EXHIBIT 99(b)
Page 1 of 5
CULP, INC. FINANCIAL INFORMATION RELEASE | |||||||||||||||||||
CONSOLIDATED STATEMENTS OF NET INCOME | |||||||||||||||||||
FOR THE THREE MONTHS ENDED AUGUST 2, 2009 AND AUGUST 3, 2008 | |||||||||||||||||||
(Amounts in Thousands, Except for Per Share Data) | |||||||||||||||||||
THREE MONTHS ENDED (UNAUDITED) | |||||||||||||||||||
Amounts | Percent of Sales | ||||||||||||||||||
August 2, | August 3, | % Over | August 2, | August 3, | |||||||||||||||
2009 | 2008 | (Under) | 2009 | 2008 | |||||||||||||||
Net sales | $ | 45,478 | 59,321 | (23.3 | ) | % | 100.0 | % | 100.0 | % | |||||||||
Cost of sales | 37,891 | 51,919 | (27.0 | ) | % | 83.3 | % | 87.5 | % | ||||||||||
Gross profit | 7,587 | 7,402 | 2.5 | % | 16.7 | % | 12.5 | % | |||||||||||
Selling, general and | |||||||||||||||||||
administrative expenses | 4,895 | 5,384 | (9.1 | ) | % | 10.8 | % | 9.1 | % | ||||||||||
Restructuring (credit) expense | (158 | ) | 402 | N.M. | (0.3 | ) | % | 0.7 | % | ||||||||||
Income from operations | 2,850 | 1,616 | 76.4 | % | 6.3 | % | 2.7 | % | |||||||||||
Interest expense | 357 | 431 | (17.2 | ) | % | 0.8 | % | 0.7 | % | ||||||||||
Interest income | (12 | ) | (34 | ) | (64.7 | ) | % | (0.0 | ) | % | (0.1 | ) | % | ||||||
Other expense | 514 | 14 | N.M. | 1.1 | % | 0.0 | % | ||||||||||||
Income before income taxes | 1,991 | 1,205 | 65.2 | % | 4.4 | % | 2.0 | % | |||||||||||
Income taxes* | 115 | 424 | (72.9 | ) | % | 5.8 | % | 35.2 | % | ||||||||||
Net income | $ | 1,876 | 781 | 140.2 | % | 4.1 | % | 1.3 | % | ||||||||||
Net income per share-basic | $ | 0.15 | 0.06 | 150.0 | % | ||||||||||||||
Net income per share-diluted | $ | 0.15 | 0.06 | 150.0 | % | ||||||||||||||
Average shares outstanding-basic | 12,653 | 12,648 | 0.0 | % | |||||||||||||||
Average shares outstanding-diluted | 12,751 | 12,736 | 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 2, 2009, AUGUST 3, 2008 AND MAY 3, 2009 | |||||||||||||||
Unaudited | |||||||||||||||
(Amounts in Thousands) | |||||||||||||||
Amounts | Increase | ||||||||||||||
August 2, | August 3, | (Decrease) | * May 3, | ||||||||||||
2009 | 2008 | Dollars | Percent | 2009 | |||||||||||
Current assets | |||||||||||||||
Cash and cash equivalents | $ | 15,481 | 6,352 | 9,129 | 143.7 | % | 11,797 | ||||||||
Accounts receivable | 13,837 | 20,164 | (6,327 | ) | (31.4 | ) | % | 18,116 | |||||||
Inventories | 21,717 | 34,862 | (13,145 | ) | (37.7 | ) | % | 23,978 | |||||||
Deferred income taxes | 52 | 4,472 | (4,420 | ) | (98.8 | ) | % | 54 | |||||||
Assets held for sale | 1,037 | 5,610 | (4,573 | ) | (81.5 | ) | % | 1,209 | |||||||
Income taxes receivable | 396 | 160 | 236 | 147.5 | % | 210 | |||||||||
Other current assets | 1,531 | 1,627 | (96 | ) | (5.9 | ) | % | 1,264 | |||||||
Total current assets | 54,051 | 73,247 | (19,196 | ) | (26.2 | ) | % | 56,628 | |||||||
Property, plant & equipment, net | 24,013 | 33,950 | (9,937 | ) | (29.3 | ) | % | 24,253 | |||||||
Goodwill | 11,462 | 4,114 | 7,348 | 178.6 | % | 11,593 | |||||||||
Deferred income taxes | - | 29,144 | (29,144 | ) | (100.0 | ) | % | - | |||||||
Other assets | 2,885 | 2,335 | 550 | 23.6 | % | 2,820 | |||||||||
Total assets | $ | 92,411 | 142,790 | (50,379 | ) | (35.3 | ) | % | 95,294 | ||||||
Current liabilities | |||||||||||||||
Current maturities of long-term debt | $ | 4,817 | 7,378 | (2,561 | ) | (34.7 | ) | % | 4,764 | ||||||
