10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 29, 2023

Commission File No. 1-12597

CULP, INC.

(Exact name of registrant as specified in its charter)

North Carolina	56-1001967
(State or other jurisdiction of incorporation or other organization)	(I.R.S. Employer Identification No.)

1823 Eastchester Drive
High Point, North Carolina	27265-1402
(Address of principal executive offices)	(zip code)

(336) 889-5161

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

		Name of Each Exchange
Title of Each Class	Trading Symbol(s)	On Which Registered
Common Stock, par value $.05/ Share	CULP	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period after the registrant was required to submit such files). ☒ Yes No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller Reporting Company	☒
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Common shares outstanding as of December 6, 2023: 12,469,903

Par Value: $0.05 per share

INDEX TO FORM 10-Q

For the period ended October 29, 2023

	Part I - Financial Statements	Page
Item 1.	Financial Statements: (Unaudited)	I-1
	Consolidated Statements of Net Loss — Three Months and Six Months Ended October 29, 2023, and October 30, 2022	I-1
	Consolidated Statements of Comprehensive Loss – Three Months and Six Months Ended October 29, 2023 and October 30, 2022	I-3
	Consolidated Balance Sheets — October 29, 2023, October 30, 2022, and April 30, 2023	I-4
	Consolidated Statements of Cash Flows — Six Months Ended October 29, 2023, and October 30, 2022	I-5
	Consolidated Statements of Shareholders’ Equity – Six Months Ended October 29, 2023	I-6
	Consolidated Statements of Shareholders’ Equity – Six Months Ended October 30, 2022	I-7
	Notes to Consolidated Financial Statements	I-8
	Cautionary Statement Concerning Forward-Looking Information	I-31
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	I-32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	I-47
Item 4.	Controls and Procedures	I-47
	Part II - Other Information
Item 1.	Legal Proceedings	II-1
Item 1A.	Risk Factors	II-1
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	II-1
Item 6.	Exhibits	II-2
Signatures		II-3

Item 1: Financial Statements

CULP, INC.

CONSOLIDATED STATEMENTS OF NET LOSS

FOR THE THREE MONTHS ENDED OCTOBER 29, 2023, AND OCTOBER 30, 2022

UNAUDITED

(Amounts in Thousands, Except for Per Share Data)

	THREE MONTHS ENDED
	October 29,			October 30,
	2023			2022
Net sales	$	58,725		$	58,381
Cost of sales		(50,775	)		(60,594	)
Gross profit (loss)		7,950			(2,213	)
Selling, general and administrative expenses		(10,045	)		(9,103	)
Restructuring expense		(144	)		(615	)
Loss from operations		(2,239	)		(11,931	)
Interest income		282			79
Other income		49			829
Loss before income taxes		(1,908	)		(11,023	)
Income tax expense		(516	)		(1,150	)
Net loss	$	(2,424	)	$	(12,173	)
Net loss per share - basic	$	(0.19	)	$	(0.99	)
Net loss per share - diluted	$	(0.19	)	$	(0.99	)
Average shares outstanding, basic		12,456			12,280
Average shares outstanding, diluted		12,456			12,280

See accompanying notes to consolidated financial statements.

I-1

CULP, INC.

CONSOLIDATED STATEMENTS OF NET LOSS

FOR THE SIX MONTHS ENDED OCTOBER 29, 2023, AND OCTOBER 30, 2022

UNAUDITED

(Amounts in Thousands, Except for Per Share Data)

	SIX MONTHS ENDED
	October 29,			October 30,
	2023			2022
Net sales	$	115,387		$	120,985
Cost of sales		(100,352	)		(119,071	)
Gross profit		15,035			1,914
Selling, general and administrative expenses		(19,874	)		(17,968	)
Restructuring expense		(482	)		(615	)
Loss from operations		(5,321	)		(16,669	)
Interest income		627			96
Other income		145			747
Loss before income taxes		(4,549	)		(15,826	)
Income tax expense		(1,217	)		(2,046	)
Net loss	$	(5,766	)	$	(17,872	)
Net loss per share - basic	$	(0.47	)	$	(1.46	)
Net loss per share - diluted	$	(0.47	)	$	(1.46	)
Average shares outstanding, basic		12,394			12,259
Average shares outstanding, diluted		12,394			12,259

See accompanying notes to consolidated financial statements.

I-2

CULP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

FOR THE THREE AND SIX MONTHS ENDED OCTOBER 29, 2023, AND OCTOBER 30, 2022

UNAUDITED

(Amounts in Thousands)

	THREE MONTHS ENDED
	October 29,			October 30,
	2023			2022
Net loss	$	(2,424	)	$	(12,173	)
Unrealized holding loss on investments, net of tax		(82	)		(46	)
Comprehensive loss	$	(2,506	)	$	(12,219	)

	SIX MONTHS ENDED
	October 29,			October 30,
	2023			2022
Net loss	$	(5,766	)	$	(17,872	)
Unrealized holding loss on investments, net of tax		(25	)		(53	)
Comprehensive loss	$	(5,791	)	$	(17,925	)

See accompanying notes to consolidated financial statements.

I-3

CULP, INC.

CONSOLIDATED BALANCE SHEETS

OCTOBER 29, 2023, OCTOBER 30, 2022, AND APRIL 30, 2023

UNAUDITED

(Amounts in Thousands)

	October 29,			October 30,			April 30,
	2023			2022			2023*
Current assets:
Cash and cash equivalents	$	15,214		$	19,137		$	20,964
Short-term investments - rabbi trust		937			2,237			1,404
Accounts receivable, net		23,036			22,443			24,778
Inventories		44,465			52,224			45,080
Short-term note receivable		256			—			219
Current income taxes receivable		340			510			—
Other current assets		4,346			3,462			3,071
Total current assets		88,594			100,013			95,516
Property, plant and equipment, net		34,664			38,832			36,111
Right of use assets		6,874			11,609			8,191
Intangible assets		2,064			2,440			2,252
Long-term investments - rabbi trust		6,995			7,526			7,067
Long-term note receivable		1,596			—			1,726
Deferred income taxes		472			493			480
Other assets		901			717			840
Total assets	$	142,160		$	161,630		$	152,183
Current liabilities:
Accounts payable - trade	$	27,903		$	24,298		$	29,442
Accounts payable - capital expenditures		298			200			56
Operating lease liability - current		2,540			2,655			2,640
Deferred compensation - current		937			2,237			1,404
Deferred revenue		853			1,527			1,192
Accrued expenses		8,106			7,594			8,533
Accrued restructuring costs		—			33			—
Income taxes payable - current		998			969			753
Total current liabilities		41,635			39,513			44,020
Operating lease liability - long-term		2,431			4,194			3,612
Income taxes payable - long-term		2,055			2,629			2,675
Deferred income taxes		5,663			5,700			5,954
Deferred compensation - long-term		6,748			7,486			6,842
Total liabilities		58,532			59,522			63,103
Commitments and Contingencies (Notes 10, 16, and 17)
Shareholders' equity
Preferred stock, $0.05 par value, authorized 10,000,000		—			—			—
Common stock, $0.05 par value, authorized 40,000,000 shares, issued    and outstanding 12,469,903 at October 29, 2023; 12,293,762 at October 30, 2022,    and 12,327,414 at April 30, 2023		624			615			616
Capital contributed in excess of par value		44,581			43,671			44,250
Accumulated earnings		38,429			57,843			44,195
Accumulated other comprehensive (loss) income		(6	)		(21	)		19
Total shareholders' equity		83,628			102,108			89,080
Total liabilities and shareholders' equity	$	142,160		$	161,630		$	152,183

* Derived from audited consolidated financial statements.

See accompanying notes to consolidated financial statements.

I-4

CULP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED OCTOBER 29, 2023, AND OCTOBER 30, 2022

UNAUDITED

(Amounts in Thousands)

	SIX MONTHS ENDED
	October 29,			October 30,
	2023			2022
Cash flows from operating activities:
Net loss	$	(5,766	)	$	(17,872	)
Adjustments to reconcile net loss to net cash (used in)      provided by operating activities:
Depreciation		3,251			3,489
Non-cash inventory (credits) charges		(2,001	)		6,439
Amortization		193			214
Stock-based compensation		485			565
Deferred income taxes		(283	)		(269	)
Gain sale of equipment		(278	)		(232	)
Non-cash restructuring expenses		379			—
Foreign currency exchange gain		(697	)		(1,168	)
Changes in assets and liabilities:
Accounts receivable		1,644			(443	)
Inventories		2,304			7,192
Other current assets		(1,355	)		(728	)
Other assets		(123	)		58
Accounts payable – trade		(495	)		6,027
Deferred revenue		(339	)		1,007
Accrued restructuring costs		—			33
Accrued expenses and deferred compensation		(762	)		1,254
Income taxes		(633	)		601
Net cash (used in) provided by operating activities		(4,476	)		6,167
Cash flows from investing activities:
Capital expenditures		(1,972	)		(1,051	)
Proceeds from the sale of equipment		309			465
Proceeds from note receivable		150			—
Proceeds from the sale of investments (rabbi trust)		986			46
Purchase of investments (rabbi trust)		(472	)		(505	)
Net cash used in investing activities		(999	)		(1,045	)
Cash flows from financing activities:
Common stock surrendered for withholding taxes payable		(146	)		(33	)
Payments of debt issuance costs		—			(206	)
Net cash used in financing activities		(146	)		(239	)
Effect of exchange rate changes on cash and cash equivalents		(129	)		(296	)
(Decrease) increase in cash and cash equivalents		(5,750	)		4,587
Cash and cash equivalents at beginning of year		20,964			14,550
Cash and cash equivalents at end of period	$	15,214		$	19,137

See accompanying notes to consolidated financial statements.

I-5

CULP, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED OCTOBER 29, 2023

UNAUDITED

(Dollars in thousands, except share data)

							Capital						Accumulated
							Contributed						Other			Total
	Common Stock						in Excess			Accumulated			Comprehensive			Shareholders'
	Shares			Amount			of Par Value			Earnings			Income (Loss)			Equity
Balance, April 30, 2023 *		12,327,414		$	616		$	44,250		$	44,195		$	19		$	89,080
Net loss		—			—			—			(3,342	)		—			(3,342	)
Stock-based compensation		—			—			322			—			—			322
Unrealized gain on investments		—			—			—			—			57			57
Immediately vested common stock award		16,616			1			(1	)		—			—			—
Balance, July 30, 2023		12,344,030		$	617		$	44,571		$	40,853		$	76		$	86,117
Net loss		—			—			—			(2,424	)		—			(2,424	)
Stock-based compensation		—			—			163			—			—			163
Unrealized loss on investments		—			—			—			—			(82	)		(82	)
Common stock issued in connection with the     vesting of time-based restricted stock units		151,653			8			(8	)		—			—			—
Common stock surrendered in connection with      payroll withholding taxes		(25,780	)		(1	)		(145	)		—			—			(146	)
Balance, October 29, 2023		12,469,903		$	624		$	44,581		$	38,429		$	(6	)	$	83,628

* Derived from audited consolidated financial statements.

See accompanying notes to consolidated financial statements

I-6

CULP, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED OCTOBER 30, 2022

UNAUDITED

(Dollars in thousands, except share data)

						Capital						Accumulated
						Contributed						Other			Total
	Common Stock					in Excess			Accumulated			Comprehensive			Shareholders'
	Shares			Amount		of Par Value			Earnings			Income (Loss)			Equity
Balance, May 1, 2022 *		12,228,629		$	611	$	43,143		$	75,715		$	32		$	119,501
Net loss		—			—		—			(5,699	)		—			(5,699	)
Stock-based compensation		—			—		252			—			—			252
Unrealized loss on investments		—			—		—			—			(7	)		(7	)
Common stock issued in connection with the     vesting of performance-based restricted      stock units		913			—		—			—			—			—
Common stock issued in connection with the     vesting of time-based restricted stock units		32,199			2		(2	)		—			—			—
Common stock surrendered in connection with      payroll withholding taxes		(6,708	)		—		(52	)		—			—			(52	)
Immediately vested common stock award		19,753			1		(1	)		—			—			—
Balance, July 31, 2022		12,274,786		$	614	$	43,340		$	70,016		$	25		$	113,995
Net loss		—			—		—			(12,173	)		—			(12,173	)
Stock-based compensation		—			—		313			—			—			313
Unrealized loss on investments		—			—		—			—			(46	)		(46	)
Common stock issued in connection with the     vesting of performance-based restricted      stock units		69			—		—			—			—			—
Common stock issued in connection with the     vesting of time-based restricted stock units		600			—		—			—			—			—
Common stock surrendered in connection with      payroll withholding taxes		(20	)		—		19			—			—			19
Immediately vested common stock award		18,327			1		(1	)		—			—			—
Balance, October 30, 2022		12,293,762		$	615	$	43,671		$	57,843		$	(21	)	$	102,108

* Derived from audited consolidated financial statements.

See accompanying notes to consolidated financial statements.

I-7

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Culp, Inc. and its majority-owned subsidiaries (the “company”) include all adjustments that are, in the opinion of management, necessary for fair presentation of the results of operations and financial position. All these adjustments are of a normal recurring nature. Results of operations for interim periods may not be indicative of future results. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements that are included in the company’s annual report on Form 10-K filed with the Securities and Exchange Commission on July 14, 2023, for the fiscal year ended April 30, 2023.

The company’s six-months ended October 29, 2023, and October 30, 2022, each represent 26-week periods.

2. Significant Accounting Policies

As of October 29, 2023, there were no changes in the nature of our significant accounting policies or the application of those policies from those reported in our annual report on Form 10-K for the year then ended April 30, 2023.

Recently Adopted Accounting Pronouncements

There were no recently adopted accounting pronouncements during the first half of fiscal 2024.

Recently Issued Accounting Pronouncements

Effective November 27, 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07 Improvements to Reportable Segment Disclosures which enhances disclosure requirements to segment reporting including (i) significant segment expenses that are regularly provided to the Chief Operating Decision Maker (CODM) that are included within each measure of segment profit or loss, (ii) other segment items by reportable segment as defined by ASU 2023-07, and (iii) the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of each segment's profit or loss in assessing segment performance and deciding how to allocate resources. ASU 2023-07 is effective for public entities starting in annual periods beginning after December 15, 2023 (i.e., our fiscal 2025 annual report) and interim periods beginning after December 15, 2024 (i.e., first quarter of fiscal 2026 interim report). Management is currently evaluating the effects ASU 2023-07 will have on the notes to the consolidated financial statements.

3. Allowance for Doubtful Accounts

A summary of the activity in the allowance for doubtful accounts follows:

	Six Months Ended
(dollars in thousands)	October 29, 2023			October 30, 2022
Beginning balance	$	342		$	292
Provision for bad debts		228			49
Write-offs, net of recoveries		(29	)		(53	)
Ending balance	$	541		$	288

During the six-month periods ended October 29, 2023, and October 30, 2022, we assessed the credit risk of our customers within our accounts receivable portfolio. Our risk assessment includes the respective customers’ (i) financial position; (ii) past payment history; (iii) management’s general ability; and (iv) historical loss experience; as well as (v) any other ongoing economic conditions. After our risk assessment was completed, we assigned credit grades to our customers, which in turn, were used to determine our allowance for doubtful accounts totaling $541,000 and $288,000 as of October 29, 2023, and October 30, 2022, respectively.

4. Revenue from Contracts with Customers

Nature of Performance Obligations

Our operations are classified into two business segments: mattress fabrics and upholstery fabrics. The mattress fabrics segment manufactures, sources, and sells fabrics and mattress covers primarily to bedding manufacturers. The upholstery fabrics segment

I-8

develops, manufactures, sources, and sells fabrics primarily to residential and commercial furniture manufacturers. In addition, the upholstery fabrics segment includes Read Window Products LLC (“Read”), which provides window treatments and sourcing of upholstery fabrics and other products, as well as measuring and installation services for Read’s products, to customers in the hospitality and commercial industries. Read also supplies soft goods such as decorative top sheets, coverlets, duvet covers, bed skirts, bolsters, and pillows.

