CONSHOHOCKEN, Pa. — December 4, 2017 — Today, ASTM International released a new video that tells the organization’s story through the eyes of a technical expert as she goes to work, develops standards, uses helpful tools, and builds partnerships.

The video was shown at the kickoff of two concurrent ASTM International “committee week” events held this week in Houston and New Orleans where thousands of the organization’s members will create and update standards. The Houston meetings involve fields such as petroleum, bioenergy, and commercial spaceflight while the New Orleans meetings involve cement, concrete, masonry, road materials, roofing, rubber, carbon black, fire safety, and more.

“I’m thrilled to release this succinct and powerful video that reflects ASTM International’s mission,” said Katharine Morgan, who became president in February. “In just 90 seconds, it captures how we are working with our members, customers, and partners to help our world work better.”

The video transcript is below:

Whether you go to an office, a lab, or a worksite each day… you see how technical standards support quality, safety, innovation, and trade.

As your organization grows and industries evolve, standards must keep pace.

ASTM International is open to anyone who wants to help create or update standards.  Every voice is heard in our committees, where the world’s most respected experts develop the world’s most respected standards.

The Compass platform provides constant access to the latest standards across dozens of industries… with tools to help your team collaborate and make informed decisions.

We’re also here to prepare you for accreditation or certify your products.

Training and e-learning show test methods in action, providing the skills and confidence to perform tests correctly.

When your industry or nation needs a leader across all of these areas, we can be your partner.

For standards and all your needs surrounding them, we connect the dots – in your workplace… in your career… and in your daily life. Together, we are helping our world work better.

The video is also available with Spanish and Mandarin voiceovers.

The organization plans to send a small gift to members and customers who mention on social media how ASTM International helps them “connect the dots” in their work, tagging ASTM International’s Twitter (@ASTMIntl) and/or Facebook accounts.

Posted December 4, 2017

Source: ASTM International

ALEXANDRIA, Va. — December 1, 2017 — AmeriPride Services Inc., Twin Falls, Idaho, has earned Hygienically Clean Food Safety certification, reflecting their commitment to best management practices (BMPs) in laundering as verified by on-site inspection and their capability to produce hygienically clean textiles as quantified by ongoing microbial testing.

The certification confirms the laundry’s dedication to compliance and processing garments and linens using BMPs as described in its quality assurance documentation, the focal point for inspectors’ evaluation of critical control points (CCPs) that minimize risk. The independent, third-party inspection must confirm essential evidence that:

• Employees are properly trained and protected
• Managers understand legal requirements
• OSHA-compliant
• Physical plant operates effectively

In addition, the AmeriPride facility passed three rounds of outcome-based microbial testing, indicating that their processes are producing Hygienically Clean garments and linens and zero presence of harmful bacteria. To maintain their certification, laundry plants must pass quarterly testing to ensure that as laundry conditions change, such as water quality, textile fabric composition and wash chemistry, laundered product quality is consistently maintained.

This process eliminates subjectivity by focusing on outcomes and results that verify textiles cleaned in these facilities meet appropriate hygienically clean standards and BMPs for animal processing, dairies, fruit/vegetable, bakeries, grain and other food and beverage industry segments.

The Twin Falls facility is the third in the AmeriPride chain to receive the Hygienically Clean Food Safety certification; the company’s Fresno, Calif., and St. Cloud, Minn., laundries earned the designation earlier this year. The Twin Falls laundry previously earned Hygienically Clean Healthcare certification for serving hospitals, surgery centers, medical offices, nursing homes and other medical facilities. Another 10 of the company’s U.S. locations have achieved the healthcare certification: Little Rock, Ark.; Phoenix; Watkinsville, Ga.; Topeka, Kan.; Bemidji and Minneapolis, Minn.; Springfield, Mo.; Omaha, Neb.; Memphis, Tenn.; and Lubbock, Texas. The company’s Canadian Linen and Uniform Service facility in Lethbridge, Alberta, is also Hygienically Clean Healthcare certified.

