4Q21 Update: Revenues Surge



KEY POINTS
  • Culp issued its Fiscal Year 2021 Fourth Quarter earnings report shortly after the market close of Wednesday, June 16, 2021. It also released its 4Q21 earnings presentation soon after that and conducted its earnings conference call the following morning at 11 am Eastern Time.
  • Consolidated 4Q21 revenues surged higher by ~67% YOY to $79.1 million. Sales for Culp Home Fashions (CHF), its mattress fabric segment, grew by ~84%, and revenues for Culp Upholstery Fabric (CUF) grew by 50% YOY.
  • 4Q21 operating income (income from operations) improved to $1.64 million versus an $18.0 million loss in 4Q20. 4Q20 included a $13.7 million pre-tax, non-cash impairment charge to continuing operations (not discontinued operations) for the remaining balance sheet goodwill and some intangible assets.
  • 4Q21 net income (GAAP) was ~$1.49 million, $0.12 per share. Adjusting (a) 4Q21 for the after-tax effect of a “bargain purchase” for the buy-out of its Haitian joint venture partner and certain other tax adjustments and (b) 4Q20 for the taxed-effect of the $13.7 million impairment, 4Q21 diluted adjusted EPS (non-GAAP) from continuing operations was $0.11 versus ($0.43) in 4Q20.
  • The improvement in Culp’s operations was also evident in its financial condition. Net cash at quarter-end was $46.9 million versus $51.8 million at 3Q21 end and $38.7 million at the end of FY20. Culp currently has no outstanding debt. In this report we show summary table of 4Q21 versus F4Q20.
  • Management provided an outlook for 1Q22 (ending 8/1/21). It expects consolidated revenues to grow by ~20% (CUF modestly better than CHF). It also expects operating income in the first quarter to be “significantly improved” as compared both to 4Q21 and to 1Q21. For all of FY22, management expects net sales to “continue increasing moderately and consolidated operating income to increase significantly as compared to fiscal 2021.” Our estimates for 1Q22 and all of FY22 are discussed and shown in this report.
  • The release also announced that Culp’s board of directors also declared its $0.11 quarterly dividend and reinstated its previously suspended share repurchase programs, with the entire $5.0 million authorization still available.

SNAPSHOT: 4Q21 VS. 4Q20

Source: CULP Filings;  Water Tower Research

Culp issued its Fiscal Year 2021 Fourth Quarter earnings report shortly after the market close of Wednesday, June 16, 2021. It also released its 4Q21 earnings presentation soon after that and conducted its earnings conference call the following morning at 11 am Eastern Time.

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