Culp, Inc. (CULP) is scheduled to report third-quarter fiscal 2024 results on Mar 6, after market close.In the last reported quarter, the company’s earnings and net sales topped the Zacks Consensus Estimate by 5% and 1.6%, respectively. The metrics increased 80.4% and 0.6% year over year, respectively.CULP’s earnings topped the consensus mark in all of the trailing four quarters, the positive surprise being 15%, on average.The Trend in Estimate RevisionFor the quarter to be reported, the Zacks Consensus Est ...

HIGH POINT, N.C.--(BUSINESS WIRE)--Culp, Inc. (NYSE: CULP) today announced that it will provide an online, real-time webcast and rebroadcast of its third quarter fiscal 2024 conference call on Thursday, March 7, 2024, at 11:00 a.m. ET. During this call, Culp will review the company’s financial and operating results for the third quarter ended January 28, 2024. A press release announcing these results will be issued after the close of market trading on Wednesday, March 6, 2024. The live webcast of Culp’s co ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 29, 2023 Commission File No. 1-12597 CULP, INC. (Exact name of registrant as specified in its charter) NORTH CAROLINA 56-1001967 (State or other jurisdiction of incorporation or other organization) 1823 Eastchester Drive | Large accelerated | filer | ☐ | Accelerated | filer | ☐ | | --- | --- | --- | -- ...

Financial Data and Key Metrics Changes - Consolidated net sales for the second quarter were $58.7 million, up 0.6% year-over-year [6] - The company reported a loss from operations of $2.2 million, significantly improved from a loss of $11.9 million in the prior year [6] - Net loss for the quarter was $2.4 million or $0.19 per diluted share, compared to a net loss of $12.2 million or $0.99 per diluted share in the prior year [6] - Adjusted EBITDA was close to breakeven at negative $247,000, compared to negative $8.2 million for the prior year [54] Business Line Data and Key Metrics Changes - Upholstery Fabrics segment sales were $27.3 million, down 14.9% year-over-year, affected by softness in the residential home furnishings industry [7] - Operating income for the Upholstery Fabrics segment was $1.4 million, up from $262,000 in the prior year, with an operating margin of 5.1% [7] - Mattress Fabrics segment sales were $31.4 million, up 19.6% year-over-year, driven by new fabric placements and better pricing [21] - Operating loss for the Mattress Fabrics segment was $936,000, a 90% improvement from a loss of $9 million a year ago [21] Market Data and Key Metrics Changes - The company noted ongoing softness in the residential home furnishings industry but indicated solid demand in the hospitality contract business, which accounted for approximately 33% of Upholstery Fabrics segment sales [7][19] - The domestic mattress industry remains pressured by demand softness, but the company believes it is outperforming industry trends [21] Company Strategy and Development Direction - The company is focused on a comprehensive transformation within its mattress fabrics business, aiming for long-term improvements in quality, sales, and operational processes [52] - The company is maintaining a strong balance sheet and ensuring appropriate working capital while making strategic capital investments, particularly in the mattress fabric segment [3][5] - The company aims to return to consolidated operating profitability by the end of the fiscal year, with expectations for improved performance in the second half of fiscal '24 [4][23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about seeing the bottom in residential home furnishings upholstery fabric sales, attributing this to normalized inventory levels [10] - The company expects to continue sequential and year-over-year operating improvements without relying on macro industry tailwinds [4] - Management highlighted the importance of operational improvements and customer gains as key drivers for future performance [11][12] Other Important Information - The company ended the quarter with $15.2 million in cash and no outstanding borrowings, with total liquidity of $41.4 million [5][22] - Capital expenditures for the fiscal year are projected to be in the range of $5 million to $6 million, focusing on maintenance and efficiency improvements [22] Q&A Session Summary Question: What is the outlook for residential home furnishings and upholstery fabric sales? - Management believes they have seen the bottom in residential home furnishings upholstery fabric sales due to normalized inventory levels [10] Question: How is the company managing its SG&A expenses? - SG&A expenses are up due to investments in the business, but management expects to achieve positive leverage as sales rise [33][45] Question: What is the timeframe for returning to double-digit operating margins? - Management indicated they are still in the middle of a transformation process and expect steady improvement towards historical results over time [32]

