Exhibit 99(b)
Page 1 of 13
CULP, INC. FINANCIAL INFORMATION RELEASE |
CONSOLIDATED STATEMENTS OF NET INCOME |
FOR THREE MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018 |
(UNAUDITED) |
(Amounts in Thousands, Except for Per Share Data) |
THREE MONTHS ENDED | ||||||||||||||||||||
(4) Amounts (4) | Percent of Sales | |||||||||||||||||||
November 3, 2019 | October 28, 2018 | % Over (Under) | November 3, 2019 | October 28, 2018 | ||||||||||||||||
Net sales | $ | 72,619 | 77,006 | (5.7 | )% | 100.0 | % | 100.0 | % | |||||||||||
Cost of sales | 58,516 | 63,680 | (1)(3) | (8.1 | )% | 80.6 | % | 82.7 | % | |||||||||||
Gross profit | 14,103 | 13,326 | 5.8 | % | 19.4 | % | 17.3 | % | ||||||||||||
Selling, general and | ||||||||||||||||||||
administrative expenses | 10,120 | 10,103 | (3) | 0.2 | % | 13.9 | % | 13.1 | % | |||||||||||
Restructuring credit | - | (1,061 | ) | (2) | (100.0 | )% | 0.0 | % | (1.4 | )% | ||||||||||
Income from operations | 3,983 | 4,284 | (7.0 | )% | 5.5 | % | 5.6 | % | ||||||||||||
Interest expense | 30 | 18 | 66.7 | % | 0.0 | % | 0.0 | % | ||||||||||||
Interest income | (240 | ) | (151 | ) | 58.9 | % | (0.3 | )% | (0.2 | )% | ||||||||||
Other expense | 87 | 142 | (38.7 | )% | 0.1 | % | 0.2 | % | ||||||||||||
Income before income taxes | 4,106 | 4,275 | (4.0 | )% | 5.7 | % | 5.6 | % | ||||||||||||
Income tax expense * | 1,898 | 1,276 | 48.7 | % | 46.2 | % | 29.8 | % | ||||||||||||
Loss from investment in unconsolidated joint venture | 16 | 55 | (70.9 | )% | 0.0 | % | 0.1 | % | ||||||||||||
Net income | 2,192 | 2,944 | (25.5 | )% | 3.0 | % | 3.8 | % | ||||||||||||
Net loss (income) attributable to non-controlling interest | 108 | (11 | ) | N.M. | 0.1 | % | (0.0 | )% | ||||||||||||
Net income attributable to Culp Inc. common shareholders | $ | 2,300 | 2,933 | (21.6 | )% | 3.2 | % | 3.8 | % | |||||||||||
Net income attributable to Culp Inc. common shareholders per share - basic | $ | 0.19 | $ | 0.23 | (17.4 | )% | ||||||||||||||
Net income attributable to Culp Inc. common shareholders per share - diluted | $ | 0.19 | $ | 0.23 | (17.4 | )% | ||||||||||||||
Average shares outstanding-basic | 12,408 | 12,515 | (0.9 | )% | ||||||||||||||||
Average shares outstanding-diluted | 12,408 | 12,551 | (1.1 | )% |
* 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 October 28, 2018, includes a $270 restructuring related charge for operating costs associated with our closed upholstery fabrics 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 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 total $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 Reconciliation of Selected Income Statement Information to Adjusted Results for the three-month periods November 3, 2019 and October 28, 2018, which exclude certain charges and credits. |
Page 2 of 13
CULP, INC. FINANCIAL INFORMATION RELEASE |
CONSOLIDATED STATEMENTS OF NET INCOME |
FOR SIX MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018 |
(UNAUDITED) |
(Amounts in Thousands, Except for Per Share Data) |
SIX MONTHS ENDED | ||||||||||||||||||||
(4) Amounts (4) | Percent of Sales | |||||||||||||||||||
November 3, 2019 | October 28, 2018 | % Over (Under) | November 3, 2019 | October 28, 2018 | ||||||||||||||||
Net sales | $ | 147,466 | 148,479 | (0.7 | )% | 100.0 | % | 100.0 | % | |||||||||||
Cost of sales | 119,998 | 124,594 | (1)(3) | (3.7 | )% | 81.4 | % | 83.9 | % | |||||||||||
Gross profit | 27,468 | 23,885 | 15.0 | % | 18.6 | % | 16.1 | % | ||||||||||||
Selling, general and | ||||||||||||||||||||
administrative expenses | 20,831 | 18,136 | (3) | 14.9 | % | 14.1 | % | 12.2 | % | |||||||||||
Restructuring credit | (35 | ) | (2) | (610 | ) | (2) | (94.3 | )% | (0.0 | )% | (0.4 | )% | ||||||||
Income from operations | 6,672 | 6,359 | 4.9 | % | 4.5 | % | 4.3 | % | ||||||||||||
Interest expense | 39 | 38 | 2.6 | % | 0.0 | % | 0.0 | % | ||||||||||||
Interest income | (490 | ) | (301 | ) | 62.8 | % | (0.3 | )% | (0.2 | )% | ||||||||||
Other expense | 174 | 399 | (56.4 | )% | 0.1 | % | 0.3 | % | ||||||||||||
Income before income taxes | 6,949 | 6,223 | 11.7 | % | 4.7 | % | 4.2 | % | ||||||||||||
Income tax expense * | 3,580 | 2,182 | 64.1 | % | 51.5 | % | 35.1 | % | ||||||||||||
Loss from investment in unconsolidated joint venture | 3 | 132 | (97.7 | )% | 0.0 | % | 0.1 | % | ||||||||||||
Net income | 3,366 | 3,909 | (13.9 | )% | 2.3 | % | 2.6 | % | ||||||||||||
Net loss (income) attributable to non-controlling interest | 272 | (19 | ) | N.M. | 0.2 | % | (0.0 | )% | ||||||||||||
Net income attributable to Culp Inc. common shareholders | $ | 3,638 | 3,890 | (6.5 | )% | 2.5 | % | 2.6 | % | |||||||||||
Net income attributable to Culp Inc. common shareholders per share - basic | $ | 0.29 | $ | 0.31 | (6.5 | )% | ||||||||||||||
Net income attributable to Culp Inc. common shareholders per share - diluted | $ | 0.29 | $ | 0.31 | (6.5 | )% | ||||||||||||||