Our primary performance obligations include the sale of mattress fabrics and upholstery fabrics, as well as the performance of customized fabrication and installation services for Read’s products associated with window treatments.

Contract Assets & Liabilities

Certain contracts, primarily those for customized fabrication and installation services associated with Read, require upfront customer deposits that result in a contract liability which is recorded in the Consolidated Balance Sheets as deferred revenue. Our terms are customary within the industries in which we operate and are not considered financing arrangements. There were no contract assets recognized as of October 29, 2023, October 30, 2022, or April 30, 2023.

A summary of the activity associated with deferred revenue follows:

	Six months ended
(dollars in thousands)	October 29, 2023			October 30, 2022
Beginning balance	$	1,192		$	520
Revenue recognized on contract liabilities		(1,986	)		(1,747	)
Payments received for services not yet rendered		1,647			2,754
Ending balance	$	853		$	1,527

Disaggregation of Revenue

The following table presents our disaggregated revenue by segment, timing of revenue recognition, and product sales versus services rendered for the three-month period ending October 29, 2023:

	Mattress		Upholstery
(dollars in thousands)	Fabrics		Fabrics		Total
Products transferred at a point in time	$	31,377	$	24,194	$	55,571
Services transferred over time		—		3,154		3,154
Total Net Sales	$	31,377	$	27,348	$	58,725

The following table presents our disaggregated revenue by segment, timing of revenue recognition, and product sales versus services rendered for the six-month period ending October 29, 2023:

	Mattress		Upholstery
(dollars in thousands)	Fabrics		Fabrics		Total
Products transferred at a point in time	$	60,599	$	48,968	$	109,567
Services transferred over time		—		5,820		5,820
Total Net Sales	$	60,599	$	54,788	$	115,387

The following table presents our disaggregated revenue by segment, timing of revenue recognition, and product sales versus services rendered for the three-month period ending October 30, 2022:

	Mattress		Upholstery
(dollars in thousands)	Fabrics		Fabrics		Total
Products transferred at a point in time	$	26,230	$	29,883	$	56,113
Services transferred over time		—		2,268		2,268
Total Net Sales	$	26,230	$	32,151	$	58,381

The following table presents our disaggregated revenue by segment, timing of revenue recognition, and product sales versus services rendered for the six-month period ending October 30, 2022:

I-9

	Mattress		Upholstery
(dollars in thousands)	Fabrics		Fabrics		Total
Products transferred at a point in time	$	55,602	$	61,406	$	117,008
Services transferred over time		—		3,977		3,977
Total Net Sales	$	55,602	$	65,383	$	120,985

5. Inventories

Inventories are carried at the lower of cost or net realizable value. Cost is determined using the FIFO (first-in, first-out) method.

A summary of inventories follows:

(dollars in thousands)	October 29, 2023		October 30, 2022		April 30, 2023
Raw materials	$	8,433	$	9,859	$	7,908
Work-in-process		2,196		3,724		2,602
Finished goods		33,836		38,641		34,570
	$	44,465	$	52,224	$	45,080

Measurement of Inventory to Net Realizable Value

We recorded a non-cash inventory (credit) charge of $(1.3) million and $5.3 million for the three months ended October 29, 2023 and October 30, 2022, respectively. The non-cash inventory credit of $(1.3) million for the three months ended October 29, 2023 represented a $(1.2) million credit related to adjustments made to our inventory markdowns reserve estimated based on our policy for aged inventory for both our mattress and upholstery fabrics segments, as well as a credit of ($78,000) for the gain on disposal of inventory related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. The non-cash inventory charge of $5.3 million for the three months ended October 30, 2022 represented a $2.9 million write down of inventory to its net realizable value associated with our mattress fabrics segment, $2.3 million related to our inventory markdowns reserve estimated based on our policy for aged inventory for both our mattress and upholstery fabrics segments and a $98,000 charge for the loss on disposal and markdowns of inventory related to our exit of our cut and sew upholstery fabrics operation located in Shanghai, China. Of the $(1.3) million non-cash inventory credit for the second quarter of fiscal 2024, $(801,000) and $(482,000) pertained to our mattress fabrics and upholstery fabrics segments, respectively. Of the $5.3 million non-cash inventory charge for the second quarter of 2023, $3.8 million and $1.5 million pertained to our mattress fabrics and upholstery fabrics segments, respectively.

We recorded a non-cash inventory (credit) charge of $(2.0) million and $6.4 million for the six months ended October 29, 2023, and October 30, 2022, respectively. The non-cash inventory credit of $(2.0) million for the six months ended October 29, 2023, represented a $(2.1) million credit 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 net restructuring related charge of $101,000. This net restructuring related charge represents markdowns of inventory totaling $179,000 during the first quarter of fiscal 2024, partially offset by a gain on disposal of inventory totaling $78,000 during the second quarter of fiscal 2024, both of which related to the discontinuation of production of cut and sewn upholstery kits at our facility in Ouanaminthe, Haiti during the respective periods. The non-cash inventory charge of $6.4 million for the six months ended October 30, 2022, represented a $2.9 million write down of inventory to its net realizable value associated with our mattress fabrics segment, a $3.4 million charge related to markdowns of inventory estimated based on our policy for aged inventory for both our mattress and upholstery fabrics segments, and a $98,000 charge related to the loss on disposal and markdowns of inventory related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China. Of the $(2.0) million non-cash inventory credit for the first half of fiscal 2024, $(1.5) million and $(453,000) pertained to our mattress fabrics and upholstery fabrics segments, respectively. Of the $6.4 million non-cash inventory charge for the first half of fiscal 2023, $4.2 million and $2.2 million pertained to our mattress fabrics and upholstery fabrics segments, respectively.

Mattress Fabrics Segment - Net Realizable Value

During the second quarter of fiscal 2023, our mattress fabrics segment experienced a 35.8% decline in net sales compared with the second quarter of fiscal 2022. This decline in net sales led to a significant decrease in gross margin to (8.7%) (excluding a non-cash inventory charge of $3.8 million disclosed above) during the second quarter of fiscal 2023, as compared with gross margin of 15.0% during the second quarter of fiscal 2022. The significant decline in net sales and profitability during the second quarter of

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fiscal 2023 stemmed from a greater than anticipated decline in consumer discretionary spending on mattress products, which we believe was driven by the following factors: (i) inflationary effects of commodities such as gas, food, and other necessities; (ii) a significant increase in interest rates; (iii) the pulling forward of demand for home goods products during the early years of the COVID-19 pandemic, which demand then shifted to travel, leisure, and other services; and (iv) excess inventory held by customers due to the decline in consumer demand. Based on this evidence, management conducted a thorough review of its mattress fabrics inventory and, as a result, recorded a charge of $2.9 million within cost of sales to write down inventory to its net realizable value. This $2.9 million charge was based on management's best estimates of product sales prices, customer demand trends, and its plans to transition to new products.

Assessment

As of October 29, 2023, we reviewed our mattress fabrics and upholstery fabrics inventories to determine if any additional write-downs, 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 three months and six months ended October 29, 2023, other than the markdowns of inventory associated with our upholstery fabrics segment restructuring activity described more fully in Note 9 of the consolidated financial statements.

Based on the current unfavorable macroeconomic conditions, 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 its results. These differences could result in higher than expected markdowns of inventory, 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)	October 29, 2023		October 30, 2022		April 30, 2023
Tradename	$	540	$	540	$	540
Customer relationships, net		1,185		1,486		1,335
Non-compete agreement, net		339		414		377
	$	2,064	$	2,440	$	2,252

Tradename

Our 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 October 29, 2023, no indicators of impairment existed, and therefore we did not record any asset impairment charges associated with our tradename through the second quarter of fiscal 2024.

Customer Relationships

A summary of the change in the carrying amount of our customer relationships follows:

	Six months ended
(dollars in thousands)	October 29, 2023			October 30, 2022
Beginning balance, net	$	1,335		$	1,636
Amortization expense		(150	)		(150	)
Ending balance, net	$	1,185		$	1,486

Our customer relationships are amortized on a straight-line basis over useful lives ranging from nine to seventeen years.

The gross carrying amount of our customer relationships was $3.1 million as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively. Accumulated amortization for these customer relationships was $1.9 million, $1.6 million, and $1.8 million as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively.

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The remaining amortization expense for the next five fiscal years and thereafter are as follows: FY 2024 - $151,000; FY 2025 - $301,000; FY 2026 - $301,000; FY 2027 - $278,000; FY 2028 - $52,000; and thereafter - $102,000.

The weighted average amortization period for our customer relationships was 4.3 years as of October 29, 2023.

Non-Compete Agreement

A summary of the change in the carrying amount of our non-compete agreement follows:

	Six months ended
(dollars in thousands)	October 29, 2023			October 30, 2022
Beginning balance, net	$	377		$	452
Amortization expense		(38	)		(38	)
Ending balance, net	$	339		$	414

Our non-compete agreement is associated with a prior acquisition by our mattress fabrics segment and is amortized on a straight-line basis over the fifteen-year life of the agreement.

The gross carrying amount of our non-compete agreement was $2.0 million as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively. Accumulated amortization for our non-compete agreement was $1.7 million, $1.6 million, and $1.6 million as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively.

The remaining amortization expense for the next five years and thereafter follows: FY 2024 - $38,000; FY 2025 - $76,000; FY 2026 - $76,000; FY 2027 - $76,000; FY 2028 - $73,000.

The weighted average amortization period for the non-compete agreement was 4.5 years as of October 29, 2023.

Impairment

As of October 29, 2023, management reviewed the long-lived assets associated with our mattress fabrics segment, which consisted of property, plant, and equipment, right of use assets, and finite-lived intangible assets (collectively known as the "Mattress Asset Group"), for impairment, as events and changes in circumstances occurred that indicated the carrying amount of the Mattress Asset Group may not be recoverable. The mattress fabrics segment experienced a significant cumulative operating loss totaling $18.1 million commencing in the second quarter of fiscal 2023, and continuing through the second quarter of fiscal 2024. We believe the significant decline in profitability for the mattress fabrics segment stemmed from a decline in consumer discretionary spending on mattress products, which we believe was driven by the following factors: (i) inflationary effects of commodities such as gas, food, and other necessities; (ii) a significant increase in interest rates; (iii) the pulling forward of demand for home goods products during the early years of the COVID-19 pandemic, which demand has now shifted to travel, leisure, and other services; and (iv) excess inventory held by customers due to the decline in consumer demand.

Based on the above evidence, we were required to determine the recoverability of the Mattress Asset Group, which is classified as held and used, by comparing the carrying amount of the Mattress Asset Group to the sum of the future undiscounted cash flows expected to result from its use and eventual disposition. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized for the excess of the carrying amount over the sum of the undiscounted future cash flows of the asset group. The carrying amount of the Mattress Asset Group totaled $35.5 million, which relates to property, plant, and equipment of $32.8 million, right of use assets of $2.0 million, customer relationships of $332,000, and a non-compete agreement of $339,000. The total carrying amount of the Mattress Asset Group did not exceed the sum of its future undiscounted cash flows from its use and disposition. As a result, we determined no impairment associated with the Mattress Asset Group existed as of October 29, 2023.

7. Note Receivable

In connection with the restructuring activity of our upholstery fabrics cut and sew operation located in Ouanaminthe, Haiti, effective January 24, 2023, Culp Upholstery Fabrics Haiti, Ltd. (“CUF Haiti”) entered into an agreement to terminate a lease of a facility (“Termination Agreement”). See Note 9 of the consolidated financial statements for further details regarding this restructuring activity.

Pursuant to the terms of the original lease agreement (the “Original Lease”), CUF Haiti was required to pay in advance $2.8 million for the full amount of rent due prior to the commencement of the Original Lease, with the initial lease term set to expire on December 31, 2029. Pursuant to the terms of the Termination Agreement, the Original Lease was formally terminated when CUF

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Haiti vacated and returned possession of the leased facility to the lessor. After CUF Haiti vacated and returned possession of the leased facility, a third party (the “Lessee”) took possession of this facility, and the Lessee agreed to pay CUF Haiti $2.4 million in the form of a note receivable over a period commencing on April 1, 2023, and ending on December 31, 2029, based on the terms stated in the Termination Agreement. In connection with Termination Agreement, an affiliate of the Lessee has guaranteed payment in full of all amounts due and payable to CUF Haiti by the Lessee, and CUF Haiti has been fully and unconditionally discharged from all of its remaining obligations under the Original Lease.

As of the end of our third quarter of fiscal 2023, the gross carrying amount of the note receivable totaling $2.4 million was 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. Consequently, since the fair value of the note receivable was less than its carrying amount, we recorded a restructuring charge of $434,000 during the third quarter of fiscal 2023 to reduce the note receivable’s carrying amount to its reported fair value.

We used an interest rate of 6.0% to determine the present value of the future discounted cash flows, which was 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 11 for further explanation of the fair value hierarchy).

The following table represents the remaining future principal payments as of October 29, 2023:

(dollars in thousands)
2024	$	180
2025		360
2026		360
2027		360
2028		360
Thereafter		600
Undiscounted value of note receivable	$	2,220
Less: unearned interest income		(368	)
Present value of note receivable	$	1,852

As of October 29, 2023, we believe there is no expected credit loss related to the collectibility of our note receivable, as the Lessee has made all required principal payments stated in the Termination Agreement. We will continue to evaluate the facts and circumstances at the end of each reporting period to determine if an expected credit loss is deemed necessary.

8. Accrued Expenses

A summary of accrued expenses follows:

(dollars in thousands)	October 29, 2023		October 30, 2022		April 30, 2023
Compensation, commissions and related benefits	$	4,540	$	4,489	$	5,800
Other accrued expenses		3,566		3,105		2,733
	$	8,106	$	7,594	$	8,533

9. Upholstery Fabrics Segment Restructuring

Ouanaminthe, Haiti

During the third quarter of fiscal 2023, CUF Haiti entered into an agreement to terminate a lease associated with a facility located in Ouanaminthe, Haiti and, in turn, moved the production of upholstery cut and sewn kits to an existing facility leased by Culp Home Fashions Haiti, Ltd. (“CHF Haiti”) during the fourth quarter of fiscal 2023. Both CUF Haiti and CHF Haiti are indirect wholly-owned subsidiaries of the company. During the first quarter of fiscal 2024, demand for upholstery cut and sewn kits

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declined more than previously anticipated, resulting in the strategic action to discontinue the production of upholstery cut and sew kits in Haiti.

The following summarizes our restructuring expense and restructuring related (credits) charges from the restructuring activities associated with our upholstery fabrics operations located in Haiti for the three months and six months ending October 29, 2023:

	Three Months Ended			Six Months Ended
(dollars in thousands)	October 29, 2023			October 29, 2023
Employee termination benefits	$	2		$	103
Impairment loss - equipment		142			379
(Gain) loss on disposal and markdowns of inventory		(78	)		101
Restructuring expense and restructuring related (credits) charges (1) (2)	$	66		$	583

(1) Of the total $66,000, $144,000 and ($78,000) were recorded within restructuring expense and cost of sales, respectively, in the Consolidated Statement of Net Loss for the three-month period ending October 29, 2023.

(2) Of the total $583,000, $482,000 and $101,000 were recorded within restructuring expense and cost of sales, respectively, in the Consolidated Statement of Net Loss for the six-month period ending October 29, 2023.

