Exhibit 99(b)
Page 1 of 13
CULP, INC. FINANCIAL INFORMATION RELEASE |
CONSOLIDATED STATEMENTS OF NET INCOME |
FOR THREE MONTHS ENDED OCTOBER 28, 2018 AND OCTOBER 29, 2017 |
(UNAUDITED) |
(Amounts in Thousands, Except for Per Share Data) |
THREE MONTHS ENDED | |||||||||||||||||||||||
Amounts | Percent of Sales | ||||||||||||||||||||||
October 28, | October 29, | % Over | October 28, | October 29, | |||||||||||||||||||
2018 | 2017 | (Under) | 2018 | 2017 | |||||||||||||||||||
Net sales | $ | 77,006 | 80,698 | (4.6 | )% | 100.0 | % | 100.0 | % | ||||||||||||||
Cost of sales | (1)(3)(4) | 63,680 | 64,894 | (1.9 | )% | 82.7 | % | 80.4 | % | ||||||||||||||
Gross profit | 13,326 | 15,804 | (15.7 | )% | 17.3 | % | 19.6 | % | |||||||||||||||
Selling, general and | |||||||||||||||||||||||
administrative expenses | (3)(4) | 10,103 | 9,415 | 7.3 | % | 13.1 | % | 11.7 | % | ||||||||||||||
Restructuring credit | (2)(4) | (1,061 | ) | - | (100.0 | )% | (1.4 | )% | 0.0 | % | |||||||||||||
Income from operations | 4,284 | 6,389 | (32.9 | )% | 5.6 | % | 7.9 | % | |||||||||||||||
Interest expense | 18 | 37 | (51.4 | )% | 0.0 | % | 0.0 | % | |||||||||||||||
Interest income | (151 | ) | (128 | ) | 18.0 | % | (0.2 | )% | (0.2 | )% | |||||||||||||
Other expense | 142 | 321 | (55.8 | )% | 0.2 | % | 0.4 | % | |||||||||||||||
Income before income taxes | 4,275 | 6,159 | (30.6 | )% | 5.6 | % | 7.6 | % | |||||||||||||||
Income taxes* | 1,276 | 2,108 | (39.5 | )% | 29.8 | % | 34.2 | % | |||||||||||||||
Loss from investment in unconsolidated joint venture | 55 | 75 | (26.7 | )% | 0.1 | % | 0.1 | % | |||||||||||||||
Net income | 2,944 | 3,976 | (26.0 | )% | 3.8 | % | 4.9 | % | |||||||||||||||
Less: Net income attributable to non-controlling interest | (11 | ) | - | (100.0 | )% | (0.0 | )% | 0.0 | % | ||||||||||||||
Net income attributable to Culp Inc. common shareholders | $ | 2,933 | 3,976 | (26.2 | )% | 3.8 | % | 4.9 | % | ||||||||||||||
Net income attributable to Culp Inc. common shareholders per share - basic | $ | 0.23 | $ | 0.32 | (28.1 | )% | |||||||||||||||||
Net income attributable to Culp Inc. common shareholders per share - diluted | $ | 0.23 | $ | 0.32 | (28.1 | )% | |||||||||||||||||
Average shares outstanding-basic | 12,515 | 12,440 | 0.6 | % | |||||||||||||||||||
Average shares outstanding-diluted | 12,551 | 12,580 | (0.2 | )% | |||||||||||||||||||
* 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 October 28, 2018, includes a $270 restructuring related charge for operating costs associated with our closed upholstery fabrics plant facility located in Anderson, SC. |
(2) | The $1.1 million restructuring credit represents a $1.1 million gain on the sale of equipment partially offset by a charge of $63 for employee termination benefits associated with the closure of our Anderson, SC upholstery fabrics plant facility. |
(3) | During the three-month period ending October 28, 2018, our mattress fabrics segment incurred non-recurring charges totaling $248 that pertained to employee termination benefits and other operational reorganization costs. Of the $248 total non-recurring charge, $159 and $89 were recorded in cost of sales and selling, general, and administrative expenses, respectively. |
(4) | See page 8 for our statement of operations that exclude our restructuring credit and restructuring related charges associated with our upholstery fabrics segment and non-recurring charges associated with our mattress fabrics segment for the three-month period ending October 28, 2018. There were no restructuring activities or non-recurring charges asscociated with our mattress fabrics segment noted for the three-month period ending October 29, 2017. |
Page 2 of 13
CULP, INC. FINANCIAL INFORMATION RELEASE |
CONSOLIDATED STATEMENTS OF NET INCOME |
FOR SIX MONTHS ENDED OCTOBER 28, 2018 AND OCTOBER 29, 2017 |
(UNAUDITED) |
(Amounts in Thousands, Except for Per Share Data) |
SIX MONTHS ENDED | |||||||||||||||||||||||
Amounts | Percent of Sales | ||||||||||||||||||||||
October 28, | October 29, | % Over | October 28, | October 29, | |||||||||||||||||||
2018 | 2017 | (Under) | 2018 | 2017 | |||||||||||||||||||
Net sales | $ | 148,479 | 160,230 | (7.3 | )% | 100.0 | % | 100.0 | % | ||||||||||||||
Cost of sales | (1)(3)(4) | 124,594 | 127,962 | (2.6 | )% | 83.9 | % | 79.9 | % | ||||||||||||||
Gross profit | 23,885 | 32,268 | (26.0 | )% | 16.1 | % | 20.1 | % | |||||||||||||||
Selling, general and | |||||||||||||||||||||||
administrative expenses | (3)(4) | 18,136 | 18,916 | (4.1 | )% | 12.2 | % | 11.8 | % | ||||||||||||||
Restructuring credit | (2)(4) | (610 | ) | - | (100.0 | )% | (0.4 | )% | 0.0 | % | |||||||||||||
Income from operations | 6,359 | 13,352 | (52.4 | )% | 4.3 | % | 8.3 | % | |||||||||||||||
Interest expense | 38 | 37 | 2.7 | % | 0.0 | % | 0.0 | % | |||||||||||||||
Interest income | (301 | ) | (259 | ) | 16.2 | % | (0.2 | )% | (0.2 | )% | |||||||||||||
Other expense | 399 | 674 | (40.8 | )% | 0.3 | % | 0.4 | % | |||||||||||||||
Income before income taxes | 6,223 | 12,900 | (51.8 | )% | 4.2 | % | 8.1 | % | |||||||||||||||
Income taxes* | 2,182 | 3,748 | (41.8 | )% | 35.1 | % | 29.1 | % | |||||||||||||||
Loss from investment in unconsolidated joint venture | 132 | 193 | (31.6 | )% | 0.1 | % | 0.1 | % | |||||||||||||||
Net income | 3,909 | 8,959 | (56.4 | )% | 2.6 | % | 5.6 | % | |||||||||||||||
Less: Net income attributable to non-controlling interest | (19 | ) | - | (100.0 | )% | (0.0 | )% | 0.0 | % | ||||||||||||||
Net income attributable to Culp Inc. common shareholders | $ | 3,890 | 8,959 | (56.6 | )% | 2.6 | % | 5.6 | % | ||||||||||||||
Net income attributable to Culp Inc. common shareholders per share - basic | $ | 0.31 | $ | 0.72 | (56.9 | )% | |||||||||||||||||
Net income attributable to Culp Inc. common shareholders per share - diluted | $ | 0.31 | $ | 0.71 | (56.3 | )% | |||||||||||||||||
