Exhibit 99(b)
Page 1 of 5
CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF NET INCOME (LOSS)
FOR THE THREE MONTHS ENDED JULY 30, 2006 AND JULY 31, 2005
(Amounts in Thousands, Except for Per Share Data)
THREE MONTHS ENDED (UNAUDITED)
---------------------------------------------------
Amounts Percent of Sales
------------------- ------------------
July 30, July 31, % Over July 30, July 31,
2006 2005 (Under) 2006 2005
--------- --------- -------- -------- --------
Net sales $ 62,585 62,340 0.4 % 100.0 % 100.0 %
Cost of sales 54,525 55,785 (2.3)% 87.1 % 89.5 %
--------- --------- -------- -------- --------
Gross profit 8,060 6,555 23.0 % 12.9 % 10.5 %
Selling, general and administrative expenses 6,575 9,856 (33.3)% 10.5 % 15.8 %
Restructuring expense 730 1,826 (60.0)% 1.2 % 2.9 %
--------- --------- -------- -------- --------
Income (loss) from operations 755 (5,127) 114.7 % 1.2 % (8.2)%
Interest expense 950 948 0.2 % 1.5 % 1.5 %
Interest income (46) (16) 187.5 % (0.1)% (0.0)%
Other (income) expense (278) 133 (309.0)% (0.4)% 0.2 %
--------- --------- -------- -------- --------
Income (loss) before income taxes 129 (6,192) 102.1 % 0.2 % (9.9)%
Income taxes* (3) (2,251) 99.9 % (2.3)% 36.4 %
--------- --------- -------- -------- --------
Net income (loss) $ 132 (3,941) 103.3 % 0.2 % (6.3)%
========= ========= ======== ======== ========
Net income (loss) per share-basic $ 0.01 (0.34) 102.9 %
Net income (loss) per share-diluted $ 0.01 (0.34) 102.9 %
Net income (loss) per share, diluted, excluding
restructuring and related charges $ 0.09 (0.05) 280.0 %
(see pro-forma statement on page 5)
Average shares outstanding-basic 11,672 11,551 1.0 %
Average shares outstanding-diluted 11,770 11,551 1.9 %
* Percent of sales column for income taxes is calculated as a % of income (loss)
before income taxes.
Page 2 of 5
CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED BALANCE SHEETS
JULY 30, 2006, JULY 31, 2005 AND APRIL 30, 2006
Unaudited
(Amounts in Thousands)
Amounts Increase
-------------------- (Decrease)
July 30, July 31, ------------------- * April 30,
2006 2005 Dollars Percent 2006
---------- --------- --------- --------- ----------
Current assets
Cash and cash equivalents $ 8,387 5,238 3,149 60.1 % 9,714
Accounts receivable 26,044 23,019 3,025 13.1 % 29,049
Inventories 43,055 52,125 (9,070) (17.4)% 36,693
Deferred income taxes 7,120 7,054 66 0.9 % 7,120
Assets held for sale 2,531 - 2,531 100.0 % 3,111
Other current assets 2,789 1,660 1,129 68.0 % 1,287
---------- --------- --------- --------- ----------
Total current assets 89,926 89,096 830 0.9 % 86,974
Property, plant & equipment, net 42,835 60,190 (17,355) (28.8)% 44,639
Goodwill 4,114 4,114 - 0.0 % 4,114
Deferred income taxes 21,513 12,268 9,245 75.4 % 20,176
Other assets 1,542 1,519 23 1.5 % 1,564
---------- --------- --------- --------- ----------
Total assets $ 159,930 167,187 (7,257) (4.3)% 157,467
========== ========= ========= ========= ==========
Current liabilities
Current maturities of long-term debt $ 7,739 8,126 (387) (4.8)% 8,060
Accounts payable 21,247 18,524 2,723 14.7 % 20,835
Accrued expenses 9,130 10,178 (1,048) (10.3)% 7,845
Accrued restructuring 3,745 4,855 (1,110) (22.9)% 4,054
Income taxes payable 3,561 1,179 2,382 202.0 % 2,488
---------- --------- --------- --------- ----------
Total current liabilities 45,422 42,862 2,560 6.0 % 43,282
Long-term debt, less current maturities 39,601 42,440 (2,839) (6.7)% 39,662
---------- --------- --------- --------- ----------
Total liabilities 85,023 85,302 (279) (0.3)% 82,944
Shareholders' equity 74,907 81,885 (6,978) (8.5)% 74,523
---------- --------- --------- --------- ----------
Total liabilities and
shareholders' equity $ 159,930 167,187 (7,257) (4.3)% 157,467
========== ========= ========= ========= ==========
Shares outstanding 11,685 11,552 133 1.2 % 11,655
========== ========= ========= ========= ==========
* Derived from audited financial statements.
