Exhibit 99(b)
Page 1 of 10
| CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF NET INCOME | ||||||||||||||||||||
| FOR THREE MONTHS ENDED JULY 29, 2018 AND JULY 30, 2017 | ||||||||||||||||||||
| (UNAUDITED) | ||||||||||||||||||||
| (Amounts in Thousands, Except for Per Share Data) | ||||||||||||||||||||
| THREE MONTHS ENDED | ||||||||||||||||||||
| Amounts | Percent of Sales | |||||||||||||||||||
| July 29, | July 30 | % Over | July 29, | July 30 | ||||||||||||||||
| 2018 | 2017 | (Under) | 2018 | 2017 | ||||||||||||||||
| Net sales | $ | 71,473 | 79,533 | (10.1 | )% | 100.0 | % | 100.0 | % | |||||||||||
| Cost of sales | 60,914 | (1) (2) | 63,068 | (3.4 | )% | 85.2 | % | 79.3 | % | |||||||||||
| Gross profit | 10,559 | 16,465 | (35.9 | )% | 14.8 | % | 20.7 | |||||||||||||
| Selling, general and | ||||||||||||||||||||
| administrative expenses | 8,033 | 9,501 | (15.5 | )% | 11.2 | % | 11.9 | % | ||||||||||||
| Restructuring expense | 451 | (2) | - | 100.0 | % | 0.6 | % | 0.0 | % | |||||||||||
| Income from operations | 2,075 | 6,964 | (70.2 | )% | 2.9 | % | 8.8 | % | ||||||||||||
| Interest expense | 20 | - | 100.0 | % | 0.0 | % | 0.0 | % | ||||||||||||
| Interest income | (150 | ) | (131 | ) | 14.5 | % | (0.2 | )% | (0.2 | )% | ||||||||||
| Other expense | 257 | 353 | (27.2 | )% | 0.4 | % | 0.4 | % | ||||||||||||
| Income before income taxes | 1,948 | 6,742 | (71.1 | )% | 2.7 | % | 8.5 | % | ||||||||||||
| Income taxes* | 906 | 1,640 | (44.8 | )% | 46.5 | % | 24.3 | % | ||||||||||||
| Loss from investment in unconsolidated joint venture | 77 | 118 | (34.7 | )% | 0.1 | % | 0.1 | % | ||||||||||||
| Net income | 965 | 4,984 | (80.6 | )% | 1.4 | % | 6.3 | |||||||||||||
| Less: Net income attributable to non-controlling interest | (8 | ) | - | (100.0 | )% | (0.0 | )% | 0.0 | % | |||||||||||
| Net income attributable to Culp Inc. common shareholders | $ | 957 | 4,984 | (80.8 | )% | 1.3 | % | 6.3 | % | |||||||||||
| Net income attributable to Culp Inc. common shareholders per share-basic | $ | 0.08 | $ | 0.40 | (80.0 | )% | ||||||||||||||
| Net income attributable to Culp Inc. common shareholders per share-diluted | $ | 0.08 | $ | 0.40 | (80.0 | )% | ||||||||||||||
| Average shares outstanding-basic | 12,510 | 12,399 | 0.9 | % | ||||||||||||||||
| Average shares outstanding-diluted | 12,600 | 12,590 | 0.1 | % | ||||||||||||||||
| * Percent of sales column for income taxes is calculated as a % of income before income taxes. | ||||||||||||||||||||
Notes
(1) | Cost of sales for the three-month period ending July 29, 2018 includes a $1.6 million restructuring related charge for inventory markdowns. |
(2) | See page 6 for detailed description of charges and adjusted statement of operations excluding restructuring expense and restructuring related charges incurred for the three-month period ending July 29, 2018. There were no restructuring activities noted for the three-month period ending July 30, 2017. |
Page 2 of 10
| CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||
| July 29, 2018, JULY 30, 2017 AND APRIL 29, 2018 | ||||||||||||||||||||
| Unaudited | ||||||||||||||||||||
| (Amounts in Thousands) | ||||||||||||||||||||
| Amounts | ||||||||||||||||||||
| (Condensed) | Increase | |||||||||||||||||||
| July 29, | July 30, | (Decrease) | * April 29, | |||||||||||||||||
| 2018 | 2017 | Dollars | Percent | 2018 | ||||||||||||||||
| Current assets | ||||||||||||||||||||
| Cash and cash equivalents | $ | 8,593 | 18,322 | (9,729 | ) | (53.1 | )% | 21,228 | ||||||||||||
| Short-term investments - Available for Sale | - | 2,469 | (2,469 | ) | (100.0 | )% | 2,451 | |||||||||||||
| Short-term investments - Held-To-Maturity | 30,756 | - | 30,756 | 100.0 | % | 25,759 | ||||||||||||||
| Accounts receivable | 23,225 | 22,140 | 1,085 | 4.9 | % | 26,307 | ||||||||||||||
| Inventories | 54,989 | 55,227 | (238 | ) | (0.4 | )% | 53,454 | |||||||||||||
| Other current assets | 3,852 | 3,441 | 411 | 11.9 | % | 2,870 | ||||||||||||||
| Total current assets | 121,415 | 101,599 | 19,816 | 19.5 | % | 132,069 | ||||||||||||||
| Property, plant & equipment, net | 53,178 | 52,912 | 266 | 0.5 | % | 51,794 | ||||||||||||||
| Goodwill | 27,222 | 11,462 | 15,760 | 137.5 | % | 13,569 | ||||||||||||||
| Deferred income taxes | 3,721 | 436 | 3,285 | 753.4 | % | 1,458 | ||||||||||||||
| Long-term Investments - Held-To-Maturity | - | 30,907 | (30,907 | ) | (100.0 | )% | 5,035 | |||||||||||||
| Long-term Investments - Rabbi Trust | 7,671 | 6,714 | 957 | 14.3 | % | 7,326 | ||||||||||||||
| Investment in unconsolidated joint venture | 1,525 | 1,477 | 48 | 3.2 | % | 1,501 | ||||||||||||||
