CULP INC - FORM 8-K - EX-99.(B) - EXHIBIT 99(B)

Attached files

file	filename
8-K - CULP, INC. 8-K - CULP INC	a50881697.htm
EX-99.(A) - EXHIBIT 99(A) - CULP INC	a50881697ex99a.htm

Exhibit 99(b)

Page 1 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE

CONSOLIDATED STATEMENTS OF NET INCOME

FOR THE THREE MONTHS ENDED APRIL 27, 2014 AND APRIL 28, 2013

(UNAUDITED)

(Amounts in Thousands, Except for Per Share Data)

	THREE MONTHS ENDED

	Amounts									Percent of Sales
	April 27,			April 28,			% Over			April 27,			April 28,
	2014			2013			(Under)			2014			2013

Net sales	$	74,043			70,375		5.2		%	100.0		%	100.0		%
Cost of sales		62,282			57,527		8.3		%	84.1		%	81.7		%
Gross profit		11,761			12,848		(8.5	)	%	15.9		%	18.3		%

Selling, general and
administrative expenses		7,317			6,772		8.0		%	9.9		%	9.6		%
Income from operations		4,444			6,076		(26.9	)	%	6.0		%	8.6		%

Interest expense		97			140		(30.7	)	%	0.1		%	0.2		%
Interest income		(139	)		(90	)	54.4		%	(0.2	)	%	(0.1	)	%
Other expense		366			163		124.5		%	0.5		%	0.2		%
Income before income taxes		4,120			5,863		(29.7	)	%	5.6		%	8.3		%

Income taxes*		1,380			2,161		(36.1	)	%	33.5		%	36.9		%
Net income	$	2,740			3,702		(26.0	)	%	3.7		%	5.3		%

Net income per share-basic	$	0.22		$	0.31		(29.0	)	%
Net income per share-diluted	$	0.22		$	0.30		(26.7	)	%
Average shares outstanding-basic		12,188			12,102		0.7		%
Average shares outstanding-diluted		12,413			12,323		0.7		%

PRESENTATION OF ADJUSTED NET INCOME, ADJUSTED INCOME TAXES AND EARNINGS PER SHARE (1)


	THREE MONTHS ENDED

	Amounts							Percent of Sales
	April 27,		April 28,		% Over			April 27,		April 28,
	2014		2013		(Under)			2014		2013


Income before income taxes (see above)	$	4,120		5,863	(29.7	)	%	5.6	%	8.3	%

Adjusted Income taxes (2)*		725		833	(13.0	)	%	17.6	%	14.2	%
Adjusted net income		3,395		5,030	(32.5	)	%	4.6	%	7.1	%

Adjusted net income per share-basic	$	0.28	$	0.42	(33.3	)	%
Adjusted net income per share-diluted	$	0.27	$	0.41	(34.1	)	%
Average shares outstanding-basic		12,188		12,102	0.7		%
Average shares outstanding-diluted		12,413		12,323	0.7		%

(1) Culp, Inc. currently does not incur cash income tax expense in the U.S. due to its $45.7 million in net operating loss carryforwards. Therefore,

adjusted net income is calculated using only income tax expense for our subsidiaries located in Canada and China. See reconciliation on page 10 of 10.

(2) Represents estimated income tax expense for our subsidiaries located in Canada and China. See reconciliation on page 10 of 10.

* Percent of sales column for income taxes is calculated as a % of income before income taxes.

Exhibit 99(b)

Page 2 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE

CONSOLIDATED STATEMENTS OF NET INCOME

FOR THE TWELVE MONTHS ENDED APRIL 27, 2014 AND APRIL 28, 2013

(UNAUDITED)

(Amounts in Thousands, Except for Per Share Data)

	TWELVE MONTHS ENDED

	Amounts									Percent of Sales
	April 27,			April 28,			% Over			April 27,			April 28,
	2014			2013			(Under)			2014			2013

Net sales	$	287,162			268,814		6.8		%	100.0		%	100.0		%
Cost of sales		238,256			219,284		8.7		%	83.0		%	81.6		%
Gross profit		48,906			49,530		(1.3	)	%	17.0		%	18.4		%

