Exhibit 99(b)
Page 1 of 5
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||
CONSOLIDATED STATEMENTS OF NET INCOME | ||||||||||||||||||||
FOR THE THREE MONTHS ENDED AUGUST 3, 2008 AND JULY 29, 2007 | ||||||||||||||||||||
(Amounts in Thousands, Except for Per Share Data) | ||||||||||||||||||||
THREE MONTHS ENDED (UNAUDITED) | ||||||||||||||||||||
Amounts | Percent of Sales | |||||||||||||||||||
August 3, | July 29, | % Over | August 3, | July 29, | ||||||||||||||||
2008 | 2007 | (Under) | 2008 | 2007 | ||||||||||||||||
Net sales | $ | 59,321 | 65,230 | (9.1 | ) | % | 100.0 | % | 100.0 | % | ||||||||||
Cost of sales | 51,919 | 56,174 | (7.6 | ) | % | 87.5 | % | 86.1 | % | |||||||||||
Gross profit | 7,402 | 9,056 | (18.3 | ) | % | 12.5 | % | 13.9 | % | |||||||||||
Selling, general and | ||||||||||||||||||||
administrative expenses | 5,384 | 6,321 | (14.8 | ) | % | 9.1 | % | 9.7 | % | |||||||||||
Restructuring expense | 402 | 432 | (6.9 | ) | % | 0.7 | % | 0.7 | % | |||||||||||
Income from operations | 1,616 | 2,303 | (29.8 | ) | % | 2.7 | % | 3.5 | % | |||||||||||
Interest expense | 431 | 818 | (47.3 | ) | % | 0.7 | % | 1.3 | % | |||||||||||
Interest income | (34 | ) | (58 | ) | (41.4 | ) | % | (0.1 | ) | % | (0.1 | ) | % | |||||||
Other expense | 14 | 232 | (94.0 | ) | % | 0.0 | % | 0.4 | % | |||||||||||
Income before income taxes | 1,205 | 1,311 | (8.1 | ) | % | 2.0 | % | 2.0 | % | |||||||||||
Income taxes* | 424 | 460 | (7.8 | ) | % | 35.2 | % | 35.1 | % | |||||||||||
Net income | $ | 781 | 851 | (8.2 | ) | % | 1.3 | % | 1.3 | % | ||||||||||
Net income per share-basic | $ | 0.06 | 0.07 | (14.3 | ) | % | ||||||||||||||
Net income per share-diluted | $ | 0.06 | 0.07 | (14.3 | ) | % | ||||||||||||||
Net income per share, diluted, excluding | ||||||||||||||||||||
restructuring and related charges | $ | 0.08 | 0.12 | (33.3 | ) | % | ||||||||||||||
(see pro-forma statement on page 5) | ||||||||||||||||||||
Average shares outstanding-basic | 12,648 | 12,583 | 0.5 | % | ||||||||||||||||
Average shares outstanding-diluted | 12,736 | 12,728 | 0.1 | % | ||||||||||||||||
* Percent of sales column for income taxes is calculated as a % of income before income taxes. |
Page 2 of 5
CULP, INC. FINANCIAL INFORMATION RELEASE | |||||||||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||||||||
AUGUST 3, 2008, JULY 29, 2007 AND APRIL 27, 2008 | |||||||||||||||
Unaudited | |||||||||||||||
(Amounts in Thousands) | |||||||||||||||
Amounts | Increase | ||||||||||||||
August 3, | July 29, | (Decrease) | * April 27, | ||||||||||||
2008 | 2007 | Dollars | Percent | 2008 | |||||||||||
Current assets | |||||||||||||||
Cash and cash equivalents | $ | 6,352 | 9,017 | (2,665 | ) | (29.6 | ) | % | 4,914 | ||||||
Accounts receivable | 20,164 | 23,903 | (3,739 | ) | (15.6 | ) | % | 27,073 | |||||||
Inventories | 34,862 | 42,159 | (7,297 | ) | (17.3 | ) | % | 35,394 | |||||||
Deferred income taxes | 4,472 | 5,376 | (904 | ) | (16.8 | ) | % | 4,380 | |||||||
Assets held for sale | 5,610 | 1,906 | 3,704 | 194.3 | % | 5,610 | |||||||||
Income taxes receivable | 160 | - | 160 | 100.0 | % | 438 | |||||||||
Other current assets | 1,627 | 1,649 | (22 | ) | (1.3 | ) | % | 1,328 | |||||||
Total current assets | 73,247 | 84,010 | (10,763 | ) | (12.8 | ) | % | 79,137 | |||||||
Property, plant & equipment, net | 33,950 | 36,901 | (2,951 | ) | (8.0 | ) | % | 32,939 | |||||||
