Exhibit 99(b)
Page 1 of 7
CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF NET INCOME
FOR THE THREE MONTHS AND SIX MONTHS ENDED OCTOBER 28, 2007 AND OCTOBER 29, 2006
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)
THREE MONTHS ENDED
-------------------------------------------------------------------
Amounts Percent of Sales
------------------------- --------------------------
October 28, October 29, % Over October 28, October 29,
2007 2006 (1) (Under) 2007 2006
----------- ----------- ---------- ------------ ------------
Net sales $ 64,336 59,040 9.0 % 100.0 % 100.0 %
Cost of sales 55,914 51,049 9.5 % 86.9 % 86.5 %
----------- ----------- ---------- ------------ ------------
Gross profit 8,422 7,991 5.4 % 13.1 % 13.5 %
Selling, general and
administrative expenses 5,838 6,273 (6.9)% 9.1 % 10.6 %
Restructuring (credit) expense (84) 43 295.3 % (0.1)% 0.1 %
----------- ----------- ---------- ------------ ------------
Income from operations 2,668 1,675 59.3 % 4.1 % 2.8 %
Interest expense 809 938 (13.8)% 1.3 % 1.6 %
Interest income (63) (51) 23.5 % (0.1)% (0.1)%
Other expense 463 31 N.M. 0.7 % 0.1 %
----------- ----------- ---------- ------------ ------------
Income before income taxes 1,459 757 92.7 % 2.3 % 1.3 %
Income taxes* (95) (55) 72.7 % (6.5)% (7.3)%
----------- ----------- ---------- ------------ ------------
Net income $ 1,554 812 91.4 % 2.4 % 1.4 %
=========== =========== ========== ============ ============
Net income per share-basic $ 0.12 $ 0.07 71.4 %
Net income per share-diluted $ 0.12 $ 0.07 71.4 %
Net income per share, diluted, excluding
restructuring and related charges (see
proforma statement on page 6) $ 0.16 $ 0.09 77.8 %
Average shares outstanding-basic 12,635 11,686 8.1 %
Average shares outstanding-diluted 12,809 11,689 9.6 %
SIX MONTHS ENDED
------------------------------------------------------------------
Amounts Percent of Sales
------------------------- --------------------------
October 28, October 29, % Over October 28, October 29,
2007 2006 (Under) 2007 2006
----------- ----------- ---------- ------------ ------------
Net sales $ 129,566 121,625 6.5 % 100.0 % 100.0 %
Cost of sales 112,088 105,574 6.2 % 86.5 % 86.8 %
----------- ----------- ---------- ------------ ------------
Gross profit 17,478 16,051 8.9 % 13.5 % 13.2 %
Selling, general and
administrative expenses 12,159 12,846 (5.3)% 9.4 % 10.6 %
Restructuring expense 348 466 (25.3)% 0.3 % 0.4 %
----------- ----------- ---------- ------------ ------------
Income from operations 4,971 2,739 81.5 % 3.8 % 2.3 %
Interest expense 1,627 1,888 (13.8)% 1.3 % 1.6 %
Interest income (121) (97) 24.7 % (0.1)% (0.1)%
Other expense 695 60 N.M. 0.5 % 0.0 %
----------- ----------- ---------- ------------ ------------
Income before income taxes 2,770 888 211.9 % 2.1 % 0.7 %
Income taxes* 365 (58) (729.3)% 13.2 % (6.5)%
----------- ----------- ---------- ------------ ------------
Net income $ 2,405 946 154.2 % 1.9 % 0.8 %
=========== =========== ========== ============ ============
Net income per share-basic $ 0.19 $ 0.08 137.5 %
Net income per share-diluted $ 0.19 $ 0.08 137.5 %
Net income per share, diluted, excluding
restructuring and related charges (see
proforma statement on page 7) $ 0.28 $ 0.19 47.4 %
Average shares outstanding-basic 12,609 11,679 8.0 %
Average shares outstanding-diluted 12,776 11,682 9.4 %
* Percent of sales column for income taxes is calculated as a % of income before
income taxes.
(1) Certain prior year amounts have been corrected to conform to current year
presentation. Sales proceeds received on equipment with no carrying value
of $307,000 was reclassified from other expense to restructuring expense to
conform to current year presentation.