Selling, general and
administrative expenses		28,657			28,445		0.7		%	10.0		%	10.6		%
Income from operations		20,249			21,085		(4.0	)	%	7.1		%	7.8		%

Interest expense		427			632		(32.4	)	%	0.1		%	0.2		%
Interest income		(482	)		(419	)	15.0		%	(0.2	)	%	(0.2	)	%
Other expense		1,261			583		116.3		%	0.4		%	0.2		%
Income before income taxes		19,043			20,289		(6.1	)	%	6.6		%	7.5		%

Income taxes*		1,596			1,972		(19.1	)	%	8.4		%	9.7		%
Net income	$	17,447			18,317		(4.7	)	%	6.1		%	6.8		%

Net income per share-basic	$	1.43		$	1.50		(4.7	)	%
Net income per share-diluted	$	1.41		$	1.47		(4.1	)	%
Average shares outstanding-basic		12,177			12,235		(0.5	)	%
Average shares outstanding-diluted		12,414			12,450		(0.3	)	%




PRESENTATION OF ADJUSTED NET INCOME, ADJUSTED INCOME TAXES AND EARNINGS PER SHARE (1)


	TWELVE MONTHS ENDED

	Amounts									Percent of Sales
	April 27,			April 28,			% Over			April 27,			April 28,
	2014			2013			(Under)			2014			2013


Income before income taxes (see above)	$	19,043			20,289		(6.1	)	%	6.6		%	7.5		%

Adjusted Income taxes (2)*		3,352			2,881		16.3		%	17.6		%	14.2		%
Adjusted net income		15,691			17,408		(9.9	)	%	5.5		%	6.5		%

Adjusted net income per share-basic	$	1.29		$	1.42		(9.2	)	%
Adjusted net income per share-diluted	$	1.26		$	1.40		(10.0	)	%
Average shares outstanding-basic		12,177			12,235		(0.5	)	%
Average shares outstanding-diluted		12,414			12,450		(0.3	)	%

(1) Culp, Inc. currently does not incur cash income tax expense in the U.S. due to its $45.7 million in net operating loss carryforwards. Therefore,
adjusted net income is calculated using only income tax expense for our subsidiaries located in Canada and China. See reconciliation on page 10 of 10.

(2) Represents estimated income tax expense for our subsidiaries located in Canada and China. See reconciliation on page 10 of 10.

* Percent of sales column for income taxes is calculated as a % of income before income taxes.

Exhibit 99(b)

Page 3 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE

CONSOLIDATED BALANCE SHEETS

APRIL 27, 2014 AND April 28, 2013

Unaudited

(Amounts in Thousands)

	Amounts				Increase
	April 27,		* April 28,		(Decrease)
	2014		2013		Dollars			Percent

Current assets
Cash and cash equivalents	$	29,303	$	23,530		5,773			24.5		%
Short-term investments		6,294		5,286		1,008			19.1		%
Accounts receivable		27,409		23,392		4,017			17.2		%
Inventories		40,674		38,418		2,256			5.9		%
Deferred income taxes		6,230		7,709		(1,479	)		(19.2	)	%
Income taxes receivable		121		318		(197	)		(61.9	)	%
Other current assets		2,344		2,093		251			12.0		%
Total current assets		112,375		100,746		11,629			11.5		%

Property, plant and equipment, net		31,376		30,594		782			2.6		%
Goodwill		11,462		11,462		-			0.0		%
Deferred income taxes		2,040		753		1,287			170.9		%
Long-term investments		765		-		765			100.0		%
Other assets		2,917		1,151		1,766			153.4		%

Total assets	$	160,935	$	144,706		16,229			11.2		%



Current liabilities
Current maturities of long-term debt	$	2,200	$	2,200		-			0.0		%
Line of credit		-		561		(561	)		(100.0	)	%
Accounts payable - trade		26,686		22,357		4,329			19.4		%
Accounts payable - capital expenditures		277		225		52			23.1		%
Accrued expenses		9,181		11,829		(2,648	)		(22.4	)	%
Income taxes payable - current		442		285		157			55.1		%
Total current liabilities		38,786		37,457		1,329			3.5		%

