Exhibit 99(b)
Page 1 of 7
CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF NET LOSS
FOR THE THREE MONTHS AND SIX MONTHS ENDED OCTOBER 30, 2005 AND OCTOBER 31, 2004
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)
THREE MONTHS ENDED
------------------------------------------------------------------------
Amounts Percent of Sales
-------------------------- ----------------------------
October 30, October 31, % Over October 30, October 31,
2005 2004 (Under) 2005 2004
------------ ------------ ------------ ------------- -------------
Net sales $ 67,006 75,406 (11.1)% 100.0 % 100.0 %
Cost of sales 61,455 65,839 (6.7)% 91.7 % 87.3 %
------------ ------------ ------------ ------------- -------------
Gross profit 5,551 9,567 (42.0)% 8.3 % 12.7 %
Selling, general and
administrative expenses 6,526 8,838 (26.2)% 9.7 % 11.7 %
Goodwill impairment 0 5,126 (100.0)% 0.0 % 6.8 %
Restructuring expense 4,412 1,292 241.5 % 6.6 % 1.7 %
------------ ------------ ------------ ------------- -------------
Loss from operations (5,387) (5,689) 5.3 % (8.0)% (7.5)%
Interest expense 942 937 0.5 % 1.4 % 1.2 %
Interest income (19) (29) (34.5)% (0.0)% (0.0)%
Other expense 214 173 23.7 % 0.3 % 0.2 %
------------ ------------ ------------ ------------- -------------
Loss before income taxes (6,524) (6,770) 3.6 % (9.7)% (9.0)%
Income taxes* (2,372) (2,577) (8.0)% 36.4 % 38.1 %
------------ ------------ -- ------------- -------------
----------
Net loss $ (4,152) (4,193) 1.0 % (6.2)% (5.6)%
============ ============ ============ ============= =============
Net loss per share-basic ($0.36) ($0.36) 0.0 %
Net loss per share-diluted ($0.36) ($0.36) 0.0 %
Net income (loss) per share, diluted, excluding restructuring ($0.03) $0.04 (175.0)%
and related charges and goodwill impairment (see proforma
statement on page 6)
Average shares outstanding-basic 11,559 11,549 0.1 %
Average shares outstanding-diluted 11,559 11,549 0.1 %
SIX MONTHS ENDED
----------------------------------------------------------------------
Amounts Percent of Sales
-------------------------- ----------------------------
October 30, October 31, % Over October 30, October 31,
2005 2004 (Under) 2005 2004
------------ ------------ ------------ ------------- -------------
Net sales $ 129,348 143,255 (9.7)% 100.0 % 100.0 %
Cost of sales 117,240 125,013 (6.2)% 90.6 % 87.3 %
------------ ------------ ------------ ------------- -------------
Gross profit 12,108 18,242 (33.6)% 9.4 % 12.7 %
Selling, general and
administrative expenses 16,382 18,118 (9.6)% 12.7 % 12.6 %
Goodwill impairment 0 5,126 (100.0)% 0.0 % 3.6 %
Restructuring expense 6,238 1,154 440.6 % 4.8 % 0.8 %
------------ ------------ ------------ ------------- -------------
Loss from operations (10,512) (6,156) (70.8)% (8.1)% (4.3)%
Interest expense 1,892 1,877 0.8 % 1.5 % 1.3 %
Interest income (35) (56) (37.5)% (0.0)% (0.0)%
Other expense 347 387 (10.3)% 0.3 % 0.3 %
------------ ------------ ------------ ------------- -------------
Loss before income taxes (12,716) (8,364) (52.0)% (9.8)% (5.8)%
Income taxes* (4,623) (3,119) 48.2 % 36.4 % 37.3 %
------------ ------------ ------------ ------------- -------------
Net loss $ (8,093) (5,245) (54.3)% (6.3)% (3.7)%
============ ============ ============ ============= =============
Net loss per share-basic ($0.70) ($0.45) 55.6 %
Net loss per share-diluted ($0.70) ($0.45) 55.6 %
Net loss per share, diluted, excluding restructuring ($0.08) ($0.05) 60.0 %
and related charges and goodwill impairment (see proforma
statement on page 7)
Average shares outstanding-basic 11,555 11,548 0.1 %
Average shares outstanding-diluted 11,555 11,548 0.1 %
* Percent of sales column for income taxes is calculated as a % of loss before
income taxes.
