Culp (CULP) investor relations material

Executive summary

• Major restructuring and integration initiatives, including Project Blaze and facility consolidations, have been completed, streamlining operations, reducing workforce, and optimizing manufacturing, resulting in over $20 million in annualized cost savings.

• The company is positioned for efficient scaling and future growth, with a leaner cost structure, disciplined cash management, and the ability to benefit from any demand recovery or macro/trade improvements.

• Leadership transitions include CFO retirement and expanded roles for the COO and division presidents, enhancing agility and responsiveness.

• Maintained strong market positions in bedding and upholstery, with customer wins and share gains, especially in sewn mattress covers and upholstery kits.

• Liquidity management remains a focus, with $27.7 million in liquidity as of February 2026 and additional proceeds expected from asset sales.

Financial highlights

• Q3 FY26 net sales were $48 million, down 8.2% year-over-year, with nine-month net sales at $151.9 million, down 7.7% year-over-year.

• Gross profit for Q3 FY26 was $5.3 million (11.1% margin), down from $6.3 million (12.1%) last year; nine-month gross profit was $18.3 million (12.1% margin), up 5.3% year-over-year.

• Net loss for Q3 FY26 was $3.4 million ($0.27 per diluted share), a 17% improvement year-over-year and 20% sequential improvement; nine-month net loss was $8.0 million, a 53% improvement year-over-year.

• Adjusted EBITDA for Q3 FY26 was -$2.2 million, compared to -$457,000 in the prior year period.

• Cash and cash equivalents at quarter-end were $9.7 million, with total liquidity of $27.7 million and outstanding debt of $18.5 million.

Outlook and guidance

• Sequential consolidated sales growth is expected in Q4 FY26, with solid bedding segment expectations despite ongoing demand challenges.

• Cost and efficiency benefits from restructuring and integration are expected to drive improved gross profit and lower SG&A in Q4 and beyond.

• Guidance remains limited due to macro uncertainty and potential tariff refunds, which could significantly impact results.

• Capital spending for fiscal 2026 is projected at $600,000-$700,000.

• Price actions and integration in FY26 are expected to yield $8 million in additional annualized benefits and $2.5 million in annualized margin improvement in bedding.