Income taxes payable - long-term		3,962		4,191		(229	)		(5.5	)	%
Deferred income taxes		1,013		3,075		(2,062	)		(67.1	)	%
Line of credit		586		-		586			100.0		%
Deferred compensation		2,644		-		2,644			100.0		%
Long-term debt, less current maturities		2,200		4,400		(2,200	)		(50.0	)	%

Total liabilities		49,191		49,123		68			0.1		%

Shareholders' equity		111,744		95,583		16,161			16.9		%

Total liabilities and shareholders' equity	$	160,935	$	144,706		16,229			11.2		%

Shares outstanding		12,250		12,225		25			0.2		%


* Derived from audited financial statements

Exhibit 99(b)

Page 4 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE TWELVE MONTHS ENDED APRIL 27, 2014 AND APRIL 28, 2013

Unaudited

(Amounts in Thousands)

	TWELVE MONTHS ENDED

	Amounts
	April 27,			April 28,
	2014			2013

Cash flows from operating activities:
Net income	$	17,447		$	18,317
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation		5,312			5,115
Amortization of other assets		169			235
Stock-based compensation		710			562
Excess tax benefit related to stock-based compensation		(143	)		(76	)
Deferred income taxes		(1,727	)		(344	)
Gain on sale of equipment		(283	)		-
Foreign currency exchange losses		626			222
Changes in assets and liabilities, net of effects of acquisition of assets:
Accounts receivable		(3,857	)		1,667
Inventories		(2,200	)		(1,979	)
Other current assets		(270	)		(49	)
Other assets		(72	)		(176	)
Accounts payable-trade		4,131			(8,384	)
Accrued expenses and deferred compensation		34			2,531
Accrued restructuring		-			(40	)
Income taxes		342			(526	)
Net cash provided by operating activities		20,219			17,075

Cash flows from investing activities:
Capital expenditures		(5,258	)		(4,400	)
Net cash paid for acquisition of assets		(2,640	)		-
Proceeds from the sale of equipment		407			-
Proceeds from life insurance policies		-			716
Payments on life insurance policies		(30	)		(19	)
Purchase of short-term investments		(1,945	)		(105	)
Purchase of long-term investments		(765	)		-
Proceeds from the sale of short-term investments		810			795
Net cash used in investing activities		(9,421	)		(3,013	)

Cash flows from financing activities:
Proceeds from lines of credit		-			1,000
Payments on lines of credit		-			(1,325	)
Payments on long-term debt		(2,200	)		(2,515	)
Proceeds from common stock issued		194			205
Common stock shares repurchased		-			(5,022	)
Dividends paid		(2,204	)		(7,593	)
Debt issance costs		(83	)		-
Excess tax benefit related to stock-based compensation		143			76
Net cash used in financing activities		(4,150	)		(15,174	)

Effect of exchange rate changes on cash and cash equivalents		(875	)		(381	)

Increase (decrease) in cash and cash equivalents		5,773			(1,493	)

Cash and cash equivalents at beginning of period		23,530			25,023

Cash and cash equivalents at end of period	$	29,303		$	23,530


Free Cash Flow (1)	$	13,841		$	13,067


(1)		Free Cash Flow reconciliation is as follows:
			FY 2014			FY 2013
A	)	Net cash provided by operating activities	$	20,219		$	17,075
B	)	Minus: Capital Expenditures		(5,258	)		(4,400	)
C	)	Add: Proceeds from the sale of equipment		407			-
D	)	Add: Proceeds from life insurance policies		-			716
E	)	Minus: Payments on life insurance policies		(30	)		(19	)
F	)	Add: Excess tax benefit related to stock-based compensation		143			76
G	)	Minus: Purchase of long-term investments		(765	)		-
H	)	Effect of exchange rate changes on cash and cash equivalents		(875	)		(381	)
			$	13,841		$	13,067

Exhibit 99(b)

Page 5 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE

STATEMENTS OF OPERATIONS BY SEGMENT

FOR THE THREE MONTHS ENDED APRIL 27, 2014 AND APRIL 28, 2013

(Unaudited)