Page 2 of 7
CONSOLIDATED BALANCE SHEETS
OCTOBER 28, 2007, OCTOBER 29, 2006 AND APRIL 29, 2007
Unaudited
(Amounts in Thousands)
Amounts Increase
------------------------- (Decrease)
October 28, October 29, -------------------- * April 29,
2007 2006 Dollars Percent 2007
------------ ----------- --------- --------- ------------
Current assets
Cash and cash equivalents $ 16,830 9,706 7,124 73.4 % 10,169
Accounts receivable 22,885 23,286 (401) (1.7)% 29,290
Inventories 41,518 44,430 (2,912) (6.6)% 40,630
Deferred income taxes 5,376 7,120 (1,744) (24.5)% 5,376
Assets held for sale 341 1,571 (1,230) (78.3)% 2,499
Income taxes receivable 491 - 491 100.0 % -
Other current assets 1,271 1,506 (235) (15.6)% 1,824
------------ ----------- --------- --------- ------------
Total current assets 88,712 87,619 1,093 1.2 % 89,788
Property, plant and equipment, net 37,887 42,487 (4,600) (10.8)% 37,773
Goodwill 4,114 4,114 - 0.0 % 4,114
Deferred income taxes 25,762 22,023 3,739 17.0 % 25,683
Other assets 2,439 1,354 1,085 80.1 % 2,588
----------- ----------- --------- --------- ------------
Total assets $ 158,914 157,597 1,317 0.8 % 159,946
============ =========== ========= ========= ============
Current liabilities
Current maturities of long-term debt $ 12,834 7,742 5,092 65.8 % 16,046
Lines of credit 4,016 - 4,016 100.0 % 2,593
Accounts payable 21,124 18,540 2,584 13.9 % 23,585
Accrued expenses 9,040 9,001 39 0.4 % 8,670
Accrued restructuring 2,356 3,017 (661) (21.9)% 3,282
Income taxes payable - current (1) - 3,880 (3,880) (100.0)% 4,579
------------ ----------- --------- --------- ------------
Total current liabilities 49,370 42,180 7,190 17.0 % 58,755
Income taxes payable - long-term (1) 4,299 - 4,299 100.0 % -
Long-term debt , less current maturities 22,120 39,554 (17,434) (44.1)% 22,114
------------ ----------- --------- --------- ------------
Total liabilities 75,789 81,734 (5,945) (7.3)% 80,869
Shareholders' equity 83,125 75,863 7,262 9.6 % 79,077
------------ ----------- --------- --------- ------------
Total liabilities and
shareholders' equity $ 158,914 157,597 1,317 0.8 % 159,946
============ =========== ========= ========= ============
Shares outstanding 12,635 11,687 948 8.1 % 12,569
============ =========== ========= ========= ============
* Derived from audited financial statements
(1) Amounts as of October 28, 2007 reflect the adoption of Financial Accounting
Standards Board (FASB) Interpretation No. 48, Accounting for Uncertainty in
Income Taxes" during the first quarter of fiscal 2008.
Page 3 of 7
CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED OCTOBER 28, 2007 AND OCTOBER 29, 2006
Unaudited
(Amounts in Thousands)
SIX MONTHS ENDED
----------------------------
Amounts
----------------------------
October 28, October 29,
2007 2006
------------- -----------
Cash flows from operating activities:
Net income $ 2,405 946
Adjustments to reconcile net income to net cash
provided by (used in operating activities):
Depreciation 2,892 3,364
Amortization of other assets 186 41
Stock-based compensation 366 287
Excess tax benefit related to stock options
exercised (21) -
Deferred income taxes 266 (1,847)
Restructuring expenses, net of gain on sale of related assets 73 (364)
Changes in assets and liabilities:
Accounts receivable 6,625 5,763
Inventories (888) (7,737)
Other current assets 553 (219)
Other assets (31) 148
Accounts payable (1,687) (1,965)
Accrued expenses 370 1,156
Accrued restructuring (1,002) (1,037)
Income taxes (250) 1,392
------------- -----------
Net cash provided by (used in) operating activities 9,857 (72)
------------- -----------
Cash flows from investing activities:
Capital expenditures (3,385) (1,705)
Proceeds from the sale of buildings and equipment 2,045 2,738
------------- -----------
Net cash (used in) provided by investing
activities (1,340) 1,033
------------- -----------
Cash flows from financing activities:
Proceeds from lines of credit 1,423 -
Payments on vendor-financed capital expenditures (499) (670)
Payments on long-term debt (3,206) (426)
Proceeds from common stock issued 405 127
Excess tax benefit related to stock options exercised 21 -
------------- -----------
Net cash used in financing activities (1,856) (969)