Hazard Analysis and Critical Control Points (HACCP) practices are examined in the Hygienically Clean Food Safety inspection process, evaluating the plant’s techniques for:

• Conducting hazard analysis
• Determining CCPs, monitoring their control, correcting them if not under control
• Validating and verifying HACCP system effectiveness
• Documenting and record-keeping to show ongoing conformance

On-site inspections also evaluate practices relevant to handling and processing textile products used in food manufacturing/processing establishments for adherence to U.S. Food and Drug Administration (FDA) and Centers for Disease Control and Prevention (CDC) directives. Introduced in 2014, Hygienically Clean Food Safety brought to North America the international cleanliness standards for laundering garments and other textile products for food manufacturing used worldwide by the Certification Association for Professional Textile Services and the European Committee for Standardization.

In October, Minneapolis-based AmeriPride and Aramark Corp., Philadelphia, announced a definitive agreement under which Aramark will acquire AmeriPride. The combination adds AmeriPride to Aramark’s uniform rental and career apparel business, headquartered in Burbank, Calif.

Posted December 1, 2017

Source: TRSA

TEMPE, Ariz. — December 1, 2017 — Economic activity in the manufacturing sector expanded in November, and the overall economy grew for the 102nd consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.

The report was issued today by Timothy R. Fiore, CPSM, C.P.M., chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee. “The November PMI® registered 58.2 percent, a decrease of 0.5 percentage point from the October reading of 58.7 percent. The New Orders Index registered 64 percent, an increase of 0.6 percentage point from the October reading of 63.4 percent. The Production Index registered 63.9 percent, a 2.9 percentage point increase compared to the October reading of 61 percent. The Employment Index registered 59.7 percent, a decrease of 0.1 percentage point from the October reading of 59.8 percent. The Supplier Deliveries Index registered 56.5 percent, a 4.9 percentage point decrease from the October reading of 61.4 percent. The Inventories Index registered 47 percent, a decrease of 1 percentage point from the October reading of 48 percent. The Prices Index registered 65.5 percent in November, a 3 percentage point decrease from the October level of 68.5, indicating higher raw materials prices for the 21st consecutive month. Comments from the panel reflect expanding business conditions, with new orders and production leading gains, employment expanding at a slower rate, order backlogs stable and expanding, and export orders all continuing to grow in November. Supplier deliveries continued to slow (improving), but at slower rates, and inventories continued to contract during the period. Price increases continued, but at a slower rate. The Customers’ Inventories Index improved but remains at low levels.”

Of the 18 manufacturing industries, 14 reported growth in November, in the following order: Paper Products; Machinery; Transportation Equipment; Computer & Electronic Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Printing & Related Support Activities; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Chemical Products; Furniture & Related Products; Fabricated Metal Products; Miscellaneous Manufacturing; and Primary Metals. Two industries reported contraction during the period: Wood Products; and Petroleum & Coal Products.

What Respondents Are Saying

• “Continuing to see more orders for the next six to 12 months.” (Chemical Products)
• “Strong sales through third and now fourth quarters. Backlog increasing, and capacity at suppliers tightening.” (Machinery)
• “Business has leveled out but remains strong heading into the end of the year.” (Computer & Electronic Products)
• “We are just coming off a record sales year. We expect to continue in 2018 robust activity.” (Miscellaneous Manufacturing)
• “We are seeing steady, consistent demand for end of year. We usually see a slowdown, which we haven’t seen yet.” (Fabricated Metal Products)
• “Overall industry demand remains strong. Continue to have a healthy backlog of orders. Local economy is also strong, with a fairly tight labor market.” (Transportation Equipment)
• “Business is strong. Employment is tight. Supplier deliveries have lengthened. A few suppliers are still blaming Hurricane Harvey for the lead times.” (Food, Beverage & Tobacco Products)
• “Strong season demand for products and continued requirements for uptime.” (Nonmetallic Mineral Products)
• “Currently, we have not experienced the typical seasonal slowdown toward the end of Q4. Could be that there is a lot of optimism in the American economy.” (Plastics & Rubber Products)

Manufacturing ISM® Report On Business® data is seasonally adjusted for the New Orders, Production, Employment and Supplier Deliveries Indexes.

*Number of months moving in current direction.

COMMODITIES REPORTED UP/DOWN IN PRICE AND IN SHORT SUPPLY

Commodities Up in Price
Aluminum (13); Caustic Soda (5); Copper; Corrugate (14); Nickel Based Metals; Pallets; Plastic Resins (4); Polycarbonate; Polyethylene (3); Polypropylene (3); Resin Based Products; Silicone; Soybean Oil; Steel – Hot Rolled (12); Steel Tubing; Titanium Dioxide (2); and Zinc Oxide.