Page 3 of 5
CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JULY 30, 2006 AND JULY 31, 2005
Unaudited
(Amounts in Thousands)
THREE MONTHS ENDED
---------------------------------
Amounts
---------------------------------
July 30, July 31,
2006 2005
---------------- --------------
Cash flows from operating activities:
Net income (loss) $ 132 (3,941)
Adjustments to reconcile net income (loss) to net cash
(used in) provided by operating activities:
Depreciation 1,702 6,172
Amortization of other assets 23 31
Stock-based compensation 132 53
Deferred income taxes (1,337) (2,182)
Restructuring expense 70 853
Gain on sale of equipment (307) -
Changes in assets and liabilities:
Accounts receivable 3,005 5,805
Inventories (6,362) (1,626)
Other current assets (1,502) 1,031
Other assets (6) 166
Accounts payable 796 (4,413)
Accrued expenses 1,285 622
Accrued restructuring (309) (995)
Income taxes payable 1,073 (365)
---------------- --------------
Net cash (used in) provided by operating activities (1,605) 1,211
---------------- --------------
Cash flows from investing activities:
Capital expenditures (637) (3,840)
Proceeds from the sale of buildings and equipment 1,600 2,850
---------------- --------------
Net cash provided by (used in) investing activities 963 (990)
---------------- --------------
Cash flows from financing activities:
Payments on vendor-financed capital expenditures (428) (108)
Payments on long-term debt (382) -
Proceeds from issuance of long-term debt - 16
Proceeds from common stock issued 125 2
---------------- --------------
Net cash used in financing activities (685) (90)
---------------- --------------
(Decrease) increase in cash and cash equivalents (1,327) 131
Cash and cash equivalents at beginning of period 9,714 5,107
---------------- ---------------
Cash and cash equivalents at end of period $ 8,387 5,238
================ ==============
Free Cash Flow (1) $ (1,070) 113
================ ==============
- ----------------------------------------------------------------------------------------------------------------------
(1) Free Cash Flow reconciliation is as follows:
FY 2007 FY 2006
---------------- --------------
A) Net cash (used in) provided by operating activities $ (1,605) 1,211
B) Minus: Capital Expenditures (637) (3,840)
C) Add: Proceeds from the sale of buildings and equipment 1,600 2,850
C) Minus: Payments on vendor-financed capital expenditures (428) (108)
---------------- --------------
$ (1,070) 113
================ ==============
- -----------------------------------------------------------------------------------------------------------------------
Page 4 of 5
CULP, INC. FINANCIAL INFORMATION RELEASE
SALES, GROSS PROFIT AND OPERATING INCOME (LOSS) BY SEGMENT
FOR THE THREE MONTHS ENDED JULY 30, 2006 AND JULY 31, 2005
(Amounts in thousands)
THREE MONTHS ENDED (UNAUDITED)
------------------------------------------------------------------
Amounts Percent of Total Sales
------------------------ ----------------------------
July 30, July 31, % Over July 30, July 31,
Net Sales by Segment 2006 2005 (Under) 2006 2005
- ----------------------------------------- ------------- ----------- --------- ------------- -----------
Mattress Fabrics $ 21,845 22,915 (4.7)% 34.9 % 36.8 %
Upholstery Fabrics 40,740 39,425 3.3 % 65.1 % 63.2 %
------------- ----------- ---------- ------------- -----------
Net Sales $ 62,585 62,340 0.4 % 100.0 % 100.0 %
============= =========== ========== ============= ===========
Gross Profit by Segment Gross Profit Margin