(Amounts in thousands)

	THREE MONTHS ENDED
	Amounts									Percent of Total Sales
	April 27,			April 28,			% Over			April 27,			April 28,
Net Sales by Segment	2014			2013			(Under)			2014			2013

Mattress Fabrics	$	43,669			40,839		6.9		%	59.0		%	58.0		%
Upholstery Fabrics		30,374			29,536		2.8		%	41.0		%	42.0		%

Net Sales	$	74,043			70,375		5.2		%	100.0		%	100.0		%


Gross Profit by Segment										Gross Profit Margin

Mattress Fabrics	$	7,165			7,837		(8.6	)	%	16.4		%	19.2		%
Upholstery Fabrics		4,596			5,011		(8.3	)	%	15.1		%	17.0		%
Gross Profit	$	11,761			12,848		(8.5	)	%	15.9		%	18.3		%



Selling, General and Administrative Expenses by Segment										Percent of Sales

Mattress Fabrics	$	2,683			2,449		9.6		%	6.1		%	6.0		%
Upholstery Fabrics		3,385			3,173		6.7		%	11.1		%	10.7		%
Unallocated Corporate expenses		1,249			1,150		8.6		%	1.7		%	1.6		%
Selling, General and Administrative Expenses	$	7,317			6,772		8.0		%	9.9		%	9.6		%


Operating Income (loss) by Segment										Operating Income (Loss) Margin

Mattress Fabrics	$	4,482			5,388		(16.8	)	%	10.3		%	13.2		%
Upholstery Fabrics		1,211			1,838		(34.1	)	%	4.0		%	6.2		%
Unallocated corporate expenses		(1,249	)		(1,150	)	8.6		%	(1.7	)	%	(1.6	)	%
Operating income	$	4,444			6,076		(26.9	)	%	6.0		%	8.6		%


Depreciation by Segment

Mattress Fabrics	$	1,184			1,143		3.6		%
Upholstery Fabrics		164			154		6.5		%
Depreciation	$	1,348			1,297		3.9		%

Exhibit 99(b)

Page 6 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE

STATEMENTS OF OPERATIONS BY SEGMENT

FOR THE TWELVE MONTHS ENDED APRIL 27, 2014 AND APRIL 28, 2013

(Unaudited)

(Amounts in thousands)

	TWELVE MONTHS ENDED
	Amounts										Percent of Total Sales
	April 27,			April 28,			% Over				April 27,				April 28,
Net Sales by Segment	2014			2013			(Under)				2014				2013

Mattress Fabrics	$	160,705			154,014			4.3		%		56.0		%		57.3		%
Upholstery Fabrics		126,457			114,800			10.2		%		44.0		%		42.7		%

Net Sales	$	287,162			268,814			6.8		%		100.0		%		100.0		%


Gross Profit by Segment											Gross Profit Margin

Mattress Fabrics	$	27,477			29,546			(7.0	)	%		17.1		%		19.2		%
Upholstery Fabrics		21,429			19,984			7.2		%		16.9		%		17.4		%
Gross Profit	$	48,906			49,530			(1.3	)	%		17.0		%		18.4		%


Selling, General and Administrative Expenses by Segment											Percent of Sales

Mattress Fabrics	$	9,962			9,646			3.3		%		6.2		%		6.3		%
Upholstery Fabrics		13,393			13,031			2.8		%		10.6		%		11.4		%
Unallocated Corporate expenses		5,302			5,768			(8.1	)	%		1.8		%		2.1		%
Selling, General, and Administrative Expenses	$	28,657			28,445			0.7		%		10.0		%		10.6		%


Operating Income (loss) by Segment											Operating Income (Loss) Margin

Mattress Fabrics	$	17,515			19,900			(12.0	)	%		10.9		%		12.9		%
Upholstery Fabrics		8,036			6,953			15.6		%		6.4		%		6.1		%
Unallocated corporate expenses		(5,302	)		(5,768	)		(8.1	)	%		(1.8	)	%		(2.1	)	%
Operating income	$	20,249			21,085			(4.0	)	%		7.1		%		7.8		%