Average shares outstanding-basic | 12,403 | 12,512 | (0.9 | )% | ||||||||||||||||
Average shares outstanding-diluted | 12,413 | 12,612 | (1.6 | )% |
* 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 other operating costs associated with our closed upholstery fabrics facility located in Anderson, SC. |
(2) | The $35 restructuring credit for the six-month period ending November 3, 2019, represents employee termination benefits associated with the closure of our Anderson, SC facility. The $610 restructuring credit for the six-month period ending October 28, 2018, 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 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 total $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 Reconciliation of Selected Income Statement Information to Adjusted Results for the six-month periods November 3, 2019 and October 28, 2018, which exclude certain charges and credits. |
Page 3 of 13
CULP, INC. FINANCIAL INFORMATION RELEASE |
CONSOLIDATED BALANCE SHEETS |
NOVEMBER 3, 2019, OCTOBER 28, 2018, AND APRIL 28, 2019 |
Unaudited |
(Amounts in Thousands) |
Amounts | ||||||||||||||||||||
(Condensed) | Increase | |||||||||||||||||||
November 3, | October 28, | (Decrease) | * April 28, | |||||||||||||||||
2019 | 2018 | Dollars | Percent | 2019 | ||||||||||||||||
Current assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 47,183 | 14,768 | 32,415 | 219.5 | % | 40,008 | |||||||||||||
Short-term investments - Held-To-Maturity | - | 26,719 | (26,719 | ) | (100.0 | )% | 5,001 | |||||||||||||
Accounts receivable | 24,522 | 24,362 | 160 | 0.7 | % | 23,751 | ||||||||||||||
Inventories | 55,228 | 50,601 | 4,627 | 9.1 | % | 50,860 | ||||||||||||||
Current income taxes receivable | 776 | - | 776 | 100.0 | % | 776 | ||||||||||||||
Assets held for sale | 150 | 237 | (87 | ) | (36.7 | )% | - | |||||||||||||
Other current assets | 2,710 | 2,461 | 249 | 10.1 | % | 2,849 | ||||||||||||||
Total current assets | 130,569 | 119,148 | 11,421 | 9.6 | % | 123,245 | ||||||||||||||
Property, plant & equipment, net | 46,973 | 51,325 | (4,352 | ) | (8.5 | )% | 48,389 | |||||||||||||
Goodwill | 27,222 | 27,222 | - | 0.0 | % | 27,222 | ||||||||||||||
Intangible assets | 10,260 | 10,636 | (376 | ) | (3.5 | )% | 10,448 | |||||||||||||
Long-term investments - Rabbi Trust | 7,575 | 7,851 | (276 | ) | (3.5 | )% | 7,081 | |||||||||||||
Right of use asset | 5,879 | - | 5,879 | 100.0 | % | - | ||||||||||||||
Noncurrent income taxes receivable | 733 | - | 733 | 100.0 | % | 733 | ||||||||||||||
Deferred income taxes | 511 | 3,614 | (3,103 | ) | (85.9 | )% | 457 | |||||||||||||
Investment in unconsolidated joint venture | 1,504 | 1,470 | 34 | 2.3 | % | 1,508 | ||||||||||||||
Other assets | 496 | 945 | (449 | ) | (47.5 | )% | 643 | |||||||||||||
Total assets | $ | 231,722 | 222,211 | 9,511 | 4.3 | % | 219,726 | |||||||||||||
Current liabilities | ||||||||||||||||||||
Accounts payable - trade | $ | 27,395 | 24,007 | 3,388 | 14.1 | % | 24,377 | |||||||||||||
Accounts payable - capital expenditures | 402 | 114 | 288 | 252.6 | % | 78 | ||||||||||||||
Operating lease liability - current | 2,282 | - | 2,282 | 100.0 | % | - | ||||||||||||||
Deferred revenue | 375 | 649 | (274 | ) | (42.2 | )% | 399 | |||||||||||||
Accrued expenses | 8,915 | 8,670 | 245 | 2.8 | % | 9,192 | ||||||||||||||
Accrued restructuring costs | 35 | 260 | (225 | ) | (86.5 | )% | 124 | |||||||||||||
Deferred compensation | - | 714 | (714 | ) | (100.0 | )% | - | |||||||||||||
Income taxes payable - current | 1,539 | 2,044 | (505 | ) | (24.7 | )% | 1,022 | |||||||||||||
Total current liabilities | 40,943 | 36,458 | 4,485 | 12.3 | % | 35,192 | ||||||||||||||
Accrued expenses - long-term | 333 | - | 333 | 100.0 | % | 333 | ||||||||||||||
Subordinated loan payable | 925 | - | 925 | 100.0 | % | 675 | ||||||||||||||
Operating lease liability - long-term | 3,439 | - | 3,439 | 100.0 | % | - | ||||||||||||||
Contingent consideration - Earn-Out Obligation | 6,006 | 5,706 | 300 | 5.3 | % | 5,856 | ||||||||||||||
Income taxes payable - long-term | 3,442 | 3,233 | 209 | 6.5 | % | 3,249 | ||||||||||||||
Deferred income taxes | 3,283 | 2,225 | 1,058 | 47.6 | % | 3,176 | ||||||||||||||
Deferred compensation | 7,429 | 7,120 | 309 | 4.3 | % | 6,998 | ||||||||||||||
Total liabilities | 65,800 | 54,742 | 11,058 | 20.2 | % | 55,479 | ||||||||||||||
Shareholders' equity | ||||||||||||||||||||
Shareholders' equity attributable to Culp Inc. | 161,520 | 162,918 | (1,398 | ) | (0.9 | )% | 159,933 | |||||||||||||
Non-controlling interest | 4,402 | 4,551 | (149 | ) | (3.3 | )% | 4,314 | |||||||||||||
165,922 | 167,469 | (1,547 | ) | (0.9 | )% | 164,247 | ||||||||||||||
Total liabilities and | ||||||||||||||||||||
shareholders' equity | $ | 231,722 | 222,211 | 9,511 | 4.3 | % | 219,726 | |||||||||||||
Shares outstanding | 12,412 | 12,492 | (80 | ) | (0.6 | )% | 12,391 |
* Derived from audited financial statements.