Goodwill | 4,114 | 4,114 | - | 0.0 | % | 4,114 | |||||||||
Deferred income taxes | 29,144 | 26,220 | 2,924 | 11.2 | % | 29,430 | |||||||||
Other assets | 2,335 | 2,831 | (496 | ) | (17.5 | ) | % | 2,409 | |||||||
Total assets | $ | 142,790 | 154,076 | (11,286 | ) | (7.3 | ) | % | 148,029 | ||||||
Current liabilities | |||||||||||||||
Current maturities of long-term debt | $ | 7,378 | 13,849 | (6,471 | ) | (46.7 | ) | % | 7,375 | ||||||
Current portion of obligation under a capital lease | 692 | - | 692 | 100.0 | % | - | |||||||||
Lines of credit | - | 2,641 | (2,641 | ) | (100.0 | ) | % | - | |||||||
Accounts payable - trade | 17,249 | 16,776 | 473 | 2.8 | % | 21,103 | |||||||||
Accounts payable - capital expenditures | 1,020 | 1,219 | (199 | ) | (16.3 | ) | % | 1,547 | |||||||
Accrued expenses | 5,534 | 8,484 | (2,950 | ) | (34.8 | ) | % | 8,300 | |||||||
Accrued restructuring | 1,495 | 3,047 | (1,552 | ) | (50.9 | ) | % | 1,432 | |||||||
Income taxes payable - current | 33 | 856 | (823 | ) | (96.1 | ) | % | 150 | |||||||
Total current liabilities | 33,401 | 46,872 | (13,471 | ) | (28.7 | ) | % | 39,907 | |||||||
Accounts payable - capital expenditures | 1,275 | - | 1,275 | 100.0 | % | 1,449 | |||||||||
Income taxes payable - long-term | 5,069 | 3,765 | 1,304 | 34.6 | % | 4,802 | |||||||||
Deferred income taxes | 1,363 | - | 1,363 | 100.0 | % | 1,464 | |||||||||
Obligation under capital lease | 458 | - | 458 | 100.0 | % | - | |||||||||
Long-term debt , less current maturities | 13,980 | 22,094 | (8,114 | ) | (36.7 | ) | % | 14,048 | |||||||
Total liabilities | 55,546 | 72,731 | (17,185 | ) | (23.6 | ) | % | 61,670 | |||||||
Shareholders' equity | 87,244 | 81,345 | 5,899 | 7.3 | % | 86,359 | |||||||||
Total liabilities and | |||||||||||||||
shareholders' equity | $ | 142,790 | 154,076 | (11,286 | ) | (7.3 | ) | % | 148,029 | ||||||
Shares outstanding | 12,648 | 12,635 | 13 | 0.1 | % | 12,648 | |||||||||
* Derived from audited financial statements. |
Page 3 of 5
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
FOR THE THREE MONTHS ENDED AUGUST 3, 2008 AND JULY 29, 2007 | ||||||||||||
Unaudited | ||||||||||||
(Amounts in Thousands) | ||||||||||||
THREE MONTHS ENDED | ||||||||||||
Amounts | ||||||||||||
August 3, | July 29, | |||||||||||
2008 | 2007 | |||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 781 | 851 | |||||||||
Adjustments to reconcile net income to net cash | ||||||||||||
provided by operating activities: | ||||||||||||
Depreciation | 1,258 | 1,447 | ||||||||||
Amortization of other assets | 79 | 90 | ||||||||||
Stock-based compensation | 98 | 140 | ||||||||||
Excess tax benefit related to stock options exercised | - | (21 | ) | |||||||||
Deferred income taxes | 90 | (518 | ) | |||||||||
Restructuring expenses, net of gain on sale of related assets | - | 160 | ||||||||||
Changes in assets and liabilities: | ||||||||||||
Accounts receivable | 6,909 | 5,387 | ||||||||||
Inventories | 532 | (1,529 | ) | |||||||||
Other current assets | (299 | ) | 175 | |||||||||
Other assets | (5 | ) | (327 | ) | ||||||||
Accounts payable - trade | (3,854 | ) | (5,251 | ) | ||||||||
Accrued expenses | (2,757 | ) | (186 | ) | ||||||||
Accrued restructuring | 63 | (235 | ) | |||||||||
Income taxes | 428 | 889 | ||||||||||
Net cash provided by operating activities | 3,323 | 1,072 | ||||||||||
Cash flows from investing activities: | ||||||||||||
