Company: CULP
Filing Date: 2025-12-12
Form Type: 10-Q
Source: 0001193125-25-317167
Chunk: 4

Company: CULP INC
Filing Date: 2025-12-12
Form: 10-Q
Item: Item 3
Chunk 4
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Interest Rates

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

Revolving Credit Agreement - 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 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 annual interest rate under the Credit Agreement as of November 2, 2025, was 6.02%. As of November 2, 2025, outstanding borrowings under the Credit Agreement totaled $7.0 million.

Credit Agreements - China Operations

On November 5, 2024, we entered into an unsecured credit agreement with the Bank of China that provides for a 10.0 million RMB ($1.4 million USD as of November 2, 2025) working capital loan. Interest is charged at a rate determined by the Bank of China, which was 2.6% per year as of November 2, 2025. As of November 2, 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 Agricultural Bank of China ("ABC") that provides for a line of credit up to 29.0 million RMB ($4.1 million USD as of November 2, 2025). Interest is charged at a rate determined by ABC, which was 2.60% per year as of November 2, 2025. As of November 2, 2025, the outstanding balance under this agreement was 29.0 million RMB ($4.1 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 ($3.0 million USD as of November 2, 2025).  Interest is charged at a rate determined by ABC, which ranged from 2.50% to 2.6% during the first half of fiscal 2026. As of November 2, 2025, the outstanding balance under this agreement was 21.0 million RMB ($3.0 million USD).

Currently, we have supplier financing arrangements