Page 4 of 13
CULP, INC. FINANCIAL INFORMATION RELEASE |
SUMMARY OF CASH AND INVESTMENTS |
NOVEMBER 3, 2019, OCTOBER 28, 2018, AND APRIL 28, 2019 |
Unaudited |
(Amounts in Thousands) |
Amounts | ||||||||||||
November 3, | October 28, | April 28, | ||||||||||
2019 | 2018 | 2019* | ||||||||||
Cash and cash equivalents | $ | 47,183 | $ | 14,768 | $ | 40,008 | ||||||
Short-term investments - Held-To-Maturity | - | 26,719 | 5,001 | |||||||||
Total Cash and Investments | $ | 47,183 | $ | 41,487 | $ | 45,009 |
* Derived from audited financial statements.
Page 5 of 13
CONSOLIDATED STATEMENTS OF CASH FLOWS |
FOR THE SIX MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018 |
Unaudited |
(Amounts in Thousands) |
SIX MONTHS ENDED | ||||||||
Amounts | ||||||||
November 3, | October 28, | |||||||
2019 | 2018 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 3,366 | 3,909 | |||||
Adjustments to reconcile net income to net cash | ||||||||
provided by operating activities: | ||||||||
Depreciation | 3,893 | 4,056 | ||||||
Amortization | 353 | 391 | ||||||
Stock-based compensation | 467 | (106 | ) | |||||
Deferred income taxes | 53 | (2,081 | ) | |||||
Realized loss on sale of short-term investments (Available for Sale) | - | 94 | ||||||
Gain on sale of equipment | (93 | ) | (1,079 | ) | ||||
Loss from investment in unconsolidated joint venture | 3 | 132 | ||||||
Foreign currency exchange gain | (106 | ) | (102 | ) | ||||
Changes in assets and liabilities, net of effects of acquisition of businesses: | ||||||||
Accounts receivable | (835 | ) | 1,639 | |||||
Inventories | (4,797 | ) | 3,767 | |||||
Other current assets | (31 | ) | 379 | |||||
Other assets | 133 | (10 | ) | |||||
Accounts payable | 3,564 | (3,264 | ) | |||||
Deferred revenue | (24 | ) | (160 | ) | ||||
Accrued expenses and deferred compensation | 1,620 | (1,472 | ) | |||||
Accrued restructuring costs | (89 | ) | 260 | |||||
Income taxes | 770 | 247 | ||||||
Net cash provided by operating activities | 8,247 | 6,600 | ||||||
Cash flows from investing activities: | ||||||||
Net cash paid for acquisition of businesses | - | (12,096 | ) | |||||
Capital expenditures | (2,410 | ) | (2,096 | ) | ||||
Proceeds from the sale of property, plant, and equipment | 363 | 1,280 | ||||||
Investment in unconsolidated joint venture | - | (100 | ) | |||||
Proceeds from the sale of short-term investments (Held to Maturity) | 5,000 | 4,000 | ||||||
Proceeds from the sale of short-term investments (Available for Sale) | - | 2,458 | ||||||
Purchase of short-term investments (Available for Sale) | - | (10 | ) | |||||
Purchase of long-term investments (Rabbi Trust) | (479 | ) | (526 | ) | ||||
Net cash provided by (used in) investing activities | 2,474 | (7,090 | ) | |||||
Cash flows from financing activities: | ||||||||
Proceeds from line of credit | - | 12,000 | ||||||
Payments on line of credit | - | (12,000 | ) | |||||
Payments on vendor-financed capital expenditures | - | (1,412 | ) | |||||
Proceeds from subordinated loan payable | 250 | - | ||||||
Cash paid for acquisition of businesses | (1,532 | ) | - | |||||
Dividends paid | (2,482 | ) | (2,253 | ) | ||||
Common stock surrendered for withholding taxes payable | (51 | ) | (1,292 | ) | ||||
Capital contribution from non-controlling interest | 360 | - | ||||||
Common stock repurchased | - | (844 | ) | |||||
Net cash used in financing activities | (3,455 | ) | (5,801 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (91 | ) | (169 | ) | ||||
Increase (decrease) in cash and cash equivalents | 7,175 | (6,460 | ) | |||||
Cash and cash equivalents at beginning of period | 40,008 | 21,228 | ||||||
Cash and cash equivalents at end of period | $ | 47,183 | 14,768 | |||||
Free Cash Flow (1) | $ | 5,630 | 3,577 |
(1) Free Cash Flow reconciliation is as follows: | ||||||||
FY 2020 | FY 2019 | |||||||
A) Net cash provided by operating activities | $ | 8,247 | 6,600 | |||||
B) Minus: Capital Expenditures | (2,410 | ) | (2,096 | ) | ||||
C) Plus: Proceeds from the sale of property, plant, and equipment | 363 | 1,280 | ||||||
D) Minus: Investment in unconsolidated joint venture | - | (100 | ) | |||||
E) Minus: Payments on vendor-financed capital expenditures | - | (1,412 | ) | |||||
F) Minus: Purchase of long-term investments (Rabbi Trust) | (479 | ) | (526 | ) | ||||
G) Effects of exchange rate changes on cash and cash equivalents | (91 | ) | (169 | ) | ||||
Free Cash Flow | $ | 5,630 | 3,577 | |||||
Page 6 of 13
CULP, INC. FINANCIAL INFORMATION RELEASE |
STATEMENTS OF OPERATIONS BY SEGMENT |
FOR THE THREE MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018 |
(Unaudited) |
(Amounts in thousands) |
THREE MONTHS ENDED | ||||||||||||||||||||
Amounts | Percent of Total Sales | |||||||||||||||||||
November 3, | October 28, | % Over | November 3, | October 28, | ||||||||||||||||
Net Sales by Segment | 2019 | 2018 | (Under) | 2019 | 2018 | |||||||||||||||
Mattress Fabrics | $ | 35,459 | 37,205 | (4.7 | )% | 48.8 | % | 48.3 | % | |||||||||||
Upholstery Fabrics | 33,884 | 35,017 | (3.2 | )% | 46.7 | % | 45.5 | % | ||||||||||||
Home Accessories | 3,276 | 4,784 | (31.5 | )% | 4.5 | % | 6.2 | % | ||||||||||||
Net Sales | $ | 72,619 | 77,006 | (5.7 | )% | 100.0 | % | 100.0 | % | |||||||||||
Gross Profit by Segment | Gross Profit Margin | |||||||||||||||||||
Mattress Fabrics | $ | 6,247 | 5,781 | 8.1 | % | 17.6 | % | 15.5 | % | |||||||||||