Average shares outstanding-basic | 12,512 | 12,420 | 0.7 | % | |||||||||||||||||||
Average shares outstanding-diluted | 12,612 | 12,613 | (0.0 | )% | |||||||||||||||||||
* Percent of sales column for income taxes is calculated as a % of income before income taxes. |
Notes | |
(1) | Cost of sales for the six-month period ending October 28, 2018, includes restructuring related charges totaling $1.8 million, of which $1.6 million pertains to inventory markdowns and $270 pertains to operating costs associated with our closed upholstery fabrics plant facility located in Anderson, SC. |
(2) | The $610 restructuring credit represents a $1.1 million gain on the sale of equipment partially offset by a charge of $513 for employee termination benefits associated with the closure of our Anderson, SC upholstery fabrics plant facility. |
(3) | During the six-month period ending October 28, 2018, our mattress fabrics segment incurred non-recurring charges totaling $248 that pertained to employee termination benefits and other operational reorganization costs. Of the $248 total non-recurring charge, $159 and $89 were recorded in cost of sales and selling, general, and administrative expenses, respectively. |
(4) | See page 9 for our statement of operations that exclude our restructuring credit and restructuring related charges associated with our upholstery fabrics segment and non-recurring charges associated with our mattress fabrics segment for the three-month period ending October 28, 2018. There were no restructuring activities or non-recurring charges associated with our mattress fabrics segment noted for the three-month period ending October 29, 2017. |
Page 3 of 13
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||
OCTOBER 28, 2018, OCTOBER 29, 2017 AND APRIL 29, 2018 | ||||||||||||||||||||
Unaudited | ||||||||||||||||||||
(Amounts in Thousands) | ||||||||||||||||||||
Amounts | ||||||||||||||||||||
(Condensed) | Increase | |||||||||||||||||||
October 28, | October 29, | (Decrease) | * April 29, | |||||||||||||||||
2018 | 2017 | Dollars | Percent | 2018 | ||||||||||||||||
Current assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 14,768 | 15,739 | (971 | ) | (6.2 | )% | 21,228 | ||||||||||||
Short-term investments - Available for Sale | - | 2,478 | (2,478 | ) | (100.0 | )% | 2,451 | |||||||||||||
Short-term investments - Held-To-Maturity | 26,719 | 4,015 | 22,704 | 565.5 | % | 25,759 | ||||||||||||||
Accounts receivable | 24,362 | 24,220 | 142 | 0.6 | % | 26,307 | ||||||||||||||
Inventories | 50,601 | 50,209 | 392 | 0.8 | % | 53,454 | ||||||||||||||
Assets held for sale | 237 | - | 237 | 100.0 | % | - | ||||||||||||||
Other current assets | 2,461 | 2,263 | 198 | 8.7 | % | 2,870 | ||||||||||||||
Total current assets | 119,148 | 98,924 | 20,224 | 20.4 | % | 132,069 | ||||||||||||||
Property, plant & equipment, net | 51,325 | 52,530 | (1,205 | ) | (2.3 | )% | 51,794 | |||||||||||||
Goodwill | 27,222 | 11,462 | 15,760 | 137.5 | % | 13,569 | ||||||||||||||
Intangible assets | 10,636 | 1,428 | 9,208 | 644.8 | % | 4,275 | ||||||||||||||
Deferred income taxes | 3,614 | 491 | 3,123 | 636.0 | % | 1,458 | ||||||||||||||
Long-term Investments - Held-To-Maturity | - | 26,853 | (26,853 | ) | (100.0 | )% | 5,035 | |||||||||||||
Long-term Investments - Rabbi Trust | 7,851 | 6,921 | 930 | 13.4 | % | 7,326 | ||||||||||||||
Investment in unconsolidated joint venture | 1,470 | 1,522 | (52 | ) | (3.4 | )% | 1,501 | |||||||||||||
Other assets | 945 | 912 | 33 | 3.6 | % | 957 | ||||||||||||||
Total assets | $ | 222,211 | 201,043 | 21,168 | 10.5 | % | 217,984 | |||||||||||||
Current liabilities | ||||||||||||||||||||
Accounts payable - trade | $ | 24,007 | 24,600 | (593 | ) | (2.4 | )% | 27,237 | ||||||||||||
Accounts payable - capital expenditures | 114 | 3,209 | (3,095 | ) | (96.4 | )% | 1,776 | |||||||||||||
Deferred revenue | 649 | - | 649 | 100.0 | % | 809 | ||||||||||||||
Accrued expenses | 8,670 | 7,364 | 1,306 | 17.7 | % | 9,325 | ||||||||||||||
Accrued restructuring costs | 260 | - | 260 | 100.0 | % | - | ||||||||||||||
Deferred compensation | 714 | - | 714 | 100.0 | % | - | ||||||||||||||
Income taxes payable - current | 2,044 | 692 | 1,352 | 195.4 | % | 1,437 | ||||||||||||||
Total current liabilities | 36,458 | 35,865 | 593 | 1.7 | % | 40,584 | ||||||||||||||
Accrued expenses - long-term | - | - | - | 0.0 | % | 763 | ||||||||||||||
Contingent consideration - Earn-Out Obligation | 5,706 | - | 5,706 | 100.0 | % | - | ||||||||||||||
Income taxes payable - long-term | 3,233 | 487 | 2,746 | 563.9 | % | 3,758 | ||||||||||||||
Deferred income taxes | 2,225 | 4,641 | (2,416 | ) | (52.1 | )% | 2,150 | |||||||||||||
Deferred compensation | 7,120 | 6,970 | 150 | 2.2 | % | 7,353 | ||||||||||||||
Total liabilities | 54,742 | 47,963 | 6,779 | 14.1 | % | 54,608 | ||||||||||||||
Shareholders' equity | ||||||||||||||||||||
Shareholders' equity attributable to Culp Inc. | 162,918 | 153,080 | 9,838 | 6.4 | % | 163,376 | ||||||||||||||
Non-controlling interest | 4,551 | - | 4,551 | 100.0 | % | - | ||||||||||||||
167,469 | 153,080 | 14,389 | 9.4 | % | 163,376 | |||||||||||||||
Total liabilities and | ||||||||||||||||||||
shareholders' equity | $ | 222,211 | 201,043 | 21,168 | 10.5 | % | 217,984 | |||||||||||||
Shares outstanding | 12,492 | 12,435 | 57 | 0.5 | % | 12,450 | ||||||||||||||
* Derived from audited financial statements. |
Page 4 of 13
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||
SUMMARY OF CASH AND INVESTMENTS | ||||||||||||
OCTOBER 28, 2018, OCTOBER 29, 2017, AND APRIL 29, 2018 | ||||||||||||
Unaudited | ||||||||||||
(Amounts in Thousands) | ||||||||||||
Amounts | ||||||||||||
October 28, | October 29, | April 29, | ||||||||||
2018 | 2017 | 2018* | ||||||||||
