Culp Inc., a provider of fabrics for bedding and upholstery, sold its mattress fabric manufacturing facility in Quebec, Canada, in the first week of its new fiscal year.
The sale marks the completion of the restructuring plan the supplier announced a year ago. Culp sold the plant for $6.2 million USD ($8.6 million CA), with $1.4 million USD ($2 million CA) received at closing and the balance to be paid with interest over the course of six months to a year. The company expects to realize about $3 million to $3.5 million in cash proceeds, which it plans to use to reduce outstanding debt and enhance financial flexibility.
“I’d like to thank our team for their efficiency in executing our restructuring plan,” said Iv Culp, president and CEO of Culp Inc. “Our ability to reshape the cost structure of our mattress fabric business and complete the final step of selling our facility in Canada within a year is a testament to their focus and dedication. We were pleased to monetize the facility in what ultimately proved to be a softer local industrial market than originally anticipated that was made more challenging by some rezoning and utility service issues impacting the property. Exiting the facility also allows us to avoid monthly carrying costs in the six figures for insurance, maintenance and the like going forward, and the cash proceeds from the sale further strengthen our balance sheet and liquidity and we enter our new fiscal year.”
He continued: “I’d also like to thank all of our former associates and the community in Quebec for their contributions to the long run of success we enjoyed there. Consolidating our Canada operations into our U.S. platform was a difficult decision, but we never hesitate to make changes when in the best interests of our customers and shareholders. Our new streamlined operating model, along with an expanded U.S. manufacturing capacity and nearshore and offshore options in Haiti/Dominican Republic, Vietnam, Turkey and China, offers customers a uniquely flexible and cost-effective supply chain to bring their products to market in the current trade environment.”