Page 2 of 7
CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED BALANCE SHEETS
OCTOBER 30, 2005, OCTOBER 31, 2004 AND MAY 1, 2005
Unaudited
(Amounts in Thousands)
Amounts Increase
------------------------------------ (Decrease)
October 30, October 31, ------------------------------- * May 1,
2005 2004 Dollars Percent 2005
------------------- --------------- --------------- ------------ -----------
Current assets
Cash and cash equivalents $ 12,883 16,505 (3,622) (21.9)% 5,107
Accounts receivable 26,919 26,590 329 1.2 % 28,824
Inventories 43,449 48,528 (5,079) (10.5)% 50,499
Deferred income taxes 7,054 4,980 2,074 41.6 % 7,054
Other current assets 1,846 3,100 (1,254) (40.5)% 2,691
------------------- --------------- --------------- ------------ -----------
Total current assets 92,151 99,703 (7,552) (7.6)% 94,175
Property, plant & equipment, net 54,212 76,062 (21,850) (28.7)% 66,032
Goodwill 4,114 4,114 0 0.0 % 4,114
Deferred income taxes 14,541 834 13,707 100.0 % 10,086
Other assets 1,521 1,327 194 14.6 % 1,716
------------------- --------------- --------------- ------------ -----------
Total assets $ 166,539 182,040 (15,501) (8.5)% 176,123
=================== =============== =============== ============ ===========
Current liabilities
Current maturities of long-term debt $ 8,346 594 7,752 1,305.1 % 8,110
Accounts payable 16,613 15,192 1,421 9.4 % 22,852
Accrued expenses 10,669 11,962 (1,293) (10.8)% 9,556
Accrued restructuring 5,486 5,458 28 0.5 % 5,850
Income taxes payable 1,023 0 1,023 (100.0)% 1,544
------------------- --------------- --------------- ------------ -----------
Total current liabilities 42,137 33,206 8,931 26.9 % 47,912
Long-term debt , less current maturities 46,584 50,569 (3,985) (7.9)% 42,440
------------------- --------------- --------------- ------------ -----------
Total liabilities 88,721 83,775 4,946 5.9 % 90,352
Shareholders' equity 77,818 98,265 (20,447) (20.8)% 85,771
------------------- --------------- --------------- ------------ -----------
Total liabilities and
shareholders' equity $ 166,539 182,040 (15,501) (8.5)% 176,123
=================== =============== =============== ============ ===========
Shares outstanding 11,559 11,550 9 0.1 % 11,551
=================== =============== =============== ============ ===========
* Derived from audited financial statements
Page 3 of 7
CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED OCTOBER 30, 2005 AND OCTOBER 31, 2004
Unaudited
(Amounts in Thousands)
SIX MONTHS ENDED
--------------------------------
Amounts
--------------------------------
October 30, October 31,
2005 2004
--------------- --------------
Cash flows from operating activities:
Net loss $ (8,093) (5,245)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 9,836 6,900
Amortization of other assets 51 70
Stock-based compensation 104 104
Goodwill impairment 0 5,126
Deferred income taxes (4,455) (696)
Restructuring expense 6,238 1,154
Changes in assets and liabilities:
Accounts receivable 1,905 4,129
Inventories 7,050 517
Other current assets 845 (1,466)
Other assets 149 153
Accounts payable (5,623) 1,228
Accrued expenses 1,113 (1,066)
Accrued restructuring (3,510) (440)
Income taxes payable (521) (1,850)
--------------- --------------
Net cash provided by operating activities 5,089 8,618