Cash and cash equivalents | $ | 14,768 | $ | 15,739 | $ | 21,228 | ||||||
Short-term investments - Available for Sale | - | 2,478 | 2,451 | |||||||||
Short-term investments - Held-To-Maturity | 26,719 | 4,015 | 25,759 | |||||||||
Long-term investments - Held-To-Maturity | - | 26,853 | 5,035 | |||||||||
Total Cash and Investments | $ | 41,487 | $ | 49,085 | $ | 54,473 | ||||||
* Derived from audited financial statements. |
Page 5 of 13
CULP, INC. FINANCIAL INFORMATION RELEASE | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
FOR THE SIX MONTHS ENDED OCTOBER 28, 2018 AND OCTOBER 29, 2017 | |||||||
Unaudited | |||||||
(Amounts in Thousands) | |||||||
SIX MONTHS ENDED | |||||||
Amounts | |||||||
October 28, | October 29, | ||||||
2018 | 2017 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 3,909 | 8,959 | ||||
Adjustments to reconcile net income to net cash | |||||||
provided by operating activities: | |||||||
Depreciation | 4,056 | 3,713 | |||||
Amortization | 391 | 166 | |||||
Stock-based compensation | (106 | ) | 1,558 | ||||
Deferred income taxes | (2,081 | ) | 976 | ||||
Realized loss on sale of short-term investments (Available for Sale) | 94 | - | |||||
Gain on sale of equipment | (1,079 | ) | - | ||||
Loss from investment in unconsolidated joint venture | 132 | 193 | |||||
Foreign currency exchange gain (loss) | (102 | ) | 42 | ||||
Changes in assets and liabilities, net of effects of acquisition of businesses: | |||||||
Accounts receivable | 1,639 | 561 | |||||
Inventories | 3,767 | 1,597 | |||||
Other current assets | 379 | 723 | |||||
Other assets | (10 | ) | (35 | ) | |||
Accounts payable | (3,264 | ) | (5,074 | ) | |||
Deferred revenue | (160 | ) | - | ||||
Accrued expenses and deferrred compensation | (1,472 | ) | (3,607 | ) | |||
Accrued restructuring costs | 260 | - | |||||
Income taxes | 247 | 406 | |||||
Net cash provided by operating activities | 6,600 | 10,178 | |||||
Cash flows from investing activities: | |||||||
Net cash paid for acquistion of businesses | (12,096 | ) | - | ||||
Capital expenditures | (2,096 | ) | (4,978 | ) | |||
Proceeds from the sale of equipment | 1,280 | 6 | |||||
Investment in unconsolidated joint venture | (100 | ) | (609 | ) | |||
Proceeds from the sale of short-term investments (Held to Maturity) | 4,000 | - | |||||
Proceeds from the sale of short-term investments (Available for Sale) | 2,458 | - | |||||
Purchase of short-term investments (Available for Sale) | (10 | ) | (24 | ) | |||
Proceeds from the sale of long-term investments (Rabbi Trust) | - | 54 | |||||
Purchase of long-term investments (Rabbi Trust) | (526 | ) | (1,457 | ) | |||
Net cash used in investing activities | (7,090 | ) | (7,008 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from line of credit | 12,000 | 10,000 | |||||
Payments on line of credit | (12,000 | ) | (10,000 | ) | |||
Payments on vendor-financed capital expenditures | (1,412 | ) | (2,500 | ) | |||
Dividends paid | (2,253 | ) | (4,603 | ) | |||
Common stock surrendered for withholding taxes payable | (1,292 | ) | (1,147 | ) | |||
Common stock repurchased | (844 | ) | - | ||||
Proceeds from common stock issued | - | 5 | |||||
Net cash used in financing activities | (5,801 | ) | (8,245 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (169 | ) | 19 | ||||
Decrease in cash and cash equivalents | (6,460 | ) | (5,056 | ) | |||
Cash and cash equivalents at beginning of period | 21,228 | 20,795 | |||||
Cash and cash equivalents at end of period | $ | 14,768 | 15,739 | ||||
Free Cash Flow (1) | $ | 3,577 | 713 | ||||
(1) Free Cash Flow reconciliation is as follows: | |||||||
FY 2019 | FY 2018 | ||||||
A) Net cash provided by operating activities | $ | 6,600 | 10,178 | ||||
B) Minus: Capital Expenditures | (2,096 | ) | (4,978 | ) | |||
C) Plus: Proceeds from the sale of equipment | 1,280 | 6 | |||||
D) Minus: Investment in unconsolidated joint venture | (100 | ) | (609 | ) | |||
E) Minus: Payments on vendor-financed capital expenditures | (1,412 | ) | (2,500 | ) | |||
F) Plus: Proceeds from the sale of long-term investments (Rabbi Trust) | - | 54 | |||||
G) Minus: Purchase of long-term investments (Rabbi Trust) | (526 | ) | (1,457 | ) | |||
H) Effects of exchange rate changes on cash and cash equivalents | (169 | ) | 19 | ||||
$ | 3,577 | 713 | |||||
Page 6 of 13
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||||
STATEMENTS OF OPERATIONS BY SEGMENT | ||||||||||||||||||||||
FOR THE THREE MONTHS ENDED OCTOBER 28, 2018 AND OCTOBER 29, 2017 | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||
THREE MONTHS ENDED | ||||||||||||||||||||||
Amounts | Percent of Total Sales | |||||||||||||||||||||
October 28, | October 29, | % Over | October 28, | October 29, | ||||||||||||||||||
Net Sales by Segment | 2018 | 2017 | (Under) | 2018 | 2017 | |||||||||||||||||
Mattress Fabrics | $ | 41,989 | 48,601 | (13.6 | )% | 54.5 | % | 60.2 | % | |||||||||||||
Upholstery Fabrics | 35,017 | 32,097 | 9.1 | % | 45.5 | % | 39.8 | % | ||||||||||||||
Net Sales | $ | 77,006 | 80,698 | (4.6 | )% | 100.0 | % | 100.0 | % | |||||||||||||
Gross Profit by Segment | Gross Profit Margin | |||||||||||||||||||||
Mattress Fabrics | $ | 7,498 | 9,730 | (22.9 | )% | 17.9 | % | 20.0 | % | |||||||||||||
Upholstery Fabrics | 6,257 | 6,074 | 3.0 | % | 17.9 | % | 18.9 | % | ||||||||||||||
Subtotal | 13,755 | 15,804 | (13.0 | )% | 17.9 | % | 19.6 | % | ||||||||||||||
Other non-recurring charges | (1) | (159 | ) | - | (100.0 | )% | (0.2 | )% | 0.0 | % | ||||||||||||
Restructuring related charges | (1) | (270 | ) | - | (100.0 | )% | (0.4 | )% | 0.0 | % | ||||||||||||
Gross Profit | 13,326 | 15,804 | (15.7 | )% | 17.3 | % | 19.6 | % | ||||||||||||||
Selling, General and Administrative Expenses by Segment | Percent of Sales | |||||||||||||||||||||
Mattress Fabrics | $ | 4,566 | 3,168 | 44.1 | % | 10.9 | % | 6.5 | % | |||||||||||||