Current portion of obligation under a capital lease | 452 | 692 | (240 | ) | (34.7 | ) | % | 626 | |||||||
Accounts payable - trade | 13,592 | 17,249 | (3,657 | ) | (21.2 | ) | % | 17,030 | |||||||
Accounts payable - capital expenditures | 725 | 1,020 | (295 | ) | (28.9 | ) | % | 923 | |||||||
Accrued expenses | 5,215 | 5,534 | (319 | ) | (5.8 | ) | % | 6,504 | |||||||
Accrued restructuring | 584 | 1,495 | (911 | ) | (60.9 | ) | % | 853 | |||||||
Income taxes payable - current | 72 | 33 | 39 | 118.2 | % | 83 | |||||||||
Total current liabilities | 25,457 | 33,401 | (7,944 | ) | (23.8 | ) | % | 30,783 | |||||||
Accounts payable - capital expenditures | 550 | 1,275 | (725 | ) | (56.9 | ) | % | 638 | |||||||
Income taxes payable - long-term | 3,538 | 5,069 | (1,531 | ) | (30.2 | ) | % | 3,264 | |||||||
Deferred income taxes | 1,072 | 1,363 | (291 | ) | (21.3 | ) | % | 974 | |||||||
Obligation under capital lease | - | 458 | (458 | ) | (100.0 | ) | % | - | |||||||
Long-term debt , less current maturities | 11,618 | 13,980 | (2,362 | ) | (16.9 | ) | % | 11,604 | |||||||
Total liabilities | 42,235 | 55,546 | (13,311 | ) | (24.0 | ) | % | 47,263 | |||||||
Shareholders' equity | 50,176 | 87,244 | (37,068 | ) | (42.5 | ) | % | 48,031 | |||||||
Total liabilities and | |||||||||||||||
shareholders' equity | $ | 92,411 | 142,790 | (50,379 | ) | (35.3 | ) | % | 95,294 | ||||||
Shares outstanding | 12,848 | 12,648 | 200 | 1.6 | % | 12,768 | |||||||||
* 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 2, 2009 AND AUGUST 3, 2008 | |||||||
Unaudited | |||||||
(Amounts in Thousands) | |||||||
THREE MONTHS ENDED | |||||||
Amounts | |||||||
August 2, | August 3, | ||||||
2009 | 2008 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 1,876 | 781 | ||||
Adjustments to reconcile net income to net cash | |||||||
provided by operating activities: | |||||||
Depreciation | 933 | 1,258 | |||||
Amortization of other assets | 157 | 79 | |||||
Stock-based compensation | 208 | 98 | |||||
Deferred income taxes | 100 | 90 | |||||
Restructuring expenses, net of gain on sale of related assets | (112 | ) | - | ||||
Changes in assets and liabilities: | |||||||
Accounts receivable | 4,279 | 6,909 | |||||
Inventories | 2,261 | 532 | |||||
Other current assets | (267 | ) | (299 | ) | |||
Other assets | (15 | ) | (5 | ) | |||
Accounts payable - trade | (3,371 | ) | (3,854 | ) | |||
Accrued expenses | (1,289 | ) | (2,757 | ) | |||
Accrued restructuring | (269 | ) | 63 | ||||
Income taxes | 77 | 428 | |||||
Net cash provided by operating activities | 4,568 | 3,323 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (892 | ) | (986 | ) | |||
Proceeds from the sale of equipment | 284 | - | |||||
Net cash used in investing activities | (608 | ) | (986 | ) | |||
Cash flows from financing activities: | |||||||
Payments on vendor-financed capital expenditures | (87 | ) | (599 | ) | |||
Payments on long-term debt | - | (65 | ) | ||||
Debt issuance costs | (15 | ) | - | ||||
Payments on capital lease obligation | (174 | ) | (235 | ) | |||
Net cash used in financing activities | (276 | ) | (899 | ) | |||
Increase in cash and cash equivalents | 3,684 | 1,438 | |||||
Cash and cash equivalents at beginning of period | 11,797 | 4,914 | |||||
Cash and cash equivalents at end of period | $ | 15,481 | 6,352 | ||||
Free Cash Flow (1) | $ | 3,699 | 1,503 | ||||
(1) Free Cash Flow reconciliation is as follows: | |||||||
