Company: CULP
Filing Date: 2025-03-07
Form Type: 10-Q
Source: 0000950170-25-035191
Chunk: 13

Company: CULP INC
Filing Date: 2025-03-07
Form: 10-Q
Item: Item 1
Chunk 13
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 recorded at its fair value of $2.0 million, which represented the present value of future discounted cash flows based on the payment amounts and timing of such payments due from the Lessee as stated in the Termination Agreement. We used an interest rate of 6% to determine the present value of the future discounted cash flows, based on significant unobservable inputs and assumptions determined by management such as (i) the credit characteristics of the Lessee and guarantor of the Termination Agreement; (ii) the length of the payment terms as defined in the Termination Agreement; (iii) the payment terms as defined in the Termination Agreement being denominated in USD; and (iv) the fact that the facility is located in, and the Lessee and guarantor conduct business in, Haiti, a foreign country. Since management used significant unobservable inputs and assumptions to determine the fair value of this note receivable, this note receivable was classified as Level 3 within the fair value hierarchy (see Note 12 for further explanation of the fair value hierarchy). Effective May 1, 2023, CUF Haiti formally assigned the $2.4 million note receivable to Culp, Inc. (its U.S. parent).  The following table represents the remaining future principal payments as of January 26, 2025:  

        (dollars in thousands)

        2025
         
        $
        90

        2026

        360

        2027

        360

        2028

        360

        2029

        360

        Thereafter

        240

        Undiscounted value of note receivable
         
        $
        1,770

        Less: unearned interest income

        (240
        )

        Present value of note receivable
         
        $
        1,530

      As of January 26, 2025, this note receivable totaled $1.5 million, of which $276,000 and $1.3 million were classified as short-term note receivable and long-term note receivable, respectively. As of January 28, 2024, this note receivable totaled $1.8 million, of which $260,000 and $1.5 million were classified as short-term note receivable and long-term note receivable, respectively.  As of April 28, 2024, this note receivable totaled $1.7 million