------------- -----------
Increase (decrease) in cash and cash equivalents 6,661 (8)
Cash and cash equivalents at beginning of period 10,169 9,714
------------- -----------
Cash and cash equivalents at end of period $ 16,830 9,706
============= ===========
Free Cash Flow (1) $ 8,039 291
============= ===========
- --------------------------------------------------------------------------------------------------
(1) Free Cash Flow reconciliation is as follows: 2nd Qtr 2nd Qtr
FY 2008 FY 2007
----------------------------
A) Net cash provided by (used in) operating activities $ 9,857 (72)
B) Minus: Capital Expenditures (3,385) (1,705)
C) Add: Proceeds from the sale of buildings and equipment 2,045 2,738
D) Minus: Payments on vendor-financed capital expenditures (499) (670)
E) Add: Excess tax benefit related to stock options exercised 21 -
------------- -----------
$ 8,039 291
============= ===========
- --------------------------------------------------------------------------------------------------
Page 4 of 7
CULP, INC. FINANCIAL INFORMATION RELEASE
SALES, GROSS PROFIT AND OPERATING INCOME (LOSS) BY SEGMENT
FOR THE THREE MONTHS ENDED OCTOBER 28, 2007 AND OCTOBER 29, 2006
(Amounts in thousands)
THREE MONTHS ENDED (UNAUDITED)
---------------------------------------------------------------
Amounts Percent of Total Sales
------------------------- --------------------------
October 28, October 29, % Over October 28, October 29,
Net Sales by Segment 2007 2006 (Under) 2007 2006
- ------------------------------------------------------- ----------- ----------- -------- ------------ ------------
Mattress Fabrics $ 36,010 23,494 53.3 % 56.0 % 39.8 %
Upholstery Fabrics 28,326 35,546 (20.3)% 44.0 % 60.2 %
----------- ----------- -------- ------------ ------------
Net Sales $ 64,336 59,040 9.0 % 100.0 % 100.0 %
=========== =========== ======== ============ ============
Gross Profit by Segment Gross Profit Margin
- ------------------------------------------------------- --------------------------
Mattress Fabrics $ 6,038 4,144 45.7 % 16.8 % 17.6 %
Upholstery Fabrics 2,975 4,138 (28.1)% 10.5 % 11.6 %
----------- ----------- -------- ------------ ------------
Subtotal 9,013 8,282 8.8 % 14.0 % 14.0 %
Restructuring related charges (591)(1) (291)(4) 103.1 % (0.9)% (0.5)%
----------- ----------- -------- ------------ ------------
Gross Profit $ 8,422 7,991 5.4 % 13.1 % 13.5 %
=========== =========== ======== ============ ============
Selling, General and Administrative expenses by Segment Percent of Sales
- ------------------------------------------------------- --------------------------
Mattress Fabrics $ 2,166 1,674 29.4 % 6.0 % 7.1 %
Upholstery Fabrics 2,774 3,745 (25.9)% 9.8 % 10.5 %
Unallocated Corporate expenses 873 824 5.9 % 1.4 % 1.4 %
----------- ----------- -------- ------------ ------------
5,813 6,243 (6.9)% 9.0 % 10.6 %
Restructuring related charges 25(2) 30(4) (16.7)% 0.0 % 0.1 %
----------- ----------- -------- ------------ ------------
Selling, General and Administrative expenses $ 5,838 6,273 (6.9)% 9.1 % 10.6 %
=========== =========== ======== ============ ============
Operating Income
Operating Income (loss) by Segment (Loss) Margin
- ------------------------------------------------------- --------------------------
Mattress Fabrics $ 3,872 2,470 56.8 % 10.8 % 10.5 %
Upholstery Fabrics 201 393 (48.9)% 0.7 % 1.1 %
Unallocated corporate expenses (873) (824) 5.9 % (1.4)% (1.4)%
----------- ----------- -------- ------------ ------------
Subtotal 3,200 2,039 56.9 % 5.0 % 3.5 %
Restructuring expense and restructuring related charges (532)(3) (364)(5) 46.2 % (0.8)% (0.6)%
----------- ----------- -------- ------------ ------------
Operating income $ 2,668 1,675 59.3 % 4.1 % 2.8 %
=========== =========== ======== ============ ============
Depreciation by Segment
- -------------------------------------------------------
Mattress Fabrics $ 898 918 (2.2)%
Upholstery Fabrics 547 744 (26.5)%
----------- ---------- --------
Subtotal 1,445 1,662 (13.1)%
=========== ========== ========
Notes:
(1) The $591,000 restructuring related charge represents $348,000 for inventory
markdowns and $243,000 for other operating costs associated with closed
plant facilities.