| Other assets | 11,640 | 2,397 | 9,243 | 385.6 | % | 5,232 | ||||||||||||||
| Total assets | $ | 226,372 | 207,904 | 18,468 | 8.9 | % | 217,984 | |||||||||||||
| Current liabilities | ||||||||||||||||||||
| Accounts payable - trade | $ | 25,070 | 29,112 | (4,042 | ) | (13.9 | )% | 27,237 | ||||||||||||
| Accounts payable - capital expenditures | 862 | 5,647 | (4,785 | ) | (84.7 | )% | 1,776 | |||||||||||||
| Deferred revenue | 634 | - | 634 | 100.0 | % | 809 | ||||||||||||||
| Accrued expenses | 8,176 | 6,075 | 2,101 | 34.6 | % | 9,325 | ||||||||||||||
| Accrued restructuring costs | 445 | - | 445 | 100.0 | % | - | ||||||||||||||
| Income taxes payable - current | 1,244 | 884 | 360 | 40.7 | % | 1,437 | ||||||||||||||
| Total current liabilities | 36,431 | 41,718 | (5,287 | ) | (12.7 | )% | 40,584 | |||||||||||||
| Line of credit | 4,000 | 5,000 | (1,000 | ) | (20.0 | )% | - | |||||||||||||
| Accrued expenses - long-term | 749 | - | 749 | 100.0 | % | 763 | ||||||||||||||
| Contingent consideration - Earn-Out Obligation | 5,600 | - | 5,600 | 100.0 | % | - | ||||||||||||||
| Income taxes payable - long-term | 3,733 | 487 | 3,246 | 666.5 | % | 3,758 | ||||||||||||||
| Deferred income taxes | 2,150 | 4,253 | (2,103 | ) | (49.4 | )% | 2,150 | |||||||||||||
| Deferred compensation | 7,679 | 6,769 | 910 | 13.4 | % | 7,353 | ||||||||||||||
| Total liabilities | 60,342 | 58,227 | 2,115 | 3.6 | % | 54,608 | ||||||||||||||
| Shareholders' equity | ||||||||||||||||||||
| Shareholders' equity attributable to Culp Inc. | 161,490 | 149,677 | 11,813 | 7.9 | % | 163,376 | ||||||||||||||
| Non-controlling interest | 4,540 | - | 4,540 | 100.0 | % | - | ||||||||||||||
| 166,030 | 149,677 | 16,353 | 10.9 | % | 163,376 | |||||||||||||||
| Total liabilities and | ||||||||||||||||||||
| shareholders' equity | $ | 226,372 | 207,904 | 18,468 | 8.9 | % | 217,984 | |||||||||||||
| Shares outstanding | 12,522 | 12,441 | 81 | 0.7 | % | 12,450 | ||||||||||||||
* Derived from audited financial statements.
Page 3 of 10
| CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||
| SUMMARY OF CASH AND INVESTMENTS | ||||||||||||
| JULY 29, 2018, JULY 30, 2017, AND APRIL 29, 2018 | ||||||||||||
| Unaudited | ||||||||||||
| (Amounts in Thousands) | ||||||||||||
| Amounts | ||||||||||||
| July 29, | July 30, | April 29, | ||||||||||
| 2018 | 2017 | 2018* | ||||||||||
| Cash and cash equivalents | $ | 8,593 | $ | 18,322 | $ | 21,228 | ||||||
| Short-term investments - Available for Sale | - | 2,469 | 2,451 | |||||||||
| Short-term investments - Held-To-Maturity | 30,756 | - | 25,759 | |||||||||
| Long-term investments - Held-To-Maturity | - | 30,907 | 5,035 | |||||||||
| Total Cash and Investments | $ | 39,349 | $ | 51,698 | $ | 54,473 | ||||||
* Derived from audited financial statements.
Page 4 of 10
| CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| FOR THE THREE MONTHS ENDED JULY 29, 2018 AND JULY 30, 2017 | ||||||||
| Unaudited | ||||||||
| (Amounts in Thousands) | ||||||||
| THREE MONTHS ENDED | ||||||||
| Amounts | ||||||||
| July 29, | July 30, | |||||||
| 2018 | 2017 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 965 | 4,984 | |||||
| Adjustments to reconcile net income to net cash (used in) | ||||||||
| provided by operating activities: | ||||||||
| Depreciation | 2,015 | 1,807 | ||||||
| Amortization of assets | 145 | 82 | ||||||
| Stock-based compensation | (501 | ) | 757 | |||||
| Deferred income taxes | (2,263 | ) | 643 | |||||
| Realized loss on sale of short-term investments (Available for Sale) | 94 | - | ||||||
| Loss on sale of equipment | 35 | - | ||||||
| Loss from investment in unconsolidated joint venture | 77 | 118 | ||||||
| Foreign currency exchange gain (loss) | (91 | ) | 35 | |||||
| Changes in assets and liabilities, net of effects of acquisition of businesses: | ||||||||
| Accounts receivable | 2,837 | 2,524 | ||||||
| Inventories | (429 | ) | (3,539 | ) | ||||
| Other current assets | (989 | ) | (467 | ) | ||||
| Other assets | 34 | (47 | ) | |||||
| Accounts payable | (2,494 | ) | (397 | ) | ||||
| Deferred revenue | (175 | ) | - | |||||
| Accrued expenses and deferrred compensation | (1,566 | ) | (4,704 | ) | ||||
| Accrued restructuring costs | 445 | - | ||||||
| Income taxes | (75 | ) | 608 | |||||
| Net cash (used in) provided by operating activities | (1,936 | ) | 2,404 | |||||
| Cash flows from investing activities: | ||||||||
| Capital expenditures | (757 | ) | (2,260 | ) | ||||
| Net cash paid for acquistion of businesses | (11,971 | ) | - | |||||
| Investment in unconsolidated joint venture | (100 | ) | (489 | ) | ||||