Commodities Down in Price
None.

Commodities in Short Supply
Capacitors (5); Resistors; and Titanium Dioxide.

Note: The number of consecutive months the commodity is listed is indicated after each item.

NOVEMBER 2017 MANUFACTURING INDEX SUMMARIES

PMI®

Manufacturing expanded in November as the PMI® registered 58.2 percent, a decrease of 0.5 percentage point from the October reading of 58.7 percent. “This indicates growth in manufacturing for the 15th consecutive month led by expansion in New Orders and Production, offset by Supplier Delivery improvement and declines in raw material Inventory,” Fiore said. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A PMI above 43.3 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the November PMI indicates growth for the 102nd consecutive month in the overall economy and the 15th straight month of growth in the manufacturing sector. Fiore says, “The past relationship between the PMI and the overall economy indicates that the average PMI for January through November (57.4 percent) corresponds to a 4.5 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI for November (58.2 percent) is annualized, it corresponds to a 4.7 percent increase in real GDP annually.”

The Last 12 Months

New Orders

ISM’s New Orders Index registered 64 percent in November, which is an increase of 0.6 percentage point when compared to the 63.4 percent reported for October, indicating growth in new orders for the 15th consecutive month. “New Order expansion continues at a strong pace with the index at six straight months of levels above 60 percent,” said Fiore. A New Orders Index above 52.3 percent, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).

Fourteen of 18 industries reported growth in new orders in November, listed in the following order: Electrical Equipment, Appliances & Components; Paper Products; Furniture & Related Products; Plastics & Rubber Products; Machinery; Primary Metals; Printing & Related Support Activities; Computer & Electronic Products; Transportation Equipment; Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; Chemical Products; Miscellaneous Manufacturing; and Fabricated Metal Products. Two industries — Wood Products; and Textile Mills — reported a decrease in new orders in November compared to October.

Production

ISM’s Production Index registered 63.9 percent in November, which is an increase of 2.9 percentage points when compared to the 61 percent reported for October, indicating growth in production for the 15th consecutive month. This is the highest reading since March 2011, when the index registered 64.2 percent. “Production expansion continues at levels that kept pace with new orders, consumed raw material inventory and positively impacted customer inventory,” says Fiore. An index above 51.4 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures.

The 14 industries reporting growth in production during the month of November — listed in order — are:  Paper Products; Furniture & Related Products; Plastics & Rubber Products; Transportation Equipment; Machinery; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Printing & Related Support Activities; Computer & Electronic Products; Chemical Products; Primary Metals; Miscellaneous Manufacturing; and Nonmetallic Mineral Products. No industry reported a decrease in production in November compared to October.

Employment

ISM’s Employment Index registered 59.7 percent in November, a decrease of 0.1 percentage point when compared to the October reading of 59.8 percent. This indicates growth in employment in November for the 14th consecutive month. “Employment expansion remains strong in spite of signs of labor market tightening,” says Fiore. An Employment Index above 50.5 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

Of the 18 manufacturing industries, the 11 reporting employment growth in November — listed in order — are: Textile Mills; Machinery; Computer & Electronic Products; Transportation Equipment; Paper Products; Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Chemical Products; Fabricated Metal Products; and Petroleum & Coal Products. Two industries — Apparel, Leather & Allied Products; and Electrical Equipment, Appliances & Components —   reported a decrease in employment in November.

Supplier Deliveries

The delivery performance of suppliers to manufacturing organizations was slower in November, as the Supplier Deliveries Index registered 56.5 percent. This is 4.9 percentage points lower than the 61.4 percent reported for October. “This is the 19th straight month of slowing supplier deliveries, and reflects delivery performance improvement over the prior month, but still insufficient to maintain raw material inventory levels,” says Fiore. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.

The 10 industries reporting slower supplier deliveries in November — listed in order — are: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Paper Products; Machinery; Computer & Electronic Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; Chemical Products; Miscellaneous Manufacturing; and Fabricated Metal Products. Three industries — Furniture & Related Products; Primary Metals; and Electrical Equipment, Appliances & Components — reported faster deliveries in November compared to October.

Inventories*

The Inventories Index registered 47 percent in November, which is a decrease of 1 percentage point when compared to the 48 percent reported for October, indicating raw materials inventories contracted in November. “The inventory contraction reflects the continued difficulty of the supply chain to deliver materials and services meeting production schedules,” said Fiore. An Inventories Index greater than 42.9 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis (BEA) figures on overall manufacturing inventories (in chained 2000 dollars).

