September ten. Culp Inc returned to profit in its fiscal first quarter, lifted by tariff recoveries and a surging bedding business.
Net sales hit fifty-four million dollars, up six and a half percent. The bedding segment jumped thirteen percent to thirty-one point eight million – nearshore manufacturing investments and market-share gains drove the growth. Upholstery slipped to twenty-two point two million from twenty-two point six million, mostly because the quarter had one fewer selling week.
Adjusted gross profit reached eight point four million, fifteen point six percent of revenue, before accounting for six point nine million in tariff recoveries. Operating loss narrowed sharply to two hundred seventy-one thousand from one point nine million a year ago. Bottom line: six million dollars net income, forty-seven cents a share, versus a two hundred thirty-one thousand dollar loss.
Debt picture improved fast. Net debt plunged seventy percent to three point one million from ten point nine million. Cash flow from operations swung positive to eight point one million from negative six hundred ninety-five thousand. Adjusted EBITDA landed at five hundred sixty-six thousand, excluding tariff money and insurance proceeds, up from negative nine hundred thirty-eight thousand.
Management targets break-even operating income next quarter. Capital spending ran three hundred fourteen thousand this quarter; full-year goal is about two point five million.
All thirteen point three million in debt sits in Chinese credit facilities – low rates, preserves U.S. bank lines. Inventory dropped to forty-two point three million from forty-seven point five million. Tangible book value: four dollars twenty-four cents a share. Tax rate normalized to twelve point seven percent from a distorted one hundred twenty percent.
Liquidity stands at twenty-nine point four million – ten point two million cash plus nineteen point two million available credit. The Stokesdale, North Carolina plant carries twelve million on the books but could fetch roughly forty million. Ninety-five million in federal loss carryforwards shield about twenty million in future taxes.
CEO Culp said bedding growth materially outpaced the industry in both units and dollars. Cooling technology cleared testing; launch set for late twenty twenty-six. CFO transition: Mary Beth Hunsberger takes over from Ken Bowling on September fourteen, keeping her operations role.
Risks remain. Trade policy shifts fast; tariff disruptions could return. A real demand recovery needs stronger consumer confidence and more discretionary spending to bring shoppers back to mattress stores.