The restructuring activity related to the discontinuation of production of upholstery cut and sew kits in Haiti was completed as of October 29, 2023. As a result of our strategic decision to discontinue this production, we incurred a cumulative amount of $1.4 million in restructuring expense and restructuring related charges.

The following summarizes the activity in accrued restructuring costs for the six-month period ending October 29, 2023:

	Employee
	Termination
(dollars in thousands)	Benefits			Total
Beginning balance	$	—		$	—
Expenses incurred		103			103
Payments		(103	)		(103	)
Ending balance	$	—		$	—

Shanghai, China

During the second quarter of fiscal 2023, we closed our cut and sew upholstery fabrics operation located in Shanghai, China, which included the termination of an agreement to lease a building. This strategic action, along with the further use of our Asian supply chain, was taken in order to adjust our operating costs to better align with the declining customer demand for cut and sewn products.

The following summarizes our restructuring expense and restructuring related charges from the restructuring activities associated with our upholstery fabrics operations located in China for the three months and six months ending October 29, 2022:

	Three and Six Months Ended
(dollars in thousands)	October 30, 2022
Employee termination benefits	$	468
Loss on disposal and markdowns of inventory		98
Loss on disposal of equipment		80
Lease termination costs		47
Other associated costs		20
Restructuring expense and restructuring related charges (3)	$	713

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(3) Of the total $713,000, $615,000 and $98,000 were recorded to restructuring expense and cost of sales, respectively, in the Consolidated Statement of Net Loss for the three-month and six-month periods ending October 30, 2022.

The following summarizes the activity in accrued restructuring costs for the three-month and six-month periods ending October 30, 2022:

	Employee			Lease			Other
	Termination			Termination			Associated
(dollars in thousands)	Benefits			Costs			Costs			Total
Beginning balance	$	—		$	—		$	—		$	—
Accrual established in fiscal 2023		468			47			—			515
Expenses incurred		—			—			20			20
Payments		(468	)		(16	)		(18	)		(502	)
Ending balance	$	—		$	31		$	2		$	33

The restructuring activity related to the discontinuation of operations of the upholstery cut and sew kits in China was completed in the third quarter of fiscal 2023.

10. Lines of Credit

Revolving Credit Agreement – United States

On January 19, 2023, Culp, Inc., as borrower (the “company”), and Read, as guarantor (the “Guarantor”), entered into a Second Amended and Restated Credit Agreement (the “ABL Credit Agreement”), by and among the company, the Guarantor and Wells Fargo Bank, National Association, as the lender (the “Lender”), to establish an asset-based revolving credit facility (the “ABL Facility”). The proceeds from the ABL Facility may be used to pay fees and expenses related to the ABL Facility and will provide funding for ongoing working capital and general corporate purposes. The ABL Credit Agreement amends, restates and supersedes, and serves as a replacement for, the Amended and Restated Credit Agreement (the “Amended Agreement”), dated as of June 24, 2022, and the First Amendment to the Amended Agreement dated as of August 19, 2022, as amended, by and between the company and the Lender.

The ABL Facility may be used for revolving credit loans and letters of credit from time to time up to a maximum principal amount of $35.0 million, subject to the limitations described below. The ABL Facility contains a sub-facility that allows the company to issue letters of credit in an aggregate amount not to exceed $1 million. The amount available under the ABL Facility is limited by a borrowing base consisting of certain eligible accounts receivable and inventory, reduced by specified reserves, as follows:

•85% of eligible accounts receivable, plus

•the least of:

othe sum of:

▪lesser of (i) 65% of eligible inventory valued at cost based on a first-in first-out basis (net of intercompany profits) and (ii) 85% of the net-orderly-liquidation value percentage of eligible inventory, plus

▪the least of (i) 65% of eligible in-transit inventory valued at cost based on a first-in first-out basis (net of intercompany profits), (ii) 85% of the net-orderly-liquidation value percentage of eligible in-transit inventory, and (iii) $5.0 million, plus

▪the lesser of (i) 65% of eligible raw material inventory valued at cost based on a first-in first-out basis (net of intercompany profits) and (ii) 85% of the net-orderly-liquidation value percentage of eligible raw material inventory

In each case, the net-orderly-liquidation value is calculated based on the lower of (i) a first-in first-out basis and (ii) market value, and is (A) net of intercompany profits, (B) net of write-ups and write-downs in value with respect to foreign currency exchange rates and (C) consistent with most recent appraisals received and acceptable to Lender.

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o$22.5 million; and

oAn amount equal to 200% of eligible accounts receivable,

minus

•applicable reserves.

The ABL Facility permits both base rate borrowings and borrowings based upon daily simple SOFR (the secured overnight financing rate administered by the Federal Reserve Bank of New York (or its successor)). Borrowings under the ABL Facility bear interest at an annual rate equal to daily simple SOFR plus 150 basis points (if the average monthly excess availability under the ABL Facility is greater than 50%) or 175 basis points (if the average monthly excess availability under the ABL Facility is less than or equal to 50%) or 50 basis points above base rate (if the average monthly excess availability under the ABL Facility is greater than 50%) or 75 basis points above base rate (if the average monthly excess availability under the ABL Facility is less than or equal to 50%), as applicable, with a fee on unutilized commitments at an annual rate of 37.5 basis points and an annual servicing fee of $12,000.

The ABL Facility matures on January 19, 2026. The ABL Facility may be prepaid from time to time, in whole or in part, without a prepayment penalty or premium. In addition, customary mandatory prepayments of the loans under the ABL Facility are required upon the occurrence of certain events including, without limitation, outstanding borrowing exposures exceeding the borrowing base and certain dispositions of assets outside of the ordinary course of business. Accrued interest is payable monthly in arrears.

The company’s obligations under the ABL Facility (and certain related obligations) are (a) guaranteed by the Guarantor and each of the company’s future domestic subsidiaries is required to guarantee the ABL Facility on a senior secured basis (such guarantors and the company, the “Loan Parties”) and (b) secured by all assets of the Loan Parties, subject to certain exceptions. The liens and other security interests granted by the Loan Parties on the collateral for the benefit of the Lender under the ABL Facility are, subject to certain permitted liens, first-priority.

Cash Dominion. Under the terms of the ABL Facility, if (i) an event of default has occurred or (ii) excess borrowing availability under the ABL Facility (based on the lesser of $35.0 million and the borrowing base) (the “Excess Availability”) falls below $7.0 million at such time, the Loan Parties will become subject to cash dominion, which will require prepayment of loans under the ABL Facility with the cash deposited in certain deposit accounts of the Loan Parties, including a concentration account, and will restrict the Loan Parties’ ability to transfer cash from their concentration account. Such cash dominion period (a “Dominion Period”) shall end when Excess Availability shall be equal to or greater than $7.0 million for a period of 60 consecutive days and no event of default is continuing.

Financial Covenants. The ABL Facility contains a springing covenant requiring that the company’s fixed charge coverage ratio be no less than 1.10 to 1.00 during any period that (i) an event of default has occurred or (ii) Excess Availability under the ABL Facility falls below $5.25 million at such time. Such compliance period shall end when Excess Availability shall be equal to or greater than $5.25 million for a period of 60 consecutive days and no event of default is continuing.

Affirmative and Restrictive Covenants. The ABL Credit Agreement governing the ABL Facility contains customary representations and warranties, affirmative and negative covenants (subject, in each case, to exceptions and qualifications), and events of defaults, including covenants that limit the company’s ability to, among other things:

•incur additional indebtedness;

•make investments;

•pay dividends and make other restricted payments;

•sell certain assets;

•create liens;

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•consolidate, merge, sell or otherwise dispose of all or substantially all of the company’s assets; and

•enter into transactions with affiliates.

Overall

Effective January 19, 2023, interest was charged under the ABL Credit Agreement at a rate (applicable interest rate of 6.80% and 6.30% as of October 29, 2023 and April 30, 2023, respectively) calculated using the Applicable Margin over SOFR based on the company’s excess availability under the ABL Facility, as defined in the ABL Credit Agreement. Under the Amended Agreement, interest was charged at a rate (4.38% as of October 30, 2022) calculated using the Applicable Margin over SOFR based on the ratio of company’s consolidated debt to consolidated EBITDA, as defined in the Amended Agreement.

There were $535,000, $275,000, and $275,000 of outstanding letters of credit provided by the ABL Credit Agreement and the Amended Agreement, as applicable, as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively. As of October 29, 2023, we had $465,000 remaining for the issuance of additional letters of credit under the ABL Credit Agreement.

There were no borrowings outstanding under either the ABL Credit Agreement or the Amended Credit Agreement, as applicable, as of October 29, 2023, October 30, 2022, or April 30, 2023, respectively.

As of October 29, 2023, our available borrowings calculated under the provisions of the ABL Credit Agreement totaled $26.2 million.

Revolving Credit Agreement – China Operations

Denominated in Chinese Yuan Renminbi (“RMB”)

We have an unsecured credit agreement denominated in RMB with a bank located in China that provides for a line of credit of up to 35 million RMB ($4.8 million USD as of October 29, 2023). Interest charged under this agreement is based on an interest rate determined by the Chinese government at the time of borrowing. This agreement is set to expire on October 24, 2024. Our borrowing capacity of 35 million RMB is restricted to certain consolidated net sales and consolidated profitability requirements as defined in the agreement. These requirements relate to our total consolidated Culp Inc. entity as a whole. Currently, Culp Inc. does not meet the consolidated net sales and consolidated profitability requirements set forth in the agreement, therefore, we cannot borrow under this agreement.

There were no borrowings outstanding under this agreement as of October 29, 2023, October 30, 2022, or April 30, 2023, respectively.

Overall

Our loan agreements require, among other things, that we maintain compliance with certain financial covenants. As of October 29, 2023, we complied with our financial covenants.

No interest payments were made during the first half of fiscal 2024. Interest paid during the first half of fiscal 2023 totaled $8,000.

11. Fair Value

Accounting Standard Codification ("ASC") Topic 820, Fair Value Measurement establishes a fair value hierarchy that distinguishes between assumptions based on market data (observable inputs) and the company’s assumptions (unobservable inputs). Determining where an asset or liability falls within that hierarchy depends on the lowest level input that is significant to the fair value measurement as a whole. An adjustment to the pricing method used within either level 1 or level 2 inputs could generate a fair value measurement that effectively falls in a lower level in the hierarchy.

The hierarchy consists of three broad levels as follows:

Level 1 – Quoted market prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than level 1 inputs that are either directly or indirectly observable; and

Level 3 – Unobservable inputs developed using the company’s estimates and assumptions, which reflect those that market participants would use.

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The determination of where an asset or liability falls in the hierarchy requires significant judgment. We evaluate our hierarchy disclosures each quarter based on various factors, and it is possible that an asset or liability may be classified differently from quarter to quarter. However, we expect that changes in classifications between different levels will be rare.

Recurring Basis

The following tables present information about assets measured at fair value on a recurring basis:

	Fair value measurements as of October 29, 2023, using:
	Quoted prices		Significant
	in active		other	Significant
	markets for		observable	unobservable
	identical assets		inputs	inputs
(amounts in thousands)	Level 1		Level 2	Level 3	Total
Assets:
U.S. Government Money Market Fund	$	7,060	N/A	N/A	$	7,060
Growth Allocation Mutual Funds		560	N/A	N/A		560
Moderate Allocation Mutual Fund		46	N/A	N/A		46
Other		266	N/A	N/A		266

	Fair value measurements as of October 30, 2022, using:
	Quoted prices		Significant
	in active		other	Significant
	markets for		observable	unobservable
	identical assets		inputs	inputs
(amounts in thousands)	Level 1		Level 2	Level 3	Total
Assets:
U.S. Government Money Market Fund	$	9,089	N/A	N/A	$	9,089
Growth Allocation Mutual Funds		438	N/A	N/A		438
Moderate Allocation Mutual Fund		77	N/A	N/A		77
Other		159	N/A	N/A		159

	Fair value measurements as of April 30, 2023, using:
	Quoted prices		Significant
	in active		other	Significant
	markets for		observable	unobservable
	identical assets		inputs	inputs
(amounts in thousands)	Level 1		Level 2	Level 3	Total
Assets:
U.S. Government Money Market Fund	$	7,649	N/A	N/A	$	7,649
Growth Allocation Mutual Funds		528	N/A	N/A		528
Moderate Allocation Mutual Fund		86	N/A	N/A		86
Other		208	N/A	N/A		208

Investments - Rabbi Trust

We have a rabbi trust (the “Trust”) for the participants of our deferred compensation plan (the “Plan”), that enables participants to direct their contributions to various investment options under the Plan. The investments associated with the Trust consist of a money market fund and various mutual funds that are classified as available-for-sale.

As of October 29, 2023, our investments associated with the Trust totaled $7.9 million, of which $937,000 and $7.0 million were classified as short-term and long-term, respectively. As of October 30, 2022, our investments associated with the Trust totaled $9.8 million, of which $2.2 million and $7.6 million were classified as short-term and long-term, respectively. As of April 30, 2023, our investments associated with the Trust totaled $8.5 million, of which $1.4 million and $7.1 million were classified as short-term and long-term, respectively. The investments associated with the Trust had an accumulated unrealized loss of $6,000, an accumulated unrealized loss of $21,000, and an accumulated unrealized gain of $19,000 as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively.

The fair value of our investments associated with the Trust approximates their cost basis.

Other

The carrying amount of our cash and cash equivalents, accounts receivable, other current assets, accounts payable, and accrued expenses approximated their fair value because of the short maturity of these financial instruments.

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12. Net Loss Per Share

Basic net loss per share is computed using the weighted-average number of shares outstanding during the period. Diluted net loss per share uses the weighted-average number of shares outstanding during the period plus the dilutive effect of stock-based compensation calculated using the treasury stock method.

Weighted average shares used in the computation of basic and diluted net loss per share were 12,456,000 and 12,280,000 for the three months ending October 29, 2023, and October 30, 2022, respectively.

Shares of unvested common stock that were not included in the computation of diluted net loss per share consist of the following:

	Three months ended
(in thousands)	October 29, 2023		October 30, 2022
antidilutive effect from decrease in the price per share of our common stock		11		42
antidilutive effect from net loss incurred during the fiscal year		136		35
total unvested shares of common stock not included in      computation of diluted net loss per share		147		77

Weighted average shares used in the computation of basic and diluted net loss per share were 12,394,000 and 12,259,000 for the six months ending October 29, 2023, and October 30, 2022, respectively.

Shares of unvested common stock that were not included in the computation of diluted net loss per share consist of the following:

	Six months ended
(in thousands)	October 29, 2023		October 30, 2022
antidilutive effect from decrease in the price per share of our common stock		20		38
antidilutive effect from net loss incurred during the fiscal year		105		47
total unvested shares of common stock not included in      computation of diluted net loss per share		125		85

13. Segment Information

Overall

Our operations are classified into two business segments: mattress fabrics and upholstery fabrics. The mattress fabrics segment manufactures, sources, and sells fabrics and mattress covers primarily to bedding manufacturers. The upholstery fabrics segment develops, manufactures, sources, and sells fabrics primarily to residential and commercial furniture manufacturers. In addition, this segment includes Read, which provides window treatments and sourcing of upholstery fabrics and other products, as well as measuring and installation services for Read’s products, to customers in the hospitality and commercial industries. Read also supplies soft goods such as decorative top sheets, coverlets, duvet covers, bed skirts, bolsters, and pillows.

Financial Information

We evaluate the operating performance of our business segments based upon (loss) income from operations before certain unallocated corporate expenses and other items that are not expected to occur on a regular basis. Cost of sales for each segment includes costs to develop, manufacture, or source our products, including costs such as raw material and finished goods purchases, direct and indirect labor, overhead, and incoming freight charges. Unallocated corporate expenses primarily represent compensation and benefits for certain executives and their support staff, all costs associated with being a public company, amortization of intangible assets, and other miscellaneous expenses. Segment assets include assets used in the operations of each segment and consist of accounts receivable, inventories, property, plant, and equipment, and right of use assets. Intangible assets are not included in segment assets as these assets are not used by the Chief Operating Decision Maker to evaluate the respective segment’s operating performance, allocate resources to individual segments, or determine executive compensation.