The five industries reporting higher inventories in November are: Printing & Related Support Activities; Transportation Equipment; Machinery; Chemical Products; and Primary Metals. The 11 industries reporting lower inventories in November — listed in order —  are: Wood Products; Textile Mills; Paper Products; Furniture & Related Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Fabricated Metal Products; Computer & Electronic Products; and Nonmetallic Mineral Products.

Customers’ Inventories*

ISM’s Customers’ Inventories Index registered 45.5 percent in November, which is 2 percentage points higher than the 43.5 percent reported for October, indicating that customers’ inventory levels were still considered too low in November. “The index remains at low levels and continues to contract, but November performance indicates that production output made some improvement in meeting customer inventory requirements,” said Fiore.

Three manufacturing industries — Furniture & Related Products; Miscellaneous Manufacturing; and Food, Beverage & Tobacco Products — reported customers’ inventories as being too high during the month of November. The eight industries reporting customers’ inventories as too low during November — listed in order — are: Primary Metals; Electrical Equipment, Appliances & Components; Paper Products; Chemical Products; Computer & Electronic Products; Machinery; Fabricated Metal Products; and Transportation Equipment. Seven industries reported no change in customer inventories in November compared to October.

Prices*

The ISM Prices Index registered 65.5 percent in November, a decrease of 3 percentage points from the October level of 68.5 percent, indicating an increase in raw materials prices for the 21st consecutive month. In November, 37 percent of respondents reported paying higher prices, 6 percent reported paying lower prices, and 57 percent of supply executives reported paying the same prices as in October. “The Business Survey Committee noted price increases continue most notably in primary materials, including metals (steel, aluminum, copper, nickel based metals); basic and intermediate chemicals; corrugate, plastic resins and parts made from plastic resins,” says Fiore. A Prices Index above 52.4 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Producer Price Index for Intermediate Materials.

Fifteen industries reported paying increased prices for raw materials in November, in the following order: Nonmetallic Mineral Products; Plastics & Rubber Products; Textile Mills; Machinery; Food, Beverage & Tobacco Products; Paper Products; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components;  Fabricated Metal Products; Transportation Equipment; Petroleum & Coal Products; Furniture & Related Products; Chemical Products; Primary Metals; and Computer & Electronic Products. No industry reported price decreases in November compared to October.

Backlog of Orders*

ISM’s Backlog of Orders Index registered 55 percent in November, the same level of expansion as the 55 percent reported for October, indicating growth in order backlogs for the 10th consecutive month. “Backlog expansion has stabilized during the period, consistent with October and at pre-Hurricane levels. This provides strong support to continued manufacturing expansion,” said Fiore. Of the 92 percent of respondents who reported their backlog of orders, 25 percent reported greater backlogs, 15 percent reported smaller backlogs, and 60 percent reported no change from October.

The 11 industries reporting growth in order backlogs in November — listed in order — are: Apparel, Leather & Allied Products; Paper Products; Primary Metals; Furniture & Related Products; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Machinery; Petroleum & Coal Products; Computer & Electronic Products; Transportation Equipment; and Food, Beverage & Tobacco Products. The four industries reporting a decrease in order backlogs during November are: Wood Products; Fabricated Metal Products; Plastics & Rubber Products; and Miscellaneous Manufacturing.

New Export Orders*

ISM’s New Export Orders Index registered 56 percent in November, a decrease of 0.5 percentage point when compared to the 56.5 percent reported for October, indicating growth in new export orders for the 21st consecutive month. “All six big industry sectors continued to expand export activity during the period,” said Fiore.

The eight industries reporting growth in new export orders in November — listed in order — are: Paper Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; Transportation Equipment; Miscellaneous Manufacturing; Computer & Electronic Products; Machinery; and Chemical Products. One industry — Fabricated Metal Products — reported a decrease in new export orders. Nine industries reported no change in export orders in November compared to October.

Imports*

ISM’s Imports Index registered 54.5 percent in November, an increase of 0.5 percentage point when compared to the 54 percent reported for October, indicating that imports grew in November for the 10th consecutive month.

