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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

 

FORM 8-K

 

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported) March 2, 2022

 

Culp, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

North Carolina		1-12597		56-1001967
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

1823 Eastchester Drive

High Point, North Carolina  27265

(Address of Principal Executive Offices)

(Zip Code)

 

(336) 889-5161

(Registrant’s Telephone Number, Including Area Code)

 

Not Applicable

(Former name or address, if changed from last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading Symbol	Name of exchange on which registered
Common stock, par value $0.05 per share	CULP	New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).  Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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This report and the exhibit attached hereto contain “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 that may cause actual events and results to differ materially from such statements. 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 to reflect any changes in management’s expectations or any change in the assumptions or circumstances on which such statements are based, whether due to new information, future events, or otherwise. 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,” “anticipate,” “estimate,” “intend,” “plan,” “project,” and their derivatives, and include but are not limited to statements about expectations for our future operations, production levels, new product launches, 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 or liquidity measures, as well as any statements regarding potential acquisitions, future economic or industry trends, public health epidemics, or future developments. There can be no assurance that we will realize these expectations or meet our guidance, or that these beliefs will prove correct.

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. 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. The future performance of our business depends in part on our success in conducting and finalizing acquisition negotiations and integrating acquired businesses into our existing operations. Changes in consumer tastes or preferences toward products not produced by us could erode demand for our products. Changes in tariffs or trade policy, or 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 or 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. The impact of public health epidemics on employees, customers, suppliers, and the global economy, such as the global coronavirus pandemic currently affecting countries around the world, could also adversely affect our operations and financial performance. In addition, the impact of potential goodwill or intangible asset impairments or valuation allowances could affect our financial results. Increases in freight costs, labor costs, and raw material prices, including increases in market prices for petrochemical products, can also significantly affect the prices we pay for shipping, labor, and raw materials, respectively, and in turn, increase our operating costs and decrease our profitability.  Finally, disruption in our customers’ supply chains for non-fabric components may cause declines in new orders and/or delayed shipping of existing orders while our customers wait for other components, which could adversely affect our financial results. 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 most recent Form 10-K and Form 10-Q reports filed with the Securities and Exchange Commission.  A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur.

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Item 2.02 – Results of Operations and Financial Condition

On March 2, 2022, we issued a news release to announce our financial results for our third quarter ended January 30, 2022.  A copy of the news release is attached hereto as Exhibit 99.

The information set forth in this Item 2.02 of this Current Report, and in Exhibit 99, is intended to be “furnished” under Item 2.02 of Form 8-K.  Such information shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

The news release contains adjusted income statement information, which discloses adjusted net income (loss) and adjusted earnings per share, non-GAAP performance measures that eliminate a non-cash income tax charge in connection with the establishment of a full valuation allowance against the company’s U.S. net deferred income tax assets, as well as a non-cash income tax benefit resulting from the re-establishment of certain U.S. Federal net operating loss carryforwards in connection with the recently enacted final regulations regarding the Global Intangible Low Taxed Income (“GILTI”) tax provisions of the Tax Cuts and Jobs Act of 2017.  The company has included this adjusted information in order to show operational performance excluding the effects of this non-cash income tax charge and non-cash income tax benefit, which are not expected to occur on a regular basis.  Details of these calculations and a reconciliation to information from our GAAP financial statements are set forth in the news release. Management believes this presentation aids in the comparison of financial results among comparable financial periods.  We note, however, that this adjusted income statement information should not be viewed in isolation or as a substitute for net income or earnings per share calculated in accordance with GAAP.  In addition, the calculation of the company’s income taxes involves numerous estimates and assumptions, which we have made in good faith.  