Part I - Financial Information [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Culp, Inc. reported a Q1 FY24 net loss of $3.3 million on $56.7 million net sales, showing improved profitability despite reduced assets and negative operating cash flow [Consolidated Statements of Net Loss](index=3&type=section&id=Consolidated%20Statements%20of%20Net%20Loss) Q1 FY24 saw a 9.5% decrease in net sales, but gross profit increased by 71.6% to $7.1 million, narrowing the net loss to $(3.3) million and improving EPS to $(0.27) Consolidated Statements of Net Loss (Q1 FY24 vs Q1 FY23) | Metric | Three Months Ended July 30, 2023 (in thousands) | Three Months Ended July 31, 2022 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Net sales | $56,662 | $62,604 | -9.5% | | Gross profit | $7,085 | $4,128 | +71.6% | | Loss from operations | $(3,082) | $(4,738) | -35.0% | | Net loss | $(3,342) | $(5,699) | -41.4% | | Net loss per share - diluted | $(0.27) | $(0.47) | -42.6% | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of July 30, 2023, total assets decreased to $142.9 million, primarily due to reduced inventories, while total liabilities and shareholders' equity also declined Key Balance Sheet Items (in thousands) | Account | July 30, 2023 | July 31, 2022 | April 30, 2023 | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $16,812 | $18,874 | $20,964 | | Inventories | $43,817 | $63,749 | $45,080 | | Total current assets | $88,064 | $112,073 | $95,516 | | Total assets | $142,902 | $180,490 | $152,183 | | Total current liabilities | $38,251 | $41,682 | $44,020 | | Total liabilities | $56,785 | $66,495 | $63,103 | | Total shareholders' equity | $86,117 | $113,995 | $89,080 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q1 FY24 saw $4.4 million cash used in operating activities, a reversal from prior year, with investing activities providing $0.4 million, resulting in a $4.2 million decrease in cash Cash Flow Summary (in thousands) | Activity | Three Months Ended July 30, 2023 | Three Months Ended July 31, 2022 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(4,435) | $5,309 | | Net cash provided by (used in) investing activities | $374 | $(758) | | Net cash used in financing activities | $0 | $(161) | | (Decrease) increase in cash and cash equivalents | $(4,152) | $4,324 | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, revenue by segment, significant inventory reduction, upholstery fabrics restructuring, credit facility status, and a full valuation allowance on U.S. deferred tax assets - The company's operations are classified into two segments: **mattress fabrics** and **upholstery fabrics**. Revenue is primarily recognized from the sale of products at a point in time[32](index=32&type=chunk)[34](index=34&type=chunk) - In Q1 FY24, the company initiated a restructuring to discontinue the production of upholstery cut and sew kits in Haiti, resulting in a total charge of **$517,000**, comprising **$338,000** in restructuring expenses and **$179,000** in inventory markdowns recorded in cost of sales[62](index=62&type=chunk)[63](index=63&type=chunk) - As of July 30, 2023, the company had a **$35.0 million** asset-based revolving credit facility with **no outstanding borrowings** and **$25.5 million** in available borrowing capacity[67](index=67&type=chunk)[76](index=76&type=chunk) - Due to a recent history of significant cumulative U.S. pre-tax losses, the company maintained a **full valuation allowance of $19.6 million** against its U.S. net deferred income tax assets as of July 30, 2023[108](index=108&type=chunk)[109](index=109&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q1 FY24 sales decline to industry softness, improving operating loss to $(3.1) million, and maintains solid liquidity despite negative operating cash flow Overall Results of Operations (in thousands) | Metric | Q1 FY2024 | Q1 FY2023 | Change | | :--- | :--- | :--- | :--- | | Net sales | $56,662 | $62,604 | (9.5)% | | Gross profit | $7,085 | $4,128 | 71.6% | | Gross margin | 12.5% | 6.6% | +591bp | | Loss from operations | $(3,082) | $(4,738) | (35.0)% | | Net loss | $(3,342) | $(5,699) | (41.4)% | - The decrease in net sales was driven by a **17.4% decline** in the upholstery fabrics segment, while the mattress fabrics segment's sales were nearly flat (**-0.5%**)[160](index=160&type=chunk) - Cash and cash equivalents decreased by **$4.2 million** during the quarter to **$16.8 million**, primarily due to **$4.4 million** in cash used for operating activities[171](index=171&type=chunk) [Segment Analysis](index=45&type=section&id=Segment%20Analysis) Mattress Fabrics improved profitability with operating loss narrowing to $(1.4) million despite flat sales, while Upholstery Fabrics' sales declined 17.4% but operating income more than doubled to $1.3 million Segment Performance (in thousands) | Segment | Metric | Q1 FY2024 | Q1 FY2023 | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Mattress Fabrics** | Net Sales | $29,222 | $29,371 | (0.5)% | | | Loss from Operations | $(1,398) | $(2,921) | (52.1)% | | **Upholstery Fabrics** | Net Sales | $27,440 | $33,233 | (17.4)% | | | Income from Operations | $1,328 | $542 | 145.0% | [Liquidity and Capital Resources](index=57&type=section&id=Liquidity%20and%20Capital%20Resources) The company ended Q1 FY24 with $16.8 million cash and $31.1 million available credit, no outstanding borrowings, and a significant inventory reduction, with no stock repurchases or dividends expected - The company believes its current cash of **$16.8 million** and available credit of **$31.1 million** are sufficient to fund foreseeable business needs[238](index=238&type=chunk) - Inventory decreased significantly by **$19.9 million (31.3%)** compared to the prior year, reflecting management's efforts to align stock levels with demand and promotional programs[252](index=252&type=chunk) - The company did not repurchase any shares in Q1 FY24 and has **$3.2 million** remaining under its authorization. No repurchases are expected through at least Q2 FY24[246](index=246&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=63&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces minimal interest rate risk due to no outstanding borrowings and manages foreign currency risk from Canadian and Chinese subsidiaries with no material impact expected - The company is exposed to interest rate risk on its U.S. revolving credit facility, which is based on the SOFR rate. As of July 30, 2023, there were **no outstanding borrowings**[271](index=271&type=chunk)[272](index=272&type=chunk) - Foreign currency risk exists for subsidiaries in Canada and China. The company uses the U.S. dollar as the functional currency for these operations and believes a **10% change** in exchange rates would not materially affect results[274](index=274&type=chunk) [Controls and Procedures](index=63&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded disclosure controls were effective as of July 30, 2023, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of July 30, 2023[275](index=275&type=chunk) - No changes occurred during the quarter that have **materially affected**, or are reasonably likely to materially affect, the company's internal control over financial reporting[276](index=276&type=chunk) Part II - Other Information [Legal Proceedings](index=64&type=section&id=Item%201.%20Legal%20Proceedings) No material changes to legal proceedings were reported for the three months ended July 30, 2023, compared to the prior Annual Report - No **material changes** to legal proceedings were reported for the quarter[278](index=278&type=chunk) [Risk Factors](index=64&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported for the three months ended July 30, 2023, compared to the prior Annual Report - No **material changes** to risk factors were reported for the quarter[279](index=279&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=64&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any equity securities in Q1 FY24, with approximately $3.2 million remaining available for future repurchases Issuer Purchases of Equity Securities | Period | Total Number of Shares Purchased | Approximate Dollar Value of Shares that May Yet Be Purchased | | :--- | :--- | :--- | | May 1, 2023 to July 30, 2023 | 0 | $3,248,094 | [Exhibits](index=65&type=section&id=Item%206.%20Exhibits) The report includes various exhibits, notably CEO and CFO certifications and Inline XBRL data files - Exhibits filed with the report include CEO and CFO certifications (**31.1, 31.2, 32.1, 32.2**) and the Cover Page Interactive Data File (**104**)[283](index=283&type=chunk)[285](index=285&type=chunk)

