Circular knitted mattress fabrics producer Culp has reported financial and operating results for the third quarter that ended 27 January 2019. Net sales were US$ 77.2 million, compared with US$ 85.3 million a year ago. On a pre-tax basis, the company reported income of US$ 4.3 million, compared with pre-tax income of US$ 7.5 million for the third quarter of fiscal 2018. The company reported net income (GAAP) of US$ 3.2 million for the third quarter of fiscal 2019, compared with a net loss of US$ 748,000 for the third quarter of fiscal 2018. The company reported adjusted net income (non-GAAP) of US$ 3.3 million for the third quarter of fiscal 2019, compared with US$ 5.2 million for the third quarter of fiscal 2018.
â€œAs expected, our results for the third quarter reflect the ongoing significant challenges for the bedding industry, primarily related to the high volume of low-priced imported mattresses from China,â€ commented Frank Saxon, President and Chief Executive Officer of Culp.
â€œThe current supply of these products has disrupted the market and affected most of our major customers and the industry, which has continued to reduce demand for our mattress fabrics and covers. We are pleased that our upholstery fabrics business had another solid performance for the third quarter, supported by a meaningful sales contribution from Read Window Products (RWP), acquired at the end of fiscal 2018.â€
Tariff discussions - â€œWe continue to believe the domestic mattress industry will ultimately benefit from relief sought under US trade laws to address the low-priced imported mattresses from China. However, delays resulting from the recent US government shutdown have affected the timing of expected punitive measures against Chinese importers, with a preliminary ruling now expected in May 2019,â€ continued Mr Saxon.
â€œAnd, although the 1 March 2019, deadline for additional tariffs has been delayed, we continue to monitor the ongoing tariff discussions and the potential impact any additional tariffs will have for our upholstery fabrics business.â€
Focus on innovation and creative designs -Culp 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 knitted fabrics produced at Culpâ€™s manufacturing facilities and fabrics sourced through other suppliers. Culp has operations located in the United States, Canada, China and Haiti.
The projection for the fourth quarter of fiscal 2019 is for overall sales to be slightly down, compared to the same period last year. Pre-tax income is expected to be in the range of US$ 4.2 million to US$ 4.9 million.
â€œWe remain focused on innovation and creative designs in all businesses, and we are confident in our product-driven strategy and our ability to meet the changing demands of our customers. Despite the continued headwinds facing the bedding industry, we are pleased with our positive product showings with customers and the sequential improvements we are seeing in our mattress fabrics business. We also have additional opportunities to expand our market reach through RWP in the upholstery fabrics business and with Culp Home Accessories, our finished products business offering bedding accessories and home goods direct to both consumers and to businesses,â€ concluded Mr Saxon.
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