Culp Announces Revised Expectations, Including Impairment and Markdowns of Inventory, and Improved Cash Position for Second Quarter Fiscal 2023

Nov 22, 2022

Culp, Inc. (NYSE: CULP) (together with its consolidated subsidiaries, “CULP”) today announced that, based on unaudited preliminary results and current estimates, the company expects net sales of approximately $58 million for the second quarter of fiscal 2023, and expects to report a consolidated operating loss (loss from operations) to be in the range of $(11.7) to $(12.2) million for the second quarter. The consolidated operating loss includes approximately $5 million in inventory impairment charges and loss on the sale of raw material and finished goods inventory associated with the company’s mattress fabrics segment. It also includes approximately $1 million in higher-than-normal inventory markdowns associated with the company’s residential upholstery fabrics business, and approximately $700,000 in restructuring charges related to the rationalization of the upholstery fabric segment’s cut and sew platform in China. These projected results reflect a consolidated operating loss for the quarter that is greater than the company’s previously announced expectations of a consolidated operating loss comparable to the operating loss for the first quarter of fiscal 2023. The company also expects to end the quarter with a higher cash position than the first quarter of fiscal 2023, with approximately $19 million in cash and investments and no outstanding borrowings.

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