Upholstery Fabrics | 7,279 | 6,257 | 16.3 | % | 21.5 | % | 17.9 | % | ||||||||||||
Home Accessories | 577 | 1,717 | (66.4 | )% | 17.6 | % | 35.9 | % | ||||||||||||
Subtotal | 14,103 | 13,755 | 2.5 | % | 19.4 | % | 17.9 | % | ||||||||||||
Other non-recurring charges | - | (159 | ) | (1) | (100.0 | )% | 0.0 | % | (0.2 | )% | ||||||||||
Restructuring related charges | - | (270 | ) | (1) | (100.0 | )% | 0.0 | % | (0.4 | )% | ||||||||||
Gross Profit | $ | 14,103 | 13,326 | 5.8 | % | 19.4 | % | 17.3 | % | |||||||||||
Selling, General and Administrative Expenses by Segment | Percent of Sales | |||||||||||||||||||
Mattress Fabrics | $ | 2,953 | 2,872 | 2.8 | % | 8.3 | % | 7.7 | % | |||||||||||
Upholstery Fabrics | 3,806 | 3,535 | 7.7 | % | 11.2 | % | 10.1 | % | ||||||||||||
Home Accessories | 928 | 1,694 | (45.2 | )% | 28.3 | % | 35.4 | % | ||||||||||||
Unallocated Corporate expenses | 2,433 | 1,913 | 27.2 | % | 3.4 | % | 2.5 | % | ||||||||||||
Subtotal | 10,120 | 10,014 | 1.1 | % | 13.9 | % | 13.0 | % | ||||||||||||
Other non-recurring charges | - | 89 | (100.0 | )% | 0.0 | % | 0.1 | % | ||||||||||||
Selling, General and Administrative Expenses | $ | 10,120 | 10,103 | 0.2 | % | 13.9 | % | 13.1 | % | |||||||||||
Operating Income (loss) by Segment | Operating Income (Loss) Margin | |||||||||||||||||||
Mattress Fabrics | $ | 3,293 | 2,909 | 13.2 | % | 9.3 | % | 7.8 | % | |||||||||||
Upholstery Fabrics | 3,473 | 2,722 | 27.6 | % | 10.2 | % | 7.8 | % | ||||||||||||
Home Accessories | (350 | ) | 23 | N.M. | (10.7 | )% | 0.5 | % | ||||||||||||
Unallocated corporate expenses | (2,433 | ) | (1,913 | ) | 27.2 | % | (3.4 | )% | (2.5 | )% | ||||||||||
Subtotal | 3,983 | 3,741 | 6.5 | % | 5.5 | % | 4.9 | % | ||||||||||||
Other non-recurring charges | - | (248 | ) | (1) | (100.0 | )% | 0.0 | % | (0.3 | )% | ||||||||||
Restructuring credit and related charges | - | 791 | (1) | (100.0 | )% | 0.0 | % | 1.0 | % | |||||||||||
Operating income | $ | 3,983 | 4,284 | (7.0 | )% | 5.5 | % | 5.6 | % | |||||||||||
Depreciation Expense by Segment | ||||||||||||||||||||
Mattress Fabrics | $ | 1,701 | 1,752 | (2.9 | )% | |||||||||||||||
Upholstery Fabrics | 192 | 197 | (2.5 | )% | ||||||||||||||||
Home Accessories | 95 | 92 | 3.3 | % | ||||||||||||||||
Depreciation Expense | $ | 1,988 | 2,041 | (2.6 | )% |
Notes | |
(1) | See page 8 for our Reconciliation of Selected Income Statement Information to Adjusted Results for the three-month periods November 3, 2019 and October 28, 2018 for descriptions of these charges and credits. |
Page 7 of 13
CULP, INC. FINANCIAL INFORMATION RELEASE |
STATEMENTS OF OPERATIONS BY SEGMENT |
FOR THE SIX MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018 |
(Unaudited) |
(Amounts in thousands) |
SIX MONTHS ENDED | ||||||||||||||||||||
Amounts | Percent of Total Sales | |||||||||||||||||||
November 3, | October 28, | % Over | November 3, | October 28, | ||||||||||||||||
Net Sales by Segment | 2019 | 2018 | (Under) | 2019 | 2018 | |||||||||||||||
Mattress Fabrics | $ | 74,145 | 71,603 | 3.6 | % | 50.3 | % | 48.2 | % | |||||||||||
Upholstery Fabrics | 65,744 | 69,507 | (5.4 | )% | 44.6 | % | 46.8 | % | ||||||||||||
Home Accessories | 7,577 | 7,369 | 2.8 | % | 5.1 | % | 5.0 | % | ||||||||||||
Net Sales | $ | 147,466 | 148,479 | (0.7 | )% | 100.0 | % | 100.0 | % | |||||||||||
Gross Profit by Segment | Gross Profit Margin | |||||||||||||||||||
Mattress Fabrics | $ | 11,940 | 11,084 | 7.7 | % | 16.1 | % | 15.5 | % | |||||||||||
Upholstery Fabrics | 14,000 | 12,410 | 12.8 | % | 21.3 | % | 17.9 | % | ||||||||||||
Home Accessories | 1,528 | 2,385 | (35.9 | )% | 20.2 | % | 32.4 | % | ||||||||||||
Subtotal | 27,468 | 25,879 | 6.1 | % | 18.6 | % | 17.4 | % | ||||||||||||
Other non-recurring charges | - | (159 | ) | (1) | (100.0 | )% | 0.0 | % | (0.1 | )% | ||||||||||
Restructuring related charges | - | (1,835 | ) | (1) | (100.0 | )% | 0.0 | % | (1.2 | )% | ||||||||||
Gross Profit | $ | 27,468 | 23,885 | 15.0 | % | 18.6 | % | 16.1 | % | |||||||||||
Selling, General and Administrative Expenses by Segment | Percent of Sales | |||||||||||||||||||
Mattress Fabrics | $ | 6,024 | 5,384 | 11.9 | % | 8.1 | % | 7.5 | % | |||||||||||
Upholstery Fabrics | 7,652 | 7,161 | 6.9 | % | 11.6 | % | 10.3 | % | ||||||||||||
Home Accessories | 2,416 | 2,330 | 3.7 | % | 31.9 | % | 31.6 | % | ||||||||||||
Unallocated Corporate expenses | 4,739 | 3,172 | 49.4 | % | 3.2 | % | 2.1 | % | ||||||||||||
Subtotal | 20,831 | 18,047 | 15.4 | % | 14.1 | % | 12.2 | % | ||||||||||||
Other non-recurring charges | - | 89 | (1) | (100.0 | )% | 0.0 | % | 0.1 | % | |||||||||||
Selling, General and Administrative Expenses | $ | 20,831 | 18,136 | 14.9 | % | 14.1 | % | 12.2 | % | |||||||||||
Operating Income (loss) by Segment | Operating Income (Loss) Margin | |||||||||||||||||||
Mattress Fabrics | $ | 5,916 | 5,699 | 3.8 | % | 8.0 | % | 8.0 | % | |||||||||||
Upholstery Fabrics | 6,348 | 5,249 | 20.9 | % | 9.7 | % | 7.6 | % | ||||||||||||
Home Accessories | (888 | ) | 56 | N.M. | (11.7 | )% | 0.8 | % | ||||||||||||
Unallocated corporate expenses | (4,739 | ) | (3,172 | ) | 49.4 | % | (3.2 | )% | (2.1 | )% | ||||||||||
Subtotal | $ | 6,637 | 7,832 | (15.3 | )% | 4.5 | % | 5.3 | % | |||||||||||
Other non-recurring charges | - | (248 | ) | (1) | (100.0 | )% | 0.0 | % | (0.2 | )% | ||||||||||