- ------------------------------------------- ----------------------------
Mattress Fabrics $ 3,521 3,095 13.8 % 16.1 % 13.5 %
Upholstery Fabrics 5,285 3,955 33.6 % 13.0 % 10.0 %
------------- ----------- ---------- ------------- -----------
Subtotal 8,806 7,050 24.9 % 14.1 % 11.3 %
Restructuring related charges (746)(1) (495)(3) 50.7 % (1.2)% (0.8)%
------------- ----------- ---------- ------------- -----------
Gross Profit $ 8,060 6,555 23.0 % 12.9 % 10.5 %
============= =========== ========== ============= ===========
Sales, General and Administrative expenses by Segment Percent of Sales
- ------------------------------------------------------ ---------------------------
Mattress Fabrics $ 1,663 1,737 (4.3)% 7.6 % 7.6 %
Upholstery Fabrics 3,710 4,335 (14.4)% 9.1 % 11.0 %
Unallocated Corporate expenses 1,202 762 57.7 % 1.9 % 1.2 %
------------- ----------- ---------- ------------- -----------
Subtotal 6,575 6,834 (3.8)% 10.5 % 11.0 %
Restructuring related charges - 3,022(4) (100.0)% 0.0 % 4.8 %
------------- ----------- ---------- ------------- -----------
Selling, General and Administrative
expenses $ 6,575 9,856 (33.3)% 10.5 % 15.8 %
============= =========== ========== ============= ===========
Operating income (loss) by Segment Operating Income (Loss) Margin
- ------------------------------------------- ------------------------------
Mattress Fabrics $ 1,858 1,358 36.8 % 8.5 % 5.9 %
Upholstery Fabrics 1,575 (380) 514.5 % 3.9 % (1.0)%
Unallocated corporate expenses (1,202) (762) (57.7)% (1.9)% (1.2)%
------------- ----------- ---------- ------------- -----------
Subtotal 2,231 216 932.9 % 3.6 % 0.3 %
Restructuring expense and restructuring
related charges (1,476)(2) (5,343)(5) (72.4)% (2.4)% (8.6)%
------------- ----------- ---------- ------------- -----------
Operating income (loss) $ 755 (5,127) 114.7 % 1.2 % (8.2)%
============= =========== ========== ============= ===========
Depreciation by Segment
- -------------------------------------------
Mattress Fabrics $ 942 857 9.9 %
Upholstery Fabrics 760 1,798 (57.7)%
------------- ----------- ---------
Subtotal 1,702 2,655 (35.9)%
Accelerated depreciation - 3,517 (100.0)%
------------- ----------- ---------
Total Depreciation $ 1,702 6,172 (72.4)%
============= =========== =========
(1) The $746,000 represents restructuring related charges of $507,000 for other
operating costs associated with the closing of or closed plant facilities
and $239,000 for inventory markdowns.
(2) The $1.5 million represents $507,000 for other operating costs associated
with the closing of or closed plant facilities, $385,000 for asset movement
costs, $239,000 for inventory markdowns, $235,000 for termination benefits,
$116,000 for write-downs of equipment, and a credit of $6,000 for lease
termination costs. Of this total charge, $746,000 and $730,000 are included
in cost of sales and restructuring expense, respectively.
(3) The $495,000 represents restructuring related charges for accelerated
depreciation.
(4) The $3.0 million represents restructuring related charges for accelerated
depreciation.
(5) The $5.3 million represents $3.5 million for accelerated depreciation, $1.2
million for asset movement costs, $754,000 for write-downs of equipment,
$47,000 for lease termination costs, and a restructuring credit of $142,000
for the reversal of accrued termination benefits. Of this total charge,
$495,000, $3.0 million, and $1.8 million are included in cost of sales,
selling, general, and administrative expenses, and restructuring expense,
respectively.
Page 5 of 5
CULP, INC.
