Culp Inc . (NYSE:CULP), a $49.86 million market cap company currently trading below its Fair Value according to InvestingPro analysis, has announced the extension and amendment of its asset-based revolving credit facility (ABL Facility) with Wells Fargo Bank, National Association. The agreement, entered into on Sunday, extends the maturity of the ABL Facility to June 12, 2028, and includes several key modifications. With a current ratio of 1.68, the company maintains sufficient liquid assets to meet its short-term obligations.

The ABL Facility’s maximum principal amount stands at $30.0 million, with an option to increase by up to $10.0 million through an accordion feature. The facility permits a sub-facility for letters of credit up to $2 million. The borrowing base is determined by eligible accounts receivable and inventory, subject to certain conditions and reserves. This facility expansion comes as InvestingPro data shows the company operating with a moderate debt level of $10.54 million, though recent data indicates the company has been quickly burning through cash.

Interest rates on borrowings are tied to the daily simple secured overnight financing rate (SOFR) plus a margin ranging from 175 to 225 basis points, depending on the level of excess availability under the facility. Additionally, the company may incur a fee on unutilized commitments, varying with the percentage of credit used.

The amendment also allows for permitted investments in foreign subsidiaries up to $2 million, under specific conditions. Furthermore, for the fixed charge coverage ratio covenant, the company can adjust its EBITDA calculation by adding back actual cash restructuring charges for May 2024 through April 2025 and, subsequently, additional charges up to $1 million.

This modification follows the Second Amended and Restated Credit Agreement dated January 19, 2023, which in turn replaced the agreement dated June 24, 2022. The Third Amendment to the Credit Agreement filed with the SEC on June 16, 2025, details all changes, which are effective as of June 12, 2025.

The information provided in this article is based on the company’s latest SEC filing and reflects the current terms and conditions of Culp Inc.’s credit facility as amended. With trailing twelve-month revenue of $213.99 million and EBITDA of -$7.59 million, investors seeking deeper insights into Culp’s financial health can access comprehensive analysis and 8 additional ProTips through InvestingPro’s detailed research reports.

In other recent news, Culp, Inc. has completed the sale of its mattress fabric manufacturing facility in Quebec, Canada. The transaction, part of a restructuring strategy announced a year ago, was finalized for CA$8.6 million, equivalent to USD$6.2 million. The initial payment of CA$2.0 million was received, with the remaining amount to be paid over six to 12 months, including interest. The company anticipates net proceeds of $3.0 to $3.5 million after taxes and fees, which will be used to reduce debt and enhance financial flexibility. Iv Culp, the President and CEO, noted the successful execution of the restructuring plan despite a weaker-than-expected local industrial market. The sale is expected to lower substantial monthly carrying costs and improve the company’s balance sheet and liquidity. Culp also emphasized the importance of the company’s flexible supply chain, which includes expanded U.S. manufacturing and partnerships in several countries. These developments are part of Culp’s efforts to adapt to the current trade environment.

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