(2) The $25,000 restructuring related charge represents other operating costs
associated with closed plant facilities.
(3) The $532,000 represents $348,000 for inventory markdowns, $268,000 for
other operatings costs associated with closed plant facilities, $179,000
for lease termination and other exit costs, $73,000 for asset movement
costs, $27,000 for write-downs of a building and equipment, a credit of
$114,000 for proceeds received on equipment with no carrying value, and a
credit of $249,000 for employee termination benefits. Of this total charge,
$591,000 was recorded in cost of sales, $25,000 was recorded in selling,
general, and administrative expenses, and a credit of $84,000 was recorded
in restructuring expense.
(4) The $291,000 and $30,000 restructuring related charge represents other
operating costs associated with closed plant facilities.
(5) The $364,000 represents $354,000 for asset movement costs, $333,000 for
lease termination and other exit costs, $321,000 for other operating costs
associated with closed plant facilities, a credit of $53,000 for
write-downs of a building and equipment, a credit of $130,000 for sales
proceeds received on equipment with no carrying value, and a credit of
$461,000 for employee termination benefits. Of this total charge, $291,000
was recorded in cost of sales, $30,000 was recorded in selling, general,
and administrative expenses, and $43,000 was recorded in restructuring
expense. Certain prior year amounts have been corrected to conform to
current year presentation. Sales proceeds received on equipment with no
carrying value of $307,000 was reclassified from other expense to
restructuring expense to conform to current year presentation.
Page 5 of 7
CULP, INC. FINANCIAL INFORMATION RELEASE
SALES, GROSS PROFIT AND OPERATING INCOME (LOSS) BY SEGMENT
FOR THE SIX MONTHS ENDED OCTOBER 28, 2007 AND OCTOBER 29, 2006
(Amounts in thousands)
SIX MONTHS ENDED (UNAUDITED)
-------------------------------------------------------------------
Amounts Percent of Total Sales
---------------------- --------------------------------
October 28, October 29, % Over October 28, October 29,
Net Sales by Segment 2007 2006 (Under) 2007 2006
- ------------------------------- ---------- --------- --------- ----------------- --------------
Mattress Fabrics $ 72,546 45,339 60.0 % 56.0 % 37.3 %
Upholstery Fabrics 57,020 76,286 (25.3)% 44.0 % 62.7 %
---------- --------- --------- ----------------- --------------
Net Sales $ 129,566 121,625 6.5 % 100.0 % 100.0 %
========== ========= ========= ================= ==============
Gross Profit by Segment Gross Profit Margin
- ------------------------------- --------------------------------
Mattress Fabrics $ 11,843 7,665 54.5 % 16.3 % 16.9 %
Upholstery Fabrics 6,742 9,423 (28.5)% 11.8 % 12.4 %
---------- --------- --------- ----------------- --------------
Subtotal 18,585 17,088 8.8 % 14.3 % 14.0 %
Restructuring related charges (1,107)(1) (1,037)(4) 6.8 % (0.9)% (0.9)%
---------- --------- --------- ----------------- --------------
Gross Profit $ 17,478 16,051 8.9 % 13.5 % 13.2 %
========== ========= ========= ================= ==============
Selling, General and Administrative Percent of Sales
expenses by Segment
- ------------------------------------------- --------------------------------
Mattress Fabrics $ 4,208 3,337 26.1 % 5.8 % 7.4 %
Upholstery Fabrics 6,092 7,453 (18.3)% 10.7 % 9.8 %
Unallocated Corporate expenses 1,808 2,026 (10.8)% 1.4 % 1.7 %
---------- --------- --------- ---------------- --------------
Subtotal 12,108 12,816 (5.5)% 9.3 % 10.5 %
Restructuring related charges 51 (2) 30 (5) 70.0 % 0.0 % 0.0 %
---------- --------- --------- ----------------- --------------
Selling, General and
Administrative expenses $ 12,159 12,846 (5.3)% 9.4 % 10.6 %
========== ========= ========= ================= ==============
Operating Income (loss) by Operating Income (Loss)
Segment Margin
- ------------------------------- --------------------------------
Mattress Fabrics $ 7,635 4,328 76.4 % 10.5 % 9.5 %
Upholstery Fabrics 650 1,970 (67.0)% 1.1 % 2.6 %
Unallocated corporate expenses (1,808) (2,026) (10.8)% (1.4)% (1.7)%
---------- --------- --------- ----------------- --------------
Subtotal 6,477 4,272 51.6 % 5.0 % 3.5 %
Restructuring expense and
restructuring related charges (1,506)(3) (1,533)(6) (1.8)% (1.2)% (1.3)%
---------- --------- --------- ----------------- --------------
Operating income $ 4,971 2,739 81.5 % 3.8 % 2.3 %
========== ========= ========= ================= ==============
Depreciation by Segment
- -------------------------------
Mattress Fabrics $ 1,795 1,860 (3.5)%
Upholstery Fabrics 1,097 1,504 (27.1)%
---------- --------- ---------
Subtotal 2,892 3,364 (14.0)%
========== ========= =========
Notes:
(1) The $1.1 million represents restructuring related charges of $703,000 for
other operating costs associated with closed plant facilities and $404,000
for inventory markdowns.