The news release contains disclosures about free cash flow, a non-GAAP liquidity measure that we define as net cash provided by (used in) operating activities, less cash capital expenditures, plus any proceeds from sale of property, plant, and equipment, less investment in unconsolidated joint venture, less payments on vendor-financed capital expenditures, plus proceeds from the sale of long-term investments associated with our rabbi trust, less the purchase of long-term investments associated with our rabbi trust, and plus or minus the effects of foreign currency exchange rate changes on cash and cash equivalents, in each case to the extent any such amount is incurred during the period presented. Details of these calculations and a reconciliation to information from our GAAP financial statements are set forth in the news release. Management believes the disclosure of free cash flow provides useful information to investors because it measures our available cash flow for potential debt repayment, stock repurchases, dividends, additions to cash and investments, or other corporate purposes. We note, however, that not all of the company’s free cash flow is available for discretionary spending, as we may have mandatory debt payments and other cash requirements that must be deducted from our cash available for future use. In operating our business, management uses free cash flow to make decisions about what commitments of cash to make for operations, such as capital expenditures (and financing arrangements for these expenditures), purchases of inventory or supplies, SG&A expenditure levels, compensation, and other commitments of cash, while still allowing for adequate cash to meet known future commitments for cash, such as debt repayment, and also for making decisions about dividend payments and share repurchases.

The news release contains disclosures about our Adjusted EBITDA, which is a non-GAAP performance measure that reflects net income (loss) excluding loss before income taxes from discontinued operations, income tax expense (benefit) from continuing operations, and net interest income, as well as depreciation and amortization expense from continuing operations, and stock-based compensation expense. This measure also excludes asset impairment charges from continuing operations, gain on bargain purchase, and other non-recurring charges and credits associated with our business, in each case to the extent any such amount is incurred during the period presented. Details of these calculations and a reconciliation to information from our GAAP financial statements are set forth in the news release. We believe presentation of Adjusted EBITDA is useful to investors because earnings before interest income and expense, income taxes, depreciation and amortization, and similar performance measures that exclude certain charges from earnings, are often used by investors and financial analysts in evaluating and comparing companies in our industry. We note, however, that such measures are not defined uniformly by various companies, with differing

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expenses being excluded from net income to calculate these performance measures. For this reason, Adjusted EBITDA should not be viewed in isolation by investors and should not be used as a substitute for net income calculated in accordance with GAAP, nor should it be used for direct comparisons with similarly titled performance measures reported by other companies. Use of Adjusted EBITDA as an analytical tool has limitations in that this measure does not reflect all expenses that are necessary to fund and operate our business, including funds required to pay taxes, service our debt, and fund capital expenditures, among others. Management uses Adjusted EBITDA to help it analyze the company’s earnings and operating performance, by excluding the effects of expenses that depend upon capital structure and debt level, tax provisions, and non-cash items such as depreciation, amortization and stock-based compensation expense that do not require immediate uses of cash.

The news release contains disclosures about return on capital for both the entire company and for individual business segments.  We define return on capital as adjusted operating income (loss) (measured on a trailing twelve-month basis and excluding certain non-recurring charges and credits) divided by average capital employed (excluding goodwill and intangibles and obligations related to acquisitions at the divisional level only).  Operating income (loss) excludes certain non-recurring charges, and average capital employed is calculated over rolling five fiscal periods, depending on which quarter is being presented.  Details of these calculations and a reconciliation to information from our GAAP financial statements are set forth in the news release.  We believe return on capital is an accepted measure of earnings efficiency in relation to capital employed, but it is a non-GAAP performance measure that is not defined or calculated in the same manner by all companies.  This measure should not be considered in isolation or as an alternative to net income or other performance measures, but we believe it provides useful information to investors by comparing the operating income we produce to the asset base used to generate that income.  Also, operating income on a trailing twelve-month basis does not necessarily indicate results that would be expected for the full fiscal year or for the following twelve months.  We note that, particularly for return on capital measured at the segment level, not all assets and expenses are allocated to our operating segments, and there are assets and expenses at the corporate (unallocated) level that may provide support to a segment’s operations and yet are not included in the assets and expenses used to calculate that segment’s return on capital.  Thus, the average return on capital for the company’s segments will generally be different from the company’s overall return on capital.  Management uses return on capital to evaluate the company’s earnings efficiency and the relative performance of its segments.