| Proceeds from the sale of short-term investments (Available for Sale) | 2,458 | - | ||||||
| Purchase of short-term investments (Available for Sale) | (10 | ) | (12 | ) | ||||
| Proceeds from the sale of long-term investments (Rabbi Trust) | - | 49 | ||||||
| Purchase of long-term investments (Rabbi Trust) | (302 | ) | (1,267 | ) | ||||
| Net cash used in investing activities | (10,682 | ) | (3,979 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from line of credit | 11,000 | 5,000 | ||||||
| Payments on line of credit | (7,000 | ) | - | |||||
| Payments on vendor-financed capital expenditures | (1,412 | ) | (1,250 | ) | ||||
| Dividends paid | (1,127 | ) | (3,608 | ) | ||||
| Common stock surrendered for withholding taxes payable | (1,292 | ) | (1,135 | ) | ||||
| Common stock repurchased | (72 | ) | - | |||||
| Proceeds from common stock issued | - | 5 | ||||||
| Net cash provided by (used in) financing activities | 97 | (988 | ) | |||||
| Effect of exchange rate changes on cash and cash equivalents | (114 | ) | 90 | |||||
| Decrease in cash and cash equivalents | (12,635 | ) | (2,473 | ) | ||||
| Cash and cash equivalents at beginning of period | 21,228 | 20,795 | ||||||
| Cash and cash equivalents at end of period | $ | 8,593 | 18,322 | |||||
| Free Cash Flow (1) | $ | (4,621 | ) | (2,723 | ) | |||
| (1) Free Cash Flow reconciliation is as follows: | ||||||||
| FY 2019 | FY 2018 | |||||||
| A) Net cash provided by operating activities | $ | (1,936 | ) | 2,404 | ||||
| B) Minus: Capital Expenditures | (757 | ) | (2,260 | ) | ||||
| C) Minus: Investment in unconsolidated joint venture | (100 | ) | (489 | ) | ||||
| D) Minus: Payments on vendor-financed capital expenditures | (1,412 | ) | (1,250 | ) | ||||
| E) Plus: Proceeds from the sale of long-term investments (Rabbi Trust) | - | 49 | ||||||
| F) Minus: Purchase of long-term investments (Rabbi Trust) | (302 | ) | (1,267 | ) | ||||
| G) Effects of exchange rate changes on cash and cash equivalents | (114 | ) | 90 | |||||
| $ | (4,621 | ) | (2,723 | ) | ||||
Page 5 of 10
| CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||
| STATEMENTS OF OPERATIONS BY SEGMENT | ||||||||||||||||||||
| FOR THE THREE MONTHS ENDED JULY 29, 2018 AND JULY 30, 2017 | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (Amounts in thousands) | ||||||||||||||||||||
| THREE MONTHS ENDED | ||||||||||||||||||||
| Amounts | Percent of Total Sales | |||||||||||||||||||
| July 29, | July 30, | % Over | July 29, | July 30, | ||||||||||||||||
| Net Sales by Segment | 2018 | 2017 | (Under) | 2018 | 2017 | |||||||||||||||
| Mattress Fabrics | $ | 36,983 | 48,429 | (23.6 | )% | 51.7 | % | 60.9 | % | |||||||||||
| Upholstery Fabrics | 34,490 | 31,104 | 10.9 | % | 48.3 | % | 39.1 | % | ||||||||||||
| Net Sales | $ | 71,473 | 79,533 | (10.1 | )% | 100.0 | % | 100.0 | % | |||||||||||
| Gross Profit by Segment | Gross Profit Margin | |||||||||||||||||||
| Mattress Fabrics | $ | 5,971 | 9,760 | (38.8 | )% | 16.1 | % | 20.2 | % | |||||||||||
| Upholstery Fabrics | 6,153 | 6,705 | (8.2 | )% | 17.8 | % | 21.6 | % | ||||||||||||
| Subtotal | 12,124 | 16,465 | (26.4 | )% | 17.0 | % | 20.7 | % | ||||||||||||
| Restructuring related charges | (1,565 | ) | (1) | - | 100.0 | % | (2.2 | )% | 0.0 | % | ||||||||||
| Gross Profit | $ | 10,559 | 16,465 | (35.9 | )% | 14.8 | % | 20.7 | % | |||||||||||
| Selling, General and Administrative Expenses by Segment | Percent of Sales | |||||||||||||||||||
| Mattress Fabrics | $ | 3,148 | 3,391 | (7.2 | )% | 8.5 | % | 7.0 | % | |||||||||||
| Upholstery Fabrics | 3,626 | 3,811 | (4.9 | )% | 10.5 | % | 12.3 | % | ||||||||||||
| Unallocated Corporate expenses | 1,259 | 2,299 | (45.2 | )% | 1.8 | % | 2.9 | % | ||||||||||||
| Selling, General and Administrative Expenses | $ | 8,033 | 9,501 | (15.5 | )% | 11.2 | % | 11.9 | % | |||||||||||
| Operating Income (loss) by Segment | Operating Income (Loss) Margin | |||||||||||||||||||
| Mattress Fabrics | $ | 2,823 | 6,368 | (55.7 | )% | 7.6 | % | 13.1 | % | |||||||||||
| Upholstery Fabrics | 2,527 | 2,895 | (12.7 | )% | 7.3 | % | 9.3 | % | ||||||||||||
| Unallocated corporate expenses | (1,259 | ) | (2,299 | ) | (45.2 | )% | (1.8 | )% | (2.9 | )% | ||||||||||
| Subtotal | $ | 4,091 | 6,964 | (41.3 | )% | 5.7 | % | 8.8 | % | |||||||||||
| Restructuring expense and related charges | (2,016 | ) | (1) | - | 100.0 | % | (2.8 | )% | 0.0 | % | ||||||||||
| Operating income | 2,075 | 6,964 | (70.2 | )% | 2.9 | % | 8.8 | % | ||||||||||||
| Return on Capital (2) | ||||||||||||||||||||
| Mattress Fabrics | 28.6 | % | 40.3 | % | ||||||||||||||||