Upholstery Fabrics | 3,535 | 3,700 | (4.5 | )% | 10.1 | % | 11.5 | % | ||||||||||||||
Subtotal | 8,101 | 6,868 | 18.0 | % | 10.5 | % | 8.5 | % | ||||||||||||||
Other non-recurring charges | (1) | 89 | - | 100.0 | % | 0.1 | % | 0.0 | % | |||||||||||||
Unallocated Corporate expenses | 1,913 | 2,547 | (24.9 | )% | 2.5 | % | 3.2 | % | ||||||||||||||
Selling, General and Administrative Expenses | $ | 10,103 | 9,415 | 7.3 | % | 13.1 | % | 11.7 | % | |||||||||||||
Operating Income (loss) by Segment | Operating Income (Loss) Margin | |||||||||||||||||||||
Mattress Fabrics | $ | 2,932 | 6,562 | (55.3 | )% | 7.0 | % | 13.5 | % | |||||||||||||
Upholstery Fabrics | 2,722 | 2,374 | 14.7 | % | 7.8 | % | 7.4 | % | ||||||||||||||
Subtotal | $ | 5,654 | 8,936 | (36.7 | )% | 7.3 | % | 11.1 | % | |||||||||||||
Unallocated corporate expenses | (1,913 | ) | (2,547 | ) | (24.9 | )% | (2.5 | )% | (3.2 | )% | ||||||||||||
Other non-recurring charges | (1) | (248 | ) | - | (100.0 | )% | (0.3 | )% | 0.0 | % | ||||||||||||
Restructuring credit and related charges | (1) | 791 | - | 100.0 | % | 1.0 | % | 0.0 | % | |||||||||||||
Operating income | 4,284 | 6,389 | (32.9 | )% | 5.6 | % | 7.9 | % | ||||||||||||||
Depreciation Expense by Segment | ||||||||||||||||||||||
Mattress Fabrics | $ | 1,844 | 1,698 | 8.6 | % | |||||||||||||||||
Upholstery Fabrics | 197 | 207 | (4.8 | )% | ||||||||||||||||||
Depreciation Expense | $ | 2,041 | 1,905 | 7.1 | % |
Notes | |
(1) | See page 8 for detailed description of charges. |
Page 7 of 13
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||||
STATEMENTS OF OPERATIONS BY SEGMENT | ||||||||||||||||||||||
FOR THE SIX MONTHS ENDED OCTOBER 28, 2018 AND OCTOBER 29, 2017 | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||
SIX MONTHS ENDED | ||||||||||||||||||||||
Amounts | Percent of Total Sales | |||||||||||||||||||||
October 28, | October 29, | % Over | October 28, | October 29, | ||||||||||||||||||
Net Sales by Segment | 2018 | 2017 | (Under) | 2018 | 2017 | |||||||||||||||||
Mattress Fabrics | $ | 78,972 | 97,030 | (18.6 | )% | 53.2 | % | 60.6 | % | |||||||||||||
Upholstery Fabrics | 69,507 | 63,200 | 10.0 | % | 46.8 | % | 39.4 | % | ||||||||||||||
Net Sales | $ | 148,479 | 160,230 | (7.3 | )% | 100.0 | % | 100.0 | % | |||||||||||||
Gross Profit by Segment | Gross Profit Margin | |||||||||||||||||||||
Mattress Fabrics | $ | 13,470 | 19,495 | (30.9 | )% | 17.1 | % | 20.1 | % | |||||||||||||
Upholstery Fabrics | 12,410 | 12,773 | (2.8 | )% | 17.9 | % | 20.2 | % | ||||||||||||||
Subtotal | 25,880 | 32,268 | (19.8 | )% | 17.4 | % | 20.1 | % | ||||||||||||||
Other non-recurring charges | (1) | (159 | ) | - | (100.0 | )% | (0.1 | )% | 0.0 | % | ||||||||||||
Restructuring related charges | (1) | (1,836 | ) | - | (100.0 | )% | (1.2 | )% | 0.0 | % | ||||||||||||
Gross Profit | 23,885 | 32,268 | (26.0 | )% | 16.1 | % | 20.1 | % | ||||||||||||||
Selling, General and Administrative Expenses by Segment | Percent of Sales | |||||||||||||||||||||
Mattress Fabrics | $ | 7,714 | 6,559 | 17.6 | % | 9.8 | % | 6.8 | % | |||||||||||||
Upholstery Fabrics | 7,161 | 7,511 | (4.7 | )% | 10.3 | % | 11.9 | % | ||||||||||||||
Subtotal | 14,875 | 14,070 | 5.7 | % | 10.0 | % | 8.8 | % | ||||||||||||||
Other non-recurring charges | (1) | 89 | - | 100.0 | % | 0.1 | % | 0.0 | % | |||||||||||||
Unallocated Corporate expenses | 3,172 | 4,846 | (34.5 | )% | 2.1 | % | 3.0 | % | ||||||||||||||
Selling, General and Administrative Expenses | $ | 18,136 | 18,916 | (4.1 | )% | 12.2 | % | 11.8 | % | |||||||||||||
Operating Income (loss) by Segment | Operating Income (Loss) Margin | |||||||||||||||||||||
Mattress Fabrics | $ | 5,755 | 12,936 | (55.5 | )% | 7.3 | % | 13.3 | % | |||||||||||||
Upholstery Fabrics | 5,249 | 5,262 | (0.2 | )% | 7.6 | % | 8.3 | % | ||||||||||||||
Subtotal | $ | 11,004 | 18,198 | (39.5 | )% | 7.4 | % | 11.4 | % | |||||||||||||
Unallocated corporate expenses | (3,172 | ) | (4,846 | ) | (34.5 | )% | (2.1 | )% | (3.0 | )% | ||||||||||||
Other non-recurring charges | (1) | (248 | ) | - | (100.0 | )% | (0.2 | )% | 0.0 | % | ||||||||||||
Restructuring credit and related charges | (1) | (1,225 | ) | - | (100.0 | )% | (0.8 | )% | 0.0 | % | ||||||||||||
Operating income | 6,359 | 13,352 | (52.4 | )% | 4.3 | % | 8.3 | % | ||||||||||||||
Return on Capital (2) | ||||||||||||||||||||||
Mattress Fabrics | 23.6 | % | 37.3 | % | ||||||||||||||||||
Upholstery Fabrics | 56.5 | % | 60.5 | % | ||||||||||||||||||
Unallocated Corporate | N/A | N/A | ||||||||||||||||||||
Consolidated | 18.4 | % | 27.0 | % | ||||||||||||||||||
Capital Employed (2) (3) | ||||||||||||||||||||||
Mattress Fabrics | $ | 79,947 | 78,476 | 1.9 | % | |||||||||||||||||
Upholstery Fabrics | 17,796 | 17,749 | 0.3 | % | ||||||||||||||||||
Unallocated Corporate | 32,110 | 13,148 | 144.2 | % | ||||||||||||||||||
Consolidated | $ | 129,853 | 109,373 | 18.7 | % | |||||||||||||||||
Depreciation Expense by Segment | ||||||||||||||||||||||
Mattress Fabrics | $ | 3,644 | 3,310 | 10.1 | % | |||||||||||||||||
Upholstery Fabrics | 412 | 403 | 2.2 | % | ||||||||||||||||||
Depreciation Expense | $ | 4,056 | 3,713 | 9.2 | % |
Notes | |
(1) | See page 9 for detailed description of charges. |
(2) | See pages 11 and 12 of this financial information release for calculations. |
(3) | The capital employed balances are as of October 28, 2018 and October 29, 2017. |
Page 8 of 13
CULP, INC. | ||||||||||||||||||||||||||||||||||||||
ADJUSTED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||||||||||||||||||||
FOR THE THREE MONTHS ENDED OCTOBER 28, 2018 AND OCTOBER 29, 2017 | ||||||||||||||||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||||||||||||||||
THREE MONTHS ENDED | ||||||||||||||||||||||||||||||||||||||
(4) | ||||||||||||||||||||||||||||||||||||||