Capital expenditures | (986 | ) | (1,113 | ) | ||||||||
Proceeds from the sale of buildings and equipment | - | 702 | ||||||||||
Net cash used in investing activities | (986 | ) | (411 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||
Payments on vendor-financed capital expenditures | (599 | ) | (70 | ) | ||||||||
Payments on long-term debt | (65 | ) | (2,169 | ) | ||||||||
Payments on capital lease obligation | (235 | ) | - | |||||||||
Proceeds from common stock issued | - | 405 | ||||||||||
Excess tax benefit related to stock options exercised | - | 21 | ||||||||||
Net cash used in financing activities | (899 | ) | (1,813 | ) | ||||||||
Increase (decrease) in cash and cash equivalents | 1,438 | (1,152 | ) | |||||||||
Cash and cash equivalents at beginning of period | 4,914 | 10,169 | ||||||||||
Cash and cash equivalents at end of period | $ | 6,352 | 9,017 | |||||||||
Free Cash Flow (1) | $ | 1,503 | 591 | |||||||||
(1) Free Cash Flow reconciliation is as follows: | ||||||||||||
FY 2009 | FY 2008 | |||||||||||
A) | Net cash provided by operating activities | $ | 3,323 | 1,072 | ||||||||
B) | Minus: Capital Expenditures | (986 | ) | (1,113 | ) | |||||||
C) Add: Proceeds from the sale of buildings and equipment | 0 | 702 | ||||||||||
D) | Minus: Payments on vendor-financed capital expenditures | (599 | ) | (70 | ) | |||||||
E) | Minus: Payments on capital lease obligation | (235 | ) | - | ||||||||
$ | 1,503 | 591 | ||||||||||
Page 4 of 5
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||
SALES, GROSS PROFIT AND OPERATING INCOME (LOSS) BY SEGMENT | ||||||||||||||||||||
FOR THE THREE MONTHS ENDED AUGUST 3, 2008 AND JULY 29, 2007 | ||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||
THREE MONTHS ENDED (UNAUDITED) | ||||||||||||||||||||
Amounts | Percent of Sales | |||||||||||||||||||
August 3, | July 29, | % Over | August 3, | July 29, | ||||||||||||||||
Net Sales by Segment | 2008 | 2007 | (Under) | 2008 | 2007 | |||||||||||||||
Mattress Fabrics | $ | 35,561 | 36,536 | (2.7 | ) | % | 59.9 | % | 56.0 | % | ||||||||||
Upholstery Fabrics | 23,760 | 28,694 | (17.2 | ) | % | 40.1 | % | 44.0 | % | |||||||||||
Net Sales | $ | 59,321 | 65,230 | (9.1 | ) | % | 100.0 | % | 100.0 | % | ||||||||||
Gross Profit by Segment | Gross Profit Margin | |||||||||||||||||||
Mattress Fabrics | $ | 6,344 | 5,805 | 9.3 | % | 17.8 | % | 15.9 | % | |||||||||||
Upholstery Fabrics | 1,070 | 3,768 | (71.6 | ) | % | 4.5 | % | 13.1 | % | |||||||||||
Subtotal | 7,414 | 9,573 | (22.6 | ) | % | 12.5 | % | 14.7 | % | |||||||||||
Restructuring related charges | (12 | ) | (1) |
| (517 | ) | (3) |
| (97.7 | ) | % | (0.0 | ) | % | (0.8 | ) | % | |||
Gross Profit | $ | 7,402 | 9,056 | (18.3 | ) | % | 12.5 | % | 13.9 | % | ||||||||||
Sales, General and Administrative expenses by Segment | Percent of Sales | |||||||||||||||||||
Mattress Fabrics | $ | 2,128 | 2,042 | 4.2 | % | 6.0 | % | 5.6 | % | |||||||||||
Upholstery Fabrics | 2,484 | 3,318 | (25.1 | ) | % | 10.5 | % | 11.6 | % | |||||||||||
Unallocated Corporate expenses | 770 | 935 | (17.6 | ) | % | 1.3 | % | 1.4 | % | |||||||||||
Subtotal | 5,382 | 6,295 | (14.5 | ) | % | 9.1 | % | 9.7 | % | |||||||||||
Restructuring related charges | 2 | (1) |
| 26 | (3) |
| (92.3 | ) | % | 0.0 | % | 0.0 | % | |||||||
Selling, General and Administrative expenses | $ | 5,384 | 6,321 | (14.8 | ) | % | 9.1 | % | 9.7 | % | ||||||||||
