Culp's Second Quarter Financial Report Reflects Economic Downturn
December 5, 2008
HIGH POINT, North Carolina – Culp Inc. has announced its quarterly earnings for the period ending Oct. 31st and although the report lists a loss of $.5 million in pre-tax income from last year during the same quarter, company CEO Frank Saxon has emphasized that the current pre-tax income figures are relatively positive considering the current global economic situation.
Referring to a net loss of $40.9 million, or $3.23 per diluted share for the second quarter of fiscal year 2009, Saxon said "Most of the loss is non-cash."
"It's our opinion that the most important point is how much money the company did make," Saxon told Fabrics & Furnishings International. "Making $1.5 million for the quarter in the economy we're in is really good. Our quarter ended in October and the global financial crisis really started in September when the consumer stopped spending."
Although Saxon remains optimistic, sales for the company have been weak in both its mattress ticking and upholstery fabric sectors. For the second quarter fiscal 2009 sales for mattress ticking were $28 million compared with $36 million in the second fiscal of 2008. Upholstery sales this quarter were $24.2 million compared with $28.3 million in 2008.
"Industry conditions for upholstery fabrics have continued to be extremely challenging through the first half of fiscal 2009," said Saxon. "The uncertain economy, depressed housing market and credit crisis are significantly influencing consumer demand for furniture and are affecting Culp's upholstery fabric sales, mostly for U.S. produced goods."
In response to the seemingly endless economic downturn, Saxon said the company expects the housing and credit crises to continue and thus adversely affect consumer demand for furniture and bedding products. However, he assured that the company will continue to manage the business and improve profitability regardless of challenges. In one move to cut costs and restructure business, Saxon also confirmed that the company has sold its headquarters for $4.0 million and plans to lease it the building back from the purchaser for an initial term of three years. The closing on the sale is expected to occur on or before Jan. 30, 2009.
"We will continue to manage our business to improve profitability regardless of the current challenges we and our customers face," said Saxon in the company's press release. "We believe we have a solid leadership position in both of our businesses, especially as we are seeing a declining base of competitors. We continue to be enthusiastic about the opportunities from our China platform, especially when demand improves. Above all, we are focused on execution for our customers as a reliable source of innovative products, delivery performance and quality."
Referring to a net loss of $40.9 million, or $3.23 per diluted share for the second quarter of fiscal year 2009, Saxon said "Most of the loss is non-cash."
"It's our opinion that the most important point is how much money the company did make," Saxon told Fabrics & Furnishings International. "Making $1.5 million for the quarter in the economy we're in is really good. Our quarter ended in October and the global financial crisis really started in September when the consumer stopped spending."
Although Saxon remains optimistic, sales for the company have been weak in both its mattress ticking and upholstery fabric sectors. For the second quarter fiscal 2009 sales for mattress ticking were $28 million compared with $36 million in the second fiscal of 2008. Upholstery sales this quarter were $24.2 million compared with $28.3 million in 2008.
"Industry conditions for upholstery fabrics have continued to be extremely challenging through the first half of fiscal 2009," said Saxon. "The uncertain economy, depressed housing market and credit crisis are significantly influencing consumer demand for furniture and are affecting Culp's upholstery fabric sales, mostly for U.S. produced goods."
In response to the seemingly endless economic downturn, Saxon said the company expects the housing and credit crises to continue and thus adversely affect consumer demand for furniture and bedding products. However, he assured that the company will continue to manage the business and improve profitability regardless of challenges. In one move to cut costs and restructure business, Saxon also confirmed that the company has sold its headquarters for $4.0 million and plans to lease it the building back from the purchaser for an initial term of three years. The closing on the sale is expected to occur on or before Jan. 30, 2009.
"We will continue to manage our business to improve profitability regardless of the current challenges we and our customers face," said Saxon in the company's press release. "We believe we have a solid leadership position in both of our businesses, especially as we are seeing a declining base of competitors. We continue to be enthusiastic about the opportunities from our China platform, especially when demand improves. Above all, we are focused on execution for our customers as a reliable source of innovative products, delivery performance and quality."