As Reported | October 28, 2018 | As Reported | ||||||||||||||||||||||||||||||||||||
October 28, | % of | % of | Adjusted | % of | October 29, | % of | % Over | |||||||||||||||||||||||||||||||
2018 | Sales | Adjustments | Sales | Results | Sales | 2017 | Sales | (Under) | ||||||||||||||||||||||||||||||
Net sales | $ | 77,006 | 100.0 | % | - | 0.0 | % | 77,006 | 100.0 | % | 80,698 | 100.0 | % | -4.6 | % | |||||||||||||||||||||||
Cost of sales | 63,680 | 82.7 | % | (1) | (429 | ) | -0.6 | % | 63,251 | 82.1 | % | 64,894 | 80.4 | % | -2.5 | % | ||||||||||||||||||||||
Gross profit | 13,326 | 17.3 | % | (429 | ) | -0.6 | % | 13,755 | 17.9 | % | 15,804 | 19.6 | % | -13.0 | % | |||||||||||||||||||||||
Selling, general and | ||||||||||||||||||||||||||||||||||||||
administrative expenses | 10,103 | 13.1 | % | (3) | (89 | ) | -0.1 | % | 10,014 | 13.0 | % | 9,415 | 11.7 | % | 6.4 | % | ||||||||||||||||||||||
Restructuring credit | (1,061 | ) | -1.4 | % | (2) | 1,061 | 1.4 | % | - | 0.0 | % | - | 0.0 | % | 0.0 | % | ||||||||||||||||||||||
Income from operations | 4,284 | 5.6 | % | 543 | 0.7 | % | 3,741 | 4.9 | % | 6,389 | 7.9 | % | -41.4 | % | ||||||||||||||||||||||||
Interest expense | 18 | 0.0 | % | - | 0.0 | % | 18 | 0.0 | % | 37 | 0.0 | % | -51.4 | % | ||||||||||||||||||||||||
Interest income | (151 | ) | -0.2 | % | - | 0.0 | % | (151 | ) | -0.2 | % | (128 | ) | -0.2 | % | 18.0 | % | |||||||||||||||||||||
Other expense | 142 | 0.2 | % | - | 0.0 | % | 142 | 0.2 | % | 321 | 0.4 | % | -55.8 | % | ||||||||||||||||||||||||
Income before income taxes | 4,275 | 5.6 | % | 543 | 0.7 | % | 3,732 | 4.8 | % | 6,159 | 7.6 | % | -39.4 | % |
Notes | |
(1) | The $429 represents a restructuring related charge of $270 for other operating costs associated with our closed Anderson, SC upholstery fabrics plant facility and a non-recurring charge of $159 for employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment. |
(2) | The $1.1 million restructuring credit represents a $1.1 million gain on the sale of equipment partially offset by a charge of $63 for employee termination benefits associated with the closure of our Anderson, SC upholstery fabrics plant facility. |
(3) | The $89 represents employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment. |
(4) | Actual reported results were used for comparative purposes as there were no restructuring activities or non-recurring charges associated with our mattress fabrics segment for the three-month period ending October 29, 2017. |
Page 9 of 13
CULP, INC. | ||||||||||||||||||||||||||||||||||||||
ADJUSTED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||||||||||||||||||||
FOR THE SIX MONTHS ENDED OCTOBER 28, 2018 AND OCTOBER 29, 2017 | ||||||||||||||||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||||||||||||||||
SIX MONTHS ENDED | ||||||||||||||||||||||||||||||||||||||
(4) | ||||||||||||||||||||||||||||||||||||||
As Reported | October 28, 2018 | As Reported | ||||||||||||||||||||||||||||||||||||
October 28, | % of | % of | Adjusted | % of | October 29, | % of | % Over | |||||||||||||||||||||||||||||||
2018 | Sales | Adjustments | Sales | Results | Sales | 2017 | Sales | (Under) | ||||||||||||||||||||||||||||||
Net sales | $ | 148,479 | 100.0 | % | - | 0.0 | % | 148,479 | 100.0 | % | 160,230 | 100.0 | % | -7.3 | % | |||||||||||||||||||||||
Cost of sales | 124,594 | 83.9 | % | (1) | (1,995 | ) | -1.3 | % | 122,599 | 82.6 | % | 127,962 | 79.9 | % | -4.2 | % | ||||||||||||||||||||||
Gross profit | 23,885 | 16.1 | % | (1,995 | ) | -1.3 | % | 25,880 | 17.4 | % | 32,268 | 20.1 | % | -19.8 | % | |||||||||||||||||||||||
Selling, general and | ||||||||||||||||||||||||||||||||||||||
administrative expenses | 18,136 | 12.2 | % | (3) | (89 | ) | -0.1 | % | 18,047 | 12.2 | % | 18,916 | 11.8 | % | -4.6 | % | ||||||||||||||||||||||
Restructuring credit | (610 | ) | -0.4 | % | (2) | 610 | 0.4 | % | - | 0.0 | % | - | 0.0 | % | 0.0 | % | ||||||||||||||||||||||
Income from operations | 6,359 | 4.3 | % | (1,474 | ) | -1.0 | % | 7,833 | 5.3 | % | 13,352 | 8.3 | % | -41.3 | % | |||||||||||||||||||||||
Interest expense | 38 | 0.0 | % | - | 0.0 | % | 38 | 0.0 | % | 37 | 0.0 | % | 2.7 | % | ||||||||||||||||||||||||
Interest income | (301 | ) | -0.2 | % | - | 0.0 | % | (301 | ) | -0.2 | % | (259 | ) | -0.2 | % | 16.2 | % | |||||||||||||||||||||
Other expense | 399 | 0.3 | % | - | 0.0 | % | 399 | 0.3 | % | 674 | 0.4 | % | -40.8 | % | ||||||||||||||||||||||||
Income before income taxes | 6,223 | 4.2 | % | (1,474 | ) | -1.0 | % | 7,697 | 5.2 | % | 12,900 | 8.1 | % | -40.3 | % |
Notes | |
(1) | The $2.0 million represents a restructuring related charge of $1.6 million for inventory markdowns and $270 for operating costs associated with the closure of our Anderson, SC plant upholstery fabrics plant facility and $159 for employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment. |
(2) | The $610 restructuring credit represents a $1.1 million gain on the sale of equipment partially offset by a charge of $513 for employee termination benefits associated with the closure of our Anderson, SC upholstery fabrics plant facility. |
(3) | The $89 represents employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment. |
(4) | Actual reported results were used for comparative purposes as there were no restructuring activities or non-recurring charges associated with our mattress fabrics segment for the six-month period ending October 29, 2017. |
Page 10 of 13
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||
CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA | ||||||||||||||||||||
FOR THE TWELVE MONTHS ENDED OCTOBER 28, 2018 AND OCTOBER 29, 2017 | ||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||
(AMOUNTS IN THOUSANDS) | ||||||||||||||||||||
Quarter Ended | ||||||||||||||||||||
Trailing 12 | ||||||||||||||||||||
Months | ||||||||||||||||||||
