Company: CULP
Filing Date: 2025-07-11
Form Type: 10-K
Source: 0000950170-25-095233
Chunk: 12

Company: CULP INC
Filing Date: 2025-07-11
Form: 10-K
Item: Item 2
Chunk 12
---
 noted in footnote 2 below.

(2)This lease agreement has an unspecified number of renewal options available, and the year listed above is the expiration of the current lease term.

(3)As announced on May 1, 2024, the company's board of directors made the decision to consolidate the company's North American mattress fabrics operations including the closure and sale of the company's manufacturing facility located in Quebec, Canada, and to exit the leased warehouse facility also located in Quebec, Canada.  See Note 8 to the consolidated statements for additional details regarding the sale of the owned Canadian manufacturing facility effective April 30, 2025 (first quarter fiscal 2026).  The leased warehouse in Quebec, Canada is no longer used in operations.

(4)As announced on April 24, 2025, the company will close its leased facility operated by the upholstery fabrics segment located in Burlington, North Carolina, and transition its production and distribution activities utilizing a shared management model within its owned facility located in Stokesdale, North Carolina.  The Stokesdale, North Carolina facility has historically been solely operated by the mattress fabrics segment.

We believe that our facilities are in good condition, well-maintained, suitable, and adequate for present utilization.  In the upholstery fabrics segment, we have the ability to source upholstery fabric from outside suppliers to meet current and expected demand trends and further increase our output of finished goods. This ability to source upholstery fabric is part of our long-term strategy to have a low-cost platform that is scalable, but not capital intensive. In the mattress fabrics segment, we believe we have sufficient capacity to meet current and expected demand trends, but we also source certain fabrics from outside suppliers and have the ability to source additional mattress fabrics from outside suppliers to further increase our ultimate output of finished goods.