Company: CULP
Filing Date: 2025-09-12
Form Type: 10-Q
Source: 0000723603-25-000004
Chunk: 3

Company: CULP INC
Filing Date: 2025-09-12
Form: 10-Q
Item: Item 3
Chunk 3
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Interest Rates

We are exposed to market risk from changes in interest rates regarding our credit agreements.

Revolving Credit Agreements - United States

Our U.S. revolving credit agreement ("Credit Agreement") with Wells Fargo Bank, N.A., permits both base rate borrowings and borrowings that require interest to be be charged at a variable rate calculated using an applicable margin over SOFR (the secured overnight financing rate administered by the Federal Reserve Bank of New York (or its successor)), as defined in the Credit Agreement. The interest rate under the Credit Agreement as of August 3, 2025, was 6.11%. As of August 3, 2025, outstanding borrowings under the Credit Agreement totaled $7.0 million.

Credit Agreement - China Operations

On November 5, 2024, we entered into an unsecured credit agreement with the Bank in China that provides for a 10.0 million RMB ($1.4 million as of August 3, 2025) working capital loan. Interest is charged at a variable rate under the agreement based on the China Loan Prime Rate ("China LPR") minus 50 basis points, which represents 2.6% as of August 3, 2025. As of August 3, 2025, the outstanding balance under this working capital loan was 10.0 million RMB ($1.4 million USD).

Effective March 5, 2025, we entered into a separate unsecured credit agreement with the Agriculture Bank of China ("ABC") that provides for a line of credit up to 29.0 million RMB ($4.0 million as of August 3, 2025). Interest is charged under this agreement at a variable  rate based on the China LPR minus 50 basis points (applicable interest rate of 2.60% as of August 3, 2025). As of August 3, 2025, the outstanding balance under this agreement was 29.0 million RMB ($4.0 million USD).

During the first quarter of fiscal 2026, we entered into unsecured working capital loan agreements with ABC that provide for 21.0 RMB ($2.9 million USD as of August 3, 2025). Interest is charged under these agreements at variable rates based on the China LPR minus 50 basis points (applicable interest rate of 2.60% as of August 3, 2025). As of August 3,