Culp Inc

Culp Inc's capital structure is characterized by a low debt-to-equity ratio of 0.0, indicating no long-term debt obligations. The company maintains a current ratio of 2.12, suggesting adequate short-term liquidity to cover its liabilities. However, its operating cash flow is negative at -$8.22 million, and free cash flow is -$3.60 million, signaling cash flow constraints. The price-to-book ratio of 0.53 implies that the company's market value is trading below its book value, potentially indicating undervaluation or financial distress.

Profitability metrics for Culp Inc are weak, with a net loss of -$4.87 million and an operating loss of -$4.25 million. The return on equity (ROE) is -6.39%, and the return on assets (ROA) is -3.68%, both significantly below industry norms for a healthy business. Gross profit of $5.20 million represents a margin of approximately 10.5%, which is low for a textile and home furnishings company.

The company's revenue is concentrated in a single business segment, with no disclosed geographic diversification in the provided data. This lack of diversification increases exposure to regional economic downturns or supply chain disruptions.

Looking ahead, Culp Inc is projected to face continued financial pressure. Analysts estimate a mean revenue of $202 million for the current fiscal year, a decline from the last actual revenue of $213.24 million. The mean EBIT estimate is -$8.12 million, indicating continued operating losses. These trends suggest a challenging growth trajectory, with no clear signs of improvement in the near term.

Risk factors for Culp Inc include liquidity constraints, as evidenced by negative operating and free cash flows. The company has no immediate filing-based liquidity or dilution flags, but the absence of long-term debt does not mitigate the risk of cash flow insolvency. The low dilution risk is attributed to no recent or disclosed share issuance activity. However, the company's financial performance and cash flow position could necessitate future dilution if earnings do not improve.

Recent events, including the latest 10-K filing and analyst estimates, indicate ongoing financial stress. The company's ESG profile shows a governance score of 55.18, which is moderate, but its social pillar score of 25.55 is low, and its ESG controversies score of 100.00 suggests no major controversies. These metrics do not provide a strong ESG endorsement for the company.

Culp maintains a debt-to-equity ratio of 0.0, ranking in the top quartile for leverage discipline within the textiles cohort.

The company exhibits a cash conversion metric of 1.69, significantly outperforming the cohort median of 0.98.

Liquidity risk is assessed as low, supported by a current ratio of 1.78 as of April 2025.

Dilution risk is rated low, indicating minimal threat to existing shareholder equity value from share issuance.

Gross profit recovered to $27.9 million in FY2024, up from $10.9 million in FY2023, showing top-line resilience.

Credit risk is flagged as high, with interest coverage at -79.6, indicating inability to cover interest expenses.

Revenue $48.0M, −8,2% YoY; Operating income +4,2% YoY.

• ▍Revenue $48.0M, −8,2% YoY
• ▍Operating income +4,2% YoY
• ▍Net income +16,8% YoY
• ▍Free cash flow +29,6% YoY
• ▍Net margin -7.2%

Revenue $53.2M, −4,4% YoY; Operating income +36,0% YoY.

• ▍Revenue $53.2M, −4,4% YoY
• ▍Operating income +36,0% YoY
• ▍Net income +23,7% YoY
• ▍Free cash flow +31,5% YoY
• ▍Net margin -8.1%

Revenue $50.7M, −10,3% YoY; Operating income +123,6% YoY.

• ▍Revenue $50.7M, −10,3% YoY
• ▍Operating income +123,6% YoY
• ▍Net income +96,8% YoY
• ▍Free cash flow +115,3% YoY
• ▍Net margin -0.5%

Revenue $48.8M, −1,5% YoY; Operating income +47,3% YoY.

• ▍Revenue $48.8M, −1,5% YoY
• ▍Operating income +47,3% YoY
• ▍Net income +57,4% YoY
• ▍Free cash flow +63,3% YoY
• ▍Net margin -4.2%

Revenue $52.3M; Operating income -$3.9M.

• ▍Revenue $52.3M
• ▍Operating income -$3.9M
• ▍Net margin -7.9%

Revenue $55.7M; Operating income -$5.4M.

• ▍Revenue $55.7M
• ▍Operating income -$5.4M
• ▍Net margin -10.1%

Revenue $56.5M; Operating income -$6.9M.

• ▍Revenue $56.5M
• ▍Operating income -$6.9M
• ▍Net margin -12.8%

Revenue $49.5M; Operating income -$4.2M.

• ▍Revenue $49.5M
• ▍Operating income -$4.2M
• ▍Net margin -9.8%

Revenue $213.2M, −5,4% YoY; Operating income −62,5% YoY.

• ▍Revenue $213.2M, −5,4% YoY
• ▍Operating income −62,5% YoY
• ▍Net income −38,2% YoY
• ▍Free cash flow −40,0% YoY
• ▍Net margin -9.0%

Revenue $225.3M, −4,1% YoY; Operating income +60,3% YoY.

• ▍Revenue $225.3M, −4,1% YoY
• ▍Operating income +60,3% YoY
• ▍Net income +56,2% YoY
• ▍Free cash flow +59,7% YoY
• ▍Net margin -6.1%

Revenue $234.9M, −20,3% YoY; Operating income −4 300,3% YoY.

• ▍Revenue $234.9M, −20,3% YoY
• ▍Operating income −4 300,3% YoY
• ▍Net income −881,6% YoY
• ▍Free cash flow −283,8% YoY
• ▍Net margin -13.4%

Revenue $294.8M, −1,6% YoY; Operating income −94,7% YoY.

• ▍Revenue $294.8M, −1,6% YoY
• ▍Operating income −94,7% YoY
• ▍Net income −199,8% YoY
• ▍Free cash flow −33,8% YoY
• ▍Net margin -1.1%