(2) The $51,000 restructuring related charge represents other operating costs
associated with a closed plant facilities.
(3) The $1.5 million represents $754,000 for other operating costs on closed
plant facilities, $546,000 for lease termination and other exit costs,
$404,000 for inventory markdowns, $388,000 for write-downs of buildings and
equipment, $127,000 for asset movement costs, a credit of $315,000 for
sales proceeds received on equipment with no carrying value, and a credit
of $398,000 for employee termination benefits. Of this total charge, $1.1
million was recorded in cost of sales, $51,000 was recorded in selling,
general, and administrative expenses, and $348,000 was recorded in
restructuring expense.
(4) The $1.0 million represents restructuring related charges of $798,000 for
other operating costs associated with closed plant facilities and $239,000
for inventory markdowns.
(5) The $30,000 represents a restructuring related charge for other operating
costs associated with closed plant facilities.
(6) The $1.5 million represents $828,000 for other operating costs on closed
plant facilities, $740,000 for asset movement costs, $327,000 for lease
termination costs, $239,000 for inventory markdowns, $62,000 for
write-downs of buildings and equipment, a credit of $226,000 for employee
termination benefits, and a credit of $437,000 for sales proceeds received
on equipment with no carrying value. Of this total charge, $1.0 million was
recorded in cost of sales, $30,000 was recorded in selling, general, and
administrative expenses, and $466,000 was recorded in restructuring
expense.
Page 6 of 7
CULP, INC.
PROFORMA CONSOLIDATED STATEMENTS OF NET INCOME
FOR THE THREE MONTHS ENDED OCTOBER 28, 2007 AND OCTOBER 29, 2006
(Amounts in Thousands, Except for Per Share Data)
THREE MONTHS ENDED
------------------------------------------------------------------------------
As Reported October 28, 2007
October 28, % of % of Proforma Net % of
2007 Sales Adjustments Sales of Adjustments Sales
---------------------- ----------------------- -------------------------
Net sales $ 64,336 100.0% - 64,336 100.0%
Cost of sales 55,914 86.9% (591) -0.9%(1) 55,323 86.0%
---------------------- ----------------------- -------------------------
Gross profit 8,422 13.1% (591) -0.9% 9,013 14.0%
Selling, general and
administrative expenses 5,838 9.1% (25) 0.0%(2) 5,813 9.0%
Restructuring (credit) expense (84) -0.1% 84 0.1%(3) - 0.0%
---------------------- ----------------------- -------------------------
Income from operations 2,668 4.1% (532) -0.8% 3,200 5.0%
Interest expense 809 1.3% - 0.0% 809 1.3%
Interest income (63) -0.1% - 0.0% (63) -0.1%
Other expense 463 0.7% - 0.0% 463 0.7%
---------------------- ----------------------- -------------------------
Income before income taxes 1,459 2.3% (532) -0.8%(6) 1,991 3.1%
Income taxes (8) (95) -6.5% (29) 5.5% (66) -3.3%
---------------------- ----------------------- -------------------------
Net income $ 1,554 2.4% (503) -0.8% 2,057 3.2%
====================== ======================= =========================
Net income per share-basic $ 0.12 ($0.04) $ 0.16
Net income per share-diluted $ 0.12 ($0.04) $ 0.16
Average shares outstanding-basic 12,635 12,635 12,635
Average shares outstanding-diluted 12,809 12,635 12,809
THREE MONTHS ENDED
