Exhibit 99(b)
CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF NET LOSS
FOR THE THREE MONTHS ENDED July 31, 2005 AND August 1, 2004
(Amounts in Thousands, Except for Per Share Data)
THREE MONTHS ENDED (UNAUDITED)
------------------------------------------------------
Amounts Percent of Sales
--------------------- -------------------
July 31, August 1, % Over July 31, August 1,
2005 2004 (Under) 2005 2004
--------- --------- --------- -------- ---------
Net sales $ 62,340 67,849 (8.1)% 100.0% 100.0%
Cost of sales 55,785(1) 59,174(2) (5.7)% 89.5% 87.2%
--------- --------- --------- -------- ---------
Gross profit 6,555 8,675 (24.4)% 10.5% 12.8%
Selling, general and
administrative expenses 9,856(3) 9,280 6.2% 15.8% 13.7%
Restructuring expense (credit) 1,826(4) (138)(4) 1,423.2% 2.9% (0.2)%
--------- --------- --------- -------- ---------
Loss from operations (5,127) (467) 997.9% (8.2)% (0.7)%
Interest expense 948 940 0.9% 1.5% 1.4%
Interest income (16) (27) (40.7)% (0.0)% (0.0)%
Other expense 133 214 (37.9)% 0.2% 0.3%
--------- --------- --------- -------- ---------
Loss before income taxes (6,192) (1,594) (288.5)% (9.9)% (2.3)%
Income taxes* (2,251) (542) 315.3% 36.4% 34.0%
--------- --------- --------- -------- ---------
Net loss $ (3,941) (1,052) (274.6)% (6.3)% (1.6)%
========= ========= ========= ======== =========
Net loss per share-basic $ (0.34) (0.09) (277.8)%
Net loss per share-diluted $ (0.34) (0.09) (277.8)%
Net loss per share, diluted, excluding restructuring
and related charges and credits $ (0.05) (0.09) 44.4%
(see pro-forma statement on page 7)
Average shares outstanding-basic 11,551 11,547 0.0%
Average shares outstanding-diluted 11,551 11,547 0.0%
* Percent of sales column for income taxes is calculated as a % of loss
before income taxes.
(1) Includes $495,000 of restructuring related charges--see Proforma income
statement per page 5 of 5.
(2) Includes $75,000 of restructuring related charges--see Proforma income
statement per page 5 of 5.
(3) Includes $3.0 million of restructuring related charges--see Proforma income
statement per page 5 of 5.
(4) See Proforma income statement per page 5 of 5 for breakdown of
restructuring expenses.
CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED BALANCE SHEETS
JULY 31, 2005, AUGUST 1, 2004 AND MAY 1, 2005
Unaudited
(Amounts in Thousands)
Amounts Increase
---------------------- (Decrease)
July 31, August 1, -------------------- * May 1,
2005 2004 Dollars Percent 2005
---------- ---------- ---------- --------- ----------
Current assets
Cash and cash equivalents $ 5,238 11,946 (6,708) (56.2)% 5,107
Accounts receivable 23,019 24,242 (1,223) (5.0)% 28,824
Inventories 52,125 52,083 42 0.1 % 50,499
Deferred income taxes 7,054 9,256 (2,202) (23.8)% 7,054
Other current assets 1,660 1,645 15 0.9 % 2,691
---------- ---------- ---------- --------- ----------
Total current assets 89,096 99,172 (10,076) (10.2)% 94,175
Property, plant & equipment, net 60,190 78,880 (18,690) (23.7)% 66,032
Goodwill 4,114 9,240 (5,126) (55.5)% 4,114
Deferred income taxes 12,268 0 12,268 100.0 % 10,086
Other assets 1,519 1,307 212 16.2 % 1,716
---------- ---------- ---------- --------- ----------
Total assets $ 167,187 188,599 (21,412) (11.4)% 176,123
========== ========== ========== ========= ==========
Current liabilities
Current maturities of long-term debt $ 8,126 545 7,581 1,391.0 % 8,110
Accounts payable 18,524 14,857 3,667 24.7 % 22,852
Accrued expenses 10,178 10,880 (702) (6.5)% 9,556
Accrued restructuring 4,855 4,656 199 4.3 % 5,850
Income taxes payable 1,179 606 573 94.6 % 1,544
---------- ---------- ---------- --------- ----------
Total current liabilities 42,862 31,544 11,318 35.9 % 47,912
Long-term debt, less current maturities 42,440 50,519 (8,079) (16.0)% 42,440
Deferred income taxes 0 4,138 (4,138) (100.0)% 0
---------- ---------- ---------- -------- ----------
Total liabilities 85,302 86,201 (899) (1.0)% 90,352
Shareholders' equity 81,885 102,398 (20,513) (20.0)% 85,771
---------- ---------- ---------- -------- ----------
Total liabilities and
shareholders' equity $ 167,187 188,599 (21,412) (11.4)% 176,123
========== ========== ========== ========= ==========
Shares outstanding 11,552 11,548 4 0.0 % 11,551
========== ========== ========== ========= ==========
* Derived from audited financial statements.
CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JULY 31, 2005 AND AUGUST 1, 2004
Unaudited
(Amounts in Thousands)
THREE MONTHS ENDED
-----------------------
Amounts
-----------------------
July 31, August 1,
2005 2004
--------- ---------
Cash flows from operating activities:
Net loss $ (3,941) (1,052)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 6,172 3,362
Amortization of other assets 31 37
Stock-based compensation 53 52
Deferred income taxes (2,182) 0
Restructuring expense (credit) 1,826 (138)
Changes in assets and liabilities:
Accounts receivable 5,805 6,477
Inventories (1,626) (3,038)
Other current assets 1,031 (11)
Other assets 166 206
Accounts payable (4,413) 112
Accrued expenses 622 (2,148)
Accrued restructuring (1,968) (228)
Income taxes payable (365) (1,244)
--------- ---------
Net cash provided by operating activities 1,211 2,387
--------- ---------
Cash flows from investing activities:
Capital expenditures (3,840) (4,375)
Proceeds from the sale of buildings 2,850 0
--------- ---------
Net cash used in investing activities (990) (4,375)
--------- ---------
Cash flows from financing activities:
Payments on vendor-financed capital expenditures (108) (675)
Proceeds from issuance of long-term debt 16 34
Proceeds from common stock issued 2 7
--------- ---------
Net cash used in financing activities (90) (634)
--------- ---------
Increase (decrease) in cash and cash equivalents 131 (2,622)
Cash and cash equivalents at beginning of period 5,107 14,568
--------- ---------
Cash and cash equivalents at end of period $ 5,238 11,946
========= =========
Free Cash Flow (1) $ 113 (2,663)
========= =========
- --------------------------------------------------------------------------------
(1) Free Cash Flow reconciliation is as follows:
FY 2006 FY 2005
-----------------------
A) Net cash provided by operating activities $ 1,211 2,387
B) Minus: Capital Expenditures (3,840) (4,375)
C) Add: Proceeds from the sale of buildings 2,850 0
C) Minus: Payments on vendor-financed capital
expenditures (108) (675)
--------- ---------
$ 113 (2,663)
========= =========
- --------------------------------------------------------------------------------
CULP, INC. FINANCIAL INFORMATION RELEASE
SALES, GROSS PROFIT AND OPERATING INCOME (LOSS) BY SEGMENT
FOR THE THREE MONTHS ENDED JULY 31, 2005 AND AUGUST 1, 2004
(Amounts in thousands)
THREE MONTHS ENDED (UNAUDITED)
---------------------------------------------------------
Amounts Percent of Total Sales
----------------------- ----------------------
July 31, August 1, % Over July 31, August 1,
Net Sales by Segment 2005 2004 (Under) 2005 2004
- ----------------------------------------------------- --------- --------- --------- -------- ---------
Mattress Fabrics $ 22,915 25,953 (11.7)% 36.8 % 38.3 %
Upholstery Fabrics 39,425 41,896 (5.9)% 63.2 % 61.7 %
--------- --------- --------- -------- ---------
Net Sales $ 62,340 67,849 (8.1)% 100.0 % 100.0 %
========= ========= ========= ======== =========
Gross Profit by Segment Gross Profit Margin
- ----------------------------------------------------- ----------------------
