Culp fintabs 6-27-2024

Culp narrows fiscal 2024 loss to $13.8 million as restructuring plan begins

HIGH POINT – Upholstery and mattress fabric supplier Culp Inc. posted a net loss of $4.9 million in the fourth quarter ended April 24 compared with a net loss of $4.7 million during the same quarter last year.

The company’s fourth-quarter sales dropped 19.4% to $49.5 million compared with net sales of $61.4 million in the same period last year.

Breaking out sales by segment, Culp reported sales of $25.8 million in the mattress fabrics division for the quarter, a 16.1% decline compared to sales of $30.7 million in the fourth quarter of last year. The company’s upholstery fabrics business posted sales of $23.8 million in the quarter, a 22.6% drop from fourth quarter sales of $30.7 million in fiscal 2023.

For the fiscal year, the company reported a net loss of $13.8 million compared with a loss of $31.5 million posted in fiscal 2023. Sales for the full year were $225.3 million, down 4.1% from last year’s reported $235 million.

The mattress fabrics division delivered a bright spot with fiscal year sales bouncing up 4.8% to $116.4 million compared with sales of $111 million in the same period last year. The segment reported an operating loss of $6.8 million for the year compared with an operating loss of $18.7 million in the prior year.

Upholstery fabrics sales dropped 12.1% to $109 million compared with sales of $123.9 million in fiscal 2023. The upholstery division reported operating income of $5.8 million for the fiscal year, compared with $2 million for fiscal 2023.

“These results reflected weakness in industry demand in both of our businesses, driven primarily by ongoing macro-economic headwinds,” said Iv Culp, president and CEO. “Our sales performance for the fourth quarter was also affected to some degree by the timing of orders, as many of our larger customers experienced extremely slow conditions beginning in January. We posted solid year-over-year sales gains in both businesses during our fiscal third quarter, and we were making progress towards our stated improvement goals. However, we faced a significant decline in order levels during our fourth quarter, related to demand pressures our customers faced early in the calendar year.”

In May, the company announced a restructuring plan that includes closing a factory in Canada and one in Haiti. The moves, the company said, primarily impact the mattress fabrics segment and are expected to deliver between $10 million and $11 million in savings and operating improvements once fully implemented by the end of this year.

“The announced adjustments, once fully implemented, will enable us to grow more efficiently and profitably with a lower level of fixed costs,” Culp said. “Importantly, these strategic steps do not limit our ability to grow the business, but instead allow us to better optimize our global mix of manufacturing capabilities and long-term sourcing partners. Also, we are extremely grateful for the support we have received from our valued customers, suppliers, and employees, and we are confident that the strength of these relationships will help drive our recovery.”

Looking ahead to next year, the company offered limited guidance citing macro-economic uncertainty and its ongoing restructuring. Culp did say that it expects to return to positive operating income on a monthly basis during the second half of fiscal 2025.

“As we look ahead to fiscal 2025, we expect industry conditions will remain pressured for some time, but we believe our fiscal 2024 fourth quarter revenue levels represented a bottom point for Culp,” Culp said. “We believe the strategic actions we are taking will position us for profitable growth opportunities, and we remain committed to delivering sustainable results and enhancing value for our shareholders over the long term.”

See also:

  • Culp narrows loss in Q3 buoyed by higher sales in upholstery and mattress segments
  • Culp agreement with shareholder nets newest board member

 

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