Exhibit 99.
NEWS RELEASE
Investor Contact: Media Contact:
Kathy J. Hardy Kenneth M. Ludwig
Corporate Secretary Senior Vice President,
336-888-6209 Human Resources
336-889-5161
CULP ANNOUNCES STRATEGIC MARKETING INITIATIVE IN CHINA
HIGH POINT, NC (March 31, 2003) Culp, Inc. (NYSE:CFI) today announced a
strategic marketing initiative to establish manufacturing and distribution
operations in China.
Culp's strategy is to link the company's strong customer relationships,
design expertise and production technology with low-cost fabric manufacturers
in China in order to deliver enhanced value to its customers throughout the
world.
The company's China operations will include a plant offering
value-added finishing to fabric designed by Culp and sourced from Chinese
manufacturers. Culp has created a separate U.S.- based design group
dedicated to the fabric produced in China. In addition, the facility will
provide on-site quality control testing and fabric inspection that meets U.S.
standards. Through its new China distribution center, Culp will have the
ability to offer multiple delivery and packaging options, including finished
fabric roll goods as well as cut and sew fabric kits, to its customers
located throughout the world. This new operation will also provide the
company with the ability to source low-cost raw materials, principally yarn,
for its U.S. manufacturing plants. The company has leased a
65,000-square-foot manufacturing and distribution facility located near
Shanghai, China. Culp anticipates making an investment of approximately $3.0
million, which consists primarily of manufacturing equipment and leasehold
improvements. The company plans to start production with approximately 30
employees by November 1, 2003, and have as many as 150 employees in China
once the plant is running at full capacity.
Michael D. Messer has been appointed vice president and general manager
of the China operations for Culp and will be relocating to the Shanghai
area. He is a 21-year veteran of Culp, and most recently served as vice
president of manufacturing for the Culp Decorative Fabrics division. Thomas
E. Sibley, Jr., has been named product manager and will serve as the liaison
between the company's design group and its customers. Additionally, he will
coordinate sales of the China-sourced product through Culp's existing sales
force. Previously, Sibley was a regional sales manager for the company's
contract fabrics.
Commenting on the announcement, Robert G. Culp, III, chairman and chief
executive officer of Culp, said, "We are very excited about the potential
growth opportunity that our China platform represents for Culp. This
strategic initiative will enable us to integrate China-sourced goods with our
domestic line and allow us to expand our business with middle-to-higher end
fabrics. We believe the production from our China operation will complement
rather than replace production at our other facilities and further enhance
our competitive position. In China we will have the capacity to produce
150,000 yards of fabric per week, which represents approximately $25.0
million in annual sales for Culp. Furthermore, with the combination of
Culp's dedicated design resources, value-added fabric finishing, quality
control testing, and supply-chain management, we can now offer our customers
an even stronger value proposition with an impressive array of delivery
choices. We plan to present our first major fabric offering from China at
the Showtime Fabric Fair in July, 2003, and we look forward to sharing this
exciting opportunity with our customers."
Culp, Inc. is one of the world's largest marketers of upholstery
fabrics for furniture and is a leading marketer of mattress ticking for
bedding. The company's fabrics are used principally in the production of
residential and commercial furniture and bedding products.
This release contains statements that may be deemed "forward-looking
statements" within the meaning of the federal securities laws, including the
Private Securities Litigation Reform Act of 1995 (Section 27A of the
Securities Act of 1933 and Section 27A of the Securities and Exchange Act of
1934). Such statements are inherently subject to risks and uncertainties.
Further, forward-looking statements are intended to speak only as of the date
on which they are made. Forward-looking statements are statements that
include projections, expectations or beliefs about future events or results
or otherwise are not statements of historical fact. Such statements are
often but not always characterized by qualifying words such as "expect,"
"believe," "estimate," "plan" and "project" and their derivatives, and
include but are not limited to statements about expectations for the
company's future operations, production levels, sales, expenses and other
performance measures. Factors that could influence the matters discussed in
such statements include the level of housing starts and sales of existing
homes, consumer confidence, trends in disposable income, and general economic
conditions. Decreases in these economic indicators could have a negative
effect on the company's business and prospects. Likewise, increases in
interest rates, particularly home mortgage rates, and increases in consumer
debt or the general rate of inflation, could affect the company adversely.
Because of the significant percentage of the company's sales derived from
international shipments, strengthening of the U. S. dollar against other
currencies could make the company's products less competitive on the basis of
price in markets outside the United States. Additionally, economic and
political instability in international areas could affect the demand for the
company's products. Other risk factors that could have an impact on the
company's activities in China include uncertainties in connection with
operating in a geographic area and business culture where the company does
not have extensive experience, foreign language barriers, potential delays
caused by the distance between the China operations and the company's
traditional geographic base and similar risks associated with establishing
business operations in a remote and unfamiliar location. Other factors that
could affect the matters discussed in forward-looking statements are included
in the company's periodic reports filed with the Securities and Exchange
Commission.
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