Return on Capital (1)

Mattress Fabrics		29.3	%		35.6	%
Upholstery Fabrics		40.7	%		40.4	%
Unallocated Corporate		N/A			N/A
Consolidated		26.2	%		29.4	%

Capital Employed (2)

Mattress Fabrics		62,457			57,950			7.8		%
Upholstery Fabrics		17,419			17,313			0.6		%
Unallocated Corporate		(2,482	)		(2,564	)		N/A
Consolidated		77,394			72,699			6.5		%


Depreciation by Segment

Mattress Fabrics	$	4,694			4,487			4.6		%
Upholstery Fabrics		618			628			(1.6	)	%
Depreciation	$	5,312			5,115			3.9		%


Notes:

(1) See pages 8 and 9 of this financial information release for calculations.

(2) The capital employed balances are as of April 27, 2014 and April 28, 2013.

Exhibit 99(b)

Page 7 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE

CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA

FOR THE TWELVE MONTHS ENDED APRIL 27, 2014 AND APRIL 28, 2013

(UNAUDITED)

(AMOUNTS IN THOUSANDS)



	Quarter Ended
												Trailing 12
												Months
	7/28/2013		10/27/2013			1/26/2014			4/27/2014			4/27/2014

Net income	$	3,230	$	3,096		$	8,381		$	2,740		$	17,447
Income taxes		2,305		1,718			(3,807	)		1,380			1,596
Interest expense (income), net		48		(3	)		(57	)		(43	)		(55	)
Depreciation and amortization expense		1,344		1,373			1,370			1,394			5,481
Stock based compensation		152		224			175			159			710
Adjusted EBITDA	$	7,079	$	6,408		$	6,062		$	5,630		$	25,179



	Quarter Ended
												Trailing 12
												Months
	7/29/2012			10/28/2012		1/27/2013			4/28/2013			4/28/2013

Net income	$	3,524	$	8,268		$	2,823		$	3,702		$	18,317
Income taxes		1,848		(3,736	)		1,700			2,160			1,972
Interest expense, net		63		60			40			50			213
Depreciation and amortization expense		1,314		1,344			1,338			1,354			5,350
Stock based compensation		70		127			111			254			562
Adjusted EBITDA	$	6,819	$	6,063		$	6,012		$	7,520		$	26,414

Exhibit 99(b)

Page 8 of 10

	CULP, INC. FINANCIAL INFORMATION RELEASE
	RETURN ON CAPITAL EMPLOYED BY SEGMENT
	FOR THE TWELVE MONTHS ENDED APRIL 27, 2014
	(Amounts in Thousands)
	(Unaudited)

	Operating Income
	Twelve Months			Average			Return on
	Ended			Capital			Avg. Capital
	April 27, 2014 (1)			Employed (3)			Employed (2)

Mattress Fabrics	$	17,515		$	59,728			29.3	%
Upholstery Fabrics		8,036			19,760			40.7	%
(less: Unallocated Corporate)		(5,302	)		(2,329	)		N/A
Total	$	20,249		$	77,159			26.2	%

Average Capital Employed	As of the three Months Ended April 27, 2014												As of the three Months Ended January 26, 2014												As of the three Months Ended October 27, 2013
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total

Total assets		79,055			34,987			46,893			160,935			78,503			37,147			41,028			156,678			79,444			35,881			40,917			156,242
Total liabilities		(16,598	)		(17,568	)		(15,025	)		(49,191	)		(18,804	)		(13,589	)		(14,842	)		(47,235	)		(20,500	)		(15,581	)		(18,646	)		(54,727	)