| Upholstery Fabrics | 53.7 | % | 61.6 | % | ||||||||||||||||
| Unallocated Corporate | N/A | N/A | ||||||||||||||||||
| Consolidated | 21.4 | % | 28.8 | % | ||||||||||||||||
| Capital Employed (2) (3) | ||||||||||||||||||||
| Mattress Fabrics | $ | 83,471 | 74,913 | 11.4 | % | |||||||||||||||
| Upholstery Fabrics | 19,506 | 19,508 | (0.0 | )% | ||||||||||||||||
| Unallocated Corporate | 31,118 | 13,801 | 125.5 | % | ||||||||||||||||
| Consolidated | $ | 134,095 | 108,222 | 23.9 | % | |||||||||||||||
| Depreciation Expense by Segment | ||||||||||||||||||||
| Mattress Fabrics | $ | 1,800 | 1,612 | 11.7 | % | |||||||||||||||
| Upholstery Fabrics | 215 | 195 | 10.3 | % | ||||||||||||||||
| Depreciation Expense | $ | 2,015 | 1,807 | 11.5 | % | |||||||||||||||
Notes
(1) | See page 6 for detailed description of charges. |
(2) | See pages 8 and 9 of this financial information release for calculations. |
| (3) | The capital employed balances are as of July 29, 2018 and July 30, 2017. |
Page 6 of 10
| CULP, INC. | ||||||||||||||||||||||||||||||||||||
| ADJUSTED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||||||||||||||||||
| FOR THE THREE MONTHS ENDED JULY 29, 2018 AND JULY 30, 2017 | ||||||||||||||||||||||||||||||||||||
| THREE MONTHS ENDED (UNAUDITED) | ||||||||||||||||||||||||||||||||||||
| (3) | ||||||||||||||||||||||||||||||||||||
| As Reported | July 29, 2018 | As Reported | ||||||||||||||||||||||||||||||||||
| July 29, | % of | % of | Adjusted | % of | July 30, | % of | % Over | |||||||||||||||||||||||||||||
| 2018 | Sales | Adjustments | Sales | Results | Sales | 2017 | Sales | (Under) | ||||||||||||||||||||||||||||
| Net sales | $ | 71,473 | 100.0 | % | - | 0.0 | % | 71,473 | 100.0 | % | 79,533 | 100.0 | % | -10.1 | % | |||||||||||||||||||||
| Cost of sales | 60,914 | 85.2 | % | (1,565 | ) | -2.2 | % | (1) | 59,349 | 83.0 | % | 63,068 | 79.3 | % | -5.9 | % | ||||||||||||||||||||
| Gross profit | 10,559 | 14.8 | % | (1,565 | ) | -2.2 | % | 12,124 | 17.0 | % | 16,465 | 20.7 | % | -26.4 | % | |||||||||||||||||||||
| Selling, general and | ||||||||||||||||||||||||||||||||||||
| administrative expenses | 8,033 | 11.2 | % | - | 0.0 | % | 8,033 | 11.2 | % | 9,501 | 11.9 | % | -15.5 | % | ||||||||||||||||||||||
| Restructuring expense | 451 | 0.6 | % | (451 | ) | -0.6 | % | (2) | - | 0.0 | % | - | 0.0 | % | 0.0 | % | ||||||||||||||||||||
| Income from operations | 2,075 | 2.9 | % | (2,016 | ) | -2.8 | % | 4,091 | 5.7 | % | 6,964 | 8.8 | % | -41.3 | % | |||||||||||||||||||||
| Interest expense | 20 | 0.0 | % | - | 0.0 | % | 20 | 0.0 | % | - | 0.0 | % | 100.0 | % | ||||||||||||||||||||||
| Interest income | (150 | ) | -0.2 | % | - | 0.0 | % | (150 | ) | -0.2 | % | (131 | ) | -0.2 | % | 14.5 | % | |||||||||||||||||||
| Other expense | 257 | 0.4 | % | - | 0.0 | % | 257 | 0.4 | % | 353 | 0.4 | % | -27.2 | % | ||||||||||||||||||||||
| Income before income taxes | 1,948 | 2.7 | % | (2,016 | ) | -2.8 | % | 3,964 | 5.5 | % | 6,742 | 8.5 | % | -41.2 | % | |||||||||||||||||||||
Notes
(1) | The $1.6 million restructuring related charge represents inventory markdowns associated with the closure of our Anderson, SC plant facility. |
(2) | The $451 restructuring charge represents employee termination benefits associated with the closure of our Anderson, SC plant facility. |
| (3) | Actual reported results were used for comparative purposes as there were no restructuring activities for the three month period ending July 30, 2017. |
Page 7 of 10
| CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA | ||||||||||||||||||||
| FOR THE TWELVE MONTHS ENDED JULY 29, 2018 AND JULY 30, 2017 | ||||||||||||||||||||
| (UNAUDITED) | ||||||||||||||||||||
| (AMOUNTS IN THOUSANDS) | ||||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||
| Trailing 12 | ||||||||||||||||||||
| Months | ||||||||||||||||||||
| 10/29/2017 | 1/28/2018 | 4/29/2018 | 7/29/2018 | 7/29/2018 | ||||||||||||||||
| Net income (loss) | $ | 3,976 | $ | (748 | ) | $ | 12,666 | $ | 957 | $ | 16,851 | |||||||||
| Income taxes | 2,108 | 8,208 | (6,217 | ) | 906 | 5,005 | ||||||||||||||
| Interest income, net | (91 | ) | (101 | ) | (117 | ) | (130 | ) | (439 | ) | ||||||||||
| Restructuring expense and related charges | - | - | - | 2,016 | 2,016 | |||||||||||||||
| Depreciation and amortization expense | 1,990 | 2,048 | 2,096 | 2,160 | 8,294 | |||||||||||||||
| Stock based compensation | 801 | 864 | (210 | ) | (501 | ) | 954 | |||||||||||||
| Adjusted EBITDA | $ | 8,784 | $ | 10,271 | $ | 8,218 | $ | 5,408 | $ | 32,681 | ||||||||||
| Quarter Ended | ||||||||||||||||||||