CHIP 2 This presentation contains "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 21E of the Securities and Exchange Act of 1934). Such statements are inherently subject to risks and uncertainties that may cause actual events and results to differ materially from such statements. Further, forward looking statements are intended to speak only as of the date on ...

Financial Data and Key Metrics Changes - The company reported net sales of $56.7 million, a decrease of 9.5% compared to the prior year period, primarily due to a decline in upholstery fabrics sales [37] - The operating loss for the quarter was $3.1 million, which included $517,000 in restructuring-related charges, resulting in an adjusted loss from operations of $2.6 million, an improvement from a loss of $4.7 million in the prior year [37][38] - The net loss for the first quarter was $3.3 million or $0.27 per diluted share, compared to a net loss of $5.7 million or $0.47 per diluted share for the prior year [37] Business Segment Data and Key Metrics Changes - Mattress Fabrics segment sales were $29.2 million, down 0.5% year-over-year, with an operating loss of $1.4 million, a 52% improvement from the previous year [43] - Upholstery Fabrics segment sales were $27.4 million, down 17.4% year-over-year, with operating income of $1.3 million and an operating margin of 4.8%, reflecting a 145% improvement [44][45] Market Data and Key Metrics Changes - The domestic mattress industry is experiencing significant contraction, with reports indicating a 10% reduction in dollars and a 20% reduction in units through the first six months of calendar 2023 [26] - Despite the overall market challenges, the company’s CHF revenue remained flat, indicating market share gains [26] Company Strategy and Development Direction - The company is focused on a comprehensive transformation plan within its CHF mattress fabrics business, aiming for long-term improvements in quality, sales, and operational processes [25] - The company is maintaining a strong balance sheet and strategic working capital management, ending the quarter with $16.8 million in cash and no outstanding debt [34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of fiscal 2024, expecting a return to operating profitability despite current market challenges [54] - The company anticipates that improvements in the mattress fabrics segment will drive recovery, while the upholstery fabrics segment will continue to face demand softness [12][54] Other Important Information - The company is strategically investing in its business while managing inventory against current demand levels [34] - Capital expenditures for the fiscal year are projected to be between $5 million and $6 million, focusing on maintenance and efficiency improvements [47] Q&A Session Summary Question: Can you provide a breakdown between pricing and unit volumes for CHF? - Management indicated that pricing and unit volumes were closely aligned, with no significant difference between the two [58] Question: Are you seeing notable customers moving away from Culp in the residential segment? - Management clarified that there are no significant changes in the customer base, attributing softness to overall industry demand rather than customer loss [64] Question: What are the expectations for operating profitability in the second half of the year? - Management stated that while they are not forecasting profitability for the entire year, they expect to achieve operating profitability in at least one quarter of the second half [84]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 1O-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended April 30, 2023 Commission File No. 1-12597 1823 Eastchester Drive, High Point, North Carolina (Address of principal executive offices) 27265 (zip code) (336) 889-5161 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: connection with its Annual Meeting of S ...