PROFORMA CONSOLIDATED STATEMENTS OF NET INCOME (LOSS)
FOR THE THREE MONTHS ENDED JULY 30, 2006 AND JULY 31, 2005
(Amounts in Thousands, Except for Per Share Data)
THREE MONTHS ENDED (UNAUDITED)
---------------------------------------------------
As Reported
July 30, % of % of
2006 Sales Adjustments Sales
---------------------- ----------------------
Net sales 62,585 100.0% - 0.0%
Cost of sales 54,525 87.1% (746) -1.2% (1)
---------------------- ----------------------
Gross profit 8,060 12.9% (746) -1.2%
Selling, general and
administrative expenses 6,575 10.5% - 0.0%
Restructuring expense 730 1.2% (730) -1.2% (2)
---------------------- ----------------------
Income (loss) from operations 755 1.2% (1,476) -2.4%
Interest expense 950 1.5% - 0.0%
Interest income (46) -0.1% - 0.0%
Other (income) expense (278) -0.4% 307 0.5% (3)
---------------------- ----------------------
Income (loss) before income taxes 129 0.2% (1,169) -1.9% (8)
Income taxes (7) (3) -2.3% (184) 15.7%
---------------------- ----------------------
Net income (loss) $ 132 0.2% (985) -1.6%
====================== ======================
Net income (loss) per share-basic $0.01 ($0.08)
Net income (loss) per share-diluted $0.01 ($0.08)
Average shares outstanding-basic 11,672 11,672
Average shares outstanding-diluted 11,770 11,672
THREE MONTHS ENDED (UNAUDITED)
----------------------------------------------------
July 30, 2006 As Reported
Proforma Net % of July 31, % of
of Adjustments Sales 2005 Sales
----------------------- -----------------------
Net sales 62,585 100.0% 62,340 100.0%
Cost of sales 53,779 85.9% 55,785 89.5%
----------------------- -----------------------
Gross profit 8,806 14.1% 6,555 10.5%
Selling, general and
administrative expenses 6,575 10.5% 9,856 15.8%
Restructuring expense - 0.0% 1,826 2.9%
----------------------- -----------------------
Income (loss) from operations 2,231 3.6% (5,127) -8.2%
Interest expense 950 1.5% 948 1.5%
Interest income (46) -0.1% (16) 0.0%
Other (income) expense 29 0.0% 133 0.2%
----------------------- -----------------------
Income (loss) before income taxes 1,298 2.1% (6,192) -9.9%
Income taxes (7) 181 13.9% (2,251) 36.4%
----------------------- -----------------------
Net income (loss) 1,117 1.8% (3,941) -6.3%
======================= =======================
Net income (loss) per share-basic $0.10 ($0.34)
Net income (loss) per share-diluted $0.09 ($0.34)
Average shares outstanding-basic 11,672 11,551
Average shares outstanding-diluted 11,770 11,551
THREE MONTHS ENDED (UNAUDITED)
--------------------------------------------------------------
July 31, 2005 Proforma
% of Proforma Net % of % Over
Adjustments Sales of Adjustments Sales (Under)
------------------ ----------------------- ---------
Net sales - 0.0% 62,340 100.0% 0.4%
Cost of sales (495) -0.8% (4) 55,290 88.7% -2.7%
------------------ ----------------------- ---------
Gross profit (495) -0.8% 7,050 11.3% 24.9%
Selling, general and
administrative expenses (3,022) -4.8% (5) 6,834 11.0% -3.8%
Restructuring expense (1,826) -2.9% (6) - 0.0% 0.0%
------------------ ----------------------- ---------
Income (loss) from operations (5,343) -8.6% 216 0.3% 932.9%
Interest expense - 0.0% 948 1.5% 0.2%
Interest income - 0.0% (16) 0.0% 187.5%
Other (income) expense - 0.0% 133 0.2% -78.2%
------------------ ----------------------- ---------
Income (loss) before income taxes (5,343) -8.6% (9) (849) -1.4% 252.9%
Income taxes (7) (2,030) 38.0% (221) 26.0% 181.9%
------------------ ----------------------- ---------
Net income (loss) (3,313) -5.3% (628) -1.0% 277.9%
================== ======================= =========
Net income (loss) per share-basic ($0.29) ($0.05)
Net income (loss) per share-diluted ($0.29) ($0.05)
Average shares outstanding-basic 11,551 11,551
Average shares outstanding-diluted 11,551 11,551
Notes:
(1) The $746,000 represents restructuring related charges of $507,000 for other
operating costs associated with the closing of or closed plant facilities
and $239,000 for inventory markdowns.
(2) The $730,000 in restructuring expense represents $385,000 for asset
movement costs; $235,000 for termination benefits; $116,000 for write-downs
of equipment, and a credit of $6,000 for lease termination costs.
(3) The $307,000 represents sales proceeds received on equipment with no
carrying value.
(4) The $495,000 represents restructuring related charges for accelerated
depreciation.
(5) The $3.0 million represents restructuring related charges for accelerated
depreciation.
(6) 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 benefits.
(7) The percent of net sales column for income taxes is calculated as a % of
income (loss) before income taxes.
(8) Of this total charge, $815,000 and $354,000 represent cash and non-cash
charges, respectively.
(9) Of this total charge, $1.0 million and $4.3 million represent cash and
non-cash charges, respectively.