--------------- --------------
Cash flows from investing activities:
Capital expenditures (4,875) (5,556)
Proceeds from the sale of buildings and equipment 3,950 0
--------------- --------------
Net cash used in investing activities (925) (5,556)
--------------- --------------
Cash flows from financing activities:
Payments on vendor-financed capital expenditures (799) (1,273)
Proceeds from issuance of long-term debt 4,380 133
Proceeds from common stock issued 31 15
--------------- --------------
Net cash provided by (used in) financing activities 3,612 (1,125)
--------------- --------------
Increase in cash and cash equivalents 7,776 1,937
Cash and cash equivalents at beginning of period 5,107 14,568
--------------- --------------
Cash and cash equivalents at end of period $ 12,883 16,505
=============== ==============
Free Cash Flow (1) $ 3,365 1,789
=============== ==============
- -----------------------------------------------------------------------------------------------------------------------
(1) Free Cash Flow reconciliation is as follows: 2nd Qtr 2nd Qtr
FY 2006 FY 2005
-----------------------------------
A) Net cash provided by operating activities $ 5,089 8,618
B) Minus: Capital Expenditures (4,875) (5,556)
C) Add: Proceeds from the sale of buildings and equipment 3,950 0
D) Minus: Payments on vendor-financed capital expenditures (799) (1,273)
--------------- --------------
$ 3,365 1,789
=============== ==============
- -----------------------------------------------------------------------------------------------------------------------
Page 4 of 7
CULP, INC. FINANCIAL INFORMATION RELEASE
SALES, GROSS PROFIT AND OPERATING INCOME (LOSS) BY SEGMENT/DIVISION
FOR THE THREE MONTHS ENDED OCTOBER 30, 2005 AND OCTOBER 31, 2004
(Amounts in thousands)
THREE MONTHS ENDED (UNAUDITED)
-------------------------------------------------------------------------
Amounts Percent of Total Sales
--------------------------- ------------------------------
October 30, October 31, % Over October 30, October 31,
Net Sales by Segment 2005 2004 (Under) 2005 2004
- ------------------------------------------------ ------------- ----------- ---------- ------------- --------------
Mattress Fabrics $ 23,990 26,886 (10.8)% 35.8 % 35.7 %
Upholstery Fabrics 43,016 48,520 (11.3)% 64.2 % 64.3 %
------------- ----------- ---------- ------------- --------------
Net Sales $ 67,006 75,406 (11.1)% 100.0 % 100.0 %
============= =========== ========== ============= ==============
Gross Profit by Segment Gross Profit Margin
- ------------------------------------------------ ------------------------------
Mattress Fabrics $ 3,302 4,461 (26.0)% 13.8 % 16.6 %
Upholstery Fabrics 4,000 6,230 (35.8)% 9.3 % 12.8 %
------------- ----------- ---------- ------------- --------------
Subtotal 7,302 10,691 (31.7)% 10.9 % 14.2 %
Restructuring related charges (1,751)(1) (1,124) (2) (55.8)% (2.6)% (1.5)%
------------- ----------- ---------- ------------- --------------
Gross Profit $ 5,551 9,567 (42.0)% 8.3 % 12.7 %
============= =========== ========== ============= ==============
Sales, General and Administrative expenses by Segment Percent of Sales
- ------------------------------------------------------ ------------------------------
Mattress Fabrics $ 1,636 1,784 (8.3)% 6.8 % 6.6 %