I-19

Statements of operations for our operating segments are as follows:

	Three months ended
	October 29, 2023			October 30, 2022
net sales by segment:
mattress fabrics	$	31,377		$	26,230
upholstery fabrics		27,348			32,151
net sales	$	58,725		$	58,381
gross profit (loss):
mattress fabrics	$	2,483		$	(6,057	)
upholstery fabrics		5,389			3,942
segment gross profit (loss):		7,872			(2,115	)
restructuring related credit (charge) (1)		78			(98	)
gross profit (loss)	$	7,950		$	(2,213	)
selling, general, and administrative expenses by segment:
mattress fabrics	$	3,419		$	2,945
upholstery fabrics		3,998			3,680
unallocated corporate expenses		2,628			2,478
selling, general, and administrative expenses	$	10,045		$	9,103
(loss) income from operations by segment:
mattress fabrics	$	(936	)	$	(9,002	)
upholstery fabrics		1,391			262
unallocated corporate expenses		(2,628	)		(2,478	)
total segment loss from operations	$	(2,173	)	$	(11,218	)
restructuring related credit (charge) (1)		78			(98	)
restructuring expense (2)		(144	)		(615	)
loss from operations	$	(2,239	)	$	(11,931	)
interest income		282			79
other income		49			829
loss before income taxes	$	(1,908	)	$	(11,023	)

I-20

(1) Gross profit and loss from operations for the three months ending October 29, 2023, includes restructuring related credits of $78,000 for the gain on disposal of inventory related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Gross loss and loss from operations for the three months ending October 30, 2022, includes restructuring related charges totaling $98,000 for loss on disposal and markdowns of inventory associated with the exit of our cut and sewn upholstery fabrics operation located in Shanghai, China.

(2) Restructuring expense of $144,000 for the three months ended October 29, 2023, represents a $142,000 impairment charge related to equipment and $2,000 of employee termination benefits related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Restructuring expense of $615,000 for the three-months ended October 30, 2022, represents $468,000 for employee termination benefits, $80,000 related to a loss on disposal of equipment, $47,000 for lease termination costs, and $20,000 of other associated costs related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China.

	Six months ended
	October 29, 2023			October 30, 2022
net sales by segment:
mattress fabrics	$	60,599		$	55,602
upholstery fabrics		54,788			65,383
net sales	$	115,387		$	120,985
gross profit (loss):
mattress fabrics	$	4,477		$	(6,093	)
upholstery fabrics		10,659			8,105
total segment gross profit	$	15,136		$	2,012
restructuring related charge (1)		(101	)		(98	)
gross profit	$	15,035		$	1,914
selling, general, and administrative expenses by segment:
mattress fabrics	$	6,811		$	5,829
upholstery fabrics		7,939			7,302
unallocated corporate expenses		5,124			4,837
selling, general, and administrative expenses	$	19,874		$	17,968
(loss) income from operations by segment:
mattress fabrics	$	(2,334	)	$	(11,922	)
upholstery fabrics		2,720			803
unallocated corporate expenses		(5,124	)		(4,837	)
total segment loss from operations	$	(4,738	)	$	(15,956	)
restructuring related charge (1)		(101	)		(98	)
restructuring expense (2)		(482	)		(615	)
loss from operations	$	(5,321	)	$	(16,669	)
interest income		627			96
other income		145			747
loss before income taxes	$	(4,549	)	$	(15,826	)

I-21

(1) Gross profit and loss from operations for the six months ending October 29, 2023, includes a net restructuring related charge of $101,000, which represents a markdown of inventory totaling $179,000 during the first quarter of fiscal 2024, partially offset by a gain on disposal of inventory totaling $78,000 during the second quarter of fiscal 2024, both of which related to the discontinuation of production of cut and sewn upholstery kits at our facility located in Ouanaminthe, Haiti. Gross profit and loss from operations for the six months ending October 30, 2022 includes restructuring related charges totaling $98,000 for loss on disposal and markdowns of inventory associated with the exit of our cut and sewn upholstery fabrics operation located in Shanghai, China.

(2) Restructuring expense of $482,000 for the six months ended October 29, 2023, represents a $379,000 impairment charge associated with equipment and $103,000 for employee termination benefits related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Restructuring expense of $615,000 for the six-months ended October 30, 2022, represents $468,000 for employee termination benefits, $80,000 related to a loss on disposal of equipment, $47,000 for lease termination costs, and $20,000 of other associated costs related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China.

Balance sheet information for our operating segments follows:

(dollars in thousands)	October 29, 2023		October 30, 2022		April 30, 2023
Segment assets:
Mattress Fabrics:
Accounts receivable, net	$	11,303	$	8,700	$	12,396
Inventory		27,195		30,300		25,674
Property, plant and equipment (1)		32,862		35,853		33,749
Right of use assets (2)		1,969		2,087		2,308
Total mattress fabrics assets		73,329		76,940		74,127
Upholstery Fabrics:
Accounts receivable, net		11,733		13,743		12,382
Inventory		17,270		21,924		19,406
Property, plant and equipment (3)		1,175		2,150		1,671
Right of use assets (4)		1,992		5,898		2,618
Total upholstery fabrics assets		32,170		43,715		36,077
Total segment assets		105,499		120,655		110,204
Non-segment assets:
Cash and cash equivalents		15,214		19,137		20,964
Short-term investments - rabbi trust		937		2,237		1,404
Short-term note receivable		256		—		219
Current income taxes receivable		340		510		—
Other current assets		4,346		3,462		3,071
Long-term note receivable		1,596		—		1,726
Deferred income taxes		472		493		480
Property, plant and equipment (5)		627		829		691
Right of use assets (6)		2,913		3,624		3,265
Intangible assets		2,064		2,440		2,252
Long-term investments - rabbi trust		6,995		7,526		7,067
Other assets		901		717		840
Total assets	$	142,160	$	161,630	$	152,183

(1)The $32.9 million as of October 29, 2023, represents property, plant, and equipment of $22.2 million, $10.0 million, and $661,000 located in the U.S., Canada, and Haiti, respectively. The $35.9 million as of October 30, 2022, represents property, plant, and equipment of $23.8 million, $11.4 million, and $679,000 located in the U.S., Canada, and Haiti, respectively. The $33.7 million as of April 30, 2023, represents property, plant, and equipment of $22.7 million, $10.4 million, and $608,000 located in the U.S., Canada, and Haiti, respectively.

(2)The $2.0 million as of October 29, 2023, represents right of use assets of $1.3 million and $663,000 located in Haiti and Canada, respectively. The $2.1 million as of October 30, 2022, represents right of use assets of $1.8 million, $167,000, and $164,000 located in Haiti, Canada, and the U.S., respectively. The $2.3 million as of April 30, 2023, represents right of use assets of $1.5 million and $776,000 located in Haiti and Canada, respectively.

I-22

(3)The $1.2 million as of October 29, 2023, represents property, plant, and equipment of $1.0 million and $140,000 located in the U.S. and China, respectively. The $2.2 million as of October 30, 2022, represents property, plant, and equipment of $1.0 million, $1.0 million, and $137,000 located in the U.S., Haiti, and China, respectively. The $1.7 million as of April 30, 2023, represents property, plant, and equipment of $974,000, $592,000, and $105,000 located in the U.S., Haiti, and China, respectively.

(4)The $2.0 million as of October 29, 2023, represents right of use assets of $1.2 million and $818,000 located in China and the U.S., respectively. The $5.9 million as of October 30, 2022, represents right of use assets of $2.5 million, $2.0 million, and $1.4 million located in Haiti, China, and the U.S., respectively. The $2.6 million as of April 30, 2023, represents right of use assets of $1.5 million and $1.1 million located in China and the U.S., respectively.

(5)The $627,000, $829,000, and $691,000 as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively, represent property, plant, and equipment associated with unallocated corporate department and corporate departments shared by our mattress fabrics and upholstery fabrics segments. Property, plant, and equipment associated with our corporate departments reside in the U.S.

(6)The $2.9 million, $3.6 million, and $3.3 million as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively, represent right of use assets located in the U.S.

Information about capital expenditures and depreciation expense for our operating segments follows:

	Six months ended
(dollars in thousands)	October 29, 2023		October 30, 2022
Capital expenditures (1):
Mattress Fabrics	$	1,948	$	267
Upholstery Fabrics		185		447
Unallocated Corporate		80		60
Total capital expenditures	$	2,213	$	774
Depreciation expense:
Mattress Fabrics	$	2,922	$	3,088
Upholstery Fabrics		329		401
Total depreciation expense	$	3,251	$	3,489

(1)Capital expenditure amounts are stated on the accrual basis. See Consolidated Statements of Cash Flows for capital expenditure amounts on a cash basis.

I-23

14. Income Taxes

Effective Income Tax Rate

We recorded income tax expense of $1.2 million, or (26.8%) of loss before income taxes, for the six-month period ending October 29, 2023, compared with income tax expense of $2.0 million, or (12.9%) of loss before income taxes, for the six-month period ending October 30, 2022.

Our effective income tax rates for the six-month periods ended October 29, 2023, and October 30, 2022, were based upon the estimated effective income tax rate applicable for the full year after giving effect to any significant items related specifically to interim periods. When calculating the annual estimated effective income tax rates for the six-month periods ended October 29, 2023, and October 30, 2022, we were subject to loss limitation rules. These loss limitation rules require any taxable loss associated with our U.S. or foreign operations to be excluded from the annual estimated effective income tax rate calculation if it was determined that no income tax benefit could be recognized during the current fiscal year. The effective income tax rate can be affected over the fiscal year by the mix and timing of actual earnings from our U.S. operations and foreign subsidiaries located in China, Canada, and Haiti as compared to annual projections, as well as changes in foreign currency exchange rates in relation to the U.S. dollar.

The following schedule summarizes the principal differences between income tax expense at the U.S. federal income tax rate and the effective income tax rate reflected in the consolidated financial statements for the six-month periods ending October 29, 2023, and October 30, 2022:

	October 29,			October 30,
	2023			2022
U.S. federal income tax rate		21.0	%		21.0	%
U.S. valuation allowance		(32.8	)		(36.7	)
Withholding taxes associated with foreign jurisdictions		(9.9	)		(3.3	)
Foreign income tax rate differential		(5.7	)		3.2
Stock-based compensation		(4.2	)		(0.6	)
Tax effects of local currency foreign exchange gains		5.1			4.7
Other		(0.3	)		(1.2	)
	(26.8%)			(12.9)%

Our consolidated effective income tax rates during the first half of fiscal 2024 and the first half of fiscal 2023 were both adversely affected by the mix of earnings between our U.S. operations and foreign subsidiaries, as our taxable income stems from our operations located in China and Canada, which have higher income tax rates than the U.S. In addition, during the first half of fiscal 2024 and the first half of fiscal 2023, we incurred pre-tax losses associated with our U.S. operations, for which an income tax benefit was not recorded due to the full valuation allowance applied against our U.S. net deferred income tax assets. However, the income tax charge associated with the full valuation allowance applied against our U.S. net deferred income tax assets was lower during the first half of fiscal 2024 compared with the first half of fiscal 2023, as our $(11.8) million U.S. pre-tax loss incurred during the first half of fiscal 2024 was significantly lower than the $(20.7) million U.S. pre-tax loss incurred during the first half of fiscal 2023.

During the first half of fiscal 2024, we incurred a lower consolidated pre-tax loss totaling $(4.5) million, compared with $(15.8) million during the first half of fiscal 2023. As a result, the principal differences between income tax expense at the U.S. federal income tax rate and the effective income tax rate reflected in the consolidated financial statements were more pronounced during the first half of fiscal 2024, as compared with the first half of fiscal 2023.

U.S. Valuation Allowance

We evaluate the realizability of our U.S. net deferred income tax assets to determine if a valuation allowance is required. We assess whether a valuation allowance should be established based on the consideration of all available evidence using a “more-likely-than-not” standard, with significant weight being given to evidence that can be objectively verified. Since the company operates in multiple jurisdictions, we assess the need for a valuation allowance on a jurisdiction-by-jurisdiction basis, considering the effects of local tax law.

As of October 29, 2023, we evaluated the realizability of our U.S. net deferred income tax assets to determine if a full valuation allowance was required. Based on our assessment, we determined we still have a recent history of significant cumulative U.S. pre-tax losses, in that we experienced U.S. pre-tax losses during each of the last three fiscal years from 2021 through 2023, and we are currently expecting significant U.S. pre-tax losses to continue during fiscal 2024. As a result of the significant weight of this

I-24

negative evidence, we believe it is more likely than not that our U.S. deferred income tax assets will not be fully realizable, and therefore we provided for a full valuation allowance against our U.S. net deferred income tax assets.

Based on our assessments as of October 29, 2023, October 30, 2022, and April 30, 2023, valuation allowances against our net deferred income tax assets pertain to the following:

(dollars in thousands)	October 29, 2023		October 30, 2022		April 30, 2023
U.S. federal and state net deferred income tax assets	$	17,839	$	13,958	$	16,345
U.S. capital loss carryforward		2,330		2,330		2,330
	$	20,169	$	16,288	$	18,675

Undistributed Earnings

We assess whether the undistributed earnings from our foreign subsidiaries will be reinvested indefinitely or eventually distributed to our U.S. parent company and whether we are required to record a deferred income tax liability for those undistributed earnings from foreign subsidiaries that will not be reinvested indefinitely. As of October 29, 2023, we assessed the liquidity requirements of our U.S. parent company and determined that our undistributed earnings and profits from our foreign subsidiaries would not be reinvested indefinitely and would eventually be distributed to our U.S. parent company. The conclusion reached from this assessment was consistent with prior reporting periods.

As a result of the 2017 Tax Cuts and Jobs Act, a U.S. corporation is allowed a 100% dividend received deduction for earnings and profits received from a 10% owned foreign corporation. Therefore, a deferred income tax liability will be required only for unremitted withholding taxes associated with earnings and profits generated by our foreign subsidiaries that will ultimately be repatriated to the U.S. parent company. As a result, as of October 29, 2023, October 30, 2022, and April 30, 2023, we recorded a deferred income tax liability of $4.6 million, $4.0 million, and $4.2 million, respectively.

Uncertain Income Tax Positions

An unrecognized income tax benefit for an uncertain income tax position can be recognized in the first interim period if the more-likely-than-not recognition threshold is met by the end of the reporting period, or is effectively settled through examination, negotiation, or litigation, or the statute of limitations for the relevant taxing authority to examine and challenge the tax position has expired. If it is determined that any of the above conditions occur regarding our uncertain income tax positions, an adjustment to our unrecognized income tax benefit will be recorded at that time.

As of October 29, 2023, we had a $1.2 million total gross unrecognized income tax benefit, of which the entire amount was classified as income taxes payable – long-term in the accompanying Consolidated Balance Sheets. As of October 30, 2022, we had a $1.1 million total gross unrecognized income tax benefit, of which the entire amount was recorded to income taxes payable – long-term in the accompanying Consolidated Balance Sheets. As of April 30, 2023, we had a $1.2 million total gross unrecognized income tax benefit, of which the entire amount was classified as income taxes payable – long-term in the accompanying Consolidated Balance Sheets. These unrecognized income tax benefits would favorably affect income tax expense in future periods by $1.2 million, $1.1 million, and $1.2 million, as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively.

Our gross unrecognized income tax benefit of $1.2 million as of October 29, 2023, relates to income tax positions for which significant change is currently not expected within the next year.

