Culp, Inc. is to expand the footprint of its Class sewn cover operations in Haiti and Asia during the second half of fiscal 2020 as it looks to recover from the turmoil of the influx of Chinese imports and the subsequent anti-dumping measures. With the company’s Mattress Fabrics Segment reporting a 4.7 per cent drop in second quarter sales to $35.5 mn, Culp said that while demand was softer in its legacy mattress fabrics business, it experienced very favorable demand trends for mattress covers from customers in the popular and expanding boxed bedding space
“CLASS, our sewn mattress cover business, delivered an exceptionally strong performance for the second quarter, and we are optimistic about additional opportunities with existing and new customers,” said Iv Culp, President and Chief Operating Officer of Culp. “Our robust supply platform for covers, including our production locations in the U.S., Haiti, and Asia, supports diversification and creates a strong competitive advantage for Culp, with the versatility and scalability necessary to serve our customers in an expanding global environment.
“We delivered an improved operating performance for the second quarter despite the modest decline in sales. Our recent investments in infrastructure and our focused efforts to rationalize both fabric and sewn cover production in the most cost-effective locations improved our operating efficiency. We also benefited from more favorable raw material prices compared with the second quarter last year.
Looking ahead, Culp said it was well positioned in the marketplace, especially as conditions improve from the continued decline in China mattress imports and a more stable demand environment for legacy customers.
“We are meeting the changing demands of our customers with creative designs, innovative products, and an efficient global platform with the critical abilities to provide vertical product offerings from fabrics to sewn covers,” Culp said. “We also intend to expand the footprint of our Class sewn cover operations in Haiti and Asia during the second half of fiscal 2020, giving us further flexibility and capacity for serving the needs of our customers in the boxed bedding space.”
Overall, net sales were $72.6 mn, down 5.7 per cent over the prior year with pre-tax income slipping to $4.1 mn, compared with $4.3 mn for the prior-year period. Net income attributable to Culp, Inc. shareholders was $2.3 mn, or $0.19 per diluted share, compared with net income of $2.9 mn, or $0.23 per diluted share, in the prior-year period.