Item 9.01 (d) – Exhibits

 

99		News Release dated March 2, 2022
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

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EXHIBIT INDEX

 

Exhibit Number		Exhibit
99		News Release dated March 2, 2022
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

		CULP, INC. (Registrant)
		By:	/s/ Kenneth R. Bowling
			Chief Financial Officer
			(principal financial officer)
		By:	/s/ Thomas B. Gallagher, Jr.
			Vice President of Finance
			(principal accounting officer)

 

 

Dated:  March 2, 2022

 

 

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Exhibit 99

 

 

 

 

CULP ANNOUNCES RESULTS FOR THIRD QUARTER FISCAL 2022

 

 

HIGH POINT, N.C. (March 2, 2022) ─ Culp, Inc. (NYSE: CULP) (together with its consolidated subsidiaries, “CULP”) today reported financial and operating results for the third quarter ended January 30, 2022.  

 

Fiscal 2022 Third Quarter Financial Summary

 

Financial Outlook

 

 

 

 

 

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CULP Announces Results for Third Quarter Fiscal 2022

Page 2

March 2, 2022

 

Commenting on the results, Iv Culp, president and chief executive officer of Culp, Inc., said, “As expected, the third quarter was significantly challenged by a convergence of factors that affected our sales and operating performance. While sales were generally in line with expectations and reflected stable demand for our products as compared to the prior-year period, revenue for our mattress fabric segment was affected by a variety of factors, including lower demand for sewn mattress covers due to high customer inventory levels; customer delays of new product rollouts; and some weakening in the U.S. mattress industry due to traditional seasonal slowdowns, the impact of the Omicron variant, and inflationary pressures affecting consumer spending.  

 

“With respect to our operating performance, profitability was pressured more than expected, particularly for our mattress fabrics business.  We incurred operating inefficiencies within our mattress fabrics global platform due to an unfavorable product mix impacting our U.S. and Canadian locations.  Also, the continued rapid rise in freight, raw material, and labor costs, as well as ongoing labor challenges, affected profitability for the quarter.  While additional pricing action was taken during the third quarter to help further offset inflationary pressures to some extent, we did not receive the full benefit of those actions throughout the quarter due to the timing of implementation.      

 

“Despite the headwinds, the fundamentals of our business remain solid, and we have the financial strength to support our business in the current environment.  In each of our segments, we continue to execute our product-driven strategy with an emphasis on design creativity, innovation, and servicing the evolving needs of our customers.  Our diversified global platform and robust supply chain have enabled us to meet our customer delivery commitments in the face of numerous challenges, and we are well positioned to capitalize on planned new programs and expanding market opportunities.  Notably, we opened our new Haiti facility during the third quarter, which will allow us to expand our near-shore capacity for cut and sewn upholstery kits to support future growth and build supply chain resiliency.

 

“We have also made considerable investments in our business during the past nine months, including a third cut and sew facility in Haiti, a new innovation campus in High Point, North Carolina, and higher inventory balances to protect against supply chain disruption, support our valued customers, and get ahead of rising raw material costs.  As a result of these strategic investments, our cash position has declined during fiscal 2022, but we now expect our cash position to stabilize during the fourth quarter.  Importantly, while it is always our intent and desire to grow our revenues and profits, we understand that we are facing an uncertain demand and cost environment.  We will be laser focused on generating cash and keeping our expense structure in line with current demand trends.  

 

“Looking ahead, we expect the current pressures to continue near-term, but we are assertively working to mitigate these challenges.  We have additional pricing actions taking effect in both of our businesses during the fourth quarter to help further offset rising costs.  We are also focused on controlling costs; diligently managing and capitalizing on our strategic investment in inventory; retaining existing and newly trained employees; and improving our operating efficiencies.  Our market position remains solid with new planned placements and product development opportunities, and we expect to see a more normalized product mix in our business during the fourth quarter.