Restructuring credit (expense) and related charges | 35 | (1,225 | ) | (1) | (102.9 | )% | 0.0 | % | (0.8 | )% | ||||||||||
Operating income | 6,672 | 6,359 | 4.9 | % | 4.5 | % | 4.3 | % | ||||||||||||
Return on Capital (2) | ||||||||||||||||||||
Mattress Fabrics | 16.2 | % | 23.9 | % | ||||||||||||||||
Upholstery Fabrics | 61.2 | % | 56.5 | % | ||||||||||||||||
Home Accessories | N.M. | N.M. | ||||||||||||||||||
Unallocated Corporate | N.M. | N.M. | ||||||||||||||||||
Consolidated | 10.7 | % | 18.4 | % | ||||||||||||||||
Capital Employed (2) (3) | ||||||||||||||||||||
Mattress Fabrics | $ | 70,394 | 76,704 | (8.2 | )% | |||||||||||||||
Upholstery Fabrics | 19,411 | 17,796 | 9.1 | % | ||||||||||||||||
Home Accessories | 4,548 | 3,243 | 40.2 | % | ||||||||||||||||
Unallocated Corporate | 31,409 | 32,110 | (2.2 | )% | ||||||||||||||||
Consolidated | $ | 125,762 | 129,853 | (3.2 | )% | |||||||||||||||
Depreciation Expense by Segment | ||||||||||||||||||||
Mattress Fabrics | $ | 3,321 | 3,514 | (5.5 | )% | |||||||||||||||
Upholstery Fabrics | 382 | 412 | (7.3 | )% | ||||||||||||||||
Home Accessories | 190 | 130 | 46.2 | % | ||||||||||||||||
Depreciation Expense | $ | 3,893 | 4,056 | (4.0 | )% |
Notes | |
(1) | See page 9 for our Reconciliation of Selected Income Statement Information to Adjusted Results for the six-month periods November 3, 2019 and October 28, 2018 for descriptions of these charges and credits. |
(2) | See pages 11 and 12 of this financial information release for calculations. |
(3) | The capital employed balances are as of November 3, 2019 and October 28, 2018. |
Page 8 of 13
CULP, INC. |
RECONCILIATION OF SELECTED INCOME STATEMENT INFORMATION TO ADJUSTED RESULTS |
FOR THE THREE MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018 |
THREE MONTHS ENDED (UNAUDITED) | ||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||
As Reported | November 3, 2019 | As Reported | October 28, 2018 | |||||||||||||||||||||||||||||||||||||||||
November 3, | % of | Adjusted | % of | October 28, | % of | Adjusted | % of | % Over | ||||||||||||||||||||||||||||||||||||
2019 | Sales | Adjustments | Results | Sales | 2018 | Sales | Adjustments | Results | Sales | (Under) | ||||||||||||||||||||||||||||||||||
Net sales | $ | 72,619 | 100.0 | % | - | 72,619 | 100.0 | % | 77,006 | 100.0 | % | - | 77,006 | 100.0 | % | -5.7 | % | |||||||||||||||||||||||||||
Cost of sales | 58,516 | 80.6 | % | - | 58,516 | 80.6 | % | 63,680 | 82.7 | % | (1) | (429 | ) | 63,251 | 82.1 | % | -7.5 | % | ||||||||||||||||||||||||||
Gross Profit | 14,103 | 19.4 | % | - | 14,103 | 19.4 | % | 13,326 | 17.3 | % | (429 | ) | 13,755 | 17.9 | % | 2.5 | % | |||||||||||||||||||||||||||
Selling, general and | ||||||||||||||||||||||||||||||||||||||||||||
administrative expenses | 10,120 | 13.9 | % | - | 10,120 | 13.9 | % | 10,103 | 13.1 | % | (2) | (89 | ) | 10,014 | 13.0 | % | 1.1 | % | ||||||||||||||||||||||||||
Restructuring credit | - | 0.0 | % | - | - | 0.0 | % | (1,061 | ) | -1.4 | % | (3) | 1,061 | - | 0.0 | % | 0.0 | % | ||||||||||||||||||||||||||
Income from operations | 3,983 | 5.5 | % | - | 3,983 | 5.5 | % | 4,284 | 5.6 | % | 543 | 3,741 | 4.9 | % | 6.5 | % | ||||||||||||||||||||||||||||
Interest expense | 30 | 0.0 | % | - | 30 | 0.0 | % | 18 | 0.0 | % | - | 18 | 0.0 | % | 66.7 | % | ||||||||||||||||||||||||||||
Interest income | (240 | ) | -0.3 | % | - | (240 | ) | -0.3 | % | (151 | ) | -0.2 | % | - | (151 | ) | -0.2 | % | 58.9 | % | ||||||||||||||||||||||||
Other expense | 87 | 0.1 | % | - | 87 | 0.1 | % | 142 | 0.2 | % | - | 142 | 0.2 | % | -38.7 | % | ||||||||||||||||||||||||||||
Income before income taxes | 4,106 | 5.7 | % | - | 4,106 | 5.7 | % | 4,275 | 5.6 | % | 543 | 3,732 | 4.8 | % | 10.0 | % |
Notes | |
(1) | The $429 represents a restructuring related charge of $270 for other operating costs associated with our closed Anderson, SC upholstery fabrics 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 $89 represents employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment. |
(3) | The $1.1 million restructuring credit represents a $1.1 million gain for 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 facility. |
Page 9 of 13
CULP, INC. |
RECONCILIATION OF SELECTED INCOME STATEMENT INFORMATION TO ADJUSTED RESULTS |
FOR THE SIX MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018 |
SIX MONTHS ENDED (UNAUDITED) | ||||||||||||||||||||||||||||||||||||||||||||
As Reported | November 3, 2019 | As Reported | October 28, 2018 | |||||||||||||||||||||||||||||||||||||||||
November 3, | % of | Adjusted | % of | October 28, | % of | Adjusted | % of | % Over | ||||||||||||||||||||||||||||||||||||
2019 | Sales | Adjustments | Results | Sales | 2018 | Sales | Adjustments | Results | Sales | (Under) | ||||||||||||||||||||||||||||||||||
Net sales | $ | 147,466 | 100.0 | % | - | 147,466 | 100.0 | % | 148,479 | 100.0 | % | - | 148,479 | 100.0 | % | -0.7 | % | |||||||||||||||||||||||||||
Cost of sales | 119,998 | 81.4 | % | - | 119,998 | 81.4 | % | 124,594 | 83.9 | % | (2) | (1,994 | ) | 122,600 | 82.6 | % | -2.1 | % | ||||||||||||||||||||||||||
Gross Profit | 27,468 | 18.6 | % | - | 27,468 | 18.6 | % | 23,885 | 16.1 | % | (1,994 | ) | 25,879 | 17.4 | % | 6.1 | % | |||||||||||||||||||||||||||
Selling, general and | ||||||||||||||||||||||||||||||||||||||||||||