| Trailing 12 | ||||||||||||||||||||
| Months | ||||||||||||||||||||
| 10/30/2016 | 1/29/2017 | 4/30/2017 | 7/30/2017 | 7/30/2017 | ||||||||||||||||
| Net income | $ | 4,475 | $ | 6,347 | $ | 6,198 | $ | 4,984 | $ | 22,004 | ||||||||||
| Income taxes | 2,684 | 643 | 778 | 1,640 | 5,745 | |||||||||||||||
| Interest income, net | (15 | ) | (124 | ) | (134 | ) | (131 | ) | (404 | ) | ||||||||||
| Restructuring expense and related charges | - | - | - | - | - | |||||||||||||||
| Depreciation and amortization expense | 1,778 | 1,875 | 1,863 | 1,889 | 7,405 | |||||||||||||||
| Stock based compensation | 896 | 962 | 739 | 757 | 3,354 | |||||||||||||||
| Adjusted EBITDA | $ | 9,818 | $ | 9,703 | $ | 9,444 | $ | 9,139 | $ | 38,104 | ||||||||||
| % Over (Under) | -10.5 | % | 5.9 | % | -13.0 | % | -40.8 | % | -14.2 | % | ||||||||||
Page 8 of 10
| CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||||||||||||||||||||||||||||||
| RETURN ON CAPITAL EMPLOYED BY SEGMENT | ||||||||||||||||||||||||||||||||||||||||||||||||
| FOR THE TWELVE MONTHS ENDED JULY 29, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||
| (Amounts in Thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||
Operating Income | ||||||||||||||||||||||||||||||||||||||||||||||||
| Twelve | Return on Avg. Capital Employed (2) | |||||||||||||||||||||||||||||||||||||||||||||||
| Months Ended | Average CapitalEmployed (3) | |||||||||||||||||||||||||||||||||||||||||||||||
| July 29, 2018 (1) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Mattress Fabrics | $ | 22,310 | $ | 77,999 | 28.6 | % | ||||||||||||||||||||||||||||||||||||||||||
| Upholstery Fabrics | 10,592 | 19,715 | 53.7 | % | ||||||||||||||||||||||||||||||||||||||||||||
| (less: Unallocated Corporate) | (8,314 | ) | 17,421 | N/A | ||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 24,588 | $ | 115,134 | 21.4 | % | ||||||||||||||||||||||||||||||||||||||||||
| Average Capital Employed | As of the three Months Ended July 29, 2018 | As of the three Months Ended April 29, 2018 | As of the three Months Ended January 28, 2018 | |||||||||||||||||||||||||||||||||||||||||||||
| Mattress | Upholstery | Unallocated | Mattress | Upholstery | Unallocated | Mattress | Upholstery | Unallocated | ||||||||||||||||||||||||||||||||||||||||
| Fabrics | Fabrics | Corporate | Total | Fabrics | Fabrics | Corporate | Total | Fabrics | Fabrics | Corporate | Total | |||||||||||||||||||||||||||||||||||||
| Total assets (4) | $ | 98,064 | 37,386 | 90,922 | 226,372 | $ | 95,061 | 39,812 | 83,111 | 217,984 | $ | 93,827 | 43,458 | 79,559 | 216,844 | |||||||||||||||||||||||||||||||||
| Total liabilities (5) | (14,593 | ) | (17,880 | ) | (27,869 | ) | (60,342 | ) | (17,335 | ) | (18,679 | ) | (18,594 | ) | (54,608 | ) | (18,418 | ) | (22,781 | ) | (23,463 | ) | (64,662 | ) | ||||||||||||||||||||||||
| Subtotal | $ | 83,471 | $ | 19,506 | $ | 63,053 | $ | 166,030 | $ | 77,726 | $ | 21,133 | $ | 64,517 | $ | 163,376 | $ | 75,409 | $ | 20,677 | $ | 56,096 | $ | 152,182 | ||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | - | - | (8,593 | ) | (8,593 | ) | - | - | (21,228 | ) | (21,228 | ) | - | - | (22,428 | ) | (22,428 | ) | ||||||||||||||||||||||||||||||
| Short-term investments - Available-For-Sale | - | - | - | - | - | - | (2,451 | ) | (2,451 | ) | - | - | (2,472 | ) | (2,472 | ) | ||||||||||||||||||||||||||||||||
| Short-term investments - Held-To-Maturity | - | - | (30,756 | ) | (30,756 | ) | - | - | (25,759 | ) | (25,759 | ) | - | - | (17,206 | ) | (17,206 | ) | ||||||||||||||||||||||||||||||
| Long-term investments - Held-To-Maturity | - | - | - | - | - | - | (5,035 | ) | (5,035 | ) | - | - | (13,625 | ) | (13,625 | ) | ||||||||||||||||||||||||||||||||
| Long-term investments - Rabbi Trust | - | - | (7,671 | ) | (7,671 | ) | - | - | (7,326 | ) | (7,326 | ) | - | - | (7,176 | ) | (7,176 | ) | ||||||||||||||||||||||||||||||
| Deferred income taxes - non-current | - | - | (3,721 | ) | (3,721 | ) | - | - | (1,458 | ) | (1,458 | ) | - | - | (1,942 | ) | (1,942 | ) | ||||||||||||||||||||||||||||||
| Income taxes payable - current | - | - | 1,244 | 1,244 | - | - | 1,437 | 1,437 | - | - | 1,580 | 1,580 | ||||||||||||||||||||||||||||||||||||
| Income taxes payable - long-term | - | - | 3,733 | 3,733 | - | - | 3,758 | 3,758 | - | - | 10,940 | 10,940 | ||||||||||||||||||||||||||||||||||||
| Deferred income taxes - non-current | - | - | 2,150 | 2,150 | - | - | 2,150 | 2,150 | - | - | 2,096 | 2,096 | ||||||||||||||||||||||||||||||||||||
| Line of credit | - | - | 4,000 | 4,000 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
