false 0000723603 0000723603 2022-08-19 2022-08-19

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

 

FORM 8-K

 

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported) August 19, 2022

 

Culp, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

North Carolina		1-12597		56-1001967
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

1823 Eastchester Drive

High Point, North Carolina  27265

(Address of Principal Executive Offices)

(Zip Code)

 

(336) 889-5161

(Registrant’s Telephone Number, Including Area Code)

 

Not Applicable

(Former name or address, if changed from last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

	☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
	☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
	☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading Symbol	Name of exchange on which registered
Common stock, par value $0.05 per share	CULP	New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).  Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

---

 

 

Item 1.01.  Entry into a Material Definitive Agreement

On August 19, 2022, Culp, Inc. (the “Company”) entered into a First Amendment to Amended and Restated Credit Facility (the “First Amendment”), which amends the Amended and Restated Credit Agreement, dated as of June 24, 2022, between the Company and Wells Fargo Bank, National Association (the “Credit Agreement”).  The terms of the First Amendment amend the time period in which the financial covenant for the minimum ratio of consolidated EBITDA to consolidated net interest expense applies, such that this EBITDA to interest expense covenant does not apply during any of the four quarters of the Company’s fiscal 2023.  During that period, the Company must maintain minimum “access to liquidity” of $15 million, which is defined as unencumbered liquid assets plus available and unused credit under the revolving credit facility as calculated using the borrowing base, all as defined in the Credit Agreement.

 

 

Item 9.01 (d) – Exhibits

 

10.1		First Amendment to Amended and Restated Credit Agreement by and between Culp, Inc. and Wells Fargo Bank, N.A., dated August 19, 2022
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

2

---

 

 

EXHIBIT INDEX

 

Exhibit Number		Exhibit
10.1		First Amendment to Amended and Restated Credit Agreement by and between Culp, Inc. and Wells Fargo Bank, N.A., dated August 19, 2022
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

3

---

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

		CULP, INC. (Registrant)
		By:	/s/ Ashley Durbin
			VP, General Counsel, and Corporate Secretary

 

Dated:  August 22, 2022

 

 

4

Exhibit 10.1

FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this "Amendment") is entered into as of August 19, 2022 by and between CULP, INC., a North Carolina corporation ("Borrower"), and WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank").

RECITALS

WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and conditions of that certain Amended and Restated Credit Agreement between Borrower and Bank dated as of June 24, 2022, as amended from time to time ("Credit Agreement").

WHEREAS, Bank and Borrower have agreed to certain changes in the terms and conditions set forth in the Credit Agreement and have agreed to amend the Credit Agreement to reflect said changes.

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Amendments to Credit Agreement.  The Credit Agreement is hereby amended as set forth in this Section 1.

1.1Section 5.9(b) of the Credit Agreement  is amended and restated in its entirety to read as follows:

“(b)Consolidated EBITDA/Consolidated Net Interest Expense Ratio. Ratio of Consolidated EBITDA to Consolidated Net Interest Expense not less than 3.00 to 1.00 as of the end of the Fiscal Quarter ended nearest to April 30, 2022, and as of the end of the Fiscal Quarter ending nearest to July 31, 2023 and as of each Fiscal Quarter end thereafter, all as determined on a rolling 4-quarter basis.”

1.2Section 5.9(c) of the Credit Agreement  is amended and restated in its entirety to read as follows:

“(c)Liquidity. For the Fiscal Quarters ending nearest to July 30, 2022, October 31, 2022, January 31, 2023 and April 30, 2023, sum of (i) Unencumbered Liquid Assets, valued at fair market value, plus (ii) unused but available borrowings under the Line of Credit (that is, (x) the lesser of the maximum principal amount of the Line of Credit or then-current Availability (as defined in Section 2.1(b)), minus (y) outstanding borrowings and Letters of Credit) shall not be less than Fifteen Million and No/100 Dollars ($15,000,000.00).  As used herein, “Unencumbered Liquid Assets” shall mean cash, cash equivalents and/or publicly traded marketable securities acceptable to Bank in its sole, but reasonable, discretion, free of any lien or other encumbrance (provided that retirement account assets held in a fiduciary capacity by Borrower shall not qualify as Unencumbered Liquid Assets).”

2.Conditions to Effectiveness.  The effectiveness of this Amendment is subject to the fulfillment to Bank’s satisfaction of the following conditions:

(i)This Amendment; and

 

---

 

(ii)Such other documentation as Bank may reasonably require in connection with this Amendment.

3.No Further Amendment.  Except as specifically provided herein, all terms and conditions of the Credit Agreement remain in full force and effect, without waiver or modification.  All terms defined in the Credit Agreement shall have the same meaning when used in this Amendment.  This Amendment and the Credit Agreement shall be read together, as one document.

4.Representations and Warranties.  Borrower hereby remakes all representations and warranties contained in the Credit Agreement and reaffirms all covenants set forth therein.  Borrower further certifies that as of the date of this Amendment there exists no Event of Default as defined in the Credit Agreement, nor any condition, act or event which with the giving of notice or the passage of time or both would constitute any such Event of Default.  Borrower acknowledges and confirms that Bank has existing, valid first priority security interests and liens in the collateral securing the Line of Credit and that such security interests and liens shall secure Borrower’s obligations under the Credit Agreement as amended by this Amendment including, without limitation, all obligations under the Line of Credit Note and all future modifications of the Credit Agreement, the Line of Credit Note and the other Loan Documents.

5.Costs.  Borrower agrees to pay all costs and expenses of the Bank in connection with the preparation, execution and delivery of this Amendment, including without limitation the fees and expenses of the Bank’s legal counsel.

6.Counterparts.  This Amendment may be executed in any number of counterparts, each of which when executed and delivered shall be deemed to be an original, and all of which when taken together shall constitute one and the same document.

[Remainder of Page Intentionally Left Blank]

 

 

WBD (US) 57307071v2

---

 

 

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have caused this Amendment to be executed, with the intention that it constitute an instrument under seal, as of the day and year first written above.

 

 

 

 

WBD (US) 57307071v2