Subtotal	$	62,457		$	17,419		$	31,868		$	111,744		$	59,699		$	23,558		$	26,186		$	109,443		$	58,944		$	20,300		$	22,271		$	101,515
Less:
Cash and cash equivalents		-			-			(29,303	)		(29,303	)		-			-			(23,293	)		(23,293	)		-			-			(24,267	)		(24,267	)
Short-term investments		-			-			(6,294	)		(6,294	)		-			-			(7,077	)		(7,077	)		-			-			(6,220	)		(6,220	)
Long-term investments		-			-			(765	)		(765	)		-			-			-			-			-			-			-			-
Income taxes receivable		-			-			(121	)		(121	)		-			-			-			-			-			-			-			-
Deferred income taxes - current		-			-			(6,230	)		(6,230	)		-			-			(7,503	)		(7,503	)		-			-			(7,745	)		(7,745	)
Deferred income taxes - non-current		-			-			(2,040	)		(2,040	)		-			-			(1,227	)		(1,227	)		-			-			(661	)		(661	)
Current maturities of long-term debt		-			-			2,200			2,200			-			-			2,200			2,200			-			-			2,200			2,200
Line of credit		-			-			586			586			-			-			573			573			-			-			585			585
Income taxes payable - current		-			-			442			442			-			-			130			130			-			-			304			304
Income taxes payable - long-term		-			-			3,962			3,962			-			-			3,953			3,953			-			-			4,141			4,141
Deferred income taxes - non-current		-			-			1,013			1,013			-			-			945			945			-			-			5,016			5,016
Long-term debt, less current maturities		-			-			2,200			2,200			-			-			2,200			2,200			-			-			2,200			2,200

Total Capital Employed	$	62,457		$	17,419		$	(2,482	)	$	77,394		$	59,699		$	23,558		$	(2,913	)	$	80,344		$	58,944		$	20,300		$	(2,176	)	$	77,068


	As of the three Months Ended July 28, 2013												As of the three Months Ended April 28, 2013
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total

Total assets		78,217			34,381			38,503			151,101			73,954			30,995			39,757			144,706
Total liabilities		(18,627	)		(14,172	)		(19,717	)		(52,516	)		(16,004	)		(13,682	)		(19,437	)		(49,123	)

Subtotal	$	59,590		$	20,209		$	18,786		$	98,585		$	57,950		$	17,313		$	20,320		$	95,583
Less:
Cash and cash equivalents		-			-			(21,423	)		(21,423	)		-			-			(23,530	)		(23,530	)
Short-term investments		-			-			(6,174	)		(6,174	)		-			-			(5,286	)		(5,286	)
Long-term investments		-			-			-			-			-			-			-			-
Income taxes receivable		-			-			(292	)		(292	)		-			-			(318	)		(318	)
Deferred income taxes - current		-			-			(7,747	)		(7,747	)		-			-			(7,709	)		(7,709	)
Deferred income taxes - non-current		-			-			(651	)		(651	)		-			-			(753	)		(753	)
Current maturities of long-term debt		-			-			2,200			2,200			-			-			2,200			2,200
Line of credit		-			-			560			560									561			561
Income taxes payable - current		-			-			320			320			-			-			285			285
Income taxes payable - long-term		-			-			4,176			4,176			-			-			4,191			4,191
Deferred income taxes - non-current		-			-			4,335			4,335			-			-			3,075			3,075
Long-term debt, less current maturities		-			-			4,400			4,400			-			-			4,400			4,400

Total Capital Employed	$	59,590		$	20,209		$	(1,510	)	$	78,289		$	57,950		$	17,313		$	(2,564	)	$	72,699


	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total

Average Capital Employed (3)	$	59,728		$	19,760		$	(2,329	)	$	77,159

Notes:
(1) See reconciliation per page 6 of this financial information release.

(2) Return on average capital employed represents operating income for fiscal 2014 divided by average capital employed.
Average capital employed does not include cash and cash equivalents, short-term investments, long-term investments, long-term debt,
including current maturities, line of credit, current and noncurrent deferred tax assets and liabilities, income taxes payable and income taxes receivable.

(3) Average capital employed was computed using the five periods ending April 27, 2014, January 26, 2014, October 27, 2013, July 28, 2013 and April 28, 2013.