 

“I remain very optimistic about CULP’s future as we continue to demonstrate the competitive strength of our innovative product offerings and diversified global platform.  We look forward to the opportunities ahead to deliver long-term profitable growth and value for our shareholders,” added Culp.

 

Segment Update

 

Mattress Fabrics Segment

 

Sales for this segment were $38.4 million for the third quarter, down 0.4 percent compared with sales of $38.6 million in the third quarter of fiscal 2021.  

 

“Our third quarter results reflected ongoing headwinds pressuring profitability more than anticipated,” said Sandy Brown, president of the company’s mattress fabrics division.  “Sales for the quarter, which included pricing and surcharge actions that were in effect during the period, were relatively stable as compared to the third quarter of fiscal 2021.  However, top line performance was tempered by significant weakness in mattress cover sales as our customers continued to work through their existing inventory levels, as well as customer delays in launching new products.  Sales were also affected by traditional seasonal slowdowns over the holidays, the widespread resurgence of COVID, the impact of inflationary pressures on consumer spending, and weather disruptions at some of our facilities.

 

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CULP Announces Results for Third Quarter Fiscal 2022

Page 3

March 2, 2022

 

“Our operating performance for the third quarter of fiscal 2022 was significantly pressured by operating inefficiencies within our global platform due to an unfavorable product mix impacting our U.S. and Canadian locations.  Operating performance was also affected by higher freight, raw material, and labor costs; ongoing labor challenges, including inefficiencies due to hiring and training new employees in the U.S. and Canada and record levels of COVID absenteeism in January; and inefficiencies due to normal holiday shutdowns at certain of our locations.  

 

“Despite the convergence of near-term headwinds, we remained focused on product innovation, creative designs, and personalized customer attention.  We had a very favorable showing at the recent Las Vegas market, and we are excited about the positive response from customers.  Also, the strength and flexibility of our global manufacturing and sourcing operations enabled us to support the evolving needs of our customers throughout the quarter.  This platform continues to provide us with a competitive advantage for opportunities to expand our market reach across new and existing customers.  Additionally, while we experienced lower demand in our mattress cover business during the quarter, we firmly believe our on-shore, near-shore, and off-shore supply chain strategy, as well as our fabric-to-cover model, remains a preferred platform for sewn mattress cover customers.   

 

“Looking ahead, we are enthusiastic about our strong new placements and product development opportunities for fiscal 2023.  However, some weakening in the domestic mattress industry may impact demand and lead to additional temporary delays of new product rollouts.  Rising costs also continue to pressure our profitability, but we took selective pricing action during the third quarter, and we are implementing additional targeted price increases during the fourth quarter to further mitigate these higher costs.  We also expect a more normalized product mix during the fourth quarter, and we remain committed to controlling costs, managing and reducing our inventory, retaining talent, and improving our operating efficiencies,” added Brown.

 

Upholstery Fabrics Segment

 

Sales for this segment were $41.9 million for the third quarter, up 2.7 percent compared with sales of $40.7 million in the third quarter of fiscal 2021.  

 

“We were pleased by the better-than-expected growth in our sales for the third quarter,” said Boyd Chumbley, president of the company’s upholstery fabrics division.  “This was driven by solid demand for our products, even when compared to an especially strong sales performance during the prior-year period.  Demand remained well above pre-pandemic levels, and we continued to benefit from our robust platform in Asia, our stable, long-term supplier relationships, and the success of our product innovation strategy, including the continued popularity of our LiveSmart® portfolio of performance products.  Our sales results were also supplemented by the pricing and surcharge actions that were effective during the quarter.  

 

“Our operating performance for the third quarter of fiscal 2022 reflected meaningful sequential improvement as compared to the second quarter of fiscal 2022.  However, as compared to the prior-year period, our results reflected higher freight and raw material costs, start-up costs for our new Haiti facility, unfavorable foreign currency fluctuations in China, and a lower contribution from our Read Window Products business.  We took additional pricing action during the third quarter to help cover a portion of the continued rise in our operating costs, and this action began to favorably impact our results during the latter part of the quarter.  Although the temporary cost-price lag affected operating performance for the third quarter, we will benefit during the fourth quarter from the full realization of this additional pricing action.  