Mattress Fabrics $ 3,095 4,794 (35.4)% 13.5 % 18.5 %
Upholstery Fabrics 3,955 3,956 (0.0)% 10.0 % 9.4 %
--------- --------- --------- -------- ---------
Subtotal 7,050 8,750 (19.4)% 11.3 % 12.9 %
Restructuring related charges (495)(1) (75)(2) 560.0 % -0.8 % (0.0)%
--------- --------- --------- -------- ---------
Gross Profit $ 6,555 8,675 (24.4)% 10.5 12.8 %
========= ========= ========= ======== =========
Sales, General and Administrative expenses by Segment Percent of Sales
- ----------------------------------------------------- ----------------------
Mattress Fabrics $ 1,737 1,895 (8.3)% 7.6 % 7.3 %
Upholstery Fabrics 4,335 6,575 (34.1)% 11.0 % 15.7 %
Unallocated Corporate expenses 762 810 (5.9)% 1.2 % 1.2 %
--------- --------- --------- -------- ---------
Subtotal 6,834 9,280 (26.4) 11.0 % 13.7 %
Restructuring related charges 3,022(3) 0 100.0 % 4.8 % 0.0 %
--------- --------- --------- -------- ---------
Selling, General and Administrative expenses $ 9,856 9,280 6.2 % 15.8 % 13.7 %
========= ========= ========= ======== =========
Operating Income
Operating income (loss) by Segment (Loss) Margin
- ----------------------------------------------------- ----------------------
Mattress Fabrics $ 1,358 2,899 (53.2)% 5.9 % 11.2 %
Upholstery Fabrics (380) (2,619) 85.5 % (1.0)% (6.3)%
Unallocated corporate expenses (762) (810) 5.9 % (1.2)% (1.2)%
--------- --------- --------- -------- ---------
Subtotal 216 (530) 140.8 % 0.3 % (0.8)%
Restructuring (expense) and credits (1,826)(4) 138 (2) N/A % (2.9)% 0.2 %
Restructuring related charges (3,517)(5) (75)(2) N/A % (5.6)% (0.1)%
--------- --------- --------- -------- ---------
Operating loss $ (5,127) (467) (997.9)% (8.2)% (0.7)%
========= ========= ========= ======== =========
Depreciation by Segment
- -----------------------------------------------------
Mattress Fabrics $ 857 916 (6.4)%
Upholstery Fabrics 1,798 2,446 (26.5)%
--------- --------- ---------
Subtotal 2,655 3,362 (21.0)%
Accelerated depreciation (Restructuring related) 3,517(5) 0 100.0 %
--------- --------- ---------
Total Depreciation $ 6,172 3,362 83.6 %
========= ========= =========
(1) The $495,000 represents restructuring related charges for accelerated
depreciation on equipment associated with the consolidation of the the
Burlington, NC and Anderson, SC manufacturing facilities.
(2) The $75,000 represents equipment dismantling charges related to the closing
of the Lumberton, NC manufacturing facility. The $138,000 restructuring
credit represents the reversal of certain accrued expenses associated with
termination benefits.
(3) The $3.0 million represents restructuring related charges for accelerated
depreciation associated with the design and distribution centers sold in
June 2005.
(4) The $1.8 million restructuring expense includes $1.2 million in asset
movement costs; $754,000 in write-downs of equipment; $47,000 in lease
termination expense; and $142,000 in a restructuring credit for the
reversal of accrued termination benefit expenses.
(5) See note (1) and (3).
CULP, INC.