The 11 industries reporting growth in imports during the month of November — listed in order — are: Textile Mills; Primary Metals; Printing & Related Support Activities; Nonmetallic Mineral Products; Transportation Equipment; Computer & Electronic Products; Machinery; Miscellaneous Manufacturing; Fabricated Metal Products; Chemical Products; and Paper Products. Two industries — Food, Beverage & Tobacco Products; and Electrical Equipment, Appliances & Components — reported a decrease in imports during November compared to October.

*The Inventories, Customers’ Inventories, Prices, Backlog of Orders, New Export Orders and Imports Indexes do not meet the accepted criteria for seasonal adjustments.

Buying Policy

Average commitment lead time for Capital Expenditures decreased in November to 140 days from 145 days. Average lead time for Production Materials decreased by 1 day to 59 days. Average lead time for Maintenance, Repair and Operating (MRO) Supplies increased by 4 days to 37 days.

About This Report

DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report’s information reflects the entire U.S., while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. The information compiled in this report is for the month of November 2017.

The data presented herein is obtained from a survey of manufacturing supply executives based on information they have collected within their respective organizations. ISM makes no representation, other than that stated within this release, regarding the individual company data collection procedures. The data should be compared to all other economic data sources when used in decision-making.

Data and Method of Presentation

The Manufacturing ISM Report On Business is based on data compiled from purchasing and supply executives nationwide. Membership of the Manufacturing Business Survey Committee is diversified by NAICS, based on each industry’s contribution to gross domestic product (GDP). Manufacturing Business Survey Committee responses are divided into the following NAICS code categories: Food, Beverage & Tobacco Products; Textile Mills; Apparel, Leather & Allied Products; Wood Products; Paper Products; Printing & Related Support Activities; Petroleum & Coal Products; Chemical Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Primary Metals; Fabricated Metal Products; Machinery; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Furniture & Related Products; and Miscellaneous Manufacturing (products such as medical equipment and supplies, jewelry, sporting goods, toys and office supplies).

Survey responses reflect the change, if any, in the current month compared to the previous month. For each of the indicators measured (New Orders, Backlog of Orders, New Export Orders, Imports, Production, Supplier Deliveries, Inventories, Customers’ Inventories, Employment and Prices), this report shows the percentage reporting each response, the net difference between the number of responses in the positive economic direction (higher, better and slower for Supplier Deliveries) and the negative economic direction (lower, worse and faster for Supplier Deliveries), and the diffusion index. Responses are raw data and are never changed. The diffusion index includes the percent of positive responses plus one-half of those responding the same (considered positive).

The resulting single index number for those meeting the criteria for seasonal adjustments (PMI, New Orders, Production, Employment and Supplier Deliveries) is then seasonally adjusted to allow for the effects of repetitive intra-year variations resulting primarily from normal differences in weather conditions, various institutional arrangements, and differences attributable to non-moveable holidays. All seasonal adjustment factors are subject annually to relatively minor changes when conditions warrant them. The PMI is a composite index based on the diffusion indexes of five of the indexes with equal weights: New Orders (seasonally adjusted), Production (seasonally adjusted), Employment (seasonally adjusted), Supplier Deliveries (seasonally adjusted), and Inventories.

Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. A PMI reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. A PMI above 43.3 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 43.3 percent, it is generally declining. The distance from 50 percent or 43.3 percent is indicative of the strength of the expansion or decline. With some of the indicators within this report, ISM has indicated the departure point between expansion and decline of comparable government series, as determined by regression analysis. The Manufacturing ISM Report On Business survey is sent out to Manufacturing Business Survey Committee respondents the first part of each month. Respondents are asked to ONLY report on information for the current month. ISM receives survey responses throughout most of any given month, with the majority of respondents generally waiting until late in the month to submit responses in order to give the most accurate picture of current business activity. ISM then compiles the report for release on the first business day of the following month.

The industries reporting growth, as indicated in the Manufacturing ISM Report On Business monthly report, are listed in the order of most growth to least growth. For the industries reporting contraction or decreases, those are listed in the order of the highest level of contraction/decrease to the least level of contraction/decrease.

Responses to Buying Policy reflect the percent reporting the current month’s lead time, the approximate weighted number of days ahead for which commitments are made for Capital Expenditures; Production Materials; and Maintenance, Repair and Operating (MRO) Supplies, expressed as hand-to-mouth (five days), 30 days, 60 days, 90 days, six months (180 days), a year or more (360 days), and the weighted average number of days. These responses are raw data, never revised, and not seasonally adjusted since there is no significant seasonal pattern.