 

“Top line performance in our hospitality business continued to recover from pandemic-related impacts during the third quarter, with higher sales in both our hospitality/contract fabric business and our Read Window Products business.  We were also excited to open our new Haiti facility during the third quarter.  Although the ramp up for this facility has taken longer than expected due to travel restrictions that delayed our training timeline, we are pleased to have commenced product shipments in January, and we look forward to increasing production and reducing start-up costs over the upcoming months.

 

 

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CULP Announces Results for Third Quarter Fiscal 2022

Page 4

March 2, 2022

 

“Looking ahead, we expect that current near-term headwinds, including inflationary conditions, labor availability in our U.S. operations, and customer supply chain constraints, may continue to pressure our results during the fourth quarter.  We also expect a slowdown in new business for the residential home furnishings industry, as compared to the peak experienced during the post-COVID stay-at-home surge, which may temper the level of growth in sales for our residential fabric products.  Additionally, our sales and operating performance for the fourth quarter, as compared sequentially to the third quarter, will be affected by the timing of the Chinese New Year holiday, which falls substantially within the fourth quarter.  Despite these external conditions, we remain encouraged by generally favorable demand trends.  We are confident in our ability to navigate these pressures as we leverage our product-driven strategy and innovative products, along with our flexible Asian platform, stable supply chain partners, and expanded capacity in Haiti, to sustain our competitive advantage and expand our market reach.  We are well positioned for the long term, and we look forward to the opportunities ahead as we continue to support our valued customers,” added Chumbley.

 

Balance Sheet

 

“We remain focused on maintaining a strong financial position and disciplined execution of our capital allocation strategy during these uncertain times,” added Ken Bowling, executive vice president and chief financial officer of Culp, Inc.  “Over the course of this fiscal year, we have strategically committed significant funds for organic investment in our business to positively position CULP for future growth as external conditions normalize. As of January 30, 2022, we reported $22.2 million in total cash and investments and no debt outstanding under our $30 million unsecured line of credit.  This compares with $46.9 million in total cash and investments and no outstanding debt as of the end of fiscal 2021.  Notably, as mentioned earlier, we expect our cash position to stabilize during the fourth quarter of fiscal 2022.

 

“Our cash flow from operations and free cash flow were $(12.4) million and $(18.5) million, respectively, for the first nine months of fiscal 2022.  (See reconciliation table at the back of this press release.)  As we continue to invest in our business, our cash flow from operations and free cash flow during the first nine months of this fiscal year were affected by the following uses of cash:  (i) an investment of $17.1 million in higher inventory levels to protect against supply chain disruption and support our valued customers, to get ahead of rising raw material costs, and to strategically improve our in-stock position ahead of the Chinese New Year holiday; (ii) $5.3 million investment in capital expenditures, including expenditures for machinery, equipment, and IT investments, as well as expenditures related to our new innovation campus; (iii) $1.9 million in payments for the new building lease and startup expenses associated with our Haiti upholstery cut and sew operation; and (iv) increased accounts payable payments related to our return to normal credit terms as opposed to the extended terms previously granted in response to the COVID-19 pandemic.  

 

“Additionally, during the first nine months of fiscal 2022, we paid $4.1 million in regular quarterly dividends and spent $1.8 million on share repurchases.”

 

Dividends and Share Repurchases

 

The company announced that its Board of Directors has approved the payment of a quarterly cash dividend of 11.5 cents per share. This compares with 11 cents per share paid for the same period last year, reflecting an increase of five percent.  At an annual indicated dividend of 46 cents per share, the yield is 5.67 percent, based upon yesterday’s closing stock price of $8.11 per share.  The next quarterly payment will be made on April 19, 2022, to shareholders of record as of April 11, 2022.