administrative expenses | 20,831 | 14.1 | % | - | 20,831 | 14.1 | % | 18,136 | 12.2 | % | (3) | (89 | ) | 18,047 | 12.2 | % | 15.4 | % | ||||||||||||||||||||||||||
Restructuring credit | (35 | ) | 0.0 | % | (1) | 35 | - | 0.0 | % | (610 | ) | -0.4 | % | (4) | 610 | - | 0.0 | % | 0.0 | % | ||||||||||||||||||||||||
Income from operations | 6,672 | 4.5 | % | 35 | 6,637 | 4.5 | % | 6,359 | 4.3 | % | (1,473 | ) | 7,832 | 5.3 | % | -15.3 | % | |||||||||||||||||||||||||||
Interest expense | 39 | 0.0 | % | - | 39 | 0.0 | % | 38 | 0.0 | % | - | 38 | 0.0 | % | 2.6 | % | ||||||||||||||||||||||||||||
Interest income | (490 | ) | -0.3 | % | - | (490 | ) | -0.3 | % | (301 | ) | -0.2 | % | - | (301 | ) | -0.2 | % | 62.8 | % | ||||||||||||||||||||||||
Other expense | 174 | 0.1 | % | - | 174 | 0.1 | % | 399 | 0.3 | % | - | 399 | 0.3 | % | -56.4 | % | ||||||||||||||||||||||||||||
Income before income taxes | 6,949 | 4.7 | % | 35 | 6,914 | 4.7 | % | 6,223 | 4.2 | % | (1,473 | ) | 7,696 | 5.2 | % | -10.2 | % |
Notes | |
(1) | The $35 restructuring credit represents employee termination benefits associated with the closure of our Anderson, SC facility. |
(2) | 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 upholstery fabrics facility, as well as $159 for employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment. |
(3) | The $89 represents employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment. |
(4) | The $610 restructuring credit represents a $1.1 million gain for 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 facility. |
Page 10 of 13
CULP, INC. FINANCIAL INFORMATION RELEASE |
CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA |
FOR THE TWELVE MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018 |
(UNAUDITED) |
(AMOUNTS IN THOUSANDS) |
Quarter Ended | ||||||||||||||||||||
Trailing 12 | ||||||||||||||||||||
Months | ||||||||||||||||||||
1/27/2019 | 4/28/2019 | 8/4/2019 | 11/3/2019 | 11/3/2019 | ||||||||||||||||
Net income (loss) | $ | 3,060 | $ | (1,511 | ) | $ | 1,174 | $ | 2,192 | $ | 4,915 | |||||||||
Income taxes | 1,225 | 3,017 | 1,682 | 1,898 | 7,822 | |||||||||||||||
Interest income, net | (251 | ) | (210 | ) | (241 | ) | (210 | ) | (912 | ) | ||||||||||
Other non-recurring charges | 429 | 500 | - | - | 929 | |||||||||||||||
Restructuring expense (credit) and related charges | 340 | - | (35 | ) | - | 305 | ||||||||||||||
Depreciation and amortization expense | 2,232 | 2,218 | 2,081 | 2,165 | 8,696 | |||||||||||||||
Stock based compensation | 479 | (243 | ) | 154 | 313 | 703 | ||||||||||||||
Adjusted EBITDA | $ | 7,514 | $ | 3,771 | $ | 4,815 | $ | 6,358 | $ | 22,458 | ||||||||||
% Net Sales | 9.7 | % | 5.3 | % | 6.4 | % | 8.8 | % | 7.6 | % | ||||||||||
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 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 | ||||||||||
% Net Sales | 12.0 | % | 10.5 | % | 7.6 | % | 8.1 | % | 9.7 | % | ||||||||||
% Over (Under) | -26.8 | % | -54.1 | % | -11.1 | % | 2.1 | % | -25.5 | % |
Page 11 of 13
CULP, INC. FINANCIAL INFORMATION RELEASE |
RETURN ON CAPITAL EMPLOYED BY SEGMENT |
FOR THE TWELVE MONTHS ENDED NOVEMBER 3, 2019 |
(Amounts in Thousands) |
(Unaudited) |
Operating Income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Twelve Months | Average | Return on | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ended | Capital | Avg. Capital | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
November 3, 2019 (1) | Employed (3) | Employed (2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mattress Fabrics | $ | 11,822 | $ | 73,160 | 16.2 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Upholstery Fabrics | 11,924 | 19,468 | 61.2 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home Accessories | (1,678 | ) | 3,749 | N.M. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(less: Unallocated Corporate) | (8,404 | ) | 31,082 | N.M. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 13,664 | $ | 127,459 | 10.7 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average Capital Employed | As of the three Months Ended November 3, 2019 | As of the three Months Ended August 4, 2019 | As of the three Months Ended April 28, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mattress | Upholstery | Home | Unallocated | Mattress | Upholstery | Home | Unallocated | Mattress | Upholstery | Home | Unallocated | |||||||||||||||||||||||||||||||||||||||||||||||||
Fabrics | Fabrics | Accessories | Corporate | Total | Fabrics | Fabrics | Accessories | Corporate | Total | Fabrics | Fabrics | Accessories | Corporate | Total | ||||||||||||||||||||||||||||||||||||||||||||||
Total assets (4) | $ | 84,473 | 42,122 | 7,280 | 97,847 | 231,722 | $ | 83,056 | 40,456 | 6,414 | 94,521 | 224,447 | $ | 83,393 | 37,529 | 5,618 | 93,186 | 219,726 | ||||||||||||||||||||||||||||||||||||||||||
Total liabilities (5) | (14,079 | ) | (22,711 | ) | (2,732 | ) | (26,278 | ) | (65,800 | ) | (11,854 | ) | (20,352 | ) | (2,301 | ) | (25,604 | ) | (60,111 | ) | (10,996 | ) | (18,114 | ) | (2,215 | ) | (24,154 | ) | (55,479 | ) | ||||||||||||||||||||||||||||||
Subtotal | $ | 70,394 | $ | 19,411 | $ | 4,548 | $ | 71,569 | $ | 165,922 | $ | 71,202 | $ | 20,104 | $ | 4,113 | $ | 68,917 | $ | 164,336 | $ | 72,397 | $ | 19,415 | $ | 3,403 | $ | 69,032 | $ | 164,247 | ||||||||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | - | - | - | (47,183 | ) | (47,183 | ) | - | - | - | (44,236 | ) | (44,236 | ) | - | - | - | (40,008 | ) | (40,008 | ) | |||||||||||||||||||||||||||||||||||||||