Posted December 1, 2017

Source: Institute for Supply Management

HIGH POINT, N.C. — November 30, 2017 — Culp Inc. today reported financial and operating results for the second quarter and six months ended October 29, 2017.

Fiscal 2018 Second Quarter Highlights

• Net sales were $80.7 million, up 7.1 percent, with mattress fabrics sales up 6.8 percent and upholstery fabrics sales up 7.7 percent, as compared with the same quarter last year.
• Pre-tax income was $6.2 million, compared with $7.2 million in the second quarter of fiscal 2017. The $6.2 million included approximately $400,000 of non-recurring legal and other professional expenses.
• Net income was $4.0 million, or $0.32 per diluted share, compared with net income of $4.5 million, or $0.36 per diluted share, in the prior year period.
• The company’s financial position reflected total cash and investments of $49.1 million and no outstanding debt. (See summary of cash and investments table on page 5.) The $49.1 million was achieved despite spending $7.5 million in capital expenditures, which includes vendor financed payments, and $4.6 million on dividend payments during the first six months of this fiscal year.
• The company announced a 12.5 percent increase in its quarterly cash dividend from $0.08 to $0.09 per share, or $0.36 per share on an annualized basis, commencing in the third quarter of fiscal 2018.

Fiscal 2018 Year to Date Highlights

• Net sales were $160.2 million, up 2.7 percent, with mattress fabrics sales up 1.0 percent and upholstery fabrics sales up 5.4 percent compared with the same period a year ago.
• Pre-tax income was $12.9 million, compared with $15.7 million for the same period last year.
• Net income was $9.0 million, or $0.71 per diluted share, compared with net income of $9.8 million, or $0.78 per diluted share, in the prior year period.
• Annualized consolidated return on capital was 25 percent, compared with 34 percent for the same period a year ago.
• During the first half of fiscal 2018, the company paid $4.6 million in dividends, of which $2.6 million was for a special dividend. Since June 2011, the company has returned a total of $51.0 million to shareholders in the form of regular quarterly and special dividends and share repurchases.

Financial Outlook

• The projection for third quarter fiscal 2018 is for overall sales to be slightly higher than the previous year’s third quarter. Pre-tax income for the third quarter of fiscal 2018 is expected to be in the range of $6.8 million to $7.4 million. Pre-tax income for the third quarter of fiscal 2017 was $7.0 million.
• The company’s performance for the second half of fiscal 2018 is currently expected to be somewhat better than the results achieved during the second half of last fiscal year, excluding any impact from potential acquisitions.

Overview

For the second quarter ended October 29, 2017, net sales were $80.7 million, compared with $75.3 million for the same period a year ago. The company reported net income of $4.0 million, or $0.32 per diluted share, for the second quarter of fiscal 2018, compared with net income of $4.5 million, or $0.36 per diluted share, for the second quarter of fiscal 2017. The results for the second quarter of fiscal 2018 included approximately $400,000 of non-recurring legal and professional expenses related to the proposed acquisition of a China business that was not completed. The effective GAAP income tax rate was 34.2 percent for the second quarter of fiscal 2018, compared with 37.5 percent for the second quarter of last year. The rate decrease was primarily due to the mix of earnings between the company’s U.S. parent and foreign subsidiaries. The consolidated adjusted effective income tax rate was 14.2 percent for the second quarter of fiscal 2018, compared with 17.8 percent for the prior year. (A reconciliation of consolidated adjusted effective income tax rate to consolidated GAAP effective income tax rate is presented on page 6.)

Commenting on the results, Frank Saxon, president and chief executive officer of Culp, Inc., said, “Overall, our second quarter sales were higher than expected, and we are pleased with the solid top line performance for both upholstery fabrics and mattress fabrics. We have continued to drive product innovation and creativity and leverage the strength of our efficient global manufacturing platform. We have just completed a major transition period in our mattress fabrics business, and we expect to realize greater operating efficiencies from these changes going forward. Our strategic initiatives focused on product and customer diversification are producing favorable results for our upholstery fabrics business. Importantly, we have the financial strength to continue to make the strategic investments to enhance our operations, including potential acquisitions that support our growth objectives.

