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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
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Date of Report (Date of earliest event reported) May 12, 2004
CULP, INC.
(Exact name of registrant as specified in its charter)
North Carolina 0-12781 56-1001967
(State or other jurisdiction of (Commission File No.) (IRS Employer
incorporation) Identification No.)
101 South Main Street
High Point, North Carolina 27260
(Address of principal executive offices)
(336) 889-5161
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
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Item 7 -- Exhibits
Exhibit 99 - News Release dated May 12, 2004
Item 12 - Results of Operations and Financial Condition
On May 12, 2004, the Registrant issued a press release to disclose management's
estimates of its earnings for the fourth quarter of the Registrant's fiscal year
that ended May 2, 2004. The press release is attached hereto as Exhibit 99 and
is incorporated herein by reference.
The press release contains management's estimate of earnings per share excluding
a credit to restructuring reserves to be reported in mid-June, which is a
non-GAAP performance measure that management believes provides investors with a
more accurate picture of the results of the Registrant's operations for
comparative purposes. Management uses this performance measure to assess its
progress toward internal operating goals. Also, earnings per share excluding
restructuring and related charges and credits is the performance measure used
internally by the Registrant to set benchmarks to determine the payment and
levels of bonuses for senior management.
Forward Looking Information
This report contains statements that may be deemed "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 27A 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. 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 the company's future operations, production
levels, sales, expenses, profit margins, earnings or other performance measures.
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 the company's 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 the company adversely. In addition, strengthening of the U.S. dollar
against other currencies could make the company's products less competitive on
the basis of price in markets outside the United States. Also, economic and
political instability in international areas could affect the company's
operations or sources of goods in those areas. Other risk factors that could
have an impact on the company's activities in China include uncertainties in
connection with operating in a geographic area and business culture where the
company does not have extensive experience, foreign language barriers, potential
delays caused by the distance between the China operations and the company's
traditional geographic base and similar risks associated with establishing
business operations in a remote and unfamiliar location. Other factors that
could affect the matters discussed in forward-looking statements are included in
the company's periodic reports filed with the Securities and Exchange
Commission.
Exhibit 99
NEWS RELEASE
Investor Contact: Kathy J. Hardy Media Contact: Kenneth M. Ludwig
Corporate Secretary Senior Vice President,
336-888-6209 Human Resources
336-889-5161
CULP ANNOUNCES PRELIMINARY FOURTH QUARTER RESULTS
HIGH POINT, NC (May 12, 2004) - Culp, Inc. (NYSE:CFI) today announced that,
based on preliminary information and estimates, it expects earnings for the
fourth fiscal quarter ended May 2, 2004, to be in the range of $0.27 to $0.30
per diluted share. The results for the fourth fiscal quarter will include a
credit of approximately $0.03 per diluted share related to the company's
restructuring reserves. Excluding this amount, the company expects earnings for
the quarter to be approximately $0.24 to $0.27 per diluted share. These
projected results are lower than the company's previously announced expectation
of $0.31 to $0.35 per diluted share for the period.
Commenting on the announcement, Robert G. Culp, III, chairman and chief
executive officer of Culp, Inc., said, "Our preliminary results for the fourth
fiscal quarter primarily reflect weaker-than-expected demand for upholstery
fabrics. The slowdown in orders in this segment is attributed to both the
current consumer preference for leather and suede furniture and to more
competition from imported fabrics, mostly from Asia. While sales in our mattress
ticking segment have continued to trend higher, our consolidated sales for the
quarter were lower than anticipated.
"Our results for fiscal 2004 will show improvement in our mattress ticking
business as well as considerable progress in strengthening our balance sheet,"
Culp continued. "Mattress ticking sales have continued to be a key driver of our
profitability, with sales up nearly 10.0% for the quarter and over 7.0% for the
fiscal year. We expect the mattress ticking business will continue to contribute
significantly to the company's overall profitability in fiscal 2005. And while
the furniture industry appears to be stabilizing, we anticipate continued
competitive pressure on demand for upholstery fabrics. We are focusing on our
offshore sourcing initiatives, including our China operations, to increase sales
of upholstery fabrics produced outside of the company's U.S. manufacturing
plants.
"Maintaining a strong financial position has been a top priority for fiscal
2004. With the prepayment of $25 million in debt during the third quarter of
fiscal 2004, we have reduced our long-term debt by a total of $86 million over
the past four years. As such, we have considerably strengthened our balance
sheet and have greater financial flexibility to pursue our strategic
initiatives," added Culp.
The company expects to announce financial results for the fourth quarter and
fiscal year ended May 2, 2004, on or about June 16, 2004.
Culp, Inc. is one of the world's largest marketers of upholstery fabrics for
furniture and is a leading marketer of mattress ticking for bedding. The
company's fabrics are used principally in the production of residential and
commercial furniture and bedding products.
This release contains statements that may be deemed "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 27A 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. 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 the company's future operations, production
levels, sales, expenses, profit margins, earnings or other performance measures.
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 the company's 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 the company adversely. In addition, strengthening of the U.S. dollar
against other currencies could make the company's products less competitive on
the basis of price in markets outside the United States. Also, economic and
political instability in international areas could affect the company's
operations or sources of goods in those areas. Other risk factors that could
have an impact on the company's activities in China include uncertainties in
connection with operating in a geographic area and business culture where the
company does not have extensive experience, foreign language barriers, potential
delays caused by the distance between the China operations and the company's
traditional geographic base and similar risks associated with establishing
business operations in a remote and unfamiliar location. Other factors that
could affect the matters discussed in forward-looking statements are included in
the company's periodic reports filed with the Securities and Exchange
Commission.
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