CULP INC

Restructuring Plan Update

The restructuring plan announced on May 1, 2024, primarily focused on the company's mattress fabrics segment, is progressing as planned.

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Expect to achieve $10.0 - $11.0 million in annualized savings and operating improvements after restructuring initiatives are fully implemented by the end of the calendar year, with most of the restructuring benefit realized during the second half of fiscal 2025.

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Expect a return to break-even operating results at currently depressed industry demand levels post restructuring.

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Expect to incur cash restructuring and restructuring-related costs and charges of approximately $2.5 million, the majority of which are anticipated to be incurred in the first half of fiscal 2025. The company expects to fund these cash costs primarily with the sale of excess manufacturing equipment.

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Expect to receive at least $10.0 - $12.0 million in cash proceeds (net of all taxes and commissions) from the sale of real estate associated with the restructuring plan.

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Also expect to incur non-cash restructuring and restructuring-related costs and charges of approximately $5.4 million (excluding any gain from the sale of real estate).

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Assuming the completion of all restructuring actions and the sale of associated real estate by the end of fiscal 2025, the company currently projects its cash as of the end of fiscal 2025 to be higher than its $10.0 million in cash as of the end of fiscal 2024.