“We are also pleased that our board has approved an increase in our quarterly cash dividend from $0.08 to $0.09 per share, or $0.36 per share on an annualized basis. This is an important milestone for Culp, as $0.36 per share is three times the payment amount when dividends were reinstated in July 2012. Our financial performance and strong balance sheet have enabled us to take this action, which is consistent with our capital allocation strategy and confirms our commitment to generate value for our shareholders,” added Saxon.

Mattress Fabrics Segment

Mattress fabrics sales for the second quarter were $48.6 million, up 6.8 percent compared with $45.5 million for the second quarter of fiscal 2017.

“We are pleased with the solid growth in mattress fabrics sales for the second quarter,” said Iv Culp, president of Culp’s mattress fabrics division. “Notably, we continued to execute our strategy in an uncertain market environment, and Culp again outperformed reported mattress industry growth trends. Our strategic focus on design creativity and innovation and our ability to provide a diverse product offering across all price points, including mattress fabrics and sewn covers, have been the key drivers of our sales performance. Sales for the second quarter of fiscal 2018 also reflected aggressive marketing of some new product roll-outs. Our global manufacturing platform supports our product strategy with outstanding customer service and delivery performance.

“We have made excellent progress in enhancing our platform and production capabilities as we have recently completed a period of major transformation across our North American manufacturing operations. As expected, we experienced some disruptions to our production through the second quarter, as well as higher expenses associated with product roll-outs; however, we expect to realize greater operating efficiencies going forward. All of our knitting and other fabric forming equipment has been placed into service in our expanded Stokesdale, North Carolina, facility, and our U.S. mattress cover operation, CLASS, is fully operational in its new location, also in North Carolina. We have also finished the installation of new equipment in our Canada operation, and we are now focused on further refinement of our overall inspection and quality processes to support our continuous improvement initiatives.

“From product design to final delivery, we are executing our diversification strategy to offer a full complement of fabrics and sewn covers. We are excited about the increasing sales contribution from CLASS, our mattress cover business, as we have expanded our business with traditional customers and made impressive strides in reaching new customer markets, especially the fast growing boxed bedding space. Additionally, our newest joint venture mattress cover production facility in Haiti will further strengthen our ability to grow our CLASS business. We have commenced production activities, and we will continue to gradually add capacity in line with expected demand. The Haiti operation complements our U.S. operations with additional capacity via a mirrored platform, improving our ability to meet customer demand and remain cost-competitive. We also have the ability to utilize our China fabric and cut and sew platform to expand our business to new markets. With the transformation of our North American operations and our global production capabilities for both fabric and sewn covers, we are well positioned to meet demand in all segments of the market. At the same time, we continue to look for supportive opportunities to add to our platform through acquisitions or other strategies that will support our growth.

“Looking ahead, Culp has a solid competitive position across all product categories, supported by a sustainable, efficient global platform with sufficient capacity and distribution capabilities. Overall, we expect to see solid improvement in our quarterly operating results as we move into the second half of fiscal 2018,” added Culp.

Upholstery Fabrics Segment

Sales for this segment were $32.1 million for the second quarter of fiscal 2018, up 7.7 percent compared with sales of $29.8 million in the second quarter of fiscal 2017.

“We are pleased with the solid growth in our upholstery fabric sales for the second quarter, as we benefitted from the success of our various growth initiatives,” noted Boyd Chumbley, president of Culp’s upholstery fabric division. “However, our operating performance was affected by higher than anticipated freight costs associated with our China operation. During our second quarter, a forced Chinese government shutdown in certain textile mills for environmental control disrupted the supply chain, and we incurred additional freight costs in order to ensure customer deliveries. We also experienced some impact from an unfavorable China foreign exchange rate.

“We have continued to drive innovation and creativity and execute our product-driven strategy and reach new market segments. Our results for the second quarter reflect the success of this strategy, highlighted by expanded sales of LiveSmart®, our popular ‘performance’ line of highly durable, stain-resistant fabric. We have also seen continued solid growth in sales of fabrics designed for the hospitality market, and we are excited about the opportunities to reach a more diverse customer base. We are exploring potential acquisitions in the hospitality market that will complement our upholstery fabrics business, which is principally in the residential market.

“We had an excellent showing at the recent October furniture market, and our creative designs and innovative products continue to distinguish the Culp brand. We are especially pleased with the favorable customer response to LiveSmart®, as many manufacturers are featuring this fabric in their showrooms. We have recently launched a new website specifically for this innovative product line along with a more aggressive marketing campaign, and we remain optimistic about the sales opportunities for Culp.

