High Point - US circular knitter Culp Inc has benefitted significantly from its acquisition of the remaining fifty per cent ownership interest in its Haiti-based mattress cover facility as well as the recent antidumping duties imposed on mattress imports from seven countries.
Reporting third quarter net sales of US$79.3 million, up 15.8 per cent over the prior-year period, with mattress fabrics sales up 15.1 per cent and upholstery fabrics sales up 16.4 per cent, Culp said that the acquisition had enabled it to increase its flexibility and enhance its capacity to meet growing customer demand.
Net income from continuing operations was $2.1 million, or $0.17 per diluted share, compared with net income from continuing operations of $1.0 million, or $0.08 per diluted share, for the prior-year period.
Sales in the mattress segment were $38.6 million for the third quarter, up from $33.5 million in the third quarter of fiscal 2020.
Sandy Brown, president of the company’s mattress fabrics division said the company was pleased by the strong growth in sales and operating performance for the mattress fabric segment during the third quarter, which is historically the most challenging quarter due to seasonality within the mattress industry.
“Our significant increase in sales compared to the prior-year period, was driven by an ongoing consumer focus on the at-home experience and overall comfort," Brown said. "We also benefitted from market share gains across a diversified group of new and existing customers, including further growth in our sewn mattress cover business and the success of our fabric-to-cover model. Our performance primarily reflects our solid increase in sales, offset somewhat by unfavorable China foreign exchange rate fluctuations for mattress covers and our customers’ supply chain constraints resulting from non-fabric components.
"In addition, we believe the domestic mattress industry and, in turn, our business, began to realize some benefits during the quarter from the preliminary antidumping duties imposed in October 2020 by the U.S. Department of Commerce on mattress imports from seven countries. We are cautiously optimistic that this tailwind will continue during the fourth quarter of fiscal 2021 and beyond.
“We are also excited about our recent strategic investment to acquire the remaining fifty per cent ownership interest in our sewn mattress cover joint venture in Haiti, which was completed at the beginning of the fiscal 2021 fourth quarter. By gaining full ownership of the Haiti platform, we have increased our flexibility and enhanced our capacity to meet growing customer demand, while also maintaining certain commitments to our previous joint venture partner through a supply agreement.
“Barring additional shutdowns or significant disruption in our customers’ supply chain for raw materials other than fabric, we believe we are well positioned to increase market share during the fourth quarter of fiscal 2021."