Income Taxes Paid

The following table sets forth taxes paid by jurisdiction:

	Six Months Ended		Six Months Ended
	October 29,		October 30,
(dollars in thousands)	2023		2022
United States Transition Tax Payment	$	499	$	265
China Income Taxes, Net of Refunds		1,278		1,286
Canada Income Taxes, Net of Refunds		336		161
	$	2,113	$	1,712

I-25

15. Stock-Based Compensation

Equity Incentive Plan Description

On September 16, 2015, our shareholders approved an equity incentive plan titled the Culp, Inc. 2015 Equity Incentive Plan (the “2015 Plan”). The 2015 Plan authorizes the grant of stock options intended to qualify as incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based units, and other equity and cash related awards as determined by the Compensation Committee of our board of directors. An aggregate of 1,200,000 shares of common stock were authorized for issuance under the 2015 Plan, with certain sub-limits that would apply with respect to specific types of awards that may be issued as defined in the 2015 Plan. Effective September 27, 2023, our shareholders approved an amendment and restatement of the 2015 Plan (the "Amended and Restated Plan"). The Amended and Restated Plan authorizes the issuance of an additional 960,000 shares of common stock in addition to the shares of common stock still available for issuance under the 2015 Plan. The Amended and Restated Plan also removed certain sub-limits that previously applied with respect to specific type of awards that may be issued under the plan.

As of October 29, 2023, there were 765,399 shares available for future equity-based grants under the Amended and Restated Plan.

Performance-Based Restricted Stock Units

Senior Executives

We grant performance-based restricted stock units to senior executives which could earn up to a certain number of shares of common stock if certain performance targets are met over a three-fiscal year performance period as defined in the related restricted stock unit award agreements. The number of shares of common stock that are earned based on performance targets that have been achieved may be adjusted based on a market-based total shareholder return component as defined in the related restricted stock unit award agreements.

Our performance-based restricted stock units granted to senior executives were measured based on their fair market value on the date of grant. The fair market value per share was determined using the Monte Carlo simulation model for the market-based total shareholder return component and the closing price of our common stock for the performance-based component.

The following table provides assumptions used to determine the fair market value of the market-based total shareholder return component using the Monte Carlo simulation model on our outstanding performance-based restricted stock units granted to senior executives on September 28, 2023, August 10, 2022 and July 22, 2021:

	September 28,	August 10,	July 22,
	2023	2022	2021
Closing price of our common stock	$5.59	$5.06	$14.75
Expected volatility of our common stock	37.3%	48.2%	54.2%
Expected volatility of peer companies	35.7%-91.5%	41.6%-105.1%	45.7%-101.5%
Risk-free interest rate	4.90%	3.13%	0.33%
Dividend yield	0.00%	0.00%	3.00%
Correlation coefficient of peer companies	0.01-0.21	0.05-0.23	0.03-0.35

Key Employees

We grant performance-based restricted stock units to key employees which could earn up to a certain number of shares of common stock if certain performance targets are met over a three-fiscal year performance period as defined in the related restricted stock unit award agreements. Our performance-based restricted stock units granted to key employees were measured based on the fair market value (the closing price of our common stock) on the date of grant. No market-based total shareholder return component was included in these awards.

I-26

Overall

The following table summarizes information related to our grants of performance-based restricted stock units associated with senior executives and key employees that were unvested as of October 29, 2023:

	(3)		(4)
	Performance-Based		Restricted Stock
	Restricted Stock		Units Expected
Date of Grant	Units Awarded		to Vest		Price Per Share			Vesting Period
September 28, 2023 (1)		227,497		121,740	$	6.43	(5)	34 months
August 10, 2022 (1)		178,714		—	$	5.77	(6)	3 years
July 22, 2021 (1)		122,476		—	$	15.93	(7)	3 years
July 22, 2021 (2)		20,500		—	$	14.75	(8)	3 years

(1)Performance-based restricted stock units awarded to senior executives.

(2)Performance-based restricted stock units awarded to key employees.

(3)Amounts represent the maximum number of common stock shares that could be earned if certain performance targets are met as defined in the related restricted stock unit agreements.

(4)Compensation cost is based on an assessment each reporting period to determine the probability of whether or not certain performance goals will be met and how many shares are expected to be earned as of the end of the vesting period. These amounts represent the number of shares that were expected to vest as of October 29, 2023.

(5)Price per share represents the fair market value per share ($1.15 per $1, or an increase of $0.84 to the closing price of our common stock on the date of grant) determined using the Monte Carlo simulation model for the market-based total shareholder return component and the closing price of our common stock ($5.59) for the performance-based component of the performance-based restricted stock units granted to senior executives on September 28, 2023.

(6)Price per share represents the fair market value per share ($1.14 per $1, or an increase of $0.71 to the closing price of our common stock on the date of grant) determined using the Monte Carlo simulation model for the market-based total shareholder return component and the closing price of our common stock ($5.06) for the performance-based component of the performance-based restricted stock units granted to senior executives on August 10, 2022.

(7)Price per share represents the fair market value per share ($1.08 per $1, or an increase of $1.18 to the closing price of our common stock on the date of grant) determined using the Monte Carlo simulation model for the market-based total shareholder return component and the closing price of our common stock ($14.75) for the performance-based component of the performance-based restricted stock units granted to senior executives on July 22, 2021.

(8)Price per share represents the closing price of our common stock on the date of grant.

There were no performance-based restricted stock units that vested during the six-month period ended October 29, 2023. The following table summarizes information related to our performance-based restricted stock units that vested during the six-month period ended October 30, 2022:

	Performance-Based				(4)
	Restricted Stock		(3)		Price
Fiscal Year	Units Vested		Fair Value		Per Share
Fiscal 2023 (1)		545	$	3	$	5.10
Fiscal 2023 (2)		437	$	2	$	5.10

(1)Performance-based restricted stock units vested by senior executives.

(2)Performance-based restricted stock units vested by key employees.

(3)Dollar amounts are in thousands.

(4)Price per share is derived from the closing price of our common stock on the date the respective performance-based restricted stock units vested.

I-27

We recorded compensation expense of $23,000 and $2,000 within selling, general, and administrative expenses associated with our performance-based restrictive stock units for the six-month periods ended October 29, 2023, and October 30, 2022, respectively. Compensation expense is recorded based on an assessment each reporting period to determine the probability of whether or not certain performance targets will be met and how many shares are expected to be earned as of the end of the vesting period. If certain performance goals are not expected to be achieved, compensation expense would not be recorded, and any previously recognized compensation expense would be reversed.

As of October 29, 2023, the remaining unrecognized compensation expense related to our performance-based restricted stock units was $759,000, which is expected to be recognized over a weighted average vesting period of 2.7 years. As of October 29, 2023, the performance-based restricted stock units that are expected to vest had a fair value totaling $674,000.

Time-Based Restricted Stock Units

The following table summarizes information related to our grants of time-based restricted stock unit awards associated with senior executives, key employees, and outside directors that were unvested as of October 29, 2023:

	Time-Based
	Restricted Stock		(1)
Date of Grant	Units Awarded		Price Per Share		Vesting Period
September 28, 2023 (2)		100,068	$	5.59	34 months
September 28, 2023 (3)		59,928	$	5.59	1 year
September 6, 2022 (2)		25,114	$	4.58	2 to 3 years
August 10, 2022 (2)		78,225	$	5.06	3 years
July 22, 2021 (2)		30,835	$	14.75	3 years

(1)Price per share represents closing price of common stock on the date the respective award was granted.

(2)Time-based restricted stock units awarded to senior executives and key employees.

(3)Time-based restricted stock units awarded to outside directors.

The following table summarizes information related to our time-based restricted stock units that vested during the six-month periods ending October 29, 2023, and October, 30, 2022, respectively:

	Time-Based				(2)
	Restricted Stock		(1)		Price
Fiscal Year	Units Vested		Fair Value		Per Share
Fiscal 2024		151,653	$	857	$	5.65
Fiscal 2023		32,799	$	167	$	5.10

(1)Dollar amounts are in thousands.

(2)Price per share is derived from the closing price of our common stock on the date the respective time-based restricted stock units vested.

We recorded compensation expense of $378,000 and $396,000 within selling, general, and administrative expenses associated with our time-based restricted stock unit awards for the six-month periods ended October 29, 2023, and October 30, 2022, respectively.

As of October 29, 2023, the remaining unrecognized compensation expense related to our time-based restricted stock units was $1.3 million, which is expected to be recognized over a weighted average vesting period of 1.9 years. As of October 29, 2023, the time-based restricted stock units that are expected to vest had a fair value totaling $1.6 million.

Immediately Vested Common Stock Awards

We granted a total of 16,616 shares of common stock to our outside directors on July 3, 2023. These shares of common stock vested immediately and were measured at their fair value on the date of the grant. The fair value of these awards was $5.04 per share on July 3, 2023, which represents the closing price of our common stock on the date of grant.

We granted a total of 18,326 and 19,753 shares of common stock to our outside directors on October 3, 2022, and July 1, 2022, respectively. These shares of common stock vested immediately and were measured at their fair value on the date of the grant. The

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fair value of these awards was $4.57 and $4.24 per share on October 3,2022, and July 1, 2022, respectively, which represents the closing price of our common stock on the date of grant.

We recorded $84,000 and $167,000 of compensation expense within selling, general, and administrative expenses for common stock awards to our outside directors for the six-month periods ended October 29, 2023, and October 30, 2022, respectively.

16. Leases

Overview

We lease manufacturing facilities, showroom and office space, distribution centers, and equipment under operating lease arrangements. Our operating leases have remaining lease terms of one to eight years, with renewal options for additional periods ranging up to twelve years.

Balance Sheet

The right of use assets and lease liabilities associated with our operating leases as of October 29, 2023, October 30, 2022, and April 30, 2023, are as follows:

(dollars in thousands)	October 29, 2023		October 30, 2022		April 30, 2023
Right of use assets	$	6,874	$	11,609	$	8,191
Operating lease liability - current		2,540		2,655		2,640
Operating lease liability – noncurrent		2,431		4,194		3,612

Supplemental Cash Flow Information

	Six Months Ended		Six Months Ended
(dollars in thousands)	October 29, 2023		October 30, 2022
Operating lease liability payments	$	1,330	$	1,068
Right of use assets exchanged for lease liabilities		157		—

Operating lease expense for the three-month periods ended October 29, 2023, and October 30, 2022, was $781,000 and $959,000, respectively. Operating lease expense for the six-month periods ended October 29, 2023, and October 30, 2022, was $1.6 million and $2.0 million, respectively. Short-term lease and variable lease expenses were immaterial for the three-month and six-month periods ended October 29, 2023, and October 30, 2022.

Other Information

Maturity of our operating lease liabilities for the remainder of fiscal 2024, the subsequent next four fiscal years, and thereafter follows:

(dollars in thousands)
2024	$	1,269
2025		1,917
2026		638
2027		342
2028		225
Thereafter		804
	$	5,195
Less: interest		(224	)
Present value of lease liabilities	$	4,971

As of October 29, 2023, the weighted average remaining lease term and discount rate for our operating leases follows:

	October 29, 2023
Weighted average lease term (in years)	3.79
Weighted average discount rate		3.46	%

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17. Commitments and Contingencies

Litigation

The company is involved in legal proceedings and claims which have arisen in the ordinary course of business. Management has determined that it is not reasonably possible that these actions, when ultimately concluded and settled, will have a material adverse effect upon the consolidated financial position, consolidated results of operations, or consolidated cash flows of the company.

Accounts Payable – Capital Expenditures

As of October 29, 2023, October 30, 2022, and April 30, 2023, we had amounts due regarding capital expenditures totaling $298,000, $200,000, and $56,000, respectively, which pertained to outstanding vendor invoices, none of which were financed.

Purchase Commitments – Capital Expenditures

As of October 29, 2023, we had open purchase commitments to acquire equipment for our mattress fabrics segment totaling $1.6 million.

18. Statutory Reserves

Our subsidiary located in China was required to transfer 10% of its net income, as determined in accordance with the People’s Republic of China (PRC) accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reached 50% of the company’s registered capital. As of October 29, 2023, the statutory surplus reserve fund represents the 50% registered capital requirement, and therefore, our subsidiary located in China is no longer required to transfer 10% of its net income in accordance with PRC accounting rules and regulations.

The transfer to this reserve must be made before distributions of any dividend to shareholders. As of October 29, 2023, the company’s statutory surplus reserve was $4.0 million. The statutory surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any. The statutory surplus reserve fund may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them provided that the remaining reserve balance after such issue is not less than 25% of the registered capital.

The company’s subsidiary located in China can transfer funds to the parent company, except for the statutory surplus reserve of $4.0 million, to assist with debt repayment, capital expenditures, and other expenses of the company’s business.

19. Common Stock Repurchase Program

In March 2020, our board of directors approved an authorization for us to acquire up to $5.0 million of our common stock. Under the common stock repurchase program, shares may be purchased from time to time in open market transactions, block trades, through plans established under the Securities Exchange Act Rule 10b5-1, or otherwise. The number of shares purchased and the timing of such purchases are based on working capital requirements, market and general business conditions, and other factors, including alternative investment opportunities.

We did not repurchase any shares of common stock during the six-month periods ending October 29, 2023, and October 30, 2022, respectively.

As of October 29, 2023, $3.2 million is available for additional repurchases of our common stock.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

This report and the exhibits attached hereto contain “forward-looking statements” within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995 (Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934). Such statements are inherently subject to risks and uncertainties that may cause actual events and results to differ materially from such statements. Further, forward looking statements are intended to speak only as of the date on which they are made, and we disclaim any duty to update or alter such statements to reflect any changes in management’s expectations or any change in the assumptions or circumstances on which such statements are based, whether due to new information, future events, or otherwise. Forward-looking statements are statements that include projections, expectations, or beliefs about future events or results or otherwise are not statements of historical fact. Such statements are often but not always characterized by qualifying words such as “expect,” “believe,” “anticipate,” “estimate,” “intend,” “plan,” “project,” and their derivatives, and include but are not limited to statements about expectations, projections, or trends for our future operations, strategic initiatives and plans, production levels, new product launches, sales, profit margins, profitability, operating (loss) income, capital expenditures, working capital levels, cost savings, income taxes, SG&A or other expenses, pre-tax (loss) income, earnings, cash flow, and other performance or liquidity measures, as well as any statements regarding dividends, share repurchases, liquidity, use of cash and cash requirements, borrowing capacity, investments, potential acquisitions, future economic or industry trends, public health epidemics, or future developments. There can be no assurance that we will realize these expectations or meet our guidance, or that these beliefs will prove correct.

Factors that could influence the matters discussed in such statements include the level of housing starts and sales of existing homes, consumer confidence, trends in disposable income, and general economic conditions. Decreases in these economic indicators could have a negative effect on our business and prospects. Likewise, increases in interest rates, particularly home mortgage rates, and increases in consumer debt or the general rate of inflation, could affect us adversely. The future performance of our business depends in part on our success in conducting and finalizing acquisition negotiations and integrating acquired businesses into our existing operations. Changes in consumer tastes or preferences toward products not produced by us could erode demand for our products. Changes in tariffs or trade policy, including changes in U.S. trade enforcement priorities, or changes in the value of the U.S. dollar versus other currencies, could affect our financial results because a significant portion of our operations are located outside the United States. Strengthening of the U.S. dollar against other currencies could make our products less competitive on the basis of price in markets outside the United States, and strengthening of currencies in Canada and China can have a negative impact on our sales of products produced in those places. In addition, because our foreign operations use the U.S. dollar as their functional currency, changes in the exchange rate between the local currency of those operations and the U.S dollar can affect our reported profits from those foreign operations. Also, economic or political instability in international areas could affect our operations or sources of goods in those areas, as well as demand for our products in international markets. The impact of public health epidemics on employees, customers, suppliers, and the global economy, such as the global coronavirus pandemic currently affecting countries around the world, could also adversely affect our operations and financial performance. In addition, the impact of potential goodwill or intangible asset impairments could affect our financial results. Increases in freight costs, labor costs, and raw material prices, including increases in market prices for petrochemical products, can also significantly affect the prices we pay for shipping, labor, and raw materials, respectively, and in turn, increase our operating costs and decrease our profitability. Finally, disruption in our customers’ supply chains for non-fabric components may cause declines in new orders and/or delayed shipping of existing orders while our customers wait for other components, which could adversely affect our financial results. Further information about these factors, as well as other factors that could affect our future operations or financial results and the matters discussed in forward-looking statements, are included in Item 1A “Risk Factors” section in our most recent Form 10-K and Form 10-Q reports filed with the Securities and Exchange Commission. A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. Additional risks and uncertainties that we do not presently know about or that we currently consider to be immaterial may also affect our business operations and financial results.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following analysis of financial condition and results of operations should be read in conjunction with the consolidated financial statements and notes and other exhibits included elsewhere in this report.