Operating income (loss) by Segment | Operating Income (Loss) Margin | |||||||||||||||||||
Mattress Fabrics | $ | 4,216 | 3,763 | 12.0 | % | 11.9 | % | 10.3 | % | |||||||||||
Upholstery Fabrics | (1,414 | ) | 450 | N.M. | (6.0 | ) | % | 1.6 | % | |||||||||||
Unallocated corporate expenses | (770 | ) | (935 | ) | 17.6 | % | (1.3 | ) | % | (1.4 | ) | % | ||||||||
Subtotal | 2,032 | 3,278 | (38.0 | ) | % | 3.4 | % | 5.0 | % | |||||||||||
Restructuring expense and restructuring related charges | (416 | ) | (2) |
| (975 | ) | (4) |
| (57.3 | ) | % | (0.7 | ) | % | (1.5 | ) | % | |||
Operating income | $ | 1,616 | 2,303 | (29.8 | ) | % | 2.7 | % | 3.5 | % | ||||||||||
Depreciation by Segment | ||||||||||||||||||||
Mattress Fabrics | $ | 758 | 897 | (15.5 | ) | % | ||||||||||||||
Upholstery Fabrics | 500 | 550 | (9.1 | ) | % | |||||||||||||||
Total Depreciation | 1,258 | 1,447 | (13.1 | ) | % |
(1) The $12 represents other operating costs associated with a closed plant facility. The $2 represents other operating costs associated with a closed plant facility. | |
(2) The $416 represents $414 for employee termination benefits, $14 for other operating costs associated with a closed plant facility, and a credit of $12 for lease termination and other exit costs. Of this total charge, $12, $2, and $402 are included in cost of sales, selling, general, and administrative expense, and restructuring expense, respectively. | |
(3) The $517 represents restructuring related charges of $460 for other operating costs associated with closed plant facilities and $57 for inventory markdowns. The $26 represents other operating costs associated with a closed plant facility. | |
(4) The $975 represents $486 for other operating costs associated with closed plant facilities, $367 for lease termination costs, $362 for write-downs of a building and equipment, $57 for inventory markdowns, $54 for asset movement costs, a credit of $149 for employee termination benefits, and a credit of $202 for sales proceeds received on equipment with no carrying value. Of this total charge, $517, $26 and $432 are included in cost of sales, selling, general, and administrative expense, and restructuring expense, respectively. |
Page 5 of 5
CULP, INC. | |||||||||||||||||||||||||||||||||||||||||||||
PROFORMA CONSOLIDATED STATEMENTS OF NET INCOME | |||||||||||||||||||||||||||||||||||||||||||||
FOR THE THREE MONTHS ENDED AUGUST 3, 2008 AND JULY 29, 2007 | |||||||||||||||||||||||||||||||||||||||||||||
(Amounts in Thousands, Except for Per Share Data) | |||||||||||||||||||||||||||||||||||||||||||||
THREE MONTHS ENDED (UNAUDITED) | |||||||||||||||||||||||||||||||||||||||||||||
As Reported | August 3, 2008 | As Reported | July 29, 2007 | Proforma | |||||||||||||||||||||||||||||||||||||||||
August 3, | % of | % of | Proforma Net | % of | July 29, | % of | % of | Proforma Net | % of | % Over | |||||||||||||||||||||||||||||||||||
2008 | Sales | Adjustments | Sales | of Adjustments | Sales | 2007 | Sales | Adjustments | Sales | of Adjustments | Sales | (Under) | |||||||||||||||||||||||||||||||||
Net sales | $ | 59,321 | 100.0 | % | - | 0.0 | % | 59,321 | 100.0 | % | 65,230 | 100.0 | % | - | 0.0 | % | 65,230 | 100.0 | % | -9.1 | % | ||||||||||||||||||||||||
Cost of sales | 51,919 | 87.5 | % | (12 | ) | 0.0 | % | (1 | ) | 51,907 | 87.5 | % | 56,174 | 86.1 | % | (517 | ) | -0.8 | % | (3 | ) | 55,657 | 85.3 | % | -6.7 | % | |||||||||||||||||||