Exhibit 99(b)

Page 9 of 10

	CULP, INC. FINANCIAL INFORMATION RELEASE
	RETURN ON CAPITAL EMPLOYED BY SEGMENT
	FOR THE TWELVE MONTHS ENDED APRIL 28, 2013
	(Amounts in Thousands)
	(Unaudited)

	Operating Income
	Twelve Months			Average			Return on
	Ended			Capital			Avg. Capital
	April 28, 2013 (1)			Employed (3)			Employed (2)

Mattress Fabrics	$	19,900		$	55,947			35.6	%
Upholstery Fabrics		6,953			17,200			40.4	%
(less: Unallocated Corporate)		(5,768	)		(1,524	)		N/A
Total	$	21,085		$	71,623			29.4	%

Average Capital Employed	As of the three Months Ended April 28, 2013												As of the three Months Ended January 27, 2013												As of the three Months Ended October 28, 2012
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total

Total assets		73,954			30,995			39,757			144,706			74,794			33,773			35,230			143,797			74,342			27,240			40,861			142,443
Total liabilities		(16,004	)		(13,682	)		(19,437	)		(49,123	)		(18,824	)		(15,299	)		(17,708	)		(51,831	)		(19,240	)		(10,512	)		(17,303	)		(47,055	)

Subtotal	$	57,950		$	17,313		$	20,320		$	95,583		$	55,970		$	18,474		$	17,522		$	91,966		$	55,102		$	16,728		$	23,558		$	95,388
Less:
Cash and cash equivalents		-			-			(23,530	)		(23,530	)		-			-			(19,489	)		(19,489	)		-			-			(23,464	)		(23,464	)
Short-term investments		-			-			(5,286	)		(5,286	)		-			-			(5,237	)		(5,237	)		-			-			(5,241	)		(5,241	)
Deferred income taxes - current		-			-			(7,709	)		(7,709	)		-			-			(4,098	)		(4,098	)		-			-			(4,470	)		(4,470	)
Income taxes receivable		-			-			(318	)		(318	)		-			-			-			-			-			-			-			-
Deferred income taxes - non-current		-			-			(753	)		(753	)		-			-			(4,172	)		(4,172	)		-			-			(4,738	)		(4,738	)
Current maturities of long-term debt		-			-			2,200			2,200			-			-			2,366			2,366			-			-			2,401			2,401
Line of credit		-			-			561			561			-			-			576			576			-			-			875			875
Income taxes payable - current		-			-			285			285			-			-			395			395			-			-			385			385
Income taxes payable - long-term		-			-			4,191			4,191			-			-			4,195			4,195			-			-			4,188			4,188
Deferred income taxes - non-current		-			-			3,075			3,075			-			-			856			856			-			-			856			856
Long-term debt, less current maturities		-			-			4,400			4,400			-			-			4,400			4,400			-			-			4,416			4,416

Total Capital Employed	$	57,950		$	17,313		$	(2,564	)	$	72,699		$	55,970		$	18,474		$	(2,686	)	$	71,758		$	55,102		$	16,728		$	(1,234	)	$	70,596


	As of the three Months Ended July 29, 2012												As of the three Months Ended April 29, 2012
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total

Total assets		78,098			29,973			35,089			143,160			71,563			33,641			39,512			144,716
Total liabilities		(21,295	)		(11,006	)		(19,028	)		(51,329	)		(17,653	)		(19,123	)		(18,940	)		(55,716	)

Subtotal	$	56,803		$	18,967		$	16,061		$	91,831		$	53,910		$	14,518		$	20,572		$	89,000
Less:
Cash and cash equivalents		-			-			(21,889	)		(21,889	)		-			-			(25,023	)		(25,023	)
Short-term investments		-			-			(5,200	)		(5,200	)								(5,941	)		(5,941	)
Deferred income taxes - current		-			-			(2,337	)		(2,337	)		-			-			(2,467	)		(2,467	)
Deferred income taxes - non-current		-			-			(2,715	)		(2,715	)		-			-			(3,205	)		(3,205	)
Current maturities of long-term debt		-			-			2,400			2,400			-			-			2,404			2,404
Line of credit		-			-			834			834			-			-			889			889
Income taxes payable - current		-			-			751			751			-			-			642			642
Income taxes payable - long-term		-			-			4,131			4,131			-			-			4,164			4,164
Deferred income taxes - non-current		-			-			705			705			-			-			705			705
Long-term debt, less current maturities		-			-			6,666			6,666			-			-			6,719			6,719

Total Capital Employed	$	56,803		$	18,967		$	(593	)	$	75,177		$	53,910		$	14,518		$	(541	)	$	67,887


	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total

Average Capital Employed (3)	$	55,947		$	17,200		$	(1,524	)	$	71,623

Notes:
(1) Operating income excludes restructuring and related charges--see reconciliation per page 6 of this financial information release.

