US circular knitter Culp Inc. has reported a drop in net income for its first quarter, hurt by a significant increase of low-cost imported mattresses from China. For the first quarter ended July 29, 2018, net sales were $71.5 mn, compared with $79.5 mn a year ago while net income was $957,000, or $0.08 per diluted share, compared with net income of $5.0 mn the previous year. Mattress fabric sales for the first quarter were $37.0 mn, compared with $48.4 mn for the first quarter of fiscal 2018.
“As expected, our sales for the first quarter reflect the significant disruptions and uncertainties surrounding the mattress industry compared with market conditions a year ago,” said Iv Culp, President of Culp’s mattress fabrics division. “We have continued to face very soft demand trends related to the rapid growth of low-cost imported mattresses from China. The influx of these products has significantly disrupted the domestic mattress business and affected many of our customers.” Culp also noted that as a leader in mattress fabrics and sewn covers, the company felt a disproportionate impact with reduced orders from its major customers during the first quarter.
“In addition, ongoing changes with a large mattress retailer have created more uncertainty throughout the mattress industry supply chain, which affected our distribution. Despite these challenges, we continued to see consistent placements with our customers, and we have strong, established customer relationships and expect to see our business normalize as market conditions improve.” Meanwhile, Culp’s company’s board of Directors has approved changes in the executive management structure of the company, effective October 1, 2018.
Robert G. (Rob) Culp, III, one of the company’s founders, will remain as Chairman of the Board, but he will change his role to become less involved in the day to day management of the company. He will continue in his role as a strategic advisor and remain involved in customer and home furnishings industry relationships.
Franklin N. Saxon, President and Chief Executive Officer of Culp, Inc., will assume the additional role of Vice Chairman of the board of Directors. Saxon joined the company in 1983 and has been a member of the board since 1987. He has served as President and Chief Executive Officer since 2007.
Robert G. (Iv) Culp, IV, President of Culp Home Fashions, the company’s mattress fabrics division, has been named Chief Operating Officer. He will assume expanded responsibilities for overseeing the operations of all the company’s businesses, in addition to his continued leadership of Culp Home Fashions.
“I have been very fortunate to serve this company since the day it opened,” Culp III said. “At the same time, I am happy to have the opportunity to turn more of the daily management of the firm over to others, and I have complete confidence in their ability to keep Culp, Inc. on a successful trajectory. These changes are part of a natural evolution for the company’s leadership. The entire board is excited about the energy and vision of our leadership team. I look forward to participating with them in the company’s continued success.”
