Company: CULP
Filing Date: 2025-03-07
Form Type: 10-Q
Source: 0000950170-25-035191
Chunk: 16

Company: CULP INC
Filing Date: 2025-03-07
Form: 10-Q
Item: Item 1
Chunk 16
---
 associated with the mattress fabrics and upholstery fabrics segments, respectively. The $8.3 million of estimated restructuring and restructuring related charges associated with our mattress fabrics segment represents (i) other associated costs of $3.3 million mostly related to relocating equipment from our facility in Quebec, Canada to 

I-14

our facility in Stokesdale, North Carolina, (ii) additional depreciation expense related to the shortening of useful lives of equipment associated with the gradual discontinuance of our operations located in Canada noted above totaling $1.3 million, (iii) employee termination benefits of $1.4 million, (iv) $1.5 million related to losses on disposal and valuation of inventory, and (v) lease termination costs of $849,000, partially offset by net gains on the disposal of equipment totaling $42,000. These restructuring and restructuring related charges exclude any expected gain from the sale of the Canadian facility, which would ultimately reduce the amount of the restructuring charges incurred. Based on changes in business and current unfavorable economic conditions related to the home furnishings and bedding industries, it is possible that the above estimates provided by management, to determine restructuring and restructuring related charges incurred during fiscal 2025 could be materially different from the actual results, and therefore could adversely affect the success of this restructuring plan. The above-referenced conditional agreement for the sale of our Canadian facility includes a purchase price of $15.5 million CAD ($10.8 million USD as of January 26, 2025), contingent on the satisfaction of certain due diligence and closing conditions. Assuming the completion of the transaction, the company currently expects the proceeds from the sale (net of all taxes and commissions) to exceed the amount of cash restructuring charges incurred in connection with the Fiscal 2025 Restructuring Plan.    The following summarizes accrued restructuring costs for the nine-month period ended January 26, 2025:  

        Employee

        Other

        Termination

        Associated

        (dollars in thousands)
         
        Benefits

        Costs

        Total

        Beginning balance
         
        $
        —

        $
        —

        $
        —

        Expenses incurred

        1,535

        2,730

        4,265

        Change in estimate adjustments

        (107
        )

        —

        (107
        )

        Payments

        (896
        )

        (2,509
        )

        (3,405
        )

        Foreign currency exchange remeasurement

        (