Business
Culp Announces Revised Expectations, Including Impairment and Markdowns of Inventory, and Improved Cash Position for Second Quarter Fiscal 2023
HIGH POINT, N.C.--(BUSINESS WIRE)-- Culp, Inc. (NYSE: CULP) (together with its consolidated subsidiaries, “CULP”) today announced that, based on unaudited
About this update from Culp, Inc.
[{"type":"text","content":" HIGH POINT, N.C.--(BUSINESS WIRE)--\nCulp, Inc. (NYSE: CULP) (together with its consolidated subsidiaries, “CULP”) today announced that, based on unaudited preliminary results and current estimates, the company expects net sales of approximately $58 million for the second quarter of fiscal 2023, and expects to report a consolidated operating loss (loss from operations) to be in the range of $(11.7) to $(12.2) million for the second quarter. The consolidated operating loss includes approximately $5 million in inventory impairment charges and loss on the sale of raw material and finished goods inventory associated with the company’s mattress fabrics segment. It also includes approximately $1 million in higher-than-normal inventory markdowns associated with the company’s residential upholstery fabrics business, and approximately $700,000 in restructuring charges related to the rationalization of the upholstery fabric segment’s cut and sew platform in China. These projected results reflect a consolidated operating loss for the quarter that is greater than the company’s previously announced expectations of a consolidated operating loss comparable to the operating loss for the first quarter of fiscal 2023. The company also expects to end the quarter with a higher cash position than the first quarter of fiscal 2023, with approximately $19 million in cash and investments and no outstanding borrowings.\n\nCommenting on the announcement, Iv Culp, president and chief executive officer of Culp, Inc., said, “The revised expectations for the second quarter of fiscal 2023 reflect continued demand weakness, particularly for our mattress fabrics segment, along with inventory impacts within both segments. The ongoing industry softness due to macro-economic pressures and changes in consumer spending, combined with inflationary pressures and our customers’ increased desire for new product offerings to roll out at the consumer level, has led us to take inventory markdowns and impairment charges on unproductive and overvalued inventory. In our upholstery fabrics segment, we also took action to restructure and rationalize our China cut and sew platform, resulting in the closure of one of our leased facilities. While these decisions will result in a higher operating loss for the second quarter, we believe having the financial impact behind us will pos...