General

Our fiscal year is the 52 or 53-week period ending on the Sunday closest to April 30. The six months ended October 29, 2023, and October 30, 2022, both represent 26-week periods.

Our operations are classified into two business segments: mattress fabrics and upholstery fabrics.

Mattress Fabrics

The mattress fabrics segment manufactures, sources, and sells fabrics and mattress covers primarily to bedding manufacturers. Currently, we have mattress fabric operations located in Stokesdale, NC, Quebec, Canada, and Ouanaminthe, Haiti.

Upholstery Fabrics

The upholstery fabrics segment develops, sources, manufactures, and sells fabrics primarily to residential and commercial furniture manufacturers. Currently, we have upholstery fabric operations located in Shanghai, China, and Burlington, NC. During the third quarter of fiscal 2022, we commenced operation of a new leased facility located in Ouanaminthe, Haiti, dedicated to the production of cut and sewn upholstery kits. However, due to a decline in demand, we (i) terminated the agreement to lease this new facility during the third quarter of fiscal 2023, (ii) relocated a scaled-down upholstery cut and sew operation into our existing mattress cover facility located in Ouanaminthe, Haiti, during the fourth quarter of fiscal 2023, and (iii) discontinued the production of cut and sewn upholstery kits in Haiti in the latter part of the first quarter of fiscal 2024. (See Note 9 to the consolidated financial statements for further details.)

Additionally, Read Window Products, LLC (“Read”), a wholly-owned subsidiary with operations located in Knoxville, TN, provides window treatments and sourcing of upholstery fabrics and other products, as well as measuring and installation services for Read’s products, to customers in the hospitality and commercial industries. Read also supplies soft goods such as decorative top sheets, coverlets, duvet covers, bed skirts, bolsters, and pillows.

Executive Summary

We evaluate the operating performance of our business segments based upon (loss) income from operations before certain unallocated corporate expenses and other items that are not expected to occur on a regular basis. Cost of sales for each business segment includes costs to develop, manufacture, or source our products, including costs such as raw material and finished good purchases, direct and indirect labor, overhead, and incoming freight charges. Unallocated corporate expenses primarily represent compensation and benefits for certain executive officers and their support staff, all costs associated with being a public company, amortization of intangible assets, and other miscellaneous expenses.

Results of Operations

	Three Months Ended
(dollars in thousands)	October 29,  2023			October 30,  2022			Change
Net sales	$	58,725		$	58,381		0.6%
Gross profit (loss)		7,950			(2,213	)	(459.2)%
Gross margin		13.5	%		(3.8	)%	1733bp
Selling, general, and administrative expenses		10,045			9,103		10.3%
Restructuring expense		144			615		(76.6)%
Loss from operations		(2,239	)		(11,931	)	(81.2)%
Operating margin		(3.8	)%		(20.4	)%	1662bp
Loss before income taxes		(1,908	)		(11,023	)	(82.7)%
Income tax expense		516			1,150		(55.1)%
Net loss		(2,424	)		(12,173	)	(80.1)%

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	Six Months Ended
(dollars in thousands)	October 29,  2023			October 30,  2022			Change
Net sales	$	115,387		$	120,985		(4.6)%
Gross profit		15,035			1,914		685.5%
Gross margin		13.0	%		1.6	%	1145bp
Selling, general, and administrative expenses		19,874			17,968		10.6%
Restructuring expense		482			615		(21.6)%
Loss from operations		(5,321	)		(16,669	)	(68.1)%
Operating margin		(4.6	)%		(13.8	)%	917bp
Loss before income taxes		(4,549	)		(15,826	)	(71.3)%
Income tax expense		1,217			2,046		(40.5)%
Net loss		(5,766	)		(17,872	)	(67.7)%

Net Sales

Overall, our net sales for the second quarter of fiscal 2024 increased by 0.6% compared with the same period a year ago, with mattress fabrics sales increasing 19.6% and upholstery fabrics sales decreasing 14.9%. Our net sales for the first half of fiscal 2024 decreased by 4.6% compared with the same period a year ago, with mattress fabrics sales increasing 9.0% and upholstery fabrics sales decreasing 16.2%.

The increase in net sales in our mattress fabrics segment for both the second quarter and the first half of fiscal 2024 was primarily driven by new fabric and sewn cover placements that are priced in line with current costs, and, to a lesser extent, sku rationalization and the re-pricing of some underperforming skus to reflect current costs, resulting in higher average selling prices overall. The decrease in net sales for our upholstery fabrics segment for both the second quarter and the first half of fiscal 2024 reflects reduced demand for our residential upholstery fabrics products, driven by a slowdown in new retail business in the residential home furnishings industry. The decrease in upholstery fabrics net sales for the first half of fiscal 2024 was partially offset by higher sales in our hospitality/contract fabric business, as compared to the prior-year period.

See the Segment Analysis section below for further details.

Loss Before Income Taxes

Overall, our loss before income taxes for the second quarter of fiscal 2024 was $(1.9) million, compared with loss before income taxes of $(11.0) million for the prior-year period, while our loss before income taxes for the first six months of fiscal 2024 was $(4.5) million, compared with loss before income taxes of $(15.8) for the prior-year period.

Operating performance for both the second quarter and the first half of fiscal 2024, as compared to the prior-year periods, was positively affected by better inventory management; higher sales and better pricing and margins for the mattress fabrics segment; fixed cost savings in the upholstery fabrics segment; improved operating efficiencies in both segments; and a more favorable foreign exchange rate associated with our upholstery fabric operations in China. Operating performance for the first half of fiscal 2024 was also positively affected by a greater contribution from the hospitality business and Read in our upholstery fabrics segment. These factors were partially offset by lower residential upholstery fabric sales and higher SG&A expense during both periods. Notably, operating performance for both the second quarter and the first half of fiscal 2023 was negatively affected by inventory impairment charges and inventory closeout sales for our mattress fabrics segment; higher than normal markdowns of inventory for our upholstery fabrics segment; and restructuring and related charges associated with our upholstery fabrics segment.

See the Segment Analysis section below for further details.

Income Taxes

We recorded income tax expense of $1.2 million or (26.8%) of loss before income taxes for the six-month period ending October 29, 2023, compared with income tax expense of $2.0 million or (12.9%) of loss before income taxes, for the six-month period ending October 30, 2022.

Our consolidated effective income tax rates during the first half of fiscal 2024 and the first half of fiscal 2023 were both adversely affected by the mix of earnings between our U.S. operations and foreign subsidiaries, as our taxable income stems from our operations located in China and Canada, which have higher income tax rates than the U.S. In addition, during the first half of fiscal 2024 and fiscal 2023, we incurred pre-tax losses associated with our U.S. operations, for which an income tax benefit was not recorded due to the full valuation allowance applied against our U.S. net deferred income tax assets. However, the income tax

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charge associated with the full valuation allowance applied against our U.S. net deferred income tax assets was lower during the first half of fiscal 2024 compared with the first half of fiscal 2023, as our $(11.8) million U.S. pre-tax loss incurred during the first half of fiscal 2024 was significantly lower than the $(20.7) million U.S. pre-tax loss incurred during the first half of fiscal 2023.

During the first half of fiscal 2024, we incurred a lower consolidated pre-tax loss totaling $(4.5) million, compared with $(15.8) million during the first half of fiscal 2023. As a result, the principal differences between income tax expense at the U.S. federal income tax rate and the effective income tax rate reflected in the consolidated financial statements were more pronounced during the first half of fiscal 2024, as compared with the first half of fiscal 2023.

Refer to Note 14 of the consolidated financial statements for further details regarding our provision for income taxes.

Liquidity

As of October 29, 2023, our cash and cash equivalents (collectively, “cash”) totaled $15.2 million, a decrease of $5.8 million compared with cash of $21.0 million as of April 30, 2023. This decrease was mostly due to net cash used in operating activities totaling $(4.5) million and capital expenditures related to our mattress fabrics segment totaling $(2.0) million, partially offset by proceeds from the sale of our rabbi trust investments totaling $986,000 to fund withdrawals from our deferred compensation plan for certain retired employees.

Our net cash used in operating activities was $(4.5) million during the first half of fiscal 2024, a decrease of $10.6 million compared with net cash provided by operating activities of $6.2 million during the first half of fiscal 2023. This trend mostly reflects (i) a significant increase in accounts payable during the first half of fiscal 2023 primarily related to our upholstery fabrics operations located in China, as the mandated COVID-19 related shutdowns were lifted during this period, and which increase in accounts payable did not recur during the first half of fiscal 2024; (ii) a significant decrease in inventory during the first half of fiscal 2023 due to a significant (23.2%) decline in net sales during the period, which significant decline did not recur during the first half of fiscal 2024; (iii) annual incentive payments made during the first quarter of fiscal 2024, which payments did not occur during the first quarter of fiscal 2023; (iv) payments to certain retired employees totaling $986,000 for withdrawals from our deferred compensation plan during the first half of fiscal 2024; partially offset by (v) an increase in cash earnings during the first half of fiscal 2024 compared with the first half of fiscal 2023.

As of October 29, 2023, there were no outstanding borrowings under our lines of credit.

Segment Analysis

Mattress Fabrics Segment

	Three Months Ended
(dollars in thousands)	October 29,  2023			October 30,  2022			Change
Net sales	$	31,377		$	26,230		19.6%
Gross profit (loss)		2,483			(6,057	)	(141.0)%
Gross profit margin		7.9	%		(23.1	)%	3101bp
Selling, general, and administrative expenses		3,419			2,945		16.1%
Loss from operations		(936	)		(9,002	)	(89.6)%
Operating margin		(3.0	)%		(34.3	)%	3134bp

	Six Months Ended
(dollars in thousands)	October 29,  2023			October 30,  2022			Change
Net sales	$	60,599		$	55,602		9.0%
Gross profit (loss)		4,477			(6,093	)	(173.5)%
Gross margin		7.4	%		(11.0	)%	1835bp
Selling, general, and administrative expenses		6,811			5,829		16.8%
Loss from operations		(2,334	)		(11,922	)	(80.4)%
Operating margin		(3.9	)%		(21.4	)%	1759bp

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Net Sales

Mattress fabrics sales increased 19.6% in the second quarter of fiscal 2024 compared to the prior-year period. Mattress fabrics sales increased 9.0% in the first half of fiscal 2024 compared to the first half of fiscal 2023.

The increase in net sales in our mattress fabrics segment for both the second quarter and the first six months of fiscal 2024 was primarily driven by new fabric and sewn cover placements that are priced in line with current raw material and operational costs, and, to a lesser extent, sku rationalization and the re-pricing of some underperforming skus to reflect current costs, resulting in higher average selling prices as compared to historical average selling prices. While the domestic mattress industry remains pressured by ongoing demand softness, we believe we are making gains with customers through new program rollouts.

During the second quarter, we maintained our focus on executing our product-driven strategy with an ongoing emphasis on innovation, design creativity, and customer relationships. The strength and flexibility of our global manufacturing and sourcing operations in the U.S., Canada, Haiti, Asia, and Turkey continued to support the evolving needs of our mattress fabrics and cover customers during the period. We also continued to diligently manage the aspects of our business we can control, taking necessary steps to withstand current market conditions and position our business for renewed growth. This includes the ongoing execution of a comprehensive business transformation plan focused on long-term improvement in areas that include quality, sales, marketing, and operational processes; supply chain optimization; employee engagement; and organizational structure. With new leadership and a restructured management team, we believe this plan will lay the foundation for steady, sequential improvement in this business, although the speed of this improvement will be affected by overall industry trends.

Looking ahead, we expect the current macro-economic environment will continue to affect consumer spending trends for some time, resulting in ongoing industry softness that may reduce demand for our mattress fabrics and cover products. We expect these conditions are likely to affect our results through at least the third quarter of fiscal 2024, although we believe we will mitigate this pressure to some extent by the continued rollout of new programs priced in line with current costs, along with opportunities to make additional gains with customers. Additionally, the potential ongoing geopolitical disruptions related to wars in Ukraine and the Middle East, as well as possible economic and health effects from additional surges in the coronavirus, remain unknown and depend on factors beyond our knowledge or control. These situations could cause disruption that could adversely affect our operations and financial performance.

Gross Profit, Selling, General & Administrative Expenses, and Loss from Operations

The decrease in this segment’s operating loss during both the second quarter and the first half of fiscal 2024, as compared to the prior-year periods (which were affected by certain inventory impairment charges and losses from inventory close out sales), was primarily due to better inventory management; higher sales; better pricing and margins (driven mostly by new product placements priced in line with current costs, and, to a lesser extent, sku rationalization and the re-pricing underperforming skus to reflect current costs); and improved operating efficiencies. These factors were partially offset by higher SG&A expense during both periods, which was due mostly to higher incentive compensation expense, an increase in provision for bad debts (reflecting current unfavorable macro-economic conditions relating to bedding products), and an increase in sampling expense driven by new product roll outs.

We expect the ongoing industry softness affecting sales volumes will affect profitability through at least the third quarter of fiscal 2024, although we believe these headwinds will be mitigated to some extent by our ongoing efforts to improve operational efficiencies and control internal costs, as well as our continued roll out of new products priced in line with current costs. We will consider further adjustments to right-size and restructure our operations as necessary to align with current demand levels, as well as additional reasonable pricing actions as competitive conditions permit to further mitigate and manage inflation.

Segment assets

Segment assets consist of accounts receivable, inventory, property, plant, and equipment, and right of use assets.

(dollars in thousands)	October 29, 2023		October 30, 2022		April 30, 2023
Accounts receivable	$	11,303	$	8,700	$	12,396
Inventory		27,195		30,300		25,674
Property, plant & equipment		32,862		35,853		33,749
Right of use assets		1,969		2,087		2,308
	$	73,329	$	76,940	$	74,127

Refer to Note 13 of the consolidated financial statements for disclosures regarding determination of our segment assets.

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Accounts Receivable

As of October 29, 2023, accounts receivable increased by $2.6 million, or 29.9%, compared with October 30, 2022. This increase reflects the increase in net sales during the second quarter of fiscal 2024 compared with fiscal 2023, as described in the Net Sales section above. In addition, we experienced slower cash collections as customers did not take advantage of cash discounts as much during the second quarter of fiscal 2024, as compared with the second quarter of fiscal 2023. This led to an increase in days' sales outstanding to 33 days for the second quarter of fiscal 2024, as compared with 30 days for the second quarter of fiscal 2023.