1/28/2018 | 4/29/2018 | 7/29/2018 | 10/28/2018 | 10/28/2018 | ||||||||||||||||
Net income (loss) | $ | (748 | ) | $ | 12,666 | $ | 965 | $ | 2,944 | $ | 15,827 | |||||||||
Income taxes | 8,208 | (6,217 | ) | 906 | 1,276 | 4,173 | ||||||||||||||
Interest income, net | (101 | ) | (117 | ) | (130 | ) | (133 | ) | (481 | ) | ||||||||||
Other non-recurring charges | - | - | - | 248 | 248 | |||||||||||||||
Restructuring expense (credit) and related charges | - | - | 2,016 | (791 | ) | 1,225 | ||||||||||||||
Depreciation and amortization expense | 2,048 | 2,096 | 2,160 | 2,287 | 8,591 | |||||||||||||||
Stock based compensation | 864 | (210 | ) | (501 | ) | 395 | 548 | |||||||||||||
Adjusted EBITDA | $ | 10,271 | $ | 8,218 | $ | 5,416 | $ | 6,226 | $ | 30,131 | ||||||||||
Quarter Ended | ||||||||||||||||||||
Trailing 12 | ||||||||||||||||||||
Months | ||||||||||||||||||||
1/29/2017 | 4/30/2017 | 7/30/2017 | 10/29/2017 | 10/29/2017 | ||||||||||||||||
Net income | $ | 6,347 | $ | 6,198 | $ | 4,984 | $ | 3,976 | $ | 21,505 | ||||||||||
Income taxes | 643 | 778 | 1,640 | 2,108 | 5,169 | |||||||||||||||
Interest income, net | (124 | ) | (134 | ) | (131 | ) | (91 | ) | (480 | ) | ||||||||||
Other non-recurring charges | - | - | - | - | - | |||||||||||||||
Restructuring expense (credit) and related charges | - | - | - | - | - | |||||||||||||||
Depreciation and amortization expense | 1,875 | 1,863 | 1,889 | 1,990 | 7,617 | |||||||||||||||
Stock based compensation | 962 | 739 | 757 | 801 | 3,259 | |||||||||||||||
Adjusted EBITDA | $ | 9,703 | $ | 9,444 | $ | 9,139 | $ | 8,784 | $ | 37,070 | ||||||||||
% Over (Under) | 5.9 | % | -13.0 | % | -40.7 | % | -29.1 | % | -18.7 | % |
Page 11 of 13
CULP, INC. FINANCIAL INFORMATION RELEASE |
RETURN ON CAPITAL EMPLOYED BY SEGMENT |
FOR THE TWELVE MONTHS ENDED OCTOBER 28, 2018 |
(Amounts in Thousands) |
(Unaudited) |
Operating Income | ||||||||||||||||||||||||||||||||||||||||||||||||
Twelve Months | Average | Return on | ||||||||||||||||||||||||||||||||||||||||||||||
Ended | Capital | Avg. Capital | ||||||||||||||||||||||||||||||||||||||||||||||
October 28, 2018 (1) | Employed (3) | Employed (2) | ||||||||||||||||||||||||||||||||||||||||||||||
Mattress Fabrics | $ | 18,680 | $ | 79,006 | 23.6 | % | ||||||||||||||||||||||||||||||||||||||||||
Upholstery Fabrics | 10,940 | 19,372 | 56.5 | % | ||||||||||||||||||||||||||||||||||||||||||||
(less: Unallocated Corporate) | (7,680 | ) | 21,083 | N/A | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 21,940 | $ | 119,461 | 18.4 | % | ||||||||||||||||||||||||||||||||||||||||||
Average Capital Employed | As of the three Months Ended October 28, 2018 | As of the three Months Ended July 29, 2018 | As of the three Months Ended April 29, 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) | $ | 91,697 | 37,442 | 93,072 | 222,211 | $ | 98,064 | 37,386 | 90,922 | 226,372 | $ | 95,061 | 39,812 | 83,111 | 217,984 | |||||||||||||||||||||||||||||||||
Total liabilities (5) | (11,750 | ) | (19,646 | ) | (23,346 | ) | (54,742 | ) | (14,593 | ) | (17,880 | ) | (27,869 | ) | (60,342 | ) | (17,335 | ) | (18,679 | ) | (18,594 | ) | (54,608 | ) | ||||||||||||||||||||||||
Subtotal | $ | 79,947 | $ | 17,796 | $ | 69,726 | $ | 167,469 | $ | 83,471 | $ | 19,506 | $ | 63,053 | $ | 166,030 | $ | 77,726 | $ | 21,133 | $ | 64,517 | $ | 163,376 | ||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | - | - | (14,768 | ) | (14,768 | ) | - | - | (8,593 | ) | (8,593 | ) | - | - | (21,228 | ) | (21,228 | ) | ||||||||||||||||||||||||||||||
Short-term investments - Available-For-Sale | - | - | - | - | - | - | - | - | - | - | (2,451 | ) | (2,451 | ) | ||||||||||||||||||||||||||||||||||
Short-term investments - Held-To-Maturity | - | - | (26,719 | ) | (26,719 | ) | - | - | (30,756 | ) | (30,756 | ) | - | - | (25,759 | ) | (25,759 | ) | ||||||||||||||||||||||||||||||
Long-term investments - Held-To-Maturity | - | - | - | - | - | - | - | - | - | - | (5,035 | ) | (5,035 | ) | ||||||||||||||||||||||||||||||||||
Long-term investments - Rabbi Trust | - | - | (7,851 | ) | (7,851 | ) | - | - | (7,671 | ) | (7,671 | ) | - | - | (7,326 | ) | (7,326 | ) | ||||||||||||||||||||||||||||||
Deferred income taxes - non-current | - | - | (3,614 | ) | (3,614 | ) | - | - | (3,721 | ) | (3,721 | ) | - | - | (1,458 | ) | (1,458 | ) | ||||||||||||||||||||||||||||||
Deferred compensation - current | - | - | 714 | 714 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Income taxes payable - current | - | - | 2,044 | 2,044 | - | - | 1,244 | 1,244 | - | - | 1,437 | 1,437 | ||||||||||||||||||||||||||||||||||||
Income taxes payable - long-term | - | - | 3,233 | 3,233 | - | - | 3,733 | 3,733 | - | - | 3,758 | 3,758 | ||||||||||||||||||||||||||||||||||||
Deferred income taxes - non-current | - | - | 2,225 | 2,225 | - | - | 2,150 | 2,150 | - | - | 2,150 | 2,150 | ||||||||||||||||||||||||||||||||||||
Line of credit | - | - | - | - | - | - | 4,000 | 4,000 | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Deferred compensation - non-current | - | - | 7,120 | 7,120 | - | - | 7,679 | 7,679 | - | - | 7,353 | 7,353 | ||||||||||||||||||||||||||||||||||||
Total Capital Employed | $ | 79,947 | $ | 17,796 | $ | 32,110 | $ | 129,853 | $ | 83,471 | $ | 19,506 | $ | 31,118 | $ | 134,095 | $ | 77,726 | $ | 21,133 | $ | 15,958 | $ | 114,817 | ||||||||||||||||||||||||
As of the three Months Ended January 28, 2018 | As of the three Months Ended October 29, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||
Mattress | Upholstery | Unallocated | Mattress | Upholstery | Unallocated | |||||||||||||||||||||||||||||||||||||||||||
Fabrics | Fabrics | Corporate | Total | Fabrics | Fabrics | Corporate | Total | |||||||||||||||||||||||||||||||||||||||||
Total assets (4) | $ | 93,827 | 43,458 | 79,559 | 216,844 | $ | 94,626 | 34,974 | 71,443 | 201,043 | ||||||||||||||||||||||||||||||||||||||
