Home Accessories Segment (Tables)

12 Months Ended

May 02, 2021

Summary of Disposal of Discontinued Operation on Consolidated Balance Sheet

The following is a summary of the assets and liabilities that were sold on March 31, 2020:

	March 31,
(dollars in thousands)	2020
ASSETS
current assets:
cash and cash equivalents	$	285
accounts receivable		588
inventories		3,344
other current assets		170
total current assets held for sale - discontinued operation		4,387
property, plant, and equipment		1,694
goodwill		—
intangible asset		—
right of use assets		918
total noncurrent assets held for sale - discontinued operation		2,612
total assets	$	6,999
LIABILITIES AND NET ASSETS
current liabilities:
accounts -payable trade	$	1,394
operating lease liability - current		195
accrued expenses		351
total current liabilities held for sale - discontinued operation		1,940
loan payable - Culp Inc.		1,500
subordinated loan payable - noncontrolling interest		925
operating lease liability - long-term		743
total noncurrent liabilities held for sale - discontinued operation		3,168
total liabilities		5,108
total net assets of discontinued operation	$	1,891

Summary of Loss from Discontinued Operation on Consolidated Statements of Net Income (Loss)

The following is a reconciliation of the major classes of financial statement line items constituting loss before income taxes from discontinued operation that are disclosed in the notes to the financial statements to loss from discontinued operation that are presented in the Consolidated Statements of Net Income (Loss) for fiscal years 2020 and 2019:

(dollars in thousands)	2020			2019
net sales	$	13,763		$	15,956
cost of sales		(10,953	)		(11,527	)
gross profit		2,810			4,429
selling, general and administrative expenses		(4,100	)		(5,162	)
asset impairments (1)		(20,202	)		—
reversal of contingent consideration - earn-out obligation (2)		5,856			—
interest expense (3)		(84	)		(30	)
other income		34			37
loss from discontinued operation related to major classes    of loss before income taxes		(15,686	)		(726	)
loss on disposal of discontinued operation (4)		(1,891	)		—
loss before income taxes from discontinued operation		(17,577	)		(726	)
income tax benefit		68			113
net loss from discontinued operation	$	(17,509	)	$	(613	)

(1) During fiscal 2020, we recorded asset impairment charges totaling $20.2 million, of which $13.6 million and $6.6 million pertained to the goodwill and tradename, respectively. See Notes 8, 9, and 15 of the notes to the consolidated financial statements for further details of our assessments that resulted in the impairment of the goodwill and tradename associated with this discontinued operation.

(2) See separate section below titled “Contingent Consideration” for further details.

(3) Interest expense is directly attributable to our discontinued operations as it pertains to loans payable assumed by the buyer, (the noncontrolling interest) or required to be paid to Culp Inc. based on the terms of the sale agreement.

(4) See separate section below titled “Consolidation and Deconsolidation” for further details.

Summary of Net Income (Loss) from Continuing Operations, Loss from Discontinued Operation, and Net Income (Loss) Attributable to Common Shareholders and Noncontrolling Interest

The following is a summary of net income (loss) from continuing operations, loss from discontinued operation, and net income (loss) attributable Culp Inc. common shareholders and the noncontrolling interest for fiscal years 2021, 2020, and 2019:

(dollars in thousands)	2021		2020			2019
net income (loss) from continuing operations	$	3,218	$	(11,158	)	$	6,071
net income (loss) from continuing operations attributable to    noncontrolling interest		—		—			—
net income (loss) from continuing operations attributable    to Culp Inc. common shareholders	$	3,218	$	(11,158	)	$	6,071
net loss from discontinued operation	$	—	$	(17,509	)	$	(613	)
net loss from discontinued operation attributable to    noncontrolling interest		—		4,674			218
net loss from discontinued operation attributable to Culp Inc.    common shareholders	$	—	$	(12,835	)	$	(395	)
net income (loss)	$	3,218	$	(28,667	)	$	5,458
net loss from noncontrolling interest		—		4,674			218
net income (loss) attributable to Culp Inc.    common shareholders	$	3,218	$	(23,993	)	$	5,676

eLuxury [Member]

Schedule of Allocation of Consideration Transferred to Assets Acquired and Liabilities Assumed

The following table presents the final allocation of the acquisition cost to the assets acquired and liabilities assumed based on their fair values.

(dollars in thousands)	Fair Value
Goodwill	$	13,653
Tradename		6,549
Equipment		2,179
Inventory		1,804
Accounts receivable and other current assets		108
Accounts payable		(1,336	)
Accrued expenses		(295	)
Non-controlling interest in eLuxury		(4,532	)
	$	18,130