Company: CULP
Filing Date: 2025-03-07
Form Type: 10-Q
Source: 0000950170-25-035191
Chunk: 9

Company: CULP INC
Filing Date: 2025-03-07
Form: 10-Q
Item: Item 1
Chunk 9
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 $2.0 million for the nine months ended January 28, 2024. This non-cash inventory credit represents a credit of $2.0 million related to adjustments made to our inventory markdown reserve estimated based on our policy for aged inventory for both our mattress and upholstery fabrics segments, partially offset by a charge of $40,000 which represents markdowns of inventory related to the discontinuance of production of cut and sewn upholstery kits at our facility in Ouanaminthe, Haiti. Assessment As of January 26, 2025, we reviewed our mattress fabrics and upholstery fabrics inventories to determine if any additional reductions of inventory in excess of the amount recorded based on our policy for aged inventory were necessary. Based on our assessment, no additional write downs of inventories to their net realizable value were recorded for the nine months ended January 26, 2025, other than the markdowns of inventory associated with our restructuring activities described in Note 10 of the consolidated financial statements.  Based on the current unfavorable macroeconomic conditions related to the home furnishings and bedding industry, it is possible that estimates used by management to determine the write down of inventory to its net realizable value could be materially different from the actual amounts or our results. These differences could result in higher than expected inventory provisions, which could adversely affect the company’s results of operations and financial condition in the near term.

6. Intangible Assets A summary of intangible assets follows:  

        (dollars in thousands)
         
        January 26, 2025

        January 28, 2024

        April 28, 2024

        Tradename
         
        $
        540

        $
        540

        $
        540

        Customer relationships, net

        809

        1,110

        1,035

        Non-compete agreement, net

        245

        320

        301

        $
        1,594

        $
        1,970

        $
        1,876

       TradenameOur tradename pertains to Read, a separate reporting unit within the upholstery fabrics segment. This tradename was determined to have an indefinite useful life at the time of its acquisition, and therefore is not being amortized. However, we are required to assess this tradename annually or between annual tests if we believe indicators of impairment exist. Based on our assessment as of January 26, 2025