Slide 1: Positioning for the Future: Culp Restructuring Plan - June 2024
CULP Positioning for the Future Culp Restructuring Plan - June 2024
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains "forward-looking statements" within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995 (Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934).
Slide 3: Restructuring Overview - Why Now?
Restructuring Overview - Why Now? FY24 Q4/PRE-RESTRUCTURING STATE • Building foundation for profitable growth in FY24, Mattress Fabrics (CHF) business transformation plan was underway ■ Industry conditions significantly declined in FY24 Q4, warranting action o Both businesses had solid sales gains i
Slide 4: Financial and Business Implications
Financial and Business Implications 4 RESTRUCTURING ACTIONS RESTRUCTURING OUTCOMES 1. Consolidate CHF North American Operations Wind Down and Close Operations in Quebec, Canada Move Knitting and Finish Capacity to Stokesdale, NC Optimize Capacity and Overhead in North America in One Facility (NC) 2.
Slide 5: Steps and Timing of Restructuring: Measuring Success
Steps and Timing of Restructuring: Measuring Success 5 FISCAL Q1 25 ΙΣΣ (MAY - JULY 2024) Major restructuring actions announced in early May Communicated phased closure of Canadian mattress fabrics facility to affected employees, customers, vendors, and Canadian regulatory authorities Initiated and
Slide 6: Liquidity, Access to Capital are Strengthened
Liquidity, Access to Capital are Strengthened Total Liquidity As of 4/28/2024 (in millions) Cash ABL Availability China Credit Line Availability $10.0 18.5 4.0 $32.5 Total Liquidity Estimated Proceeds from Canadian Real Estate Sale $10.0 Total Liquidity Including Future Real Estate Sale Proceeds* $4
Slide 7: Restructuring Puts CHF on Path to Segment Breakeven
Restructuring Puts CHF on Path to Segment Breakeven Hypothetical pro forma model of projected annualized savings on CHF profitability post-restructuring, assuming the same level of sales from fiscal 2024 (model is before any corporate allocation at segment level) Projected annualized cost and produc
Slide 8: Mattress Fabrics: Current Industry Demand Near Previous Recession Bottom Levels
Mattress Fabrics: Current Industry Demand Near Previous Recession (2009) Bottom Levels Current level of domestic unit production of 18 million units near 2009 recession levels Unique factors affecting current cycle ■ Post Covid stimulus, at home demand pull forward ■ Supply chain challenges and cost
Slide 9: Restructuring of Mattress Fabrics Segment
Restructuring of Mattress Fabrics Segment ✓ Strengthened leadership team focused on profitable growth Leverage long history of success within the bedding industry Drive operating efficiencies: 9 - Optimize manufacturing and sourcing capabilities for customer reactivity and improved cost advantage Ph
Slide 10: Solidly Profitable Upholstery Fabrics Segment With Key Initiatives Underway
Solidly Profitable Upholstery Fabrics Segment With Key Initiatives Underway to Accelerate Performance Leading position in a fragmented market Asset light model to maintain flexibility and product profit performance Growing innovative performance products LiveSmart® performance brand LiveSmart Evolve
Slide 11: What Gives CULP Confidence in Restructuring Plan / Recovery?
What Gives CULP Confidence in Restructuring Plan / Recovery? Key Success Factors Experienced leadership team focused on profitable growth Successfully navigated significant restructuring of CUF beginning in early 2000's Solid balance sheet and available liquidity Strong relationships with key custom
Slide 12: CULP
CULP
Slide 13: About Non-GAAP Financial Information
About Non-GAAP Financial Information This presentation contains adjusted income statement information, which discloses adjusted loss from operations, a non-U.S. GAAP performance measure that eliminates items which are not expected to occur on a recurring or regular basis (including, without limitati