FY 2010 | FY 2009 | ||||||
A) Net cash provided by operating activities | $ | 4,568 | 3,323 | ||||
B) Minus: Capital Expenditures | (892 | ) | (986 | ) | |||
C) Add: Proceeds from the sale of buildings and equipment | 284 | - | |||||
D) Minus: Payments on vendor-financed capital expenditures | (87 | ) | (599 | ) | |||
E) Minus: Payments on capital lease obligation | (174 | ) | (235 | ) | |||
$ | 3,699 | 1,503 | |||||
Page 4 of 5
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||
STATEMENTS OF OPERATIONS BY SEGMENT | ||||||||||||||||||
FOR THE THREE MONTHS ENDED AUGUST 2, 2009 AND AUGUST 3, 2008 | ||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||
THREE MONTHS ENDED (UNAUDITED) | ||||||||||||||||||
Amounts | Percent of Sales | |||||||||||||||||
August 2, | August 3, | % Over | August 2, | August 3, | ||||||||||||||
Net Sales by Segment | 2009 | 2008 | (Under) | 2009 | 2008 | |||||||||||||
Mattress Fabrics | $ | 26,275 | 35,561 | (26.1 | ) | % | 57.8 | % | 59.9 | % | ||||||||
Upholstery Fabrics | 19,203 | 23,760 | (19.2 | ) | % | 42.2 | % | 40.1 | % | |||||||||
Net Sales | $ | 45,478 | 59,321 | (23.3 | ) | % | 100.0 | % | 100.0 | % | ||||||||
Gross Profit by Segment | Gross Profit Margin | |||||||||||||||||
Mattress Fabrics | $ | 4,761 | 6,344 | (25.0 | ) | % | 18.1 | % | 17.8 | % | ||||||||
Upholstery Fabrics | 2,797 | 1,070 | 161.4 | % | 14.6 | % | 4.5 | % | ||||||||||
Subtotal | 7,558 | 7,414 | 1.9 | % | 16.6 | % | 12.5 | % | ||||||||||
Restructuring related (credit) charge | 29 | (1) | (12 | ) | (1) | N.M. | 0.1 | % | (0.0 | ) | % | |||||||
Gross Profit | $ | 7,587 | 7,402 | 2.5 | % | 16.7 | % | 12.5 | % | |||||||||
Sales, General and Administrative expenses by Segment | Percent of Sales | |||||||||||||||||
Mattress Fabrics | $ | 1,809 | 2,128 | (15.0 | ) | % | 6.9 | % | 6.0 | % | ||||||||
Upholstery Fabrics | 2,033 | 2,484 | (18.2 | ) | % | 10.6 | % | 10.5 | % | |||||||||
Unallocated Corporate expenses | 1,053 | 770 | 36.8 | % | 2.3 | % | 1.3 | % | ||||||||||
Subtotal | 4,895 | 5,382 | (9.0 | ) | % | 10.8 | % | 9.1 | % | |||||||||
Restructuring related charges | - | (1) | 2 | (1) | (100.0 | ) | % | 0.0 | % | 0.0 | % | |||||||
Selling, General and Administrative expenses | $ | 4,895 | 5,384 | (9.1 | ) | % | 10.8 | % | 9.1 | % | ||||||||
Operating income (loss) by Segment | Operating Income | |||||||||||||||||
Mattress Fabrics | $ | 2,952 | 4,216 | (30.0 | ) | % | 11.2 | % | 11.9 | % | ||||||||
Upholstery Fabrics | 764 | (1,414 | ) | N.M. | 4.0 | % | (6.0 | ) | % | |||||||||
Unallocated corporate expenses | (1,053 | ) | (770 | ) | (36.8 | ) | % | (2.3 | ) | % | (1.3 | ) | % | |||||
Subtotal | 2,663 | 2,032 | 31.1 | % | 5.9 | % | 3.4 | % | ||||||||||
Restructuring and related (credit) charge | 187 | (1) | (416 | ) | (1) | N.M. | 0.4 | % | (0.7 | ) | % | |||||||
Operating income | $ | 2,850 | 1,616 | 76.4 | % | 6.3 | % | 2.7 | % | |||||||||
Depreciation Expense by Segment | ||||||||||||||||||
Mattress Fabrics | $ | 900 | 758 | 18.7 | % | |||||||||||||
Upholstery Fabrics | 33 | (2) | 500 | (93.4 | ) | % | ||||||||||||
Total depreciation expense | 933 | 1,258 | (25.8 | ) | % | |||||||||||||
Notes: | ||||||||||||||||||
(1) See page 5 for detailed explanations of restructuring and restructuring related (credits) charges. | ||||||||||||||||||