(2) Return on average capital employed represents operating income for fiscal 2013 divided by average capital employed.
Average capital employed does not include cash and cash equivalents, short-term investments, long-term debt, including current maturities,
line of credit, current and noncurrent deferred tax assets and liabilities, income taxes payable, and income taxes receivable.

(3) Average capital employed was computed using the five periods ending April 28, 2013, January 27, 2013, October 28, 2012, July 29, 2012, and April 29, 2012.

Exhibit 99(b)

Page 10 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE

CONSOLIDATED ADJUSTED EFFECTIVE INCOME TAX RATE, NET INCOME AND EARNINGS PER SHARE

FOR THE TWELVE MONTHS ENDED APRIL 27, 2014 AND APRIL 28, 2013

Unaudited

(Amounts in Thousands)






		TWELVE MONTHS ENDED

		Amounts
		April 27,		April 28,
		2014		2013


Consolidated Effective GAAP Income Tax Rate	(1)	8.4	%	9.7	%

Reduction of U.S. Valuation Allowance		-		59.7	%

Undistributed earnings from foreign subsidiaries		26.3	%	(34.6)	%

Non-Cash U.S. Income Tax Expense		(17.1)	%	(19.3)	%

Non-Cash Foreign Income Tax Expense		-		(1.3)	%

Consolidated Adjusted Effective Income Tax Rate	(2)	17.6	%	14.2	%




	THREE MONTHS ENDED
	As reported					April 27, 2014		As reported					April 28, 2013
	April 27,					Proforma Net		April 28,					Proforma Net
	2014		Adjustments			of Adjustments		2013		Adjustments			of Adjustments

Income before income taxes	$	4,120	$	-		$	4,120	$	5,863				$	5,863

Income taxes (3)		1,380	$	(655	)		725		2,161	$	(1,328	)		833
Net income	$	2,740	$	655		$	3,395	$	3,702	$	1,328		$	5,030

Net income per share-basic	$	0.22	$	(0.05	)	$	0.28	$	0.31	$	(0.11	)	$	0.42
Net income per share-diluted	$	0.22	$	(0.05	)	$	0.27	$	0.30	$	(0.11	)	$	0.41
Average shares outstanding-basic		12,188		12,188			12,188		12,102		12,102			12,102
Average shares outstanding-diluted		12,413		12,413			12,413		12,323		12,323			12,323



	TWELVE MONTHS ENDED
	As reported					April 27, 2014		As reported					April 28, 2013
	April 27,					Proforma Net		April 28,					Proforma Net
		2014	Adjustments			of Adjustments			2013	Adjustments			of Adjustments

Income before income taxes	$	19,043	$	-		$	19,043	$	20,289	$	-		$	20,289

Income taxes (3)		1,596	$	1,756			3,352		1,972	$	909			2,881
Net income	$	17,447	$	(1,756	)	$	15,691	$	18,317	$	(909	)	$	17,408

Net income per share-basic	$	1.43	$	0.14		$	1.29	$	1.50	$	0.07		$	1.42
Net income per share-diluted	$	1.41	$	0.14		$	1.26	$	1.47	$	0.07		$	1.40
Average shares outstanding-basic		12,177		12,177			12,177		12,235		12,235			12,235
Average shares outstanding-diluted		12,414		12,414			12,414		12,450		12,450			12,450


(1) Calculated by dividing consolidated income tax expense by
consolidated income before income taxes.

(2) Represents estimated cash income tax expense for our subsidiaries located
in Canada and China divided by consolidated income before income taxes.

(3) Proforma income taxes calculated using the Consolidated Adjusted Effective Income Tax Rate as reflected above.

Attached files

Stock widget

Investing forum

CULP INC Reports