Upholstery Fabrics 4,069 6,016 (32.4)% 9.5 % 12.4 %
Unallocated Corporate expenses 821 1,038 (20.9)% 1.2 % 1.4 %
------------- ----------- ---------- ------------- --------------
Selling, General and Administrative expenses $ 6,526 8,838 (26.2) 9.7 % 11.7 %
============= =========== ======= ============= ==============
Operating Income (loss) by Segment Operating Income (Loss) Margin
- ------------------------------------------------ ------------------------------
Mattress Fabrics $ 1,666 2,676 (37.7)% 6.9 % 10.0 %
Upholstery Fabrics (69) 216 (131.9)% (0.2)% 0.4 %
Unallocated corporate expenses (821) (1,039) 21.0 % (1.2)% (1.4)%
------------- ----------- ---------- ------------- --------------
Subtotal 776 1,853 (58.1)% 1.2 % 2.5 %
Goodwill impairment 0 (5,126) (3)(100.0)% 0.0 % (6.8)%
Restructuring and related charges (6,163)(1) (2,416) (2)(155.1)% (9.2)% (3.2)%
------------- ----------- ---------- ------------- --------------
Operating loss $ (5,387) (5,689) 5.3 % (8.0)% (7.5)%
============= =========== ========== ============= ==============
Depreciation by Segment
- ------------------------------------------------
Mattress Fabrics $ 893 915 (2.4)%
Upholstery Fabrics 1,417 2,408 (41.2)%
------------- ----------- ----------
Subtotal 2,310 3,323 (30.5)%
Accelerated Depreciation 1,355 215 530.2 %
------------- ----------- ----------
Total Depreciation $ 3,665 3,538 3.6 %
============= =========== ==========
(1) The $1.8 million represents restructuring related charges of $1.3 million
of accelerated depreciation associated with the closing of the company's
facility in Shelby, NC and consolidating the chenille yarn operations into
the Lincolnton, NC facility, $331,000 for inventory markdowns, $104,000
for accelerated depreciation associated with the closing of the company's
finishing facility located in Burlington, NC, and $65,000 for termination
benefit expenses. The $6.2 million represents restructuring and related
charges of $2.1 million for write-downs of buildings and equipment, $1.6
million for accrued termination benefits, $1.3 million of accelerated
depreciation associated with the closing of the company's facility in
Shelby, NC and consolidating the chenille yarn operations into the
Lincolnton, NC facility, $395,000 for asset movement costs, $331,000 for
inventory markdowns, $328,000 for lease termination costs, and $104,000
for accelerated depreciation associated with the closing of the company's
finishing facility located in Burlington, NC.
(2) The $1.1 million represents restructuring related charges of $910,000 and
$215,000 for inventory markdowns and accelerated deprecation associated
with the closing of the company's facility in Pageland, SC and
consolidating those operations into the Graham, NC facility. The $2.4
million represents restructuring and related charges of $1.0 million for
accrued termination benefits, $910,000 for inventory markdowns, $278,000
for write-downs of buildings and equipment, and $215,000 for accelerated
depreciation associated with the closing of the company's facility in
Pageland, SC and consolidating those operations into the Graham, NC
facility.
(3) The $5.1 million represents a goodwill impairment charge related to the
Culp Decorative Fabrics division within the upholstery fabrics segment.