PROFORMA CONSOLIDATED STATEMENTS OF NET INCOME (LOSS)
FOR THE THREE MONTHS ENDED JULY 31, 2005 AND AUGUST 1, 2004
(Amounts in Thousands, Except for Per Share Data)
THREE MONTHS ENDED (UNAUDITED)
---------------------------------------------------------------------------------------------------------------
July 31, August 1,
2005 2004
As Proforma As Proforma
Reported Net of Reported Net of Proforma
July 31, % of Adjust- % of Adjust- % of August 1, % of Adjust- % of Adjust- % of % Over
2005 Sales ments Sales ments Sales 2004 Sales ments Sales ments Sales (Under)
---------------- --------------- ---------------- ---------------- --------------- ----------------- -------
Net sales $ 62,340 100.0% 0 0.0% 62,340 100.0% 67,849 100.0% 0 0.0% 67,849 100.0% -8.1%
Cost of sales 55,785 89.5% (495) -0.8%(1) 55,290 88.7% 59,174 87.2% (75) -0.1%(5) 59,099 87.1% -6.4%
---------------- --------------- ---------------- ---------------- --------------- ----------------- -------
Gross profit 6,555 10.5% (495) -0.8% 7,050 11.3% 8,675 12.8% (75) -0.1% 8,750 12.9% -19.4%
Selling, general
and administrative
expenses 9,856 15.8% (3,022) -4.8%(2) 6,834 11.0% 9,280 13.7% 0 0.0% 9,280 13.7% -26.4%
Restructuring
expense (credit) 1,826 2.9% (1,826) -2.9%(3) 0 0.0% (138) -0.2% 138 0.2%(5) 0 0.0% 0.0%
---------------- --------------- ---------------- ---------------- --------------- ----------------- -------
Income (loss)
from operations (5,127) -8.2% (5,343) -8.6% 216 0.3% (467) -0.7% 63 0.1% (530) -0.8% -140.8%
Interest expense 948 1.5% 0 0.0% 948 1.5% 940 1.4% 0 0.0% 940 1.4% 0.9%
Interest income (16) 0.0% 0 0.0% (16) 0.0% (27) 0.0% 0 0.0% (27) 0.0% -40.7%
Other expense 133 0.2% 0 0.0% 133 0.2% 214 0.3% 0 0.0% 214 0.3% -37.9%
---------------- --------------- ---------------- ---------------- --------------- ----------------- -------
Income (loss)
before income
taxes (6,192) -9.9% (5,343) -8.6% (849) -1.4% (1,594) -2.3% 63 0.1% (1,657) -2.4% 48.8%
Income taxes (4) (2,251) 36.4% (2,030) 38.0% (221) 26.0% (542) 34.0% 21 33.3% (563) 34.0% 60.7%
---------------- --------------- ---------------- ---------------- --------------- ----------------- -------
Net income (loss) $ (3,941) -6.3% (3,313) -5.3% (628) -1.0% (1,052) -1.6% 42 0.1% (1,094) -1.6% 42.6%
================ =============== ================ ================ =============== ================= =======
Net income (loss)
per share-basic ($0.34) ($0.29) ($0.05) ($0.09) $0.00 ($0.09)
Net income (loss)
per share-diluted ($0.34) ($0.29) ($0.05) ($0.09) $0.00 ($0.09)
Average shares
outstanding-basic 11,551 11,551 11,551 11,547 11,547 11,547
Average shares
outstanding-diluted 11,551 11,551 11,551 11,547 11,727 11,547
Notes:
(1) The $495,000 represents restructuring related charges for accelerated
depreciation on equipment associated with the consolidation of the
Burlington, NC and Anderson, SC manufacturing facilities.
(2) The $3.0 million represents accelerated depreciation on the distribution
and design centers sold in June of 2005.
(3) The $1.8 million in restructuring expense represents $1.2 million in asset
movement costs; $754,000 in write-downs of equipment; $47,000 in lease
termination costs; and $142,000 in restructuring credits for the reversal
of accrued termination and benefit expenses.
(4) The percent of net sales column for income taxes is calculated as a % of
income (loss) before income taxes.
(5) The $75,000 represents equipment dismantling charges related to the closing
of the Lumberton manufacturing facility. The $138,000 restructuring credit
represents the reversal of certain accrued expenses.