22NW Fund Discloses 9.9% Stake in Culp, Inc.

TL;DR

**22NW Fund now owns 9.9% of Culp Inc. - activist play incoming?**

AI Summary

On April 12, 2024, 22NW Fund, LP, through Aron R. English, filed a Schedule 13D concerning Culp, Inc. The filing indicates a change in beneficial ownership, with 22NW Fund, LP now holding 1,510,500 shares, representing approximately 9.9% of the outstanding common stock. This filing suggests a potential activist stake or strategic interest in Culp, Inc.

Why It Matters

This filing signals a significant stake taken by an investment fund in Culp, Inc., which could lead to changes in company strategy, management, or a potential acquisition.

Risk Assessment

Risk Level: medium — The filing indicates a significant ownership stake by an investment fund, which could lead to activist actions or strategic shifts, introducing uncertainty.

Key Numbers

• 1,510,500 — Shares Owned (Represents the total number of shares beneficially owned by 22NW Fund, LP.)
• 9.9% — Ownership Percentage (Indicates the significant stake 22NW Fund, LP holds in Culp, Inc.)

Key Players & Entities

• 22NW Fund, LP (company) — Filing entity
• Culp, Inc. (company) — Subject company
• Aron R. English (person) — Authorized representative for 22NW Fund, LP
• 1,510,500 (dollar_amount) — Number of shares beneficially owned
• 9.9% (dollar_amount) — Percentage of outstanding common stock owned
• April 12, 2024 (date) — Filing date

FAQ

Key Financial Figures

• $0.05 — ame of Issuer) Common Stock, par value $0.05 per share (Title of Class of Securiti
• $10,112,164 — tly owned by 22NW Fund is approximately $10,112,164, excluding brokerage commissions. The
• $10,150 — y owned by Mr. English is approximately $10,150, excluding brokerage commissions. The a
• $7,994 — ed by Mr. Hirai-Hadley is approximately $7,994, excluding brokerage commissions. The a
• $5,380 — tly owned by Mr. Jones is approximately $5,380, excluding brokerage commissions. Item

Filing Documents

• sc13d10680017_04122024.htm (SC 13D) — 217KB
• ex991to13d10680017_041224.htm (EX-99.1) — 11KB
• 0000921895-24-000833.txt ( ) — 230KB

Security and Issuer

Item 1. Security and Issuer . This statement relates to the common stock, par value $0.05 per share (the “Shares”), of Culp, Inc., a North Carolina corporation (the “Issuer”). The address of the principal executive offices of the Issuer is 1823 Eastchester Drive, High Point, North Carolina 27265.

Identity and Background

Item 2. Identity and Background . (a) This (i) 22NW Fund, LP, a Delaware limited partnership (“22NW Fund”), with respect to the Shares directly and beneficially owned by it; (ii) 22NW, LP, a Delaware limited partnership (“22NW”), as the investment manager of 22NW Fund; (iii) 22NW Fund GP, LLC, a Delaware limited liability company (“22NW GP”), as the general partner of 22NW Fund; (iv) 22NW GP, Inc., a Delaware S Corporation (“22NW Inc.”), as the general partner of 22NW; (v) Aron R. English, as the Portfolio Manager of 22NW, Manager of 22NW GP and President and sole shareholder of 22NW Inc.; (vi) Bryson O. Hirai-Hadley; and (vii) Alexander B. Jones. Each of the foregoing is referred to as a “Reporting Person” and collectively as the “Reporting Persons.” Each of the Reporting Persons is party to that certain Joint Filing Agreement, as further described in Item 6. Accordingly, the Reporting Persons are hereby filing a joint Schedule 13D. (b) The address of the principal office of each of the Reporting Persons is 590 1 st Ave. S., Unit C1, Seattle, Washington 98104. (c) The principal business of 22NW Fund is investing in securities. The principal business of 22NW is serving as the investment manager of 22NW Fund. The principal business of 22NW GP is serving as the general partner of 22NW Fund. The principal business of 22NW Inc. is serving as the general partner of 22NW. Mr. English is the Portfolio Manager of 22NW, Manager of 22NW GP and President and sole shareholder of 22NW Inc. Mr. Hirai-Hadley is Director of Research at 22NW. Mr. Jones is a Vice President and Senior Research Analyst at 22NW. (d) No Reporting Person has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) No Reporting Person has, during the last five years, been party to a civil proceeding of a judicial or admin

Source and Amount of Funds or Other Consideration

Item 3. Source and Amount of Funds or Other Consideration . The Shares purchased by 22NW Fund were purchased with working capital (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business). The aggregate purchase price of the 1,236,789 Shares directly owned by 22NW Fund is approximately $10,112,164, excluding brokerage commissions. The Shares directly owned by Messrs. English, Hirai-Hadley and Jones were purchased with personal funds (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business). The aggregate purchase price of the 1,450 Shares directly owned by Mr. English is approximately $10,150, excluding brokerage commissions. The aggregate purchase price of the 799 Shares directly owned by Mr. Hirai-Hadley is approximately $7,994, excluding brokerage commissions. The aggregate purchase price of the 525 Shares directly owned by Mr. Jones is approximately $5,380, excluding brokerage commissions.