Page 5 of 7
CULP, INC. FINANCIAL INFORMATION RELEASE
SALES, GROSS PROFIT AND OPERATING INCOME (LOSS) BY SEGMENT/DIVISION
FOR THE SIX MONTHS ENDED OCTOBER 30, 2005 AND OCTOBER 31, 2004
(Amounts in thousands)
SIX MONTHS ENDED (UNAUDITED)
------------------------------------------------------------------------
Amounts Percent of Total Sales
--------------------------- -----------------------------
October 30, October 31, % Over October 30, October 31,
Net Sales by Segment 2005 2004 (Under) 2005 2004
- -------------------------------------------------- ------------- ----------- ---------- ------------- -------------
Mattress Fabrics $ 46,905 52,839 (11.2)% 36.3 % 36.9 %
Upholstery Fabrics 82,443 90,416 (8.8)% 63.7 % 63.1 %
------------- ----------- ---------- ------------- -------------
Net Sales $ 129,348 143,255 (9.7)% 100.0 % 100.0 %
============= =========== ========== ============= =============
Gross Profit by Segment Gross Profit Margin
- -------------------------------------------------- ------------------------------
Mattress Fabrics $ 6,397 9,255 (30.9)% 13.6 % 17.5 %
Upholstery Fabrics 7,957 10,186 (21.9)% 9.7 % 11.3 %
------------- ----------- ---------- ------------- -------------
Subtotal 14,354 19,441 (26.2)% 11.1 % 13.6 %
Restructuring related charges (2,246)(1) (1,199) (4) (87.3)% (1.7)% (0.8)%
------------- ----------- ---------- ------------- -------------
Gross Profit $ 12,108 18,242 (33.6)% 9.4 % 12.7 %
============= =========== ========== ============= =============
Sales, General and Administrative expenses by Segment Percent of Sales
- ----------------------------------------------------------------- -----------------------------
Mattress Fabrics $ 3,373 3,679 (8.3)% 7.2 % 7.0 %
Upholstery Fabrics 8,404 12,589 (33.2)% 10.2 % 13.9 %
Unallocated Corporate expenses 1,583 1,850 (14.4)% 1.2 % 1.3 %
------------- ----------- ---------- ------------- -------------
Subtotal 13,360 18,118 (26.3) 10.3 12.6 %
Restructuring related charges 3,022 (2) 0 100.0 % 2.3 % 0.0 %
------------- ----------- ---------- ------------- -------------
Selling, General and Administrative expenses $ 16,382 18,118 (9.6) 12.7 % 12.6 %
============= =========== ========== ============= =============
Operating Income (loss) by Segment Operating Income (Loss) Margin
- -------------------------------------------------- ------------------------------
Mattress Fabrics $ 3,024 5,575 (45.8)% 6.4 % 10.6 %
Upholstery Fabrics (448) (2,403) 81.4 % (0.5)% (2.7)%
Unallocated corporate expenses (1,582) (1,849) 14.4 % (1.2)% (1.3)%
------------- ----------- ---------- ------------- -------------
Subtotal 994 1,323 (24.9)% 0.8 % 0.9 %
Goodwill impairment 0 (5,126) (5) (100.0)% 0.0 % (3.6)%
Restructuring and related charges (11,506)(3) (2,353) (4) (389.0)% (8.9)% (1.6)%
------------- ----------- ---------- ------------- -------------
Operating loss $ (10,512) (6,156) (70.8)% (8.1)% (4.3)%
============= =========== ========== ============= =============
Depreciation by Segment
- --------------------------------------------------
Mattress Fabrics $ 1,749 1,831 (4.5)%
Upholstery Fabrics 3,216 4,854 (33.7)%
------------- ----------- ----------
Subtotal 4,965 6,685 (25.7)%
Accelerated Depreciation 4,871 215 2,165.6 %
------------- ----------- ----------
Total Depreciation $ 9,836 6,900 42.6 %
============= =========== ==========
(1) The $2.3 million represents restructuring related charges of $1.3 million
of accelerated depreciation associated with the closing of the company's
facility in Shelby, NC and consolidating the chenille yarn operations into
the Lincolnton, NC facility, $495,000 for accelerated depreciation on
equipment associated with the consolidation of the Burlington, NC and
Anderson, SC manufacturing facilities within the CVP division, $331,000 for
inventory markdowns, $104,000 for accelerated depreciation associated with
the closing of the company's finishing facility located in Burlington, NC,
and $65,000 for termination benefit expenses.
(2) The $3.0 million represents accelerated depreciation associated with the
design and distribution centers sold in June of 2005.