| Deferred compensation | - | - | 7,679 | 7,679 | - | - | 7,353 | 7,353 | - | - | 7,216 | 7,216 | ||||||||||||||||||||||||||||||||||||
| Total Capital Employed | $ | 83,471 | $ | 19,506 | $ | 31,118 | $ | 134,095 | $ | 77,726 | $ | 21,133 | $ | 15,958 | $ | 114,817 | $ | 75,409 | $ | 20,677 | $ | 13,079 | $ | 109,165 | ||||||||||||||||||||||||
| As of the three Months Ended October 29, 2017 | As of the three Months Ended July 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||
| Mattress | Upholstery | Unallocated | Mattress | Upholstery | Unallocated | |||||||||||||||||||||||||||||||||||||||||||
| Fabrics | Fabrics | Corporate | Total | Fabrics | Fabrics | Corporate | Total | |||||||||||||||||||||||||||||||||||||||||
| Total assets (4) | $ | 94,626 | 34,974 | 71,443 | 201,043 | $ | 99,190 | 34,491 | 74,223 | 207,904 | ||||||||||||||||||||||||||||||||||||||
| Total liabilities (5) | (16,150 | ) | (17,225 | ) | (14,588 | ) | (47,963 | ) | (24,277 | ) | (14,983 | ) | (18,967 | ) | (58,227 | ) | ||||||||||||||||||||||||||||||||
| Subtotal | $ | 78,476 | $ | 17,749 | $ | 56,855 | $ | 153,080 | $ | 74,913 | $ | 19,508 | $ | 55,256 | $ | 149,677 | ||||||||||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | - | - | (15,739 | ) | (15,739 | ) | - | - | (18,322 | ) | (18,322 | ) | ||||||||||||||||||||||||||||||||||||
| Short-term investments - Available-For-Sale | - | - | (2,478 | ) | (2,478 | ) | - | - | (2,469 | ) | (2,469 | ) | ||||||||||||||||||||||||||||||||||||
| Short-term investments - Held-To-Maturity | - | - | (4,015 | ) | (4,015 | ) | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
| Long-term investments - Held-To-Maturity | - | - | (26,853 | ) | (26,853 | ) | - | - | (30,907 | ) | (30,907 | ) | ||||||||||||||||||||||||||||||||||||
| Long-term investments - Rabbi Trust | - | - | (6,921 | ) | (6,921 | ) | - | - | (6,714 | ) | (6,714 | ) | ||||||||||||||||||||||||||||||||||||
| Deferred income taxes - non-current | - | - | (491 | ) | (491 | ) | - | - | (436 | ) | (436 | ) | ||||||||||||||||||||||||||||||||||||
| Income taxes payable - current | - | - | 692 | 692 | - | - | 884 | 884 | ||||||||||||||||||||||||||||||||||||||||
| Income taxes payable - long-term | - | - | 487 | 487 | - | - | 487 | 487 | ||||||||||||||||||||||||||||||||||||||||
| Deferred income taxes - non-current | - | - | 4,641 | 4,641 | - | - | 4,253 | 4,253 | ||||||||||||||||||||||||||||||||||||||||
| Line of credit | - | - | - | - | - | - | 5,000 | 5,000 | ||||||||||||||||||||||||||||||||||||||||
| Deferred compensation | - | - | 6,970 | 6,970 | - | - | 6,769 | 6,769 | ||||||||||||||||||||||||||||||||||||||||
| Total Capital Employed | $ | 78,476 | $ | 17,749 | $ | 13,148 | $ | 109,373 | $ | 74,913 | $ | 19,508 | $ | 13,801 | $ | 108,222 | ||||||||||||||||||||||||||||||||
| Mattress | Upholstery | Unallocated | ||||||||||||||||||||||||||||||||||||||||||||||
| Fabrics | Fabrics | Corporate | Total | |||||||||||||||||||||||||||||||||||||||||||||
| Average Capital Employed (3) | $ | 77,999 | $ | 19,715 | $ | 17,421 | $ | 115,134 | ||||||||||||||||||||||||||||||||||||||||
Notes:
(1) | See reconciliation per page 10 of this financial information release. |
| (2) | Return on average capital employed represents the last twelve months operating income as of July 29, 2018, divided by average capital employed. Average capital employed does not include cash and cash equivalents, short-term investments - Available- For-Sale, short-term investments Held-To-Maturity, long-term investments Held-To-Maturity, long-term investments - Rabbi Trust, noncurrent deferred income tax assets and liabilities, income taxes receivable and payable, line of credit, and deferred compensation. |
| (3) | Average capital employed was computed using the quarterly five periods ending July 29, 2018, April 29, 2018, January 28, 2018, October 29, 2017, and July 30, 2017. |
| (4) | Intangible assets and goodwill are included in unallocated corporate for all periods presented and therfore, have no affect on the capital employed and return on capital employed for both our mattress fabrics and upholstery fabrics segments. |
| (5) | Accrued restructuring costs and certain obligations associated with our acquisitions are included in unallocated coporate for all periods presented and therfore, have no affect on capital employed and return on capital employed for both our mattress fabrics and upholstery fabrics segments. |
Page 9 of 10
| CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||||||||||||||||||||||||||||||
| RETURN ON CAPITAL EMPLOYED BY SEGMENT | ||||||||||||||||||||||||||||||||||||||||||||||||
