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• Net Sales: $52.3 million, down 13.5% compared with the prior year period.

• Operating Loss: $3.9 million, including $2.3 million in restructuring expenses.

• Adjusted Operating Loss: $1.6 million, improved from $2.6 million in the previous quarter.

• Net Loss: $4.1 million or $0.33 per diluted share, compared to $3.2 million or $0.26 per diluted share in the prior year period.

• Adjusted EBITDA: Near break-even at negative $123,000, improved from negative $1.3 million in the previous quarter.

• Mattress Fabric Segment Sales: $28.6 million, down 4.6% year-over-year.

• Upholstery Fabric Segment Sales: $23.6 million, down 22.3% year-over-year.

• Total Cash: $5.3 million with $5.4 million in outstanding debt.

• Free Cash Flow: Negative $10.1 million for the first nine months of the fiscal year.

• Capital Expenditures: $2.4 million for the first nine months, projected to be $3 to $3.5 million for the fiscal year.

• Liquidity: $28.5 million, including $5.3 million in cash and $23.2 million in borrowing availability.

• Warning! GuruFocus has detected 4 Warning Signs with CULP.

Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Culp Inc (NYSE:CULP) achieved a 58.3% sequential reduction in operating loss in the mattress fabric segment, indicating improved operational efficiency.

• The company completed its restructuring plan for the mattress fabric segment, which is expected to enhance profitability and streamline operations.

• Culp Inc (NYSE:CULP) is gaining market share in both the mattress and hospitality contract fabric businesses, with new business opportunities and customer wins.

• The hospitality contract fabric business saw year-over-year and sequential sales increases, representing 40% of upholstery fabrics total sales for the quarter.

• Culp Inc (NYSE:CULP) has a strong and flexible global supply chain, providing agility in navigating tariff impacts and offering supply chain optionality to customers.

Negative Points

• Culp Inc (NYSE:CULP) reported a net loss of $4.1 million for the third quarter, reflecting ongoing challenges in the demand environment.

• Consolidated sales for the third quarter were down 13.5% compared to the prior year, due to weakness in the home furnishings and bedding industries.

• The company faced pressure from lower residential upholstery fabric sales, exacerbated by inventory adjustments from a large customer.

• Tariff and global trade uncertainties are causing delays and sales pressure, potentially impacting fourth-quarter sales.

• Culp Inc (NYSE:CULP) anticipates continued industry sales pressure and macroeconomic headwinds, providing limited financial guidance for the near term.