Total liabilities (5) | (18,418 | ) | (22,781 | ) | (23,463 | ) | (64,662 | ) | (16,150 | ) | (17,225 | ) | (14,588 | ) | (47,963 | ) | ||||||||||||||||||||||||||||||||
Subtotal | $ | 75,409 | $ | 20,677 | $ | 56,096 | $ | 152,182 | $ | 78,476 | $ | 17,749 | $ | 56,855 | $ | 153,080 | ||||||||||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | - | - | (22,428 | ) | (22,428 | ) | - | - | (15,739 | ) | (15,739 | ) | ||||||||||||||||||||||||||||||||||||
Short-term investments - Available-For-Sale | - | - | (2,472 | ) | (2,472 | ) | - | - | (2,478 | ) | (2,478 | ) | ||||||||||||||||||||||||||||||||||||
Short-term investments - Held-To-Maturity | - | - | (17,206 | ) | (17,206 | ) | - | - | (4,015 | ) | (4,015 | ) | ||||||||||||||||||||||||||||||||||||
Long-term investments - Held-To-Maturity | - | - | (13,625 | ) | (13,625 | ) | - | - | (26,853 | ) | (26,853 | ) | ||||||||||||||||||||||||||||||||||||
Long-term investments - Rabbi Trust | - | - | (7,176 | ) | (7,176 | ) | - | - | (6,921 | ) | (6,921 | ) | ||||||||||||||||||||||||||||||||||||
Deferred income taxes - non-current | - | - | (1,942 | ) | (1,942 | ) | - | - | (491 | ) | (491 | ) | ||||||||||||||||||||||||||||||||||||
Deferred compensation - current | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
Income taxes payable - current | - | - | 1,580 | 1,580 | - | - | 692 | 692 | ||||||||||||||||||||||||||||||||||||||||
Income taxes payable - long-term | - | - | 10,940 | 10,940 | - | - | 487 | 487 | ||||||||||||||||||||||||||||||||||||||||
Deferred income taxes - non-current | - | - | 2,096 | 2,096 | - | - | 4,641 | 4,641 | ||||||||||||||||||||||||||||||||||||||||
Line of credit | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
Deferred compensation - non-current | - | - | 7,216 | 7,216 | - | - | 6,970 | 6,970 | ||||||||||||||||||||||||||||||||||||||||
Total Capital Employed | $ | 75,409 | $ | 20,677 | $ | 13,079 | $ | 109,165 | $ | 78,476 | $ | 17,749 | $ | 13,148 | $ | 109,373 | ||||||||||||||||||||||||||||||||
Mattress | Upholstery | Unallocated | ||||||||||||||||||||||||||||||||||||||||||||||
Fabrics | Fabrics | Corporate | Total | |||||||||||||||||||||||||||||||||||||||||||||
Average Capital Employed (3) | $ | 79,006 | $ | 19,372 | $ | 21,083 | $ | 119,461 |
Notes | |
(1) | See reconciliation per page 13 of this financial information release. |
(2) | Return on average capital employed represents the last twelve months operating income as of October 28, 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 current and noncurrent deferred compensation. |
(3) | Average capital employed was computed using the quarterly five periods ending October 28, 2018, July 29, 2018, April 29, 2018, January 28, 2018, and October 29, 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 12 of 13
CULP, INC. FINANCIAL INFORMATION RELEASE |
RETURN ON CAPITAL EMPLOYED BY SEGMENT |
FOR THE TWELVE MONTHS ENDED OCTOBER 29, 2017 |
(Amounts in Thousands) |
(Unaudited) |
Operating Income | ||||||||||||||||||||||||||||||||||||||||||||||||
Twelve Months | Average | Return on | ||||||||||||||||||||||||||||||||||||||||||||||
Ended | Capital | Avg. Capital | ||||||||||||||||||||||||||||||||||||||||||||||
October 29, 2017 (1) | Employed (3) | Employed (2) | ||||||||||||||||||||||||||||||||||||||||||||||
Mattress Fabrics | $ | 26,450 | $ | 70,822 | 37.3 | % | ||||||||||||||||||||||||||||||||||||||||||
Upholstery Fabrics | 10,879 | 17,973 | 60.5 | % | ||||||||||||||||||||||||||||||||||||||||||||
(less: Unallocated Corporate) | (9,871 | ) | 12,787 | N/A | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 27,458 | $ | 101,583 | 27.0 | % | ||||||||||||||||||||||||||||||||||||||||||
Average Capital Employed | As of the three Months Ended October 29, 2017 | As of the three Months Ended July 30, 2017 | As of the three Months Ended April 30, 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) | $ | 94,626 | 34,974 | 71,443 | $ | 201,043 | $ | 99,190 | 34,491 | 74,223 | $ | 207,904 | $ | 98,087 | $ | 32,255 | $ | 75,292 | $ | 205,634 | ||||||||||||||||||||||||||||
Total liabilities | (16,150 | ) | (17,225 | ) | (14,588 | ) | (47,963 | ) | (24,277 | ) | (14,983 | ) | (18,967 | ) | (58,227 | ) | (27,619 | ) | (16,249 | ) | (13,136 | ) | (57,004 | ) | ||||||||||||||||||||||||
Subtotal | $ | 78,476 | $ | 17,749 | $ | 56,855 | $ | 153,080 | $ | 74,913 | $ | 19,508 | $ | 55,256 | $ | 149,677 | $ | 70,468 | $ | 16,006 | $ | 62,156 | $ | 148,630 | ||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | - | - | (15,739 | ) | (15,739 | ) | - | - | (18,322 | ) | (18,322 | ) | - | - | (20,795 | ) | (20,795 | ) | ||||||||||||||||||||||||||||||
Short-term investments - Available-For-Sale | - | - | (2,478 | ) | (2,478 | ) | - | - | (2,469 | ) | (2,469 | ) | - | - | (2,443 | ) | (2,443 | ) | ||||||||||||||||||||||||||||||
Short-term investments - Held-To-Maturity | - | - | (4,015 | ) | (4,015 | ) | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||
Long-term investments - Held-To-Maturity | - | - | (26,853 | ) | (26,853 | ) | - | - | (30,907 | ) | (30,907 | ) | - | - | (30,945 | ) | (30,945 | ) | ||||||||||||||||||||||||||||||
Long-term investments - Rabbi Trust | - | - | (6,921 | ) | (6,921 | ) | - | - | (6,714 | ) | (6,714 | ) | - | - | (5,466 | ) | (5,466 | ) | ||||||||||||||||||||||||||||||
Income taxes receivable | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Deferred income taxes - non-current | - | - | (491 | ) | (491 | ) | - | - | (436 | ) | (436 | ) | - | - | (419 | ) | (419 | ) | ||||||||||||||||||||||||||||||
Income taxes payable - current | - | - | 692 | 692 | - | - | 884 | 884 | - | - | 287 | 287 | ||||||||||||||||||||||||||||||||||||
Income taxes payable - long-term | - | - | 487 | 487 | - | - | 487 | 487 | - | - | 467 | 467 | ||||||||||||||||||||||||||||||||||||
