UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) November 28, 2007
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Culp, Inc.
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(Exact Name of Registrant as Specified in its Charter)
North Carolina 0-12781 56-1001967
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(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
1823 Eastchester Drive
High Point, North Carolina 27265
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(Address of Principal Executive Offices)
(Zip Code)
(336) 889-5161
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former name or address, if changed from last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
INDEX
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Page
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Item 2.02 - Results of Operations and Financial Condition 3
Item 5.02 - Departure of Directors or Certain Officers; Election 4
of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers
Item 9.01(d) - Exhibits 4
Signature 5
Exhibits
2
Forward Looking Information. This report and the exhibits hereto contain
statements that may be deemed "forward-looking statements" within the meaning of
the federal securities laws, including the Private Securities Litigation Reform
Act of 1995 (Section 27A of the Securities Act of 1933 and Section 27A of the
Securities and Exchange Act of 1934). Such statements are inherently subject to
risks and uncertainties. Further, forward-looking statements are intended to
speak only as of the date on which they are made. Forward-looking statements are
statements that include projections, expectations or beliefs about future events
or results or otherwise are not statements of historical fact. Such statements
are often but not always characterized by qualifying words such as "expect,"
"believe," "estimate," "plan" and "project" and their derivatives, and include
but are not limited to statements about the company's future operations,
production levels, sales, SG&A or other expenses, margins, gross profit,
operating income, earnings or other performance measures. Factors that could
influence the matters discussed in such statements include the level of housing
starts and sales of existing homes, consumer confidence, trends in disposable
income, and general economic conditions. Decreases in these economic indicators
could have a negative effect on the company's business and prospects. Likewise,
increases in interest rates, particularly home mortgage rates, and increases in
consumer debt or the general rate of inflation, could affect the Company
adversely. Changes in consumer tastes or preferences toward products not
produced by the Company could erode demand for the Company's products. In
addition, strengthening of the U.S. dollar against other currencies could make
the Company's products less competitive on the basis of price in markets outside
the United States. Also, economic and political instability in international
areas could affect the company's operations or sources of goods in those areas,
as well as demand for the company's products in international markets. The
Company's level of success in integrating the acquisition of assets from the
International Textile Group, Inc. and in capturing and retaining sales to
customers related to the acquisition will affect the Company's ability to meet
its sales goals. Finally, unanticipated delays or costs in executing
restructuring actions could cause the cumulative effect of restructuring actions
to fail to meet the objectives set forth by management. Other factors that could
affect the matters discussed in forward-looking statements are included in the
company's periodic reports filed with the Securities and Exchange Commission,
including the "Risk Factors" section in the company's most recent annual report
of Form 10-K filed with the Securities and Exchange Commission on July 19, 2007
for the fiscal year ended April 29, 2007.
Item 2.02 - Results of Operations and Financial Condition
On November 28, 2007, the Company issued a news release to announce its
financial results for the second quarter ended October 28, 2007. The news
release is attached hereto as Exhibit 99(a).
Also on November 28, 2007, the Company released a Financial Information Release
containing additional financial information and disclosures about the Company's
second quarter ended October 28, 2007. The Financial Information Release is
attached hereto as Exhibit 99(b).
The news release and Financial Information Release contain disclosures about
free cash flow, a non-GAAP performance measure, that management believes
provides useful information to investors because it measures the Company's
available cash flow for potential debt repayment, stock repurchases and
additions to cash and cash equivalents. In addition, the news release and
Financial Information Release contain proforma income statement information,
which reconciles the reported and projected income statement information with
proforma results, which exclude restructuring and related charges. The Company
has included this proforma information in order to show operational performance
excluding the effects of restructuring and related charges that are not expected
to occur on a regular basis. Management believes this presentation aids in the
comparison of financial results among comparable financial periods. In addition,
this information is used by management to make operational decisions about the
Company's business, is used in certain financial covenants in the Company's loan
agreements, and is used by the Company as a financial goal for purposes of
determining management incentive bonuses.
3
Item 5.02 - Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
On November 26, 2007, the Company issued a news release announcing the departure
of Kenneth M. Ludwig, Senior Vice President, Human Resources, and Corporate
Secretary. Mr. Ludwig is expected to resign from the Company effective on or
around December 31, 2007. The release announcing Mr. Ludwig's departure is
attached hereto as Exhibit 99(c).
On November 28, 2007, the compensation committee of the Company's board of
directors approved reductions in salary for Franklin N. Saxon, President and
Chief Executive Officer, and Robert G. Culp, III, Chairman. These reductions
were based on a recommendation to the Board of Directors and its Compensation
Committee from Mr. Saxon and Mr. Culp as part of management's overall efforts to
reduce costs for the Company. Mr. Saxon's salary will be reduced by $25,000 to
$325,000, and Mr. Culp's salary will be reduced by $50,000 to $250,000.
Item 9.01 (d) - Exhibits
99(a) News Release dated November 28, 2007
99(b) Financial Information Release dated November 28, 2007
99(c) News Release dated November 26, 2007
4
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CULP, INC.
(Registrant)
By: /s/ Kenneth R. Bowling
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Chief Financial Officer
(principal financial officer)
By: /s/ Thomas B. Gallagher, Jr.
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Corporate Controller
(principal accounting officer)
Dated: November 28, 2007
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5
EXHIBIT INDEX
Exhibit Number Exhibit
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99(a) News Release dated November 28, 2007
99(b) Financial Information Release dated November 28, 2007
99(c) News Release dated November 26, 2007