---------------------------------------------------------------------------------------
As Reported October 29, 2006 Proforma
October 29, % of % of Proforma Net % of % Over
2006 Sales Adjustments Sales of Adjustments Sales (Under)
---------------------- ----------------------- ------------------------- --------
Net sales 59,040 100.0% - 59,040 100.0% 9.0%
Cost of sales 51,049 86.5% (291) -0.5%(4) 50,758 86.0% 9.0%
---------------------- ----------------------- ------------------------- --------
Gross profit 7,991 13.5% (291) -0.5% 8,282 14.0% 8.8%
Selling, general and
administrative expenses 6,273 10.6% (30) -0.1%(4) 6,243 10.6% -6.9%
Restructuring (credit) expense 43 0.1% (43) -0.1%(5) - 0.0% 0.0%
---------------------- ----------------------- ------------------------- --------
Income from operations 1,675 2.8% (364) -0.6% 2,039 3.5% 56.9%
Interest expense 938 1.6% - 0.0% 938 1.6% -13.8%
Interest income (51) -0.1% - 0.0% (51) -0.1% 23.5%
Other expense 31 0.1% - 0.0% 31 0.1% 1393.5%
---------------------- ----------------------- ------------------------- --------
Income before income taxes 757 1.3% (364) -0.6%(7) 1,121 1.9% 77.6%
Income taxes (8) (55) -7.3% (132) 36.3% 77 6.9% 185.7%
---------------------- ----------------------- ------------------------- --------
Net income 812 1.4% (232) -0.4% 1,044 1.8% 97.0%
====================== ====================== ========================= ========
Net income per share-basic $ 0.07 ($0.02) $ 0.09
Net income per share-diluted $ 0.07 ($0.02) $ 0.09
Average shares outstanding-basic 11,686 11,686 11,686
Average shares outstanding-diluted 11,689 11,686 11,689
Notes:
(1) The $591,000 restructuring related charge represents $348,000 for inventory
markdowns and $243,000 for other operating costs associated with closed
plant facilities.
(2) The $25,000 restructuring related charge represents other operating costs
associated with closed plant facilities.
(3) The $84,000 restructuring credit represents $179,000 for lease termination
and other exit costs, $73,000 for asset movement costs, $27,000 for
write-downs of a building and equipment, a credit of $114,000 for proceeds
received on equipment with no carrying value, and a credit of $249,000 for
employee termination benefits.
(4) The $291,000 and $30,000 restructuring related charge represents other
operating costs associated with closed plant facilities.
(5) The $43,000 restructuring expense represents $354,000 for asset movement
costs, $333,000 for lease termination and other exit costs, a credit of
$53,000 for write-downs of a building and equipment, a credit of $130,000
for sales proceeds received on equipment with no carrying value, and a
credit of $461,000 for employee termination benefits. Certain prior year
amounts have been corrected to conform to current year presentation. Sales
proceeds received on equipment with no carrying value of $307,000 was
reclassified from other expense to restructuring expense to conform to
current year presentation.
(6) Of this total charge, $158,000 and $374,000 represent cash and non-cash
charges, respectively.
(7) Of this total charge, $417,000 represent cash charges and the credit of
$53,000 for write-downs of a building and equipment represent a non-cash
gain.
(8) The percent of net sales column for income taxes is calculated as a % of
income before income taxes.
Page 7 of 7
CULP, INC.