Short-term investments - Held-To-Maturity | - | - | - | - | - | - | - | - | - | - | - | - | - | (5,001 | ) | (5,001 | ) | |||||||||||||||||||||||||||||||||||||||||||
Current income taxes receivable | - | - | - | (776 | ) | (776 | ) | - | - | - | (776 | ) | (776 | ) | - | - | - | (776 | ) | (776 | ) | |||||||||||||||||||||||||||||||||||||||
Long-term investments - Rabbi Trust | - | - | - | (7,575 | ) | (7,575 | ) | - | - | - | (7,347 | ) | (7,347 | ) | - | - | - | (7,081 | ) | (7,081 | ) | |||||||||||||||||||||||||||||||||||||||
Noncurrent income taxes receivable | - | - | - | (733 | ) | (733 | ) | - | - | - | (733 | ) | (733 | ) | - | - | - | (733 | ) | (733 | ) | |||||||||||||||||||||||||||||||||||||||
Deferred income taxes - non-current | - | - | - | (511 | ) | (511 | ) | - | - | - | (486 | ) | (486 | ) | - | - | - | (457 | ) | (457 | ) | |||||||||||||||||||||||||||||||||||||||
Deferred compensation - current | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
Income taxes payable - current | - | - | - | 1,539 | 1,539 | - | - | - | 1,116 | 1,116 | - | - | - | 1,022 | 1,022 | |||||||||||||||||||||||||||||||||||||||||||||
Income taxes payable - long-term | - | - | - | 3,442 | 3,442 | - | - | - | 3,640 | 3,640 | - | - | - | 3,249 | 3,249 | |||||||||||||||||||||||||||||||||||||||||||||
Deferred income taxes - non-current | - | - | - | 3,283 | 3,283 | - | - | - | 2,543 | 2,543 | - | - | - | 3,176 | 3,176 | |||||||||||||||||||||||||||||||||||||||||||||
Subordinated loan payable | - | - | - | 925 | 925 | - | - | - | 925 | 925 | - | - | - | 675 | 675 | |||||||||||||||||||||||||||||||||||||||||||||
Deferred compensation - non-current | - | - | - | 7,429 | 7,429 | - | - | - | 7,232 | 7,232 | - | - | - | 6,998 | 6,998 | |||||||||||||||||||||||||||||||||||||||||||||
Total Capital Employed | $ | 70,394 | $ | 19,411 | $ | 4,548 | $ | 31,409 | $ | 125,762 | $ | 71,202 | $ | 20,104 | $ | 4,113 | $ | 30,795 | $ | 126,214 | $ | 72,397 | $ | 19,415 | $ | 3,403 | $ | 30,096 | $ | 125,311 | ||||||||||||||||||||||||||||||
As of the three Months Ended January 27, 2019 | As of the three Months Ended October 28, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mattress | Upholstery | Home | Unallocated | Mattress | Upholstery | Home | Unallocated | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Fabrics | Fabrics | Accessories | Corporate | Total | Fabrics | Fabrics | Accessories | Corporate | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets (4) | $ | 86,707 | 43,097 | 5,607 | 89,497 | 224,908 | $ | 86,494 | 37,442 | 5,203 | 93,072 | 222,211 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities (5) | (11,604 | ) | (22,483 | ) | (2,168 | ) | (21,421 | ) | (57,676 | ) | (9,790 | ) | (19,646 | ) | (1,960 | ) | (23,346 | ) | (54,742 | ) | ||||||||||||||||||||||||||||||||||||||||
Subtotal | $ | 75,103 | $ | 20,614 | $ | 3,439 | $ | 68,076 | $ | 167,232 | $ | 76,704 | $ | 17,796 | $ | 3,243 | $ | 69,726 | $ | 167,469 | ||||||||||||||||||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | - | - | - | (26,418 | ) | (26,418 | ) | - | - | - | (14,768 | ) | (14,768 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Short-term investments - Held-To-Maturity | - | - | - | (13,544 | ) | (13,544 | ) | - | - | - | (26,719 | ) | (26,719 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Current income taxes receivable | - | - | - | - | - | - | - | - | - | �� | - | |||||||||||||||||||||||||||||||||||||||||||||||||
Long-term investments - Rabbi Trust | - | - | - | (6,834 | ) | (6,834 | ) | - | - | - | (7,851 | ) | (7,851 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Noncurrent income taxes receivable | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred income taxes - non-current | - | - | - | (3,224 | ) | (3,224 | ) | - | - | - | (3,614 | ) | (3,614 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Deferred compensation - current | - | - | - | - | - | - | - | - | 714 | 714 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Income taxes payable - current | - | - | - | 642 | 642 | - | - | - | 2,044 | 2,044 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Income taxes payable - long-term | - | - | - | 3,294 | 3,294 | - | - | - | 3,233 | 3,233 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred income taxes - non-current | - | - | - | 2,225 | 2,225 | - | - | - | 2,225 | 2,225 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Subordinated loan payable | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred compensation - non-current | - | - | - | 6,782 | 6,782 | - | - | - | 7,120 | 7,120 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total Capital Employed | $ | 75,103 | $ | 20,614 | $ | 3,439 | $ | 30,999 | $ | 130,155 | $ | 76,704 | $ | 17,796 | $ | 3,243 | $ | 32,110 | $ | 129,853 | ||||||||||||||||||||||||||||||||||||||||
Mattress | Upholstery | Home | Unallocated | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fabrics | Fabrics | Accessories | Corporate | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average Capital Employed (3) | $ | 73,160 | $ | 19,468 | $ | 3,749 | $ | 31,082 | $ | 127,459 |