This presentation contains adjusted income statement information for the three-month period ending April 30, 2023, which discloses adjusted loss from operations, a non-GAAP performance measure that eliminates items which are not expected to occur on a recurring or regular basis. These include, for the period presented, restructuring expense associated with the consolidation of certain leased facilities in Ouanaminthe, Haiti, during the fourth quarter of fiscal 2023. The company has included this adjusted in ...

Financial Data and Key Metrics Changes - Net sales for Q4 2023 were $61.4 million, an increase of 7.9% compared to the prior year period [32] - The company reported a loss from operations of $4 million, an improvement from a loss of $5.4 million in the prior year [32] - Net loss for Q4 was $4.7 million, or $0.38 per diluted share, compared to a net loss of $6 million, or $0.49 per diluted share for the prior year [33] - For the full fiscal year, net sales were $234.9 million, down 20.3% compared to the previous year [36] - The company ended the year with $21 million in cash and no outstanding debt, compared to $14.6 million in cash at the end of the previous fiscal year [42] Business Line Data and Key Metrics Changes - Mattress Fabrics segment sales for Q4 were $30.7 million, up 3.1% year-over-year and up 24.3% sequentially [46] - Upholstery Fabrics segment sales for Q4 were $30.7 million, up 13.1% over the prior year period [40] - The hospitality contract business accounted for 32% of Upholstery Fabrics segment sales in Q4, reflecting solid performance [29] Market Data and Key Metrics Changes - Demand in the hospitality contract business remained solid, benefiting from a shift in consumer spending towards travel and experiences [68] - The residential home furnishings industry continues to experience softness, impacting overall sales [54] Company Strategy and Development Direction - The company is focused on maintaining a strong balance sheet and managing cash positions, ending the year with a higher cash position than the prior year [18][21] - A comprehensive transformation plan is underway in the Culp Home Fashions business, focusing on long-term improvements in quality, sales, and operational processes [22][23] - The company aims to improve operational efficiencies and product mix to enhance profitability [80] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ongoing demand softness but expresses optimism about stabilization and recovery in the macroenvironment [16] - The company expects consolidated net sales for Q1 2024 to be slightly lower compared to Q1 2023, primarily due to softness in the Residential Home Furnishings industry [54] - Despite expected sales decline, management anticipates solid improvement in operating performance due to internal operational improvements [58] Other Important Information - The company generated positive cash flow from operations of $7.8 million and free cash flow of $6.9 million for the fiscal year, a significant turnaround from the previous year's negative cash flows [19][42] - Capital expenditures for the year were $2.1 million, with projections for fiscal 2024 spending between $4 million to $6 million [51] Q&A Session Summary Question: What inning are we in regarding operational improvements at CHF? - Management indicates they are in the middle to later innings of the transformation process, with a solid foundation established [64] Question: Are you seeing more business from current clients or new client wins in the hospitality segment? - The strength in the hospitality segment is attributed to both existing customers and new client contributions [68] Question: What is the confidence level in pricing products to reflect current costs? - Management expresses confidence in pricing products appropriately, noting improvements in margins with new product launches [70][72] Question: How long will it take to get all SKUs to positive margins? - Management estimates that over the next quarter or two, they will work through all non-productive SKUs [77] Question: Are labor inefficiencies fully resolved? - Management acknowledges improvements in labor retention and recruitment but notes challenges remain [86]