As of October 29, 2023, accounts receivable decreased by $1.1 million, or 8.8%, compared with April 30, 2023. This decrease primarily reflects faster cash collections, as we had a mix of higher sales to customers with longer credit terms during the fourth quarter of fiscal 2023, as compared with the second quarter of fiscal 2024. As a result, days’ sales outstanding decreased to 33 days during the second quarter of fiscal 2024, a decrease from 37 days during the fourth quarter of fiscal 2023. The decrease in accounts receivable due to faster cash collections was partially offset by an increase in net sales during the second quarter of fiscal 2024, as compared with the fourth quarter of fiscal 2023. Net sales for the second quarter of fiscal 2024 were $31.4 million, an increase of 2.2% compared with net sales of $30.7 million during the fourth quarter of fiscal 2023.

Inventory

As of October 29, 2023, inventory decreased by $3.1 million, or 10.2%, compared with October 30, 2022. Although net sales increased by 19.6% during the second quarter of fiscal 2024, as compared with the second quarter of fiscal 2023, inventory decreased during the second quarter of fiscal 2024, as compared with the prior-year period, due to improved raw materials inventory management in relation to current customer demand trends and promotional programs to reduce aged raw materials and finished goods.

As of October 29, 2023, inventory increased by $1.5 million, or 5.9%, compared with April 30, 2023. This trend reflects an increase in net sales during the second quarter of fiscal 2024, as compared with the fourth quarter of fiscal 2023. Net sales during the second quarter of fiscal 2024 were $31.4 million, an increase of 2.2% compared with net sales of $30.7 million during the fourth quarter of fiscal 2023.

Inventory turns were 4.5 for the second quarter of fiscal 2024, compared with 3.9 for the second quarter of fiscal 2023 and 4.4 for the fourth quarter of fiscal 2023.

Property, Plant, & Equipment

As of October 29, 2023, property, plant, and equipment has steadily decreased compared to October 30, 2022, and April 30, 2023, due to reduced capital spending stemming from the current and expected unfavorable macro-economic conditions and our strategic focus on limited capital projects that will increase efficiencies and improve the quality of our products.

The $32.9 million as of October 29, 2023, represents property, plant, and equipment of $22.2 million, $10.0 million, and $661,000 located in the U.S., Canada, and Haiti, respectively. The $35.9 million as of October 30, 2022, represents property, plant, and equipment of $23.8 million, $11.4 million, and $679,000 located in the U.S., Canada, and Haiti, respectively. The $33.7 million as of April 30, 2023, represents property, plant, and equipment of $22.7 million, $10.4 million, and $608,000 located in the U.S., Canada, and Haiti, respectively.

Right of Use Assets

As of October 29, 2023, right of use assets have decreased due to rent expense incurred over the terms of existing lease agreements.

The $2.0 million as of October 29, 2023, represents right of use assets of $1.3 million and $663,000 located in Haiti and Canada, respectively. The $2.1 million as of October 30, 2022, represents right of use assets of $1.8 million, $167,000 million, and $164,000 located in Haiti, Canada, and the U.S., respectively. The $2.3 million as of April 30, 2023, represents right of use assets of $1.5 million and $776,000 located in Haiti and Canada, respectively.

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Upholstery Fabrics Segment

Net Sales

	Three Months Ended
(dollars in thousands)	October 29,  2023			October 30,  2022			% Change
Non-U.S. Produced	$	24,129	88%	$	29,679	92%		(18.7	)%
U.S. Produced		3,219	12%		2,472	8%		30.2	%
Total	$	27,348	100%	$	32,151	100%		(14.9	)%

	Six Months Ended
(dollars in thousands)	October 29,  2023			October 30,  2022			% Change
Non-U.S. Produced	$	48,762	89%	$	61,119	93%		(20.2	)%
U.S. Produced		6,026	11%		4,264	7%		41.3	%
Total	$	54,788	100%	$	65,383	100%		(16.2	)%

Upholstery fabrics sales decreased 14.9% in the second quarter of fiscal 2024 compared to the prior-year period. Upholstery fabrics sales decreased 16.2% in the first half of fiscal 2024 compared to the first half of fiscal 2023.

The decrease in upholstery fabrics net sales in both the second quarter and the first six months of fiscal 2024 reflects ongoing softness in the residential home furnishings industry, where demand remains pressured by a challenging macro-economic environment. The decrease in residential fabric sales during the first six months of fiscal 2024 was partially mitigated by higher sales in our hospitality/contract fabric business during the period, as compared to the prior-year period.

Looking ahead, we expect that softness in the residential home furnishings industry may affect demand for our residential business for some period of time. Despite this challenge, we believe our business is well positioned for the long term with our product-driven strategy and innovative product offerings, including our popular portfolio of LiveSmart® performance products, as well as our flexible Asian platform and our long-term supplier relationships.

Notably, the potential ongoing geopolitical disruptions related to wars in Ukraine and the Middle East, as well as the economic and health effects from possible additional surges in the coronavirus, remain unknown and depend on factors beyond our control. At this time, we cannot reasonably estimate the impact on our upholstery fabrics segment, but we note that if conditions worsen in any of these situations, including additional COVID-related shutdowns of our China operations, the impact on our operations, and/or on our suppliers, customers, consumers, and the global economy, could adversely affect our financial performance.

Gross Profit, Selling, General & Administrative Expenses, and Income from Operations

	Three Months Ended
(dollars in thousands)	October 29,  2023			October 30,  2022			Change
Gross profit		5,389			3,942		36.7%
Gross margin		19.7	%		12.3	%	741bp
Selling, general, and administrative expenses		3,998			3,680		8.6%
Restructuring expense		144			615		(76.6)%
Income from operations		1,391			262		430.9%
Operating margin		5.1	%		0.8	%	429bp

	Six Months Ended
(dollars in thousands)	October 29,  2023			October 30,  2022			Change
Gross profit		10,659			8,105		31.5%
Gross margin		19.5	%		12.4	%	705bp
Selling, general, and administrative expenses		7,939			7,302		8.7%
Restructuring expense		482			615		(21.6)%
Income from operations		2,720			803		238.7%
Operating margin		5.0	%		1.2	%	376bp

The increase in upholstery fabrics profitability for both the second quarter and the first six months of fiscal 2024, as compared to the prior-year periods (which were negatively affected by higher than normal inventory markdowns), primarily reflects better inventory management; lower fixed costs resulting from the previous restructuring of the upholstery fabrics segment's cut and sew platforms; lower freight costs; and a more favorable foreign exchange rate associated with this segment's operations in China.

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Operating performance for the first half of fiscal 2024 was also positively affected by a greater contribution from hospitality fabrics and Read in our upholstery fabrics segment. These factors were partially offset by lower residential fabric sales and higher SG&A expense during both periods. The increase in SG&A expense was mostly due to wage inflation, higher professional and consulting fees, higher travel and tradeshow costs as business travel and industry tradeshows have resumed, and an increase in sampling expense driven by new product roll outs.

Looking ahead, the residential home furnishings industry remains under pressure due to shifting consumer spending trends and inflation affecting overall consumer spending. As a result, we expect lower sales volumes in our residential business will continue to affect our profitability. However, for fiscal 2024, we expect to benefit from (i) our strategic decision to discontinue production of cut and sewn upholstery kits in Haiti; (ii) improved inventory management; (iii) a solid hospitality/contract fabric business; and (iv) improvement in our Read business. We will also continue our ongoing cost reduction efforts and will consider further adjustments to right-size and restructure our operations as necessary to align with current demand levels, while maintaining our ability to service our customers.

Restructuring Activities

Ouanaminthe, Haiti

During the third quarter of fiscal 2023, Culp Upholstery Fabrics Haiti, Ltd. ("CUF Haiti") entered into an agreement to terminate a lease associated with a facility located in Ouanaminthe, Haiti, and, in turn, moved its production of upholstery cut and sew kits to an existing facility leased by Culp Home Fashions Haiti, Ltd. (“CHF Haiti”) during the fourth quarter of fiscal 2023. Both CUF Haiti and CHF Haiti are indirect wholly-owned subsidiaries of the company. During the first quarter of fiscal 2024, demand for upholstery cut and sewn kits declined more than previously anticipated, resulting in the strategic action to discontinue the production of upholstery cut and sew kits in Haiti.

The following summarizes our restructuring expense and restructuring related (credits) charges from the restructuring activities associated with our upholstery fabrics operations located in Haiti for the three months and six months ending October 29, 2023:

	Three Months Ended			Six Months Ended
(dollars in thousands)	October 29, 2023			October 29, 2023
Employee termination benefits	$	2		$	103
Impairment loss - equipment		142			379
(Gain) loss on disposal and markdowns of inventory		(78	)		101
Restructuring expense and restructuring related (credits) charges (1) (2)	$	66		$	583

(1) Of the total $66,000, $144,000 and $(78,000) were recorded within restructuring expense and cost of sales, respectively, in the Consolidated Statement of Net Loss for the three-month period ending October 29, 2023.

(2) Of the total $583,000, $482,000 and $101,000 were recorded within restructuring expense and cost of sales, respectively, in the Consolidated Statement of Net Loss for the six-month period ending October 29, 2023.

Shanghai, China

During the second quarter of fiscal 2023, we closed our cut and sew upholstery fabrics operation located in Shanghai, China, which included the termination of an agreement to lease a building. This strategic action, along with the further use of our Asian supply chain, was taken in order to adjust our operating costs to better align with the declining consumer demand for cut and sewn products.

The following summarizes our restructuring expense and restructuring related charges from the restructuring activities associated with our upholstery fabrics operations located in China for the three months and six months ending October 29, 2022:

	Three and Six Months Ended
(dollars in thousands)	October 30, 2022
Employee termination benefits	$468
Loss on disposal and markdowns of inventory	98
Loss on disposal of equipment	80
Lease termination costs	47
Other associated costs	20
Restructuring expense and restructuring related charges (1)	$713

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(1) Of the total $713,000, $615,000 and $98,000 were recorded to restructuring expense and cost of sales, respectively, in the Consolidated Statement of Net Loss for the three-month and six-month periods ending October 30, 2022.

Segment Assets

Segment assets consist of accounts receivable, inventory, property, plant, and equipment, and right of use assets:

(dollars in thousands)	October 29, 2023		October 30, 2022		April 30, 2023
Accounts receivable	$	11,733	$	13,743	$	12,382
Inventory		17,270		21,924		19,406
Property, plant & equipment		1,175		2,150		1,671
Right of use assets		1,992		5,898		2,618
	$	32,170	$	43,715	$	36,077

Refer to Note 13 of the consolidated financial statements for disclosures regarding determination of our segment assets.

Accounts Receivable

As of October 29, 2023, accounts receivable decreased by $2.0 million, or 14.6%, compared with October 30, 2022. This trend mostly reflects the decrease in net sales of 14.9% during the second quarter of fiscal 2024, compared with the second quarter of fiscal 2023, as described in the Net Sales section above. Days’ sales outstanding for this segment increased to 36 days for the second quarter of fiscal 2024, as compared with 35 days for the second quarter of fiscal 2023.

As of October 29, 2023, accounts receivable decreased by $649,000, or 5.2%, compared with April 30, 2023. This trend reflects a decrease in net sales of 11.0% during the second quarter of fiscal 2024, as compared with the fourth quarter of fiscal 2023. Net sales for the second quarter of fiscal 2024 were $27.3 million, compared with net sales of $30.7 million during the fourth quarter of fiscal 2023. The decrease in net sales was mostly offset by slower cash collections during the second quarter of fiscal 2024, as compared to the fourth quarter of fiscal 2023, as we had a mix of higher sales volume with customers with shorter credit terms during the fourth quarter of fiscal 2023. This led to an increase in days' sales outstanding to 36 days for the second quarter of fiscal 2024, as compared with 33 days for the fourth quarter of fiscal 2023.

Inventory

As of October 29, 2023, inventory decreased by $4.7 million, or 21.2%, compared with October 30, 2022. This trend mostly reflects a decrease in net sales of 14.9% during the second quarter of fiscal 2024, compared with the second quarter of fiscal 2023 (as described in the Net Sales section above). In addition, this decrease is also attributable to promotional programs used to reduce aged raw materials and finished goods inventory.

As of October 29, 2023, inventory decreased by $2.1 million, or 11.0%, compared with April 30, 2023. This trend mostly reflects a decrease in net sales of 11.0% during the second quarter of fiscal 2024, compared with the fourth quarter of fiscal 2023. Net sales for the second quarter of fiscal 2024 were $27.3 million, compared with net sales of $30.7 million during the fourth quarter of fiscal 2023.

Inventory turns were 4.4 for the second quarter of fiscal 2024, compared with 3.9 for the second quarter of fiscal 2023 and 4.8 for the fourth quarter of fiscal 2023.

Property, Plant, & Equipment

As of October 29, 2023, property, plant, and equipment steadily decreased compared to October 30, 2022, and April 30, 2023, due to (i) impairment charges of $379,000 related to our strategic action to discontinue the production of upholstery cut and sew kits in Ouanaminthe, Haiti, (ii) impairment charges of $80,000 associated with the closure of our cut and sew upholstery fabrics operation located in Shanghai, China, and (iii) a reduction in capital spending as a result of current and expected unfavorable macro-economic conditions.

The $1.2 million as of October 29, 2023, represents property, plant, and equipment of $1.0 million and $140,000 located in the U.S. and China, respectively. The $2.2 million as of October 30, 2022, represents property, plant, and equipment of $1.0 million, $1.0 million, and $137,000 located in the U.S., Haiti, and China, respectively. The $1.7 million as of April 30, 2023, represents property, plant, and equipment of $974,000, $592,000, and $105,000 located in the U.S., Haiti, and China, respectively.

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Right of Use Assets

As of October 29, 2023, right of use assets decreased compared with October 30, 2022, and April 30, 2023. This decrease mostly resulted from (i) a six-month forgiveness of rent payments associated with COVID-19 relief permitted by the Chinese government for all of our leased facilities located in Shanghai, China, during the second quarter of fiscal 2023; (ii) the termination of a building lease agreement in connection with the exit from our cut and sew upholstery fabrics operation located in Shanghai, China, during the second quarter of fiscal 2023; (iii) the termination of a building lease agreement in connection with the discontinuance of our cut and sew upholstery fabrics operation located in Ouanaminthe, Haiti, during the third quarter of fiscal 2023; and (iv) rent expense incurred over the terms of the existing respective lease agreements.

The $2.0 million as of October 29, 2023, represents right of use assets of $1.2 million and $818,000 located in China and the U.S., respectively. The $5.9 million as of October 30, 2022, represents right of use assets of $2.5 million, $2.0 million, and $1.4 million located in Haiti, China, and the U.S., respectively. The $2.6 million as of April 30, 2023, represents right of use assets of $1.5 million and $1.1 million, located in China and the U.S., respectively.

Other Income Statement Categories

	Three Months Ended
(dollars in thousands)	October 29, 2023		October 30, 2022		% Change
SG&A expenses	$	10,045	$	9,103		10.3	%
Interest income		282		79		257.0	%
Other income		49		829		(94.1	)%

	Six Months Ended
(dollars in thousands)	October 29, 2023		October 30, 2022		% Change
SG&A expenses	$	19,874	$	17,968		10.6	%
Interest income		627		96		553.1	%
Other income		145		747		(80.6	)%

Selling, General, and Administrative Expenses

The increase in selling, general, and administrative expenses during the second quarter and first half of fiscal 2024, compared with the second quarter and first half of fiscal 2023, is due to a variety of factors, including (i) wage inflation; (ii) higher incentive compensation expense that relates to annual bonuses; (iii) higher professional and consulting fees; (iv) an increase in provision for bad debts reflecting current unfavorable macro-economic conditions relating to furniture and bedding products; and (v) an increase in sampling expense driven by new product roll outs in both business segments.

Interest Income

The increase in interest income is due primarily to higher market interest rates during the second quarter and first half of fiscal 2024, as compared with the second quarter and first half of fiscal 2023.

