Company: CULP
Filing Date: 2025-08-15
Form Type: DEF 14A
Source: 0000950170-25-109242
Chunk: 39

Company: CULP INC
Filing Date: 2025-08-15
Form: DEF 14A
Chunk 39
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 Stokesdale, North Carolina; (ii) cost efficiency, through-put and quality improvements via the optimization of volume and equipment in the Company’s mattress fabrics operation in Stokesdale, North Carolina; (iii) transitioning the mattress fabrics segment’s internal weaving operation to a strategic sourcing model through the Company’s long-standing supply partners, which enhanced competitiveness and value for customers; (iv) consolidating the Company’s Haiti sewn mattress cover operation (which is located on the Dominican Republic border) into one building, which significantly reduced operating expenses at that location; (v) restructuring the Company’s upholstery fabrics finishing operation in China to better align with demand and continuing to leverage strategic supply relationships; and (vi) reducing unallocated corporate and shared services expenses. This restructuring effort is expected to generate $10 to $11 million in annualized savings and operating improvements, with many of these benefits already manifesting in the Company’s fiscal 2025 fourth quarter results.

In addition, at the end of fiscal 2025, the Company initiated an integration effort involving the combination of its two operating divisions, upholstery fabrics and mattress fabrics, into one unified business designed to optimize operational agility and collaboration, streamline costs and processes, and increase responsiveness to customer needs and market trends. In connection with this integration effort, one of our NEOs, Mr. Bruno, transitioned from his former role as president of our mattress fabrics division to a role with a Company-wide scope of responsibility, with Mr. Bruno now serving as the Company's chief commercial officer (Mr. Bruno did not receive a salary increase in connection with his promotion).

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Our results for fiscal 2025 reflect the improved cost and operating efficiency benefits driven by the above-referenced restructuring efforts. For fiscal 2025, the Company achieved a loss from operations of $(18.4) million compared to a loss from operations of $(10.6) million in fiscal 2024. However, excluding restructuring and related expenses and other extraordinary and non-recurring items, the Company achieved an adjusted loss from operations of $(9.0) million for fiscal 2025, which was an approximately 15% improvement over the prior fiscal year's adjusted loss from operations of $(10.6) million (adjusted operating income (loss) is a non-GAAP measure - see Appendix A for a reconciliation of adjusted operating income (loss) to the most directly comparable GAAP measures).

Despite the cost structure and operating improvements achieved by the Company during fiscal 2025, the combination of stretch