| FOR THE TWELVE MONTHS ENDED JULY 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||
| (Amounts in Thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||
Operating Income | ||||||||||||||||||||||||||||||||||||||||||||||||
| Twelve Months | Average CapitalEmployed (3) | Return on Avg. Capital Employed (2) | ||||||||||||||||||||||||||||||||||||||||||||||
| Ended July 30, | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2017 (1) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Mattress Fabrics | $ | 27,348 | $ | 67,847 | 40.3 | % | ||||||||||||||||||||||||||||||||||||||||||
| Upholstery Fabrics | 10,998 | 17,867 | 61.6 | % | ||||||||||||||||||||||||||||||||||||||||||||
| (less: Unallocated Corporate) | (9,978 | ) | 12,914 | N/A | ||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 28,368 | $ | 98,628 | 28.8 | % | ||||||||||||||||||||||||||||||||||||||||||
| Average Capital Employed | As of the three Months Ended July 30, 2017 | As of the three Months Ended April 30, 2017 | As of the three Months Ended January 29, 2017 | |||||||||||||||||||||||||||||||||||||||||||||
| Mattress | Upholstery | Unallocated | Mattress | Upholstery | Unallocated | Mattress | Upholstery | Unallocated | ||||||||||||||||||||||||||||||||||||||||
| Fabrics | Fabrics | Corporate | Total | Fabrics | Fabrics | Corporate | Total | Fabrics | Fabrics | Corporate | Total | |||||||||||||||||||||||||||||||||||||
| Total assets (4) | $ | 99,190 | 34,491 | 74,223 | $ | 207,904 | $ | 98,087 | $ | 32,255 | $ | 75,292 | $ | 205,634 | $ | 90,197 | $ | 30,380 | $ | 70,479 | $ | 191,056 | ||||||||||||||||||||||||||
| Total liabilities | (24,277 | ) | (14,983 | ) | (18,967 | ) | (58,227 | ) | (27,619 | ) | (16,249 | ) | (13,136 | ) | (57,004 | ) | (23,126 | ) | (11,960 | ) | (13,656 | ) | (48,742 | ) | ||||||||||||||||||||||||
| Subtotal | $ | 74,913 | $ | 19,508 | $ | 55,256 | $ | 149,677 | $ | 70,468 | $ | 16,006 | $ | 62,156 | $ | 148,630 | $ | 67,071 | $ | 18,420 | $ | 56,823 | $ | 142,314 | ||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | - | - | (18,322 | ) | (18,322 | ) | - | - | (20,795 | ) | (20,795 | ) | - | - | (15,659 | ) | (15,659 | ) | ||||||||||||||||||||||||||||||
| Short-term investments - Available-For-Sale | - | - | (2,469 | ) | (2,469 | ) | - | - | (2,443 | ) | (2,443 | ) | - | - | (2,410 | ) | (2,410 | ) | ||||||||||||||||||||||||||||||
| Long-term investments - Held-To-Maturity | - | - | (30,907 | ) | (30,907 | ) | - | - | (30,945 | ) | (30,945 | ) | - | - | (30,832 | ) | (30,832 | ) | ||||||||||||||||||||||||||||||
| Long-term investments - Rabbi Trust | - | - | (6,714 | ) | (6,714 | ) | - | - | (5,466 | ) | (5,466 | ) | - | - | (5,488 | ) | (5,488 | ) | ||||||||||||||||||||||||||||||
| Income taxes receivable | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
| Deferred income taxes - non-current | - | - | (436 | ) | (436 | ) | - | - | (419 | ) | (419 | ) | - | - | (422 | ) | (422 | ) | ||||||||||||||||||||||||||||||
| Income taxes payable - current | - | - | 884 | 884 | - | - | 287 | 287 | - | - | 217 | 217 | ||||||||||||||||||||||||||||||||||||
| Income taxes payable - long-term | - | - | 487 | 487 | - | - | 467 | 467 | - | - | 1,817 | 1,817 | ||||||||||||||||||||||||||||||||||||
| Deferred income taxes - non-current | - | - | 4,253 | 4,253 | - | - | 3,593 | 3,593 | - | - | 2,924 | 2,924 | ||||||||||||||||||||||||||||||||||||
| Line of credit | - | - | 5,000 | 5,000 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
| Deferred compensation | - | - | 6,769 | 6,769 | - | - | 5,520 | 5,520 | - | - | 5,327 | 5,327 | ||||||||||||||||||||||||||||||||||||
| Total Capital Employed | $ | 74,913 | $ | 19,508 | $ | 13,801 | $ | 108,222 | $ | 70,468 | $ | 16,006 | $ | 11,955 | $ | 98,429 | $ | 67,071 | $ | 18,420 | $ | 12,297 | $ | 97,788 | ||||||||||||||||||||||||
| As of the three Months Ended October 30, 2016 | As of the three Months Ended July 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||
| Mattress | Upholstery | Unallocated | Mattress | Upholstery | Unallocated | |||||||||||||||||||||||||||||||||||||||||||
| Fabrics | Fabrics | Corporate | Total | Fabrics | Fabrics | Corporate | Total | |||||||||||||||||||||||||||||||||||||||||
| Total assets (4) | $ | 81,683 | $ | 29,361 | $ | 68,083 | $ | 179,127 | $ | 79,911 | $ | 33,550 | $ | 69,899 | $ | 183,360 | ||||||||||||||||||||||||||||||||
| Total liabilities | (18,499 | ) | (11,180 | ) | (13,499 | ) | (43,178 | ) | (16,313 | ) | (16,329 | ) | (19,283 | ) | (51,925 | ) | ||||||||||||||||||||||||||||||||
