As an initial step in this integration, the Company will close the leased facility operated by its upholstery fabrics division in Burlington, North Carolina, and transition the production and distribution activities there to a shared management model within the Company-owned facility in Stokesdale, North Carolina, currently operated by its mattress fabric division. The Company expects to generate annualized efficiency improvements and cost reduction benefits of approximately $3 million after completion of the Burlington facility closure and other integration initiatives, with the potential for additional savings going forward. This is incremental to the approximately $10 to $11 million in annualized savings and operating improvements expected from the recent completion of the Company’s cost restructuring plan announced in May of 2024, which was focused primarily on the mattress fabrics division. That restructuring project included the consolidation of sewn cover operations, outsourcing of certain knitting and damask weaving production, and closure of the Company’s manufacturing facility in Canada and transfer of those operations and the associated equipment to its Stokesdale, North Carolina, facility, among other actions. The final step in that project, the sale of the Company’s Canadian facility, is currently expected to close within the next week, and the Company intends to use the cash proceeds to retire outstanding borrowings as part of its broader plan to improve financial flexibility and position the business for long-term success.

Iv Culp, President and Chief Executive Officer of Culp, Inc., commented, “I’m proud of the work our team is doing to transform our business and excited about this next chapter in CULP’s over 50-year history. As we executed on our restructuring project, it became apparent that our two core businesses have evolved to a point where we can be more efficient and better serve our customers if we combine into one CULP-branded business. We see a variety of opportunities to create synergies through a more centralized and cross-functional operating model coupled with a unified management team focused on the home furnishings industry holistically and unencumbered by product, customer, or market-specific boundaries. We believe this will create a stronger and more nimble CULP organization ready to maximize the collective talent and resources of both of our legacy divisions. In an uncertain macroeconomic environment, this more streamlined approach positions us to succeed across a range of demand scenarios.”

“This is a substantial undertaking that involves some facility consolidation, equipment relocation, and other operational adjustments, but no curtailment of production levels. Most importantly, it affects people and naturally involves some employment loss. While those are always difficult decisions, they also represent an inflection point for our company. We remain deeply grateful to the affected team members in Burlington and thank them for their dedication and contributions. We are committed to helping them make the best possible transition.”

Culp continued, “In addition to cost synergies, our new model also gives us more flexibility to adjust our supply chain and cost base as conditions warrant. We believe our current manufacturing platform and supply chain optionality across the U.S., Haiti/Dominican Republic, Turkey, Vietnam and China is a differentiator for our business, especially as many in our industry seek alternatives to navigate the tariff landscape and look to CULP’s long history of providing customers with preferred, compliance-sophisticated sourcing solutions. As we enter our 2026 fiscal year, we believe the strategic benefits and estimated cost reductions of approximately $3 million per year from this integration effort, along with the approximately $10-11 million in annualized savings we expect to realize from our recently completed cost restructuring initiatives, further enhances our ability to win market share and return value to shareholders.”

As part of the integration, Mary Beth Hunsberger, formerly President of the Culp Upholstery Fabrics division, has been appointed Chief Operating Officer of Culp, Inc., and Tommy Bruno, formerly President of the Culp Home Fashions division, will now serve as Culp, Inc.’s Chief Commercial Officer.

“Agility is our driving force at CULP,” said Hunsberger. “In my new role, I’m committed to leading with purpose, embracing fresh ideas, and ensuring that we are ready to adapt quickly to change.” Bruno added, “We are blazing a new trail in this era of our business. My focus is on fostering innovation and building stronger customer experiences as we push boundaries, pursue new growth, and bolster our leadership position in the home furnishings industry.”

The newly integrated Culp, Inc. will maintain its headquarters in High Point, North Carolina, and remain committed to delivering value to its customers, shareholders, and other stakeholders.

“As we move forward, we do so with optimism and resolve,” said Culp. “These organizational changes reflect our long-standing commitment to innovation and building a future that thrives on speed, creativity, and the courage to embrace what’s next.”