(3) The $11.5 million represents restructuring and related charges of $3.5
million for accelerated depreciation associated with the design and
distribution centers sold in June of 2005 and equipment associated with the
consolidation of the Burlington, NC and Anderson, SC manufacturing
facilities within the CVP division, $2.9 million for write-downs of
buildings and equipment, $1.6 million for asset movement costs, $1.5
million for termination benefits, $1.3 million for accelerated depreciation
associated with the closing of the company's facility in Shelby, NC and
consolidating the chenille yarn operations into the Lincolnton, NC
facility, $378,000 for lease termination costs, $331,000 for inventory
markdowns, $104,000 for accelerated depreciation associated with the
closing of the company's finishing facility located in Burlington, NC.
(4) The $1.2 million represents restructuring related charges of $910,000 and
$215,000 for inventory markdowns and accelerated depreciation associated
with the closing of the company's facility in Pageland, SC and
consolidating those operations into the Graham, NC facility, $75,000 for
equipment dismantling charges related to the closing of the Lumberton, NC
manufacturing facility. The $2.4 million represents restructuring and
related charges of $910,000 for inventory markdowns, $876,000 for accrued
termination benefits, $278,000 for write-downs of buildings and equipment,
$215,000 for accelerated depreciation associated with the closing of the
company's facility in Pageland, SC and consolidating those operations into
the Graham, NC facility, and $75,000 for equipment dismantling charges
related to the closing of the Lumberton, NC manufacturing facility.
(5) The $5.1 million represents a goodwill impairment charge related to the
Culp Decorative Fabrics division within the upholstery fabrics segment.
Page 6 of 7
CULP, INC.
PROFORMA CONSOLIDATED STATEMENTS OF INCOME (LOSS)
FOR THE THREE MONTHS ENDED OCTOBER 30, 2005 AND OCTOBER 31, 2004
(Amounts in Thousands, Except for Per Share Data)
THREE MONTHS ENDED
---------------------------------------------------------------------------------------------------------------
October 30, 2005 October 31, 2004
As Reported Proforma As Reported Proforma Proforma
October % of Adjust- % of Net of % of October % of Adjust- % of Net of % of % Over
30, 2005 Sales ments Sales Adjustments Sales 31, 2004 Sales ments Sales Adjustments Sales (Under)
--------------- --------------- ------------------ --------------- -------------- ----------------- --------
Net sales $ 67,006 100.0% 0 67,006 100.0% 75,406 100.0% 0 75,406 100.0% -11.1%
Cost of sales 61,455 91.7% (1,751) -2.6%(1) 59,704 89.1% 65,839 87.3% (1,124) -1.5%(3) 64,715 85.8% -7.7%
--------------- --------------- ------------------ --------------- -------------- ---------------- --------
Gross profit 5,551 8.3% (1,751) -2.6% 7,302 10.9% 9,567 12.7% (1,124) -1.5% 10,691 14.2% -31.7%
Selling,
general and
administrative
expenses 6,526 9.7% 0 0.0% 6,526 9.7% 8,838 11.7% 0 0.0% 8,838 11.7% -26.2%
Goodwill
impairment 0 0.0% 0 0.0% 0 0.0% 5,126 6.8% (5,126) -6.8%(4) 0 0.0% 0.0%
Restructuring
expense 4,412 6.6% (4,412) -6.6%(2) 0 0.0% 1,292 1.7% (1,292) -1.7%(5) 0 0.0% 0.0%
--------------- --------------- ------------------ --------------- -------------- ---------------- --------
Income (loss)
from
operations (5,387) -8.0% (6,163) -9.2% 776 1.2% (5,689) -7.5% (7,542) -10.0% 1,853 2.5% -58.1%
Interest
expense 942 1.4% 0 0.0% 942 1.4% 937 1.2% 0 0.0% 937 1.2% 0.5%