Purpose of Transaction

Item 4. Purpose of Transaction . The Reporting Persons purchased the Shares based on the Reporting Persons’ belief that the Shares, when purchased, were undervalued and represented an attractive investment opportunity. Depending upon overall market conditions, other investment opportunities available to the Reporting Persons, and the availability of Shares at prices that would make the purchase or sale of Shares desirable, the Reporting Persons may endeavor to increase or decrease their position in the Issuer through, among other things, the purchase or sale of Shares on the open market or in private transactions or otherwise, on such terms and at such times as the Reporting Persons may deem advisable. The Reporting Persons intend to engage in communications with the Issuer’s management team and Board of Directors (the “Board”) regarding opportunities to enhance shareholder value and improve corporate governance, including through potential changes to the composition of the Board. No Reporting Person has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a) - (j) of Item 4 of Schedule 13D except as set forth herein or such as would occur upon or in connection with completion of, or following, any of the actions discussed herein. The Reporting Persons intend to review their investment in the Issuer on a continuing basis and to communicate with the Issuer’s management and Board about a broad range of operational and strategic matters. Depending on various factors including, without limitation, the Issuer’s financial position and investment strategy, the price levels of the Shares, conditions in the securities markets and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without limitation, engaging in additional communications with managem

Interest in Securities of the Issuer

Item 5. Interest in Securities of the Issuer . (a)The aggregate percentage of Shares reported owned by each person named herein is based upon 12,469,903 Shares outstanding as of March 6, 2024, which is the total number of Shares outstanding as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on March 8, 2024. As of the date hereof, 22NW Fund directly beneficially owned 1,236,789 Shares, constituting approximately 9.9% of the Shares outstanding. As of the date hereof, Mr. English directly beneficially owned 1,450 Shares, constituting less than 1% of the Shares outstanding. As of the date hereof, Mr. Hirai-Hadley directly beneficially owned 799 Shares, constituting less than 1% of the Shares outstanding. As of the date hereof, Mr. Jones directly beneficially owned 525 Shares, constituting less than 1% of the Shares outstanding. 22NW, as the investment manager of 22NW Fund, may be deemed to beneficially own the 1,236,789 Shares beneficially owned by 22NW Fund, constituting approximately 9.9% of the Shares outstanding. 22NW GP, as the general partner of 22NW Fund, may be deemed to beneficially own the 1,236,789 Shares beneficially owned by 22NW Fund, constituting approximately 9.9% of the Shares outstanding. 22NW Inc., as the general partner of 22NW, may be deemed to beneficially own the 1,236,789 Shares beneficially owned by 22NW Fund, constituting approximately 9.9% of the Shares outstanding. Mr. English, as the Portfolio Manager of 22NW, Manager of 22NW GP and President and sole shareholder of 22NW Inc., may be deemed to beneficially own the 1,236,789 Shares beneficially owned by 22NW Fund, which, together with the Shares he directly beneficially owns, constitutes an aggregate of 1,238,239 Shares, constituting approximately 9.9% of the Shares outstanding. Each Reporting Person may be deemed to be a member of a “group” with the other Reporting Persons for the purposes of Section 13(d)(3)

Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer

Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer . On April 12, 2024, the Reporting Persons entered into a Joint Filing Agreement in which the Reporting Persons agreed to the joint filing on behalf of each of them of statements on Schedule 13D with respect to the securities of the Issuer to the extent required by applicable law. The Joint Filing Agreement is attached hereto as Exhibit 99.1 and is incorporated herein by reference. Other than as described herein, there are no contracts, arrangements, understandings or relationships among the Reporting Persons, or between the Reporting Persons and any other person, with respect to the securities of the Issuer.

Material to be Filed as Exhibits

Item 7. Material to be Filed as Exhibits . 99.1 Joint Filing Agreement, dated April 12, 2024. 12 CUSIP No. 230215105

SIGNATURES

SIGNATURES After reasonable inquiry and to the best of his knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: April 12, 2024 22NW FUND, LP By: 22NW Fund GP, LLC General Partner By: /s/ Aron R. English Name: Aron R. English Title: Manager 22NW, LP By: 22NW GP, Inc. General Partner By: /s/ Aron R. English Name: Aron R. English Title: President and Sole Shareholder 22NW FUND GP, LLC By: /s/ Aron R. English Name: Aron R. English Title: Manager 22NW GP, INC. By: /s/ Aron R. English Name: Aron R. English Title: President and Sole Shareholder /s/ Aron R. English ARON R. ENGLISH /s/ Bryson O. Hirai-Hadley BRYSON O. HIRAI-HADLEY /s/ Alexander B. Jones ALEXANDER B. JONES 13 CUSIP No. 230215105 SCHEDULE A Transactions in the Securities of the Issuer During the Past Sixty (60) Days Nature of the Transaction Amount of Securities Purchased/(Sold) Price ($) Date of Purchase/Sale 22NW FUND, LP Purchase of Common Stock 9,078 4.9803 03/11/2024 Purchase of Common Stock 10,922 4.9471 03/12/2024 Purchase of Common Stock 2,809 4.5445 03/14/2024 Purchase of Common Stock 1,600 4.6188 03/14/2024

View Full Filing

View this SC 13D filing on SEC EDGAR