HIGH POINT, N.C.--(BUSINESS WIRE)--Mar. 8, 2018--
Culp, Inc. (NYSE: CULP) announced today that it has reached a definitive
agreement to acquire Read Window Products, Inc., a source for custom
window treatments and other products for the hospitality and commercial
industries. Based in Knoxville, Tennessee, Read Window Products is a
turn-key provider of window treatments offering measuring, sourcing,
fabrication and installation services. Read Window Products’ primary
custom product line includes motorization, shades, drapery and shower
curtains. In addition, they supply soft goods such as decorative top
sheets, coverlets, duvet covers, bed skirts, bolsters and pillows, for
leading hospitality brands worldwide. Read Window Products has been in
business since 1981, with annual revenues of approximately $11.0 million
in 2017. Culp currently expects to fund the acquisition with cash and
investments on hand without incurring any additional debt, with closing
currently expected to occur at the end of March, subject to the
satisfaction of customary closing conditions.
Commenting on the acquisition announcement, Frank Saxon, president and
chief executive officer of Culp, Inc., said, “We have been seeking the
right strategic business opportunity to support our growing sales of
upholstery fabrics designed for the hospitality market. Today, we are
pleased to announce a definitive agreement to acquire Read Window
Products. We believe this additional product line will complement our
existing upholstery fabrics business and enhance our ability to expand
our sales and reach additional customers in the hospitality market. Read
Window Products is already solidly profitable with operating margins in
line with our current upholstery fabrics business. We have a unique
opportunity to combine our outstanding design capabilities with another
established business that enjoys a solid reputation in the hospitality
market. This proposed acquisition supports our diversification strategy
for both products and customers, and we look forward to the
opportunities ahead to integrate Read Window Products’ operations with
our existing upholstery fabrics business.”
Boyd Chumbley, president of Culp’s upholstery fabrics division, added,
“As we continue to diversify our customer base, we believe the
hospitality market offers significant growth opportunities for Culp. The
proposed acquisition of Read Window Products supports this strategy, and
we are pleased to welcome a proven market leader to Culp’s upholstery
fabrics business. Adding window treatments to our product line is a
logical step in Culp’s evolution as a complete source of fabrics for the
hospitality market. The opportunity to work with an established source
will allow us to respond to customer demand in an efficient manner. We
are excited about the potential to leverage Culp’s global platform,
product innovation and outstanding customer service with the added
expertise of Read Window Products as we extend our market reach.”
Dale Read, chief executive officer of Read Window Products, added, “We
believe this is a great opportunity for Read Window Products, and we
look forward to joining the Culp team. Our companies have similar family
cultures and values with a shared commitment to product excellence and
outstanding customer service. Together, we will be uniquely positioned
to offer the full complement of high quality, decorative fabrics used
inside a hotel room. We are excited about the growth potential this
proposed business combination brings to the hospitality market.”
About the Company
Culp, Inc. is one of the world's largest marketers of mattress fabrics
for bedding and upholstery fabrics for residential and commercial
furniture. The company markets a variety of fabrics to its global
customer base of leading bedding and furniture companies, including
fabrics produced at Culp’s manufacturing facilities and fabrics sourced
through other suppliers. Culp has operations located in the United
States, Canada, China and Haiti.
Forward Looking Statements
This release contains forward-looking statements” within the meaning
of the federal securities laws, including the Private Securities
Litigation Reform Act of 1995 (Section 27A of the Securities Act of 1933
and Section 21E of the Securities and Exchange Act of 1934).Such
statements are inherently subject to risks and uncertainties.Further,
forward looking statements are intended to speak only as of the date on
which they are made, and we disclaim any duty to update such statements.Forward-looking statements are statements that include projections,
expectations or beliefs about future events or results or otherwise are
not statements of historical fact.Such statements are often but
not always characterized by qualifying words such as “expect,”
“believe,” “estimate,” “plan” and “project” and their derivatives, and
include but are not limited to statements about expectations for our
future operations, production levels, sales, profit margins,
profitability, operating income, capital expenditures, working capital
levels, income taxes, SG&A or other expenses, pre-tax income, earnings,
cash flow, and other performance measures, as well as any statements
regarding potential acquisitions, future economic or industry trends or
future developments. Factors that could influence the matters discussed
in such statements include the level of housing starts and sales of
existing homes, consumer confidence, trends in disposable income, and
general economic conditions, as well as our success in finalizing
acquisition negotiations.Decreases in these economic indicators
could have a negative effect on our business and prospects.Likewise,
increases in interest rates, particularly home mortgage rates, and
increases in consumer debt or the general rate of inflation, could
affect us adversely. Changes in consumer tastes or preferences toward
products not produced by us could erode demand for our products. Changes
in the value of the U.S. dollar versus other currencies could affect our
financial results because a significant portion of our operations are
located outside the United States. Strengthening of the U.S. dollar
against other currencies could make our products less competitive on the
basis of price in markets outside the United States, and strengthening
of currencies in Canada and China can have a negative impact on our
sales of products produced in those places. Also, economic and political
instability in international areas could affect our operations or
sources of goods in those areas, as well as demand for our products in
international markets. Further information about these factors, as well
as other factors that could affect our future operations or financial
results and the matters discussed in forward-looking statements, is
included in Item 1A “Risk Factors” in our Form 10-K filed with the
Securities and Exchange Commission on July 14, 2017 for the fiscal year
ended April 30, 2017. In addition, please note that the company is not
responsible for changes made to this release by wire services, internet
services, or other media.
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Source: Culp, Inc.
Culp, Inc.
Investor Contact:
Kenneth R. Bowling, 336-881-5630
Chief
Financial Officer
or
Media Contact:
Teresa A. Huffman,
336-889-5161
Vice President, Human Resources