Interest income (19) 0.0% 0 0.0% (19) 0.0% (29) 0.0% 0 0.0% (29) 0.0% -34.5%
Other expense 214 0.3% 0 0.0% 214 0.3% 173 0.2% 0 0.0% 173 0.2% 23.7%
--------------- --------------- ------------------ --------------- -------------- ---------------- --------
Income (loss)
before income
taxes (6,524) -9.7% (6,163) -9.2% (361) -0.5% (6,770) -9.0% (7,542) -10.0% 772 1.0% -146.8%
Income taxes (6) (2,372) 36.4% (2,343) 38.0% (29) 8.0% (2,577) 38.1% (2,844) 37.7% 267 34.6% -110.9%
--------------- --------------- ------------------ --------------- -------------- ---------------- --------
Net income
(loss) $ (4,152) -6.2% (3,820) -5.7% (332) -0.5% (4,193) -5.6% (4,698) -6.2% 505 0.7% -165.8%
=============== =============== ================== =============== ============== ================ ========
Net income (loss)
per share-basic ($0.36) ($0.33) ($0.03) ($0.36) ($0.41) $0.04
Net income (loss)
per share-diluted ($0.36) ($0.33) ($0.03) ($0.36) ($0.41) $0.04
Average shares
outstanding-basic 11,559 11,559 11,559 11,549 11,549 11,549
Average shares
outstanding
-diluted 11,559 11,559 11,559 11,549 11,549 11,722
Notes:
(1) The $1.8 million represents restructuring related charges of $1.3 million
of accelerated depreciation associated with the closing of the company's
facility in Shelby, NC and consolidating the chenille yarn operations into
the Lincolnton, NC facility, $331,000 for inventory markdowns, $104,000 for
accelerated depreciation associated with the closing of the company's
finishing facility located in Burlington, NC, and $65,000 for termination
benefits.
(2) The $4.4 million represents restructuring charges of $2.1 million for
write-downs of buildings and equipment, $1.5 million for accrued
termination benefits, $395,000 for asset movement costs, and $328,000 for
lease termination costs.
(3) The $1.1 million represents restructuring related charges of $910,000 and
$215,000 for inventory markdowns and accelerated depreciation associated
with the closing of the company's facility in Pageland, SC and
consolidating those operations into the Graham, NC facility.
(4) The $5.1 million represents a goodwill impairment charge related to the
Culp Decorative Fabrics division within the upholstery fabrics segment.
(5) The $1.3 million represents restructuring charges of $1.0 million for
accrued termination benefits and $278,000 for write-downs of buildings and
equipment.
(6) The percent of net sales column for income taxes is calculated as a % of
income (loss) before income taxes.
Page 7 of 7
CULP, INC.
PROFORMA CONSOLIDATED STATEMENTS OF LOSS
FOR THE SIX MONTHS ENDED OCTOBER 30, 2005 AND OCTOBER 31, 2004
(Amounts in Thousands, Except for Per Share Data)
SIX MONTHS ENDED
------------------------------------------------------------------------------------------------------------------
October 30, 2005 October 31, 2004
As Reported Proforma As Reported Proforma Proforma
October % of Adjust- % of Net of % of October 31, % of Adjust- % of Net of % of % Over
30, 2005 Sales ments Sales Adjustments Sales 2004 Sales ments Sales Adjustments Sales (Under)
--------------- --------------- ------------------ ----------------- -------------- ---------------- --------
Net sales $129,348 100.0% 0 129,348 100.0% 143,255 100.0% 0 143,255 100.0% -9.7%
Cost of sales 117,240 90.6% (2,246) -1.7%(1) 114,994 88.9% 125,013 87.3% (1,199) -0.8%(4) 123,814 86.4% -7.1%
--------------- --------------- ------------------ ----------------- -------------- ---------------- --------
Gross profit 12,108 9.4% (2,246) -1.7% 14,354 11.1% 18,242 12.7% (1,199) -0.8% 19,441 13.6% -26.2%