Other Income

Management is required to assess certain economic factors to determine the currency of the primary economic environment in which our foreign subsidiaries operate. Based on our assessments, the U.S. dollar was determined to be the functional currency of our operations located in China and Canada.

The change in other income during the second quarter and first half of fiscal 2024, as compared with the second quarter and first half of fiscal 2023, is due mostly to less favorable foreign currency exchange rates applied against our balance sheet accounts denominated in Chinese Renminbi to determine the corresponding U.S. dollar financial reporting amounts during second quarter and first half of fiscal 2024, as compared with the second quarter and first half of fiscal 2023. During the second quarter of fiscal 2024, we reported foreign currency exchange gains associated with our operations located in China totaling $228,000, compared with $1.0 million during the second quarter of fiscal 2023. During the first half of fiscal 2024, we reported foreign currency exchange gains associated with our operations located in China totaling $679,000, compared with $1.2 million during the first half of fiscal 2023.

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The foreign currency exchange gain totaling $679,000 reported during the first half of fiscal 2024 related to our operations in China, was mostly non-cash, and was partially offset by $452,000 of income tax expense. The income tax expense of $452,000 was associated with taxable foreign currency exchange gains based on less favorable foreign currency exchange rates applied against balance sheet accounts denominated in U.S. dollars to determine the corresponding Chinese Renminbi local currency amounts. The foreign currency exchange rate gains incurred on our U.S. dollar denominated balance sheet accounts associated with our operations located in China are considered taxable income, as we incur income tax expense and pay income taxes in China's local currency. The $452,000 of income tax expense represents an increase in our income tax payments and withholding tax payments associated with future earnings and profits that will ultimately be repatriated from our operations located in China to the company's U.S. parent.

Income Taxes

Effective Income Tax Rate & Income Tax Expense

We recorded income tax expense of $1.2 million, or (26.8%) of loss before income taxes, for the six-month period ending October 29, 2023, compared with income tax expense of $2.0 million, or (12.9%) of loss before income taxes, for the six-month period ending October 30, 2022

Our effective income tax rates for the six-month periods ended October 29, 2023, and October 30, 2022, were based upon the estimated effective income tax rate applicable for the full year after giving effect to any significant items related specifically to interim periods. When calculating the annual estimated effective income tax rates for the six-month periods ended October 29, 2023, and October 30, 2022, we were subject to loss limitation rules. These loss limitation rules require any taxable loss associated with our U.S. or foreign operations to be excluded from the annual estimated effective income tax rate calculation if it was determined that no income tax benefit could be recognized during the current fiscal year. The effective income tax rate can be affected over the fiscal year by the mix and timing of actual earnings from our U.S. operations and foreign subsidiaries located in China, Canada, and Haiti versus annual projections, as well as changes in foreign currency exchange rates in relation to the U.S. dollar.

The following schedule summarizes the principal differences between income tax expense at the U.S. federal income tax rate and the effective income tax rate reflected in the consolidated financial statements for the six-month periods ending October 29, 2023, and October 30, 2022:

	October 29,			October 30,
	2023			2022
U.S. federal income tax rate		21.0	%		21.0	%
U.S. valuation allowance		(32.8	)		(36.7	)
Withholding taxes associated with foreign jurisdictions		(9.9	)		(3.3	)
Foreign income tax rate differential		(5.7	)		3.2
Stock-based compensation		(4.2	)		(0.6	)
Tax effects of local currency foreign exchange gains		5.1			4.7
Other		(0.3	)		(1.2	)
	(26.8%)			(12.9)%

Our consolidated effective income tax rates during the first half of fiscal 2024 and fiscal 2023 were both adversely affected by the mix of earnings between our U.S. operations and foreign subsidiaries, as our taxable income stems from our operations located in China and Canada, which have higher income tax rates than the U.S. In addition, during the first half of fiscal 2024 and the first half of fiscal 2023, we incurred pre-tax losses associated with our U.S. operations, for which an income tax benefit was not recorded due to the full valuation allowance applied against our U.S. net deferred income tax assets. However, the income tax charge associated with the full valuation allowance applied against our U.S. net deferred income tax assets was lower during the first half of fiscal 2024 compared with the first half of fiscal 2023, as our $(11.8) million U.S. pre-tax loss incurred during the first half of fiscal 2024 was significantly lower than the $(20.7) million U.S. pre-tax loss incurred during the first half of fiscal 2023.

During the first half of fiscal 2024, we incurred a lower consolidated pre-tax loss totaling $(4.5) million, compared with $(15.8) million during the first half of fiscal 2023. As a result, the principal differences between income tax expense at the U.S. federal income tax rate and the effective income tax rate reflected in the consolidated financial statements were more pronounced during the first half of fiscal 2024, as compared with the first half of fiscal 2023.

U.S. Valuation Allowance

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We evaluate the realizability of our U.S. net deferred income tax assets to determine if a valuation allowance is required. We assess whether a valuation allowance should be established based on the consideration of all available evidence using a “more-likely-than-not” standard, with significant weight being given to evidence that can be objectively verified. Since the company operates in multiple jurisdictions, we assess the need for a valuation allowance on a jurisdiction-by-jurisdiction basis, considering the effects of local tax law.

As of October 29, 2023, we evaluated the realizability of our U.S. net deferred income tax assets to determine if a full valuation allowance was required. Based on our assessment, we determined we still have a recent history of significant cumulative U.S. pre-tax losses, in that we experienced U.S. pre-tax losses during each of the last three fiscal years from 2021 through 2023, and we are currently expecting significant U.S. pre-tax losses to continue during fiscal 2024. As a result of the significant weight of this negative evidence, we believe it is more likely than not that our U.S. deferred income tax assets will not be fully realizable, and therefore we provided for a full valuation allowance against our U.S. net deferred income tax assets.

Based on our assessments as of October 29, 2023, October 30, 2022, and April 30, 2023, valuation allowances against our net deferred income tax assets pertain to the following:

(dollars in thousands)	October 29, 2023		October 30, 2022		April 30, 2023
U.S. federal and state net deferred income tax assets	$	17,839	$	13,958	$	16,345
U.S. capital loss carryforward		2,330		2,330		2,330
	$	20,169	$	16,288	$	18,675

Undistributed Earnings

Refer to Note 14 of the consolidated financial statements for disclosures regarding our assessments of our recorded deferred income tax liability balances associated with undistributed earnings from our foreign subsidiaries as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively.

Uncertain Income Tax Positions

Refer to Note 14 of the consolidated financial statements for disclosures regarding our assessments of our uncertain income tax positions as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively.

Income Taxes Paid

The following table sets forth taxes paid by jurisdiction for the six months ended October 29, 2023, and October 30, 2022, respectively:

	Six Months Ended		Six Months Ended
	October 29,		October 30,
(dollars in thousands)	2023		2022
United States Transition Tax Payment	$	499	$	265
China Income Taxes, Net of Refunds		1,278		1,286
Canada Income Taxes, Net of Refunds		336		161
	$	2,113	$	1,712

Future Liquidity

We are currently projecting annual cash income tax payments of approximately $3.2 million for fiscal 2024, compared with $2.3 million for fiscal 2023. Our estimated income tax payments for fiscal 2024 are management’s current projections only and can be affected by actual earnings from our foreign subsidiaries located in China and Canada versus annual projections; changes in the foreign exchange rates associated with our China operations in relation to the U.S. dollar; the timing of when we will repatriate earnings and profits from China and Canada; and the timing of when significant capital projects will be placed into service, which determines the deductibility of accelerated depreciation.

Additionally, we currently expect to pay minimal income taxes in the U.S. on a cash basis during fiscal 2024 due to the immediate expensing of U.S. capital expenditures and our existing U.S. federal net operating loss carryforwards that totaled $48.2 million as of April 30, 2023, which are projected to increase as a result of the significant U.S. loss carryforward we expect to generate during fiscal 2024.

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As of October 29, 2023, we will be required to pay annual U.S. federal transition tax payments, in accordance with the 2017 Tax Cuts and Jobs Act, as follows: FY 2025 - $665,000; and FY 2026 - $830,000.

Liquidity and Capital Resources

Liquidity

Overall

Currently, our sources of liquidity include cash and cash equivalents (collectively, "cash"), cash flow from operations, and amounts available under our revolving credit lines. As of October 29, 2023, we believe our cash of $15.2 million and the current availability under our revolving credit lines totaling $26.2 million (Refer to Note 10 of the consolidated financial statements for further details) will be sufficient to fund our foreseeable business needs, commitments, and contractual obligations.

As of October 29, 2023, our cash totaled $15.2 million, a decrease of $5.8 million compared with cash of $21.0 million as of April 30, 2023. This decrease was mostly due to net cash used in operating activities totaling $(4.5) million and capital expenditures related to our mattress fabrics segment totaling $(2.0) million, partially offset by proceeds from the sale of our rabbi trust investments totaling $986,000 to fund withdrawals from our deferred compensation plan for certain retired employees.

Our net cash used in operating activities was $(4.5) million during the first half of fiscal 2024, a decrease of $10.6 million compared with net cash provided by operating activities of $6.2 million during the first half of fiscal 2023. This trend mostly reflects (i) a significant increase in accounts payable during the first half of fiscal 2023 primarily related to our upholstery fabrics operations located in China, as the mandated COVID-19 related shutdowns were lifted during this period, and which increase in accounts payable did not recur during the first half of fiscal 2024; (ii) a significant decrease in inventory during the first half of fiscal 2023 due to a significant (23.2%) decline in net sales during the period, which significant decline did not recur during the first half of fiscal 2024; (iii) annual incentive payments made during the first quarter of fiscal 2024, which payments did not occur during the first quarter of fiscal 2023; (iv) payments to certain retired employees totaling $986,000 for withdrawals from our deferred compensation plan during the first half of fiscal 2024; partially offset by (v) an increase in cash earnings during the first half of fiscal 2024 compared with the first half of fiscal 2023.

As of October 29, 2023, there were no outstanding borrowings under our lines of credit.

The income taxes we pay also affect our liquidity. See the above section titled “Income Taxes Paid” of this Item 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION for further detail.

Our cash balance may be adversely affected by factors beyond our control, such as (i) recent customer demand trends, (ii) supply chain disruptions, (iii) rising interest rates and inflation, (iv) world events (including wars in Ukraine and the Middle East), and (v) the continuing uncertainty associated with COVID-19. These factors could cause delays in receipt of payment on accounts receivable and could increase cash disbursements due to rising prices.

By Geographic Area

A summary of our cash by geographic area follows:

(dollars in thousands)	October 29, 2023		October 30, 2022		April 30, 2023
United States	$	5,047	$	11,255	$	9,769
China		9,301		5,734		10,669
Canada		482		1,194		281
Haiti		375		945		236
Cayman Islands		9		9		9
	$	15,214	$	19,137	$	20,964

Common Stock Repurchase Program

In March 2020, our board of directors approved an authorization for us to acquire up to $5.0 million of our common stock. Under the common stock repurchase program, shares may be purchased from time to time in open market transactions, block trades, through plans established under the Securities Exchange Act Rule 10b5-1, or otherwise. The number of shares purchased and the

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timing of such purchases are based on working capital requirements, market and general business conditions, and other factors, including alternative investment opportunities.

We did not repurchase any shares of common stock during the six-month periods ending October 29, 2023, or October 30, 2022, respectively. As a result, as of October 29, 2023, $3.2 million is available for additional repurchases of our common stock. Despite the current share repurchase authorization, the company does not expect to repurchase any shares through at least the third quarter of fiscal 2024.

Dividends

In June 2022, our board of directors suspended the company’s quarterly cash dividend. Considering the current and expected macroeconomic conditions, we believe that preserving capital and managing our liquidity is in the company’s best interest to support future growth and the long-term interests of our shareholders. Accordingly, we do not expect to pay any dividends through at least the third quarter of fiscal 2024.

Working Capital

Operating Working Capital

Operating working capital (the total of accounts receivable and inventories, less accounts payable-trade, less accounts payable-capital expenditures, and less deferred revenue) was $38.4 million as of October 29, 2023, compared with $48.6 million as of October 30, 2022, and $39.2 million as of April 30, 2023. Operating working capital turnover was 5.5 during the second quarter of fiscal 2024, compared with 4.4 during the second quarter of fiscal 2023, and 4.6 during the fourth quarter of fiscal 2023.

Accounts Receivable

Accounts receivable was $23.0 million as of October 29, 2023, an increase of $593,000, or 2.6%, compared with $22.4 million as of October 30, 2022. This trend reflects a slight increase in net sales during the second quarter of fiscal 2024, as compared with the second quarter of fiscal 2023. Net sales were $58.7 million during the second quarter of fiscal 2024, an increase of $344,000, or 0.6%, compared with net sales of $58.4 million during the second quarter of fiscal 2023. Days’ sales outstanding were 34 days for the second quarter of fiscal 2024 and 33 days for the second quarter of fiscal 2023.

Accounts receivable was $23.0 million as of October 29, 2023, a decrease of $1.7 million, or 7.0%, compared with $24.8 million as of April 30, 2023. This decrease primarily reflects a decrease in net sales during the second quarter of fiscal 2024, as compared with the fourth quarter of fiscal 2023. Net sales were $58.7 million during the second quarter of fiscal 2024, a decrease of $2.7 million, or 4.4%, compared with net sales of $61.4 million during the fourth quarter of fiscal 2023. Days’ sales outstanding were 34 days during the second quarter of fiscal 2024, compared with 35 days during the fourth quarter of fiscal 2023.

Inventory

As of October 29, 2023, inventory decreased by $7.8 million, or 14.9%, compared with October 30, 2022. This trend reflects improved raw materials inventory management in relation to current customer demand trends related to our mattress fabrics segment and promotional programs to reduce aged raw materials and finished goods associated with both our mattress fabrics and upholstery fabrics segments.

As of October 29, 2023, inventory decreased by $615,000, or 1.4%, compared with April 30, 2023. This decrease is primarily due to a decrease in net sales during the second quarter of fiscal 2024, as compared with the fourth quarter of fiscal 2023. Net sales for the second quarter of fiscal 2024 were $58.7 million, a decrease of $2.7 million, or 4.4%, compared with net sales of $61.4 million during the fourth quarter of fiscal 2023.

Inventory turns were 4.6 for the second quarter of fiscal 2024, as compared with 4.3 for the second quarter of fiscal 2023 and 4.7 for the fourth quarter of fiscal 2023.

Accounts Payable - Trade

Accounts payable - trade was $27.9 million as of October 29, 2023, an increase of $3.6 million, or 14.8%, compared with $24.3 million as of October 30, 2022. This trend stems from management's focus on extending credit terms with certain vendors during the second quarter of fiscal 2024.

Accounts payable - trade was $27.9 million as of October 29, 2023, a decrease of $1.5 million, or 5.2%, compared with $29.4 million as of April 30, 2023. This trend reflects a decline in net sales during the second quarter of fiscal 2024, as compared with

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the fourth quarter of fiscal 2023. Net sales were $58.7 million during the second quarter of fiscal 2024, a decrease of $2.7 million, or 4.4%, compared with net sales of $61.4 million during the fourth quarter of fiscal 2023. The decrease in accounts payable as a result of the decline in net sales was partially offset by management's focus on extending credit terms with certain vendors during the second quarter of fiscal 2024.

Financing Arrangements

Currently, we have revolving credit agreements with banks for our U.S parent company and our operations located in China. As of October 29, 2023, we did not have any outstanding borrowings associated with our revolving credit agreements. Our loan agreements require, among other things, that we maintain compliance with certain financial covenants. As of October 29, 2023, we were in compliance with these financial covenants.

Refer to Note 10 of the consolidated financial statements for further disclosure regarding our revolving credit agreements.

Capital Expenditures and Depreciation

Overall

Capital expenditures on