 

The company did not repurchase any shares during the third quarter of fiscal 2022, leaving approximately $3.2 million available under the current share repurchase program as of January 30, 2022.

 

Conference Call

 

Culp, Inc. will hold a conference call to discuss financial results for the third quarter of fiscal 2022 on March 3, 2022, at 11:00 a.m. Eastern Time.  A live webcast of this call can be accessed under the “Upcoming Events” section on the investor relations page of the company’s website, www.culp.com.  A replay of the webcast will be available for 30 days under the “Past Events” section on the investor relations page of the company’s website, beginning at 2:00 p.m. Eastern Time on March 3, 2022.

 

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CULP Announces Results for Third Quarter Fiscal 2022

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March 2, 2022

 

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 manufacturing and sourcing capabilities located in the United States, Canada, China, Haiti, Turkey, and Vietnam.

 

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 that may cause actual events and results to differ materially from such statements.  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 to reflect any changes in management’s expectations or any change in the assumptions or circumstances on which such statements are based, whether due to new information, future events, or otherwise.  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,” “anticipate,” “estimate,” “intend,” “plan,” “project,” and their derivatives, and include but are not limited to statements about expectations for our future operations, production levels, new product launches, 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 or liquidity measures, as well as any statements regarding potential acquisitions, future economic or industry trends, public health epidemics, or future developments.  There can be no assurance that we will realize these expectations or meet our guidance, or that these beliefs will prove correct.

 

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.  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.  The future performance of our business depends in part on our success in conducting and finalizing acquisition negotiations and integrating acquired businesses into our existing operations.  Changes in consumer tastes or preferences toward products not produced by us could erode demand for our products.  Changes in tariffs or trade policy, or 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 or 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.  The impact of public health epidemics on employees, customers, suppliers, and the global economy, such as the global coronavirus pandemic currently affecting countries around the world, could also adversely affect our operations and financial performance.  In addition, the impact of potential goodwill or intangible asset impairments could affect our financial results.  Increases in freight costs, labor costs, and raw material prices, including increases in market prices for petrochemical products, can also significantly affect the prices we pay for shipping, labor, and raw materials, respectively, and in turn, increase our operating costs and decrease our profitability. Finally, disruption in our customers’ supply chains for non-fabric components may cause declines in new orders and/or delayed shipping of existing orders while our customers wait for other components, which could adversely affect our financial results.  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 most recent Form 10-K and Form 10-Q reports filed with the Securities and Exchange Commission.  A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur.

 

 

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CULP Announces Results for Third Quarter Fiscal 2022

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March 2, 2022

 

CULP, INC.

CONSOLIDATED STATEMENTS OF NET (LOSS) INCOME

FOR THREE MONTHS ENDED JANUARY 30, 2022, AND JANUARY 31, 2021

Unaudited

(Amounts in Thousands, Except for Per Share Data)

 

 

Notes

 

 

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CULP Announces Results for Third Quarter Fiscal 2022

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March 2, 2022

CULP, INC.

CONSOLIDATED STATEMENTS OF NET INCOME

FOR NINE MONTHS ENDED JANUARY 30, 2022, AND JANUARY 31, 2021

Unaudited

(Amounts in Thousands, Except for Per Share Data)

 

 

Notes

 

 

 

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CULP Announces Results for Third Quarter Fiscal 2022

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March 2, 2022

CULP, INC.

CONSOLIDATED BALANCE SHEETS

JANUARY 30, 2022, JANUARY 31, 2021, AND MAY 2, 2021

Unaudited

(Amounts in Thousands)

 

 

* Derived from audited financial statements.

 

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CULP Announces Results for Third Quarter Fiscal 2022

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March 2, 2022

CULP, INC.

SUMMARY OF CASH AND INVESTMENTS

JANUARY 30, 2022, JANUARY 31, 2021, AND MAY 2, 2021

Unaudited

(Amounts in Thousands)

 

 

* Derived from audited financial statements.

