In addition to raising the Timeliness rating of Culp from 3 to 2 (only TPX has a similiar rating), Valueline has a very nice report for the Company:

The profitability of Culp's upholstery fabrics division should improve in the new fiscal year that began May 1st. Consumer spending on anything home-related has been extremely weak for more than a year. For upholstered furniture, the slump not only stemmed from sinking housing markets, but also from a shift in consumer preference for leather and suede and rising competition from imported products. Amid the downturn, Culp reduced its domestic upholstery fabric operations down to a single plant and consolidated its Chinese operations, resulting in improved segment profitability as fiscal 2008 progressed. Selling, general, and administrative expenses were also cut sharply. We expect sales comparisons to continue to be negative in the near term, however. Home-buying activity has stabilized at low levels over the past three months, which may help boost the furniture market within a year. Encouragingly, too, La-Z-Boy recently reported a surprise profit for its April quarter.

The company has won protection for its proprietary products. Culp was issued copyright registrations for three of its most popular upholstery designs: Palomino, Stampede, and Wrangler. These products have leather-like appearances and qualities, and Culp estimates that a substantial amount of knock-off fabric has been sold by rivals. In addition, a competitor has agreed not to sell a fabric similar to Culp's Congo design as part of a resolution to a copyright infringement dispute.

Culp is well-established in a less-maligned business segment. Although mattress sales have been sluggish, cyclical pressures are less severe than in the furniture department. Culp has completed the integration of the knitted fabrics business of Bodet & Horst, purchased nearly a year ago. In fiscal 2008, the company also invested $5 million to significantly strengthen its woven mattress fabrics operation.

These shares are timely and have worthwhile appreciation potential to 2012-2014. Culp has built a solid leadership position in mattress fabrics, while reducing the cost structure of and streamlining its upholstery unit. Earnings should track nicely when the home-furnishing market rebounds.

Quarterly Sales ($Mill)
FYr Jul31 Oct31 Jan31 Apr30 FYr
2005 62.3 67.0 61.1 70.7 261.1
2006 62.6 59.0 55.7 73.2 250.5
2007 65.2 64.3 60.5 64.0 254.0
2008 59.3 52.3 44.6 47.8 204.0
2009 45.0 45.0 42.0 48.0 180.0
Earnings per Share
2005 -0.05 -0.03 -0.10 0.14 -0.04
2006 0.09 0.09 -0.01 0.14 0.31
2007 0.12 0.16 0.11 0.18 0.57
2008 0.08 0.08 0.03 0.14 0.33
2009 0.10 0.10 0.09 0.16 0.45

Baumie Note: I actually think 1Q10 eps est above is somewhat light -- if closer to upper end of projections and 25% tax rate, eps could be 15c to 16c, making full year est eps closer to 50c -- oh well, let's leave a little in the bank.

I also would have liked VL to have extolled mgt's brilliant efforts at debt reduction, working capital management, and operating margin improvements. Pretty amazing with 25% YOY declines in volume. Imagine if there is a boost in sales.

They do have current valuation of approx $5/sh (which we are nudging up against as I write this -- above 5, with a little more volume, and we get on more radar screens), and 3-5 year price projection of 7-11.

Nice job Culpers -- tee it up and swing again.