(2) Upholstery fabric depreciation expense represents allocation of corporate departments shared by both the mattress and upholstery fabric segments. |
Page 5 of 5
CULP, INC. | ||||||||||||||||||||||||||||
ADJUSTED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||||||||||
FOR THE THREE MONTHS ENDED AUGUST 2, 2009 AND AUGUST 3, 2008 | ||||||||||||||||||||||||||||
(Amounts in Thousands, Except for Per Share Data) | ||||||||||||||||||||||||||||
THREE MONTHS ENDED (UNAUDITED) | ||||||||||||||||||||||||||||
As Reported | August 2, 2009 | As Reported | August 3, 2008 | Adjusted | ||||||||||||||||||||||||
August 2, | % of | % of | Adjusted | % of | August 3, | % of | % of | Adjusted | % of | % Over | ||||||||||||||||||
2009 | Sales | Adjustments | Sales | Results | Sales | 2008 | Sales | Adjustments | Sales | Results | Sales | (Under) | ||||||||||||||||
Net sales | $ | 45,478 | 100.0 | % | - | 0.0 | % | 45,478 | 100.0 | % | 59,321 | 100.0 | % | - | 0.0 | % | 59,321 | 100.0 | % | -23.3 | % | |||||||
Cost of sales | 37,891 | 83.3 | % | 29 | 0.1 | % | (1) | 37,920 | 83.4 | % | 51,919 | 87.5 | % | (12 | ) | 0.0 | % | (3) | 51,907 | 87.5 | % | -26.9 | % | |||||
Gross profit | 7,587 | 16.7 | % | 29 | 0.1 | % | 7,558 | 16.6 | % | 7,402 | 12.5 | % | (12 | ) | 0.0 | % | 7,414 | 12.5 | % | 1.9 | % | |||||||
Selling, general and | ||||||||||||||||||||||||||||
administrative expenses | 4,895 | 10.8 | % | - | 0.0 | % | 4,895 | 10.8 | % | 5,384 | 9.1 | % | (2 | ) | 0.0 | % | (3) | 5,382 | 9.1 | % | -9.0 | % | ||||||
Restructuring (credit) expense | (158 | ) | -0.3 | % | 158 | 0.3 | % | (2) | - | 0.0 | % | 402 | 0.7 | % | (402 | ) | -0.7 | % | (4) | - | 0.0 | % | 0.0 | % | ||||
Income from operations | 2,850 | 6.3 | % | 187 | 0.4 | % | 2,663 | 5.9 | % | 1,616 | 2.7 | % | (416 | ) | -0.7 | % | 2,032 | 3.4 | % | 31.1 | % | |||||||
Interest expense | 357 | 0.8 | % | - | 0.0 | % | 357 | 0.8 | % | 431 | 0.7 | % | - | 0.0 | % | 431 | 0.7 | % | -17.2 | % | ||||||||
Interest income | (12 | ) | 0.0 | % | - | 0.0 | % | (12 | ) | 0.0 | % | (34 | ) | -0.1 | % | - | 0.0 | % | (34 | ) | -0.1 | % | 64.7 | % | ||||
Other expense | 514 | 1.1 | % | - | 0.0 | % | 514 | 1.1 | % | 14 | 0.0 | % | - | 0.0 | % | 14 | 0.0 | % | N.M. | |||||||||
Income before income taxes | 1,991 | 4.4 | % | 187 | 0.4 | % | (5) | 1,804 | 4.0 | % | 1,205 | 2.0 | % | (416 | ) | -0.7 | % | (6) | 1,621 | 2.7 | % | 11.3 | % | |||||
Notes: | ||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||
(1) The $29 restructuring related credit represents a credit of $50 for inventory markdowns and a charge of $21 for other operating costs associated with a closed plant facility. | ||||||||||||||||||||||||||||
(2) The $158 restructuring credit represents a credit of $112 for sales proceeds received on equipment with no carrying value, a credit of $78 for lease termination and other exit costs, and a charge of $32 for employee termination benefits. | ||||||||||||||||||||||||||||
(3) The $12 represents other operating costs associated with a closed plant facility. The $2 represents other operating costs associated with a closed plant facility. | ||||||||||||||||||||||||||||
(4) The $402 represents $414 for employee termination benefits and a credit of $12 for lease termination and other exit costs. | ||||||||||||||||||||||||||||
(5) Of this total credit, $137 and $50 represent cash and non-cash credits, respectively. | ||||||||||||||||||||||||||||
(6) The $416 represents a cash charge. |