Deferred income taxes - non-current | - | - | 4,641 | 4,641 | - | - | 4,253 | 4,253 | - | - | 3,593 | 3,593 | ||||||||||||||||||||||||||||||||||||
Line of credit | - | - | - | - | - | - | 5,000 | 5,000 | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Deferred compensation | - | - | 6,970 | 6,970 | - | - | 6,769 | 6,769 | - | - | 5,520 | 5,520 | ||||||||||||||||||||||||||||||||||||
Total Capital Employed | $ | 78,476 | $ | 17,749 | $ | 13,148 | $ | 109,373 | $ | 74,913 | $ | 19,508 | $ | 13,801 | $ | 108,222 | $ | 70,468 | $ | 16,006 | $ | 11,955 | $ | 98,429 | ||||||||||||||||||||||||
As of the three Months Ended January 29, 2017 | As of the three Months Ended October 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||
Mattress | Upholstery | Unallocated | Mattress | Upholstery | Unallocated | |||||||||||||||||||||||||||||||||||||||||||
Fabrics | Fabrics | Corporate | Total | Fabrics | Fabrics | Corporate | Total | |||||||||||||||||||||||||||||||||||||||||
Total assets (4) | $ | 90,197 | $ | 30,380 | $ | 70,479 | $ | 191,056 | $ | 81,683 | $ | 29,361 | $ | 68,083 | $ | 179,127 | ||||||||||||||||||||||||||||||||
Total liabilities | (23,126 | ) | (11,960 | ) | (13,656 | ) | (48,742 | ) | (18,499 | ) | (11,180 | ) | (13,499 | ) | (43,178 | ) | ||||||||||||||||||||||||||||||||
Subtotal | $ | 67,071 | $ | 18,420 | $ | 56,823 | $ | 142,314 | $ | 63,184 | $ | 18,181 | $ | 54,584 | $ | 135,949 | ||||||||||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | - | - | (15,659 | ) | (15,659 | ) | - | - | (13,910 | ) | (13,910 | ) | ||||||||||||||||||||||||||||||||||||
Short-term investments - Available-For-Sale | - | - | (2,410 | ) | (2,410 | ) | - | - | (2,430 | ) | (2,430 | ) | ||||||||||||||||||||||||||||||||||||
Short-term investments - Held-To-Maturity | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
Long-term investments - Held-To-Maturity | - | - | (30,832 | ) | (30,832 | ) | - | - | (31,050 | ) | (31,050 | ) | ||||||||||||||||||||||||||||||||||||
Long-term investments - Rabbi Trust | - | - | (5,488 | ) | (5,488 | ) | - | - | (4,994 | ) | (4,994 | ) | ||||||||||||||||||||||||||||||||||||
Income taxes receivable | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
Deferred income taxes - non-current | - | - | (422 | ) | (422 | ) | - | - | (581 | ) | (581 | ) | ||||||||||||||||||||||||||||||||||||
Income taxes payable - current | - | - | 217 | 217 | - | - | 513 | 513 | ||||||||||||||||||||||||||||||||||||||||
Income taxes payable - long-term | - | - | 1,817 | 1,817 | - | - | 3,734 | 3,734 | ||||||||||||||||||||||||||||||||||||||||
Deferred income taxes - non-current | - | - | 2,924 | 2,924 | - | - | 1,699 | 1,699 | ||||||||||||||||||||||||||||||||||||||||
Line of credit | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
Deferred compensation | - | - | 5,327 | 5,327 | - | - | 5,171 | 5,171 | ||||||||||||||||||||||||||||||||||||||||
Total Capital Employed | $ | 67,071 | $ | 18,420 | $ | 12,297 | $ | 97,788 | $ | 63,184 | $ | 18,181 | $ | 12,736 | $ | 94,101 | ||||||||||||||||||||||||||||||||
Mattress | Upholstery | Unallocated | ||||||||||||||||||||||||||||||||||||||||||||||
Fabrics | Fabrics | Corporate | Total | |||||||||||||||||||||||||||||||||||||||||||||
Average Capital Employed (3) | $ | 70,822 | $ | 17,973 | $ | 12,787 | $ | 101,583 |
Notes | |
(1) | See reconciliation per page 13 of this financial information release. |
(2) | Return on average capital employed represents the last twelve months operating income as of October 29, 2017, 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 noncurrent deferred compensation. |
(3) | Average capital employed was computed using the five quarterly periods ending October 29, 2017, July 30, 2017 April 30, 2017, January 29, 2017, and October 30, 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 13 of 13
CULP, INC. FINANCIAL INFORMATION RELEASE | ||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATING INCOME | ||||||||||||||||||||
FOR THE TWELVE MONTHS ENDED OCTOBER 28, 2018 AND OCTOBER 29, 2017 | ||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||
(AMOUNTS IN THOUSANDS) | ||||||||||||||||||||
Quarter Ended | ||||||||||||||||||||
Trailing 12 | ||||||||||||||||||||
Months | ||||||||||||||||||||
1/28/2018 | 4/29/2018 | 7/29/2018 | 10/28/2018 | 10/28/2018 | ||||||||||||||||
Mattress Fabrics | $ | 6,837 | $ | 6,088 | $ | 2,823 | $ | 2,932 | $ | 18,680 | ||||||||||
Upholstery Fabrics | 3,510 | 2,181 | 2,527 | 2,722 | 10,940 | |||||||||||||||
Unallocated Corporate | (2,703 | ) | (1,805 | ) | (1,259 | ) | (1,913 | ) | (7,680 | ) | ||||||||||
Subtotal | 7,644 | 6,464 | 4,091 | 3,741 | 21,940 | |||||||||||||||
Other non-recurring charges | - | - | - | (248 | ) | (248 | ) | |||||||||||||
Restructuring (expense) credit and related charges | - | - | (2,016 | ) | 791 | (1,225 | ) | |||||||||||||
Operating income | $ | 7,644 | $ | 6,464 | $ | 2,075 | $ | 4,284 | $ | 20,467 | ||||||||||
Quarter Ended (1) | (1) | |||||||||||||||||||
Trailing 12 | ||||||||||||||||||||
Months | ||||||||||||||||||||
1/29/2017 | 4/30/2017 | 7/30/2017 | 10/29/2017 | 10/29/2017 | ||||||||||||||||
Mattress Fabrics | $ | 6,367 | $ | 7,153 | $ | 6,368 | $ | 6,562 | $ | 26,450 | ||||||||||
Upholstery Fabrics | 3,100 | 2,510 | 2,895 | 2,374 | 10,879 | |||||||||||||||
Unallocated Corporate | (2,532 | ) | (2,493 | ) | (2,299 | ) | (2,547 | ) | (9,871 | ) | ||||||||||
Operating income | $ | 6,935 | $ | 7,170 | $ | 6,964 | $ | 6,389 | $ | 27,458 | ||||||||||
% Over (Under) | 10.2 | % | -9.8 | % | -70.2 | % | -32.9 | % | -25.5 | % |
Notes | |
(1) | We did not have any restructuring activities or non-recurring charges associated with our mattress fabrics segment for the three-month periods ending January 29, 2017, April 30, 2017, July 30, 2017, and October 29, 2017. |