PROFORMA CONSOLIDATED STATEMENTS OF NET INCOME
FOR THE SIX MONTHS ENDED OCTOBER 28, 2007 AND OCTOBER 29, 2006
(Amounts in Thousands, Except for Per Share Data)
SIX MONTHS ENDED
------------------------------------------------------------------------------
As Reported October 28, 2007
October 28, % of % of Proforma Net % of
2007 Sales Adjustments Sales of Adjustments Sales
---------------------- ----------------------- -------------------------
Net sales $ 129,566 100.0% - 129,566 100.0%
Cost of sales 112,088 86.5% (1,107) -0.9%(1) 110,981 85.7%
-------------------- ------------------------- ------------------------
Gross profit 17,478 13.5% (1,107) -0.9% 18,585 14.3%
Selling, general and
administrative expenses 12,159 9.4% (51) 0.0%(2) 12,108 9.3%
Restructuring expense 348 0.3% (348) -0.3%(3) - 0.0%
-------------------- ----------------------- ------------------------
Income from operations 4,971 3.8% (1,506) -1.2% 6,477 5.0%
Interest expense 1,627 1.3% - 0.0% 1,627 1.3%
Interest income (121) -0.1% - 0.0% (121) -0.1%
Other expense 695 0.5% - 0.0% 695 0.5%
-------------------- ----------------------- ------------------------
Income before income taxes 2,770 2.1% (1,506) -1.2%(7) 4,276 3.3%
Income taxes (9) 365 13.2% (380) 25.2% 745 17.4%
-------------------- ----------------------- ------------------------
Net income $ 2,405 1.9% (1,126) -0.9% 3,531 2.7%
==================== ======================= ========================
Net income per share-basic $ 0.19 ($0.09) $ 0.28
Net income per share-diluted $ 0.19 ($0.09) $ 0.28
Average shares outstanding-basic 12,609 12,609 12,609
Average shares outstanding-diluted 12,776 12,609 12,776
SIX MONTHS ENDED
---------------------------------------------------------------------------------------
As Reported October 29, 2006 Proforma
October 29, % of % of Proforma Net % of % Over
2006 Sales Adjustments Sales of Adjustments Sales (Under)
---------------------- ----------------------- ------------------------- --------
Net sales 121,625 100.0% - 121,625 100.0% 6.5%
Cost of sales 105,574 86.8% (1,037) -0.9%(4) 104,537 86.0% 6.2%
---------------------- ----------------------- ------------------------- --------
Gross profit 16,051 13.2% (1,037) -0.9% 17,088 14.0% 8.8%
Selling, general and
administrative expenses 12,846 10.6% (30) 0.0%(5) 12,816 10.5% -5.5%
Restructuring expense 466 0.4% (466) -0.4%(6) - 0.0% 0.0%
---------------------- ----------------------- ------------------------- --------
Income from operations 2,739 2.3% (1,533) -1.3% 4,272 3.5% 51.6%
Interest expense 1,888 1.6% - 0.0% 1,888 1.6% -13.8%
Interest income (97) -0.1% - 0.0% (97) -0.1% 24.7%
Other expense 60 0.0% - 0.0% 60 0.0% 1058.3%
---------------------- ----------------------- ------------------------- --------
Income before income taxes 888 0.7% (1,533) -1.3%(8) 2,421 2.0% 76.6%
Income taxes (9) (58) -6.5% (315) 20.5% 257 10.6% 189.9%
---------------------- ----------------------- ------------------------- --------
Net income 946 0.8% (1,218) -1.0% 2,164 1.8% 63.2%
====================== ======================= ========================= ========
Net income per share-basic $ 0.08 ($0.10) $ 0.19
Net income per share-diluted $ 0.08 ($0.10) $ 0.19
Average shares outstanding-basic 11,679 11,679 11,679
Average shares outstanding-diluted 11,682 11,679 11,682
Notes:
(1) The $1.1 million represents restructuring related charges of $703,00 for
other operating costs associated with the closed plant facilities and
$404,000 for inventory markdowns.
(2) The $51,000 restructuring related charge represents other operating costs
associated with the closed plant facilities.
(3) The $348,000 represents restructuring charges of $546,000 for lease
termination and other exit costs, $388,000 for write-downs of buildings and
equipment, $127,000 for asset movement costs, a credit of $315,000 for
sales proceeds received on equipment with no carrying value, and a credit
of $398,000 for employee termination benefits.
(4) The $1.0 million represents restructuring related charges of $798,000 for
other operating costs associated with closed plant facilities and $239,000
for inventory markdowns.
(5) The $30,000 restructuring related charge represents other operating costs
associated with the closed plant facilities.
(6) The $466,000 represents $740,000 for asset movement costs, $327,000 for
lease termination and other exit costs, $62,000 for write-downs of
buildings and equipment, a credit of $226,000 for employee termination
benefits, and a credit of $437,000 for sales proceeds on equipment with no
carrying value.
(7) Of this total charge, $713,000 and $793,000 represent cash and non-cash
charges, respectively.
(8) Of this total charge, $1.2 million and $301,000 represent cash and non-cash
charges, respectively.
(9) The percent of net sales column for income taxes is calculated as a % of
income before income taxes.