 

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CULP Announces Results for Third Quarter Fiscal 2022

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March 2, 2022

CULP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED JANUARY 30, 2022, AND JANUARY 31, 2021

Unaudited

(Amounts in Thousands)

 

 

Reconciliation of Free Cash Flow (1):

 

 

 

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CULP Announces Results for Third Quarter Fiscal 2022

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March 2, 2022

 

CULP, INC.

STATEMENTS OF OPERATIONS BY SEGMENT

FOR THE THREE MONTHS ENDED JANUARY 30, 2022, AND JANUARY 31, 2021

Unaudited

(Amounts in Thousands)

 

 

 

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CULP Announces Results for Third Quarter Fiscal 2022

Page 12

March 2, 2022

 

CULP, INC.

STATEMENTS OF OPERATIONS BY SEGMENT

FOR THE NINE MONTHS ENDED JANUARY 30, 2022, AND JANUARY 31, 2021

Unaudited

(Amounts in Thousands)

 

 

Notes

 

 

 

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CULP Announces Results for Third Quarter Fiscal 2022

Page 13

March 2, 2022

CULP, INC.

RECONCILIATION OF SELECTED INCOME STATEMENT INFORMATION TO ADJUSTED RESULTS

FOR THE NINE MONTHS ENDED JANUARY 31, 2021

Unaudited

(Amounts in Thousands, Except for Per Share Data)

 

 

Notes

 

 

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CULP Announces Results for Third Quarter Fiscal 2022

Page 14

March 2, 2022

CULP, INC.

CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA

FOR THE TWELVE MONTHS ENDED JANUARY 30, 2022, AND JANUARY 31, 2021

Unaudited

(Amounts in Thousands)

 

 

 

 

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CULP Announces Results for Third Quarter Fiscal 2022

Page 15

March 2, 2022

 

CULP, INC.

RETURN ON CAPITAL EMPLOYED BY SEGMENT

FOR THE TWELVE MONTHS ENDED JANUARY 30, 2022

Unaudited

(Amounts in Thousands)

 

 

 

 

 

---

CULP Announces Results for Third Quarter Fiscal 2022

Page 16

March 2, 2022

 

CULP, INC.

RETURN ON CAPITAL EMPLOYED BY SEGMENT - CONTINUED

FOR THE TWELVE MONTHS ENDED JANUARY 30, 2022

Unaudited

(Amounts in Thousands)

 

 

Notes

 

 

 

 

 

 

 

---

CULP Announces Results for Third Quarter Fiscal 2022

Page 17

March 2, 2022

 

CULP INC.

RETURN ON CAPITAL EMPLOYED BY SEGMENT

FOR THE TWELVE MONTHS ENDED JANUARY 31, 2021

Unaudited

(Amounts in Thousands)

 

 

 

 

 

---

CULP Announces Results for Third Quarter Fiscal 2022

Page 18

March 2, 2022

 

CULP INC.

RETURN ON CAPITAL EMPLOYED BY SEGMENT - CONTINUED

FOR THE TWELVE MONTHS ENDED JANUARY 31, 2021

Unaudited

(Amounts in Thousands)

 

 

 

---

CULP Announces Results for Third Quarter Fiscal 2022

Page 19

March 2, 2022

 

CULP INC.

RETURN ON CAPITAL EMPLOYED BY SEGMENT - CONTINUED

FOR THE TWELVE MONTHS ENDED JANUARY 31, 2021

Unaudited

(Amounts in Thousands)

 

 

Notes

 

 

 

---

CULP Announces Results for Third Quarter Fiscal 2022

Page 20

March 2, 2022

 

CULP INC.

CONSOLIDATED STATEMENTS OF ADJUSTED OPERATING INCOME (LOSS)

FOR THE TWELVE MONTHS ENDED JANUARY 30, 2022, AND JANUARY 31, 2021

Unaudited

(Amounts in Thousands)

 

 

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