| Subtotal | $ | 63,184 | $ | 18,181 | $ | 54,584 | $ | 135,949 | $ | 63,598 | $ | 17,221 | $ | 50,616 | $ | 131,435 | ||||||||||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | - | - | (13,910 | ) | (13,910 | ) | - | - | (45,549 | ) | (45,549 | ) | ||||||||||||||||||||||||||||||||||||
| Short-term investments - Available-For-Sale | - | - | (2,430 | ) | (2,430 | ) | - | - | (2,434 | ) | (2,434 | ) | ||||||||||||||||||||||||||||||||||||
| Long-term investments - Held-To-Maturity | - | - | (31,050 | ) | (31,050 | ) | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
| Long-term investments - Rabbi Trust | - | - | (4,994 | ) | (4,994 | ) | - | - | (4,611 | ) | (4,611 | ) | ||||||||||||||||||||||||||||||||||||
| Income taxes receivable | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Deferred income taxes - non-current | - | - | (581 | ) | (581 | ) | - | - | (1,942 | ) | (1,942 | ) | ||||||||||||||||||||||||||||||||||||
| Income taxes payable - current | - | - | 513 | 513 | - | - | 358 | 358 | ||||||||||||||||||||||||||||||||||||||||
| Income taxes payable - long-term | - | - | 3,734 | 3,734 | - | - | 3,779 | 3,779 | ||||||||||||||||||||||||||||||||||||||||
| Deferred income taxes - non-current | - | - | 1,699 | 1,699 | - | - | 1,532 | 1,532 | ||||||||||||||||||||||||||||||||||||||||
| Line of credit | - | - | - | - | - | - | 7,000 | 7,000 | ||||||||||||||||||||||||||||||||||||||||
| Deferred compensation | - | - | 5,171 | 5,171 | - | - | 5,031 | 5,031 | ||||||||||||||||||||||||||||||||||||||||
| Total Capital Employed | $ | 63,184 | $ | 18,181 | $ | 12,736 | $ | 94,101 | $ | 63,598 | $ | 17,221 | $ | 13,780 | $ | 94,599 | ||||||||||||||||||||||||||||||||
| Mattress | Upholstery | Unallocated | ||||||||||||||||||||||||||||||||||||||||||||||
| Fabrics | Fabrics | Corporate | Total | |||||||||||||||||||||||||||||||||||||||||||||
| Average Capital Employed (3) | $ | 67,847 | $ | 17,867 | $ | 12,914 | $ | 98,628 | ||||||||||||||||||||||||||||||||||||||||
Notes:
(1) | See reconciliation per page 10 of this financial information release. |
| (2) | Return on average capital employed represents the last twelve months operating income as of July 30, 2018 divided by average capital employed. Average capital employed does not included cash and cash equivalents, short-term investments - Available-For-Sale, long-term investments - Held-To-Maturity, long-term investments - Rabbie 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 five quarterly periods ending July 30, 2017, April 30, 2017 January 29, 2017, October 30, 2016, and July 31, 2016. |
| (4) | Intangible assets and goodwill are included in unallocated corporate for all periods presented and therfore, have no affect on capital employed and return on capital employed for both our mattress fabrics and upholstery fabrics segments. |
Page 10 of 10
| CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATING INCOME | ||||||||||||||||||||
| FOR THE TWELVE MONTHS ENDED JULY 29, 2018 AND JULY 30, 2017 | ||||||||||||||||||||
| (UNAUDITED) | ||||||||||||||||||||
| (AMOUNTS IN THOUSANDS) | ||||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||
| Trailing 12 | ||||||||||||||||||||
| Months | ||||||||||||||||||||
| 10/29/2017 | 1/28/2018 | 4/29/2018 | 7/29/2018 | 7/29/2018 | ||||||||||||||||
| Mattress Fabrics | $ | 6,562 | $ | 6,837 | $ | 6,088 | $ | 2,823 | $ | 22,310 | ||||||||||
| Upholstery Fabrics | 2,374 | 3,510 | 2,181 | 2,527 | 10,592 | |||||||||||||||
| Unallocated Corporate | (2,547 | ) | (2,703 | ) | (1,805 | ) | (1,259 | ) | (8,314 | ) | ||||||||||
| Subtotal | 6,389 | 7,644 | 6,464 | 4,091 | 24,588 | |||||||||||||||
| Restructuring expense and related charges | - | - | - | (2,016 | ) | (2,016 | ) | |||||||||||||
| Operating income | $ | 6,389 | $ | 7,644 | $ | 6,464 | $ | 2,075 | $ | 22,572 | ||||||||||
| Quarter Ended (1) | (1) | |||||||||||||||||||
| Trailing 12 | ||||||||||||||||||||
| Months | ||||||||||||||||||||
| 10/30/2016 | 1/29/2017 | 4/30/2017 | 7/30/2017 | 7/30/2017 | ||||||||||||||||
| Mattress Fabrics | $ | 7,460 | $ | 6,367 | $ | 7,153 | $ | 6,368 | $ | 27,348 | ||||||||||
| Upholstery Fabrics | 2,493 | 3,100 | 2,510 | 2,895 | 10,998 | |||||||||||||||
| Unallocated Corporate | (2,654 | ) | (2,532 | ) | (2,493 | ) | (2,299 | ) | (9,978 | ) | ||||||||||
| Operating income | $ | 7,299 | $ | 6,935 | $ | 7,170 | $ | 6,964 | $ | 28,368 | ||||||||||
| % Over (Under) | -12.5 | % | 10.2 | % | -9.8 | % | -70.2 | % | -20.4 | % | ||||||||||
Notes
(1) | We did not have any restructuring activities for the three month periods ending October 30, 2016, January 29, 2017, April 30, 2017, and July 30, 2017. |