Culp : Q2 Fiscal 2026 Supplemental Information

About this update from Culp, Inc.

SKCOND QUAATKA FY2G: SUPPLKMKNTAL INFOAMATION D e c e m be r 2025 BUSINKSS OVKAVIKW & STAATKGIC ACTIONS CULP, INC. (NYSK: CULP) One of North America's largest marketers of mattress fabrics for bedding and upholstery fabrics for residential, commercial, and hospitality furniture and other applications. Global customer base of leading bedding and furniture companies, including fabrics produced at manufacturing facilities in the United States, China, Haiti, and Vietnam, and fabrics sourced through a dedicated supply relationship in Turkey and other suppliers. Founded : 1972 Headquarters : High Point, North Carolina Initial Public Offering: 1983 Fiscal 2025 Revenue* : $213.2 Million Employees: ~ 880 *Year ended April 27, 2025 T W O L E A D I NG B U S I NES S ES I N M U LT I - B I LL I O N DO LLAR M A R K E T S BEDDING SEGMENT Market leader in mattress fabrics, covers and related products Strong U.S., nearshore, and offshore supply chains Majority of assets in U.S. 53% of Culp Fiscal 2025 revenue UPHOLSTERY SEGMENT Market leader in fabrics for residential and commercial/hospitality furniture and window treatment markets Asset-light sourcing model Primarily Asia supply chain 47% of Fiscal 2025 revenue 4 CULP BKDDING Large-Scale Leader in Consolidated Industry with Significant Barriers to Entry I N N OVA T I VE P ROD U C T S C O MP E TI TI V E S TR E N G T H S G R O W I N G MA R K E T S H A R E Knitted fabrics Sewn mattress covers Damask and woven fabrics Bedding accessories Wide range of fashionable styles and price points 1 Management estimates for domestic mattress fabric and cover market 2 Culp top 2 player One of the largest producers of mattress fabrics in North America Market Size $500-600M 1 Culp Share 20-25% 2 Global manufacturing and sourcing: U.S., China, Vietnam, Haiti, Turkey Strong U.S. base and global footprint provide competitive advantage in current trade/tariff environment Innovative designs capitalizing on sleep trends, cooling and sustainability CULP UPHOLSTKAY Market Leader Known for Creative Designs and Innovative Products, with Asset-Light Operating Model I N N OVA T I VE P ROD U C T S C O MP E TI TI V E S TR E N G T H S G R O W I N G MA R K E T S H A R E Upholstery fabrics for residential furniture markets Upholstery fabrics for hotel, theater, office, retail and other commercial and hospitality furniture markets Window treatments, drapery and roller shades for hospitality and other commercial markets Outstanding design capabilities Market Size $1.5 -$2.5 Billion 1 Culp Share 8-10% 2 Asset-light flexible global platform provides competitive advantage in current trade/tariff environment Innovative performance fabrics including proprietary LiveSmart brand Emphasis on sustainability and health/wellness applications 1 Management estimates for domestic upholstery fabric market 2 Culp top 5 player LIQUIDITY & CAPITAL BASK Top Priority to Aggressively Manage Liquidity/FCF and Debt TOTA L L I QU I D I TY As of 11/2/2025 (in millions) Cash $10.7 U.S. ABL Availability 17.4 China Credit Line Availability 0.0 Total Liquidity $28.1 Estimated Proceeds from Canadian Real Estate Sale* $3.0 Total Liquidity Including Future Real Estate Sale Proceeds* $31.1 *Estimated proceeds net of all taxes and commissions, to be received in Fiscal 2026. B A L A NCE S HE E T HI G HL I G HT S Liquidity in place to navigate current environment. Recently extended domestic credit facility for additional three years at market rates. Owned U.S. real estate with estimated value of ~$40-$45 million provides significant source of additional liquidity if needed. U.S. Federal NOL carryforwards totaling ~$88.1 million as of April 27, 2025. Tangible book value of $4.17/share (as of 11/2/25) understated due to owned real estate and NOLs. Recent borrowings primarily used to fund restructuring/integration initiatives and worldwide working capital as well as take advantage of favorable rates and availability in China. Restructuring and additional actions in FY26 to significantly lower expected operating costs and cash burn at current low sales levels to navigate industry softness. AKSTAUCTUAKD FOA PAOFITABILITY ACAOSS MAAKKT CYCLKS Completed Fiscal 2025 A C TI O N S Consolidated North American Bedding Operations Closed manufacturing operations and sold facility in Quebec, Canada Moved knitting and finish capacity to owned U.S. facility (North Carolina) Optimized capacity and overhead in owned U.S. facility (North Carolina) Transitioned damask mattress fabric product lines to strategic sourcing model Consolidated Haiti / DR Cut & Sew Operations into One Facility Reduced Bedding Workforce by ~35% Restructured Upholstery Finishing Operation in China Reduced Administrative SG&A Expenses OU T COME S $10 to $11 Million in Projected Annualized Cost Savings and Efficiency Gains $1 Million Reduction in Administrative SG&A Expenses Total Restructuring & Related Charges: $9.4 Million Projected Proceeds from Asset Sales & Related Items $3-3.5 Million from sale of Canada facility ~ $2.3 Million from sale of excess equipment, termination of Haiti lease, and other items All offset cash restructuring charges 2 2 FY 2 5 AKS T AUC T UAI N G DAIV IN G S TKADY G AO S S P AO FI TABILITY IN C H ALLKN GIN G IN DUS T AY KN V I AO N MKN T Poised for Accelerated Improvement in Market Recovery Revenue and Gross Profit referenced in the table above constitute Culp, Inc.'s consolidated net sales and consolidated gross profit, respectively, for the fiscal year periods indicated. Gross Profit for Q4 of FY25 includes a benefit of $1.7 million resulting from a change in Culp, Inc.'s accounting estimates for finished goods inventory markdown reserves. FISCAL 202G INTKGAATION & ADDITIONAL ACTIONS Cost and Organizational Actions Strengthen Foundation Integration of Stand-Alone Divisions to Synergize Business and Leadership Teams Division Presidents transitioned to Company-wide Chief Commercial Officer and Chief Operating Officer Consolidate operations, talent and resources to better serve home furnishings industry Creates a leaner and more agile organization better equipped to respond to customer needs and market trends ~ $1 million annualized savings and operating improvement beginning Q2 Consolidate USA Upholstery Warehousing/Distribution Relocate leased facility in Burlington, NC into owned facility in Stokesdale, NC ~ $1.7 million annualized savings from exited lease, reduced headcount and synergized operations Timing: Q3 / Q4 Consolidate and Streamline Read Window Operations Relocate leased facility in Knoxville, TN into owned facility in Stokesdale, NC and increase sourcing strategies ~$800 thousand annualized savings from exited lease, reduced headcount and synergized operations Timing: Q4 Price Action to Address Tariff Uncertainty and Rationalize Margins ~ $2.5 million annualized margin improvement in bedding segment Timing: Phasing in beginning Q2 Additional Cost Reduction and Efficiency Actions Including Reduction of China Leased Facility Footprint ~$2 million anticipated annualized savings Timing: Q3/Q4 ~ $8 Million Total Annualized Additional Benefits Attention : This is an excerpt of the original content. 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