Selling,
general and
administrative
expenses 16,382 12.7% (3,022) -2.3%(2) 13,360 10.3% 18,118 12.6% 0 0.0% 18,118 12.6% -26.3%
Goodwill
impairment 0 0.0% 0 0.0% 0 0.0% 5,126 3.6% (5,126) -3.6%(6) 0 0.0% 0.0%
Restructuring
expense 6,238 4.8% (6,238) -4.8%(3) 0 0.0% 1,154 0.8% (1,154) -0.8%(5) 0 0.0% 0.0%
--------------- --------------- ------------------ ----------------- -------------- ---------------- --------
Income (loss)
from
operations (10,512) -8.1% (11,506) -8.9% 994 0.8% (6,156) -4.3% (7,479) -5.2% 1,323 0.9% -24.9%
Interest
expense 1,892 1.5% 0 0.0% 1,892 1.5% 1,877 1.3% 0 0.0% 1,877 1.3% 0.8%
Interest income (35) 0.0% 0 0.0% (35) 0.0% (56) 0.0% 0 0.0% (56) 0.0% -37.5%
Other expense 347 0.3% 0 0.0% 347 0.3% 387 0.3% 0 0.0% 387 0.3% -10.3%
--------------- --------------- ------------------ ----------------- -------------- ---------------- --------
Loss before
income taxes (12,716) -9.8% (11,506) -8.9% (1,210) -0.9% (8,364) -5.8% (7,479) -5.2% (885) -0.6% 36.7%
Income taxes
(7) (4,623) 36.4% (4,373) 38.0% (250) 20.7% (3,119) 37.3% (2,823) 37.7% (296) 33.5% -15.7%
--------------- --------------- ------------------ ----------------- -------------- ---------------- --------
Net loss $ (8,093) -6.3% (7,133) -5.5% (960) -0.7% (5,245) -3.7% (4,656) -3.3% (589) -0.4% 63.1%
=============== =============== ================== ================= ============== ================ ========
Net loss per
share-basic ($0.70) ($0.62) ($0.08) ($0.45) ($0.40) ($0.05)
Net loss per
share-diluted ($0.70) ($0.62) ($0.08) ($0.45) ($0.40) ($0.05)
Average shares
outstanding-
basic 11,555 11,555 11,555 11,548 11,548 11,548
Average shares
outstanding-
diluted 11,555 11,555 11,555 11,548 11,548 11,548
Notes:
(1) The $2.3 million represents restructuring related charges of $1.3 million
of accelerated depreciation associated with the closing of the company's
facility in Shelby, NC and consolidating the chenille yarn operations into
the Lincolnton, NC facility, $495,000 for accelerated depreciation
associated with the consolidation of the Burlington, NC and Anderson, SC
manufacturing facilities within the CVP division, $331,000 for inventory
markdowns, $104,000 for accelerated depreciation associated with the
closing of the company's finishing facility located in Burlington, NC, and
$65,000 for termination benefit expenses.
(2) The $3.0 million represents accelerated depreciation associated with the
design and distribution centers sold in June of 2005.
(3) The $6.2 million represents restructuring expenses of $2.9 million for
write- downs of buildings and equipment, $1.6 million for asset movement
costs, $1.5 million for termination benefits, and $378,000 for lease
termination costs.
(4) The $1.2 million represents restructuring related charges of $910,000 and
$215,000 for inventory markdowns and accelerated depreciation associated
with the closing of the company's facility in Pageland, SC and
consolidating those operations into the Graham, NC facility, and $75,000
for equipment dismantling charges related to the closing of the Lumberton,
NC manufacturing facility.
(5) The $1.2 million represents restructuring expenses of $876,000 for accrued
termination benefits and $278,000 for write-downs of buildings and
equipment.
(6) The $5.1 million represents a goodwill impairment charge related to the
Culp Decorative Fabrics division within the upholstery fabrics segment.
(7) The percent of net sales column for income taxes is calculated as a % of
loss before income taxes.