“Looking ahead, we are encouraged by a more favorable market outlook as consumer spending for home furnishings is starting to pick up. We believe Culp is well positioned to benefit from any further improvement in demand trends, and we look forward to continued growth in the second half of fiscal 2018,” added Chumbley.

Balance Sheet

“We have maintained a strong financial position through the first half of fiscal 2018, even while spending $7.5 million on capital expenditures, which include vendor-financed payments, and returning $4.6 million to shareholders in regular and special dividends,” added Ken Bowling, senior vice president and chief financial officer of Culp, Inc. “As of October 29, 2017, total cash and investments were $49.1 million, with no outstanding debt on the company’s line of credit.”

Dividends and Share Repurchases

The company also announced that its Board of Directors approved a 12.5 percent increase in the company’s quarterly cash dividend from $0.08 to $0.09 per share, or $0.36 per share on an annualized basis. This payment will be made on January 16, 2018, to shareholders of record as of January 2, 2018. Future dividend payments are subject to board approval and may be adjusted at the board’s discretion as business needs or market conditions change.

The company did not repurchase any shares during the first half of fiscal 2018, leaving $5.0 million available under the share repurchase program approved by the Board in June 2016.

Since June 2011, the company has returned a total of $51.0 million to shareholders in the form of regular quarterly and special dividends and share repurchases.

Financial Outlook

Commenting on the outlook for the third quarter of fiscal 2018, Bowling remarked, “We expect overall sales to be slightly higher as compared with the third quarter of last year.

“Mattress fabrics sales are expected to be slightly higher than the same period a year ago. Operating income and margins in this segment are expected to be somewhat higher as compared to a year ago.

“In our upholstery fabrics segment, we expect sales to be slightly higher than the same period a year ago. Operating income and margins in this segment are expected to be slightly lower as compared to last year, as we expect to face higher shipment costs out of China and an unfavorable China foreign exchange rate.

“Considering these factors, the company expects to report pre-tax income for the third fiscal quarter of 2018 in the range of $6.8 million to $7.4 million. Pre-tax income for last year’s third quarter was $7.0 million.

“With respect to the full year, capital expenditures for fiscal 2018, including vendor financed payments, are currently expected to be comparable to the previous year and mostly related to additional improvement projects for mattress fabrics. Additionally, the company expects another good year of cash flow, even with the expected level of capital expenditures and modest growth in working capital,” added Bowling.

Posted December 1, 2017

Source: Culp Inc.

SPARTANBURG, S.C. — November 28, 2017 — As part of its ongoing efforts to target the interiors textiles market, Milliken & Company has signed a five-year lease at the High Point Showroom. While the build-out is not expected to be complete until June 2018, Milliken is currently accepting appointments for the December show.

The new space is located on the fourth floor of the Market Square Textile Tower. The company will use the space to showcase the full breadth of its innovative interior textiles business, including products suitable for use in home, office and hospitality environments.

The December show will prominently feature the introductory line of Breathe by Milliken™, environmentally-friendly performance fabrics. Designed to address the growing demand for more sustainable products, Breathe is a plant-based, fluorine-free performance fabric available in natural or synthetic fibers made from recycled plastic bottles. Although launched just this year, Breathe has already earned placements with top retailers such as Pottery Barn.  Milliken will use the December show to debut its expanded Breathe line, which now includes more fabrics that offer the superior protection, elegance and sustainability consumers desire.

The High Point lease is the next step in Milliken’s strategy to increase its visibility and leadership position in the interiors market.  In recent months, Milliken has combined several business units to create its integrated Specialty Interiors business, launched a website (www.millikenspecialtyinteriors.com) to better serve the market, and built the team with well-respected industry veterans to propel this expansion.

“The interiors textile market is a major area of focus for Milliken,” said Jennifer K. Harmon, vice president, Milliken Specialty Interiors. “Establishing a permanent presence at High Point is further evidence of our commitment not only to expanding our presence in this important market, but to driving innovation and educating key audiences about the unique capabilities and solutions Milliken can provide. We invite those who are interested in learning more to set up an appointment to get a sneak preview.”

Posted November 28, 2017

Source: Milliken Specialty Interiors