||||||
Interest income | (254) | -0.1% | - | 0.0% | (254) | -0.1% | (207) | -0.1% | - | 0.0% | (207) | -0.1% | 22.7% | |||||||||
Other expense | 736 | 0.3% | - | 0.0% | 736 | 0.3% | 68 | 0.0% | - | 0.0% | 68 | 0.0% | 982.4% | |||||||||
Income (loss) before income taxes | 4,843 | 1.9% | (2,912) | -1.1% | (5) | 7,755 | 3.1% | (3,001) | -1.2% | (8,394) | -3.4% | (6) | 5,393 | 2.2% | 43.8% | |||||||
Income taxes (7) | (542) | -11.2% | (1,047) | 36.0% | 505 | 6.5% | (1,685) | 56.1% | (3,234) | 38.5% | 1,549 | 28.7% | -67.4% | |||||||||
Net income (loss) | $ | 5,385 | 2.1% | (1,865) | -0.7% | 7,250 | 2.9% | (1,316) | -0.5% | (5,160) | -2.1% | 3,844 | 1.5% | 88.6% | ||||||||
Net income (loss) per share-basic | $0.43 | ($0.15) | $0.57 | ($0.11) | ($0.43) | $0.32 | ||||||||||||||||
Net income (loss) per share-diluted | $0.42 | ($0.15) | $0.57 | ($0.11) | ($0.43) | $0.32 | ||||||||||||||||
Average shares outstanding-basic | 12,624 | 12,624 | 12,624 | 11,922 | 11,922 | 11,922 | ||||||||||||||||
Average shares outstanding-diluted | 12,765 | 12,624 | 12,765 | 11,922 | 11,922 | 11,926 | ||||||||||||||||
Notes: | ||||||||||||||||||||||
(1) The $1.9 million restructuring related charge represents $1.0 million for inventory markdowns and $954 for other | ||||||||||||||||||||||
operating costs associated with closed plant facilities. The $69 restructuring related charge represents other | ||||||||||||||||||||||
operating costs associated with closed plant facilities. | ||||||||||||||||||||||
(2) The $886 restructuring charge represents $533 for lease termination and other exit costs, $503 for write-downs | ||||||||||||||||||||||
of buildings and equipment, $189 for asset movement costs, $23 for employee termination benefits, and a | ||||||||||||||||||||||
credit of $362 for sales proceeds received on equipment with no carrying value. | ||||||||||||||||||||||
(3) The $4.8 million represents restructuring related charges of $2.4 million for inventory markdowns, $1.2 million | ||||||||||||||||||||||
for accelerated depreciation, and $1.2 million for other operating costs associated with closed plant facilities. | ||||||||||||||||||||||
The $58 represents other operating costs associated with closed plant facilities. | ||||||||||||||||||||||
(4) The $3.5 million represents restructuring charges of $1.5 million for write-downs of buildings and equipment, | ||||||||||||||||||||||
$1.4 million for asset movement costs, $909 for employee termination benefits, $706 for lease termination | ||||||||||||||||||||||
and other exit costs, and a credit of $930 for sales proceeds received on equipment with no carrying value. | ||||||||||||||||||||||
(5) Of this total charge, $1.4 million and $1.5 million represent cash and non-cash charges, respectively. | ||||||||||||||||||||||
(6) Of this total charge, $3.3 million and $5.1 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. |