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 November 3, 2019, divided by average capital employed. Average capital employed does not include cash and cash equivalents, short-term investments Held-To-Maturity, long-term investments - Rabbi Trust, noncurrent deferred income tax assets and liabilities, income taxes receivable and payable, subordinated loan payable, and current and noncurrent deferred compensation. |
(3) | Average capital employed was computed using the five quarterly periods ending November 3, 2019, August 4, 2019, April 28, 2019, January 27, 2019, and October 28, 2018. |
(4) | Intangible assets and goodwill are included in unallocated corporate for all periods presented and therefore, have no affect on the capital employed and return on capital employed for our mattress fabrics, upholstery fabrics, and home accessories segments. |
(5) | Accrued restructuring costs and certain obligations associated with our acquisitions are included in unallocated corporate for all periods presented and therefore, have no affect on capital employed and return on capital employed for our mattress fabrics, upholstery fabrics, and home accessories segments. |
Page 12 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 | $ | 18,624 | $ | 77,807 | 23.9 | % | �� | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Upholstery Fabrics | 10,940 | 19,372 | 56.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home Accessories | 56 | 1,199 | N.M. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(less: Unallocated Corporate) | (7,680 | ) | 21,083 | N.M. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | Home | Unallocated | Mattress | Upholstery | Home | Unallocated | Mattress | Upholstery | Home | Unallocated | |||||||||||||||||||||||||||||||||||||||||||||||||
Fabrics | Fabrics | Accessories | Corporate | Total | Fabrics | Fabrics | Accessories | Corporate | Total | Fabrics | Fabrics | Accessories | Corporate | Total | ||||||||||||||||||||||||||||||||||||||||||||||
Total assets (4) | $ | 86,494 | 37,442 | 5,203 | 93,072 | 222,211 | $ | 93,601 | 37,386 | 4,463 | 90,922 | 226,372 | $ | 95,061 | 39,812 | - | 83,111 | 217,984 | ||||||||||||||||||||||||||||||||||||||||||
Total liabilities (5) | (9,790 | ) | (19,646 | ) | (1,960 | ) | (23,346 | ) | (54,742 | ) | (12,883 | ) | (17,880 | ) | (1,710 | ) | (27,869 | ) | (60,342 | ) | (17,335 | ) | (18,679 | ) | - | (18,594 | ) | (54,608 | ) | |||||||||||||||||||||||||||||||
Subtotal | $ | 76,704 | $ | 17,796 | $ | 3,243 | $ | 69,726 | $ | 167,469 | $ | 80,718 | $ | 19,506 | $ | 2,753 | $ | 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 | $ | 76,704 | $ | 17,796 | $ | 3,243 | $ | 32,110 | $ | 129,853 | $ | 80,718 | $ | 19,506 | $ | 2,753 | $ | 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 | Home | Unallocated | Mattress | Upholstery | Home | Unallocated | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Fabrics | Fabrics | Accessories | Corporate | Total | Fabrics | Fabrics | Accessories | 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 | Home | Unallocated | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fabrics | Fabrics | Accessories | Corporate | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average Capital Employed (3) | $ | 77,807 | $ | 19,372 | $ | 1,199 | $ | 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 payable, line of credit, and current and noncurrent deferred compensation. |
(3) | Average capital employed was computed using the five quarterly 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 therefore, have no affect on the capital employed and return on capital employed for our mattress fabrics, upholstery fabrics, and home accessories segments. |
(5) | Accrued restructuring costs and certain obligations associated with our acquisitions are included in unallocated corporate for all periods presented and therefore, have no affect on capital employed and return on capital employed for our mattress fabrics, upholstery fabrics, and home accessories segments. |
Page 13 of 13
CULP, INC. FINANCIAL INFORMATION RELEASE |
CONSOLIDATED STATEMENTS OF OPERATING INCOME (LOSS) |
FOR THE TWELVE MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018 |
(UNAUDITED) |
(AMOUNTS IN THOUSANDS) |
Quarter Ended | ||||||||||||||||||||
Trailing 12 | ||||||||||||||||||||
Months | ||||||||||||||||||||
1/27/2019 | 4/28/2019 | 8/4/2019 | 11/3/2019 | 11/3/2019 | ||||||||||||||||
Mattress Fabrics | $ | 3,208 | $ | 2,698 | $ | 2,623 | $ | 3,293 | $ | 11,822 | ||||||||||
Upholstery Fabrics | 3,799 | 1,777 | 2,875 | 3,473 | 11,924 | |||||||||||||||
Home Accessories | (311 | ) | (479 | ) | (538 | ) | (350 | ) | (1,678 | ) | ||||||||||
Unallocated Corporate | (1,628 | ) | (2,037 | ) | (2,306 | ) | (2,433 | ) | (8,404 | ) | ||||||||||
Subtotal | 5,068 | 1,959 | 2,654 | 3,983 | 13,664 | |||||||||||||||
Other non-recurring charges | (429 | ) | - | - | - | (429 | ) | |||||||||||||
Restructuring (expense) credit and related charges | (340 | ) | - | 35 | - | (305 | ) | |||||||||||||
Operating income | $ | 4,299 | $ | 1,959 | $ | 2,689 | $ | 3,983 | $ | 12,930 | ||||||||||
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 | $ | 2,790 | $ | 2,909 | $ | 18,624 | ||||||||||
Upholstery Fabrics | 3,510 | 2,181 | 2,527 | 2,722 | 10,940 | |||||||||||||||
Home Accessories | - | - | 33 | 23 | 56 | |||||||||||||||
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 | ||||||||||
% Over (Under) | -43.8 | % | -69.7 | % | 29.6 | % | -7.0 | % | -36.8 | % |