Gross profit | 7,402 | 12.5 | % | (12 | ) | 0.0 | % | 7,414 | 12.5 | % | 9,056 | 13.9 | % | (517 | ) | -0.8 | % | 9,573 | 14.7 | % | -22.6 | % | |||||||||||||||||||||||
Selling, general and | |||||||||||||||||||||||||||||||||||||||||||||
administrative expenses | 5,384 | 9.1 | % | (2 | ) | 0.0 | % | (1 | ) | 5,382 | 9.1 | % | 6,321 | 9.7 | % | (26 | ) | 0.0 | % | (3 | ) | 6,295 | 9.7 | % | -14.5 | % | |||||||||||||||||||
Restructuring expense | 402 | 0.7 | % | (402 | ) | -0.7 | % | (2 | ) | - | 0.0 | % | 432 | 0.7 | % | (432 | ) | -0.7 | % | (4 | ) | - | 0.0 | % | 0.0 | % | |||||||||||||||||||
Income from operations | 1,616 | 2.7 | % | (416 | ) | -0.7 | % | 2,032 | 3.4 | % | 2,303 | 3.5 | % | (975 | ) | -1.5 | % | 3,278 | 5.0 | % | -38.0 | % | |||||||||||||||||||||||
Interest expense | 431 | 0.7 | % | - | 0.0 | % | 431 | 0.7 | % | 818 | 1.3 | % | - | 0.0 | % | 818 | 1.3 | % | -47.3 | % | |||||||||||||||||||||||||
Interest income | (34 | ) | -0.1 | % | - | 0.0 | % | (34 | ) | -0.1 | % | (58 | ) | -0.1 | % | - | 0.0 | % | (58 | ) | -0.1 | % | -41.4 | % | |||||||||||||||||||||
Other expense | 14 | 0.0 | % | - | 0.0 | % | 14 | 0.0 | % | 232 | 0.4 | % | - | 0.0 | % | 232 | 0.4 | % | -94.0 | % | |||||||||||||||||||||||||
Income before income taxes | 1,205 | 2.0 | % | (416 | ) | -0.7 | % | (5 | ) | 1,621 | 2.7 | % | 1,311 | 2.0 | % | (975 | ) | -1.5 | % | (6 | ) | 2,286 | 3.5 | % | -29.1 | % | |||||||||||||||||||
Income taxes (7) | 424 | 35.2 | % | (149 | ) | 35.8 | % | 573 | 35.3 | % | 460 | 35.1 | % | (351 | ) | 36.0 | % | 811 | 35.5 | % | -29.3 | % | |||||||||||||||||||||||
Net income | $ | 781 | 1.3 | % | (267 | ) | -0.5 | % | 1,048 | 1.8 | % | 851 | 1.3 | % | (624 | ) | -1.0 | % | 1,475 | 2.3 | % | -28.9 | % | ||||||||||||||||||||||
Net income per share-basic |
| $0.06 | ($0.02 | ) |
| $0.08 |
| $0.07 | ($0.05 | ) | $ | 0.12 | |||||||||||||||||||||||||||||||||
Net income per share-diluted |
| $0.06 | ($0.02 | ) |
| $0.08 |
| $0.07 | ($0.05 | ) | $ | 0.12 | |||||||||||||||||||||||||||||||||
Average shares outstanding-basic | 12,648 | 12,648 | 12,648 | 12,583 | 12,583 | 12,583 | |||||||||||||||||||||||||||||||||||||||
Average shares outstanding-diluted | 12,736 | 12,648 | 12,736 | 12,728 | 12,583 | 12,728 |
Notes: | |
(1) The $12 represents other operating costs associated with a closed plant facility. The $2 represents other operating costs associated with a closed plant facility. | |
(2) The $402 represents $414 for employee termination benefits and a credit of $12 for lease termination and other exit costs. | |
(3) The $517 represents restructuring related charges of $460 for other operating costs associated with closed plant facilities and $57 for inventory markdowns. The $26 represents other operating costs associated with closed plant facilities. | |
(4) The $432 represents $367 for lease termination costs, $362 for write-downs of a building and equipment, $54 for asset movement costs, and a credit of $149 for employee termination benefits, and a credit of $202 for sales proceeds received on equipment with no carrying value. |
|
(5) The $416 represents a cash charge. | |
(6) Of this total charge, $556 and $419 represent cash and non-cash charges, respectively. | |
(7) The percent of net sales column for income taxes is calculated as a % of income before income taxes. |