Culp, Inc. (CFI) has reported an 18.67 percent rise in profit for the quarter ended Oct. 30, 2016. The company has earned $4.48 million, or $0.36 a share in the quarter, compared with $3.77 million, or $0.30 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $5.88 million, or $0.47 a share compared with $5.18 million or $0.41 a share, a year ago.
Revenue during the quarter went down marginally by 2.10 percent to $75.34 million from $76.96 million in the previous year period. Gross margin for the quarter expanded 199 basis points over the previous year period to 22.43 percent. Total expenses were 90.31 percent of quarterly revenues, down from 91.81 percent for the same period last year. This has led to an improvement of 150 basis points in operating margin to 9.69 percent.
Operating income for the quarter was $7.30 million, compared with $6.30 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $9.82 million compared with $8.82 million in the prior year period. At the same time, adjusted EBITDA margin improved 157 basis points in the quarter to 13.03 percent from 11.46 percent in the last year period.
Commenting on the results, Frank Saxon, president and chief executive officer of Culp, Inc., said, "Overall, our second quarter sales were slightly lower than the same quarter of last year, reflecting softness in the retail market for home furnishings. However, in spite of lower sales, we are pleased with the strong operating performance in both businesses, excellent free cash flow and high returns on capital. We have continued to drive product innovation and creativity and leverage the strength of our efficient manufacturing platform with favorable results. We have also realized the benefits of our recent capital improvement projects in the mattress fabrics business. Importantly, we have the financial strength to continue to make the strategic investments to enhance our operations and support our growth objectives."
Operating cash flow improves significantly
Culp, Inc. has generated cash of $16.60 million from operating activities during the first half, up 48.18 percent or $5.40 million, when compared with the last year period.
The company has spent $36.31 million cash to meet investing activities during the first six months as against cash outgo of $2.33 million in the last year period.
The company has spent $4.13 million cash to carry out financing activities during the first six months as against cash outgo of $7.70 million in the last year period.
Cash and cash equivalents stood at $13.91 million as on Oct. 30, 2016, down 55.38 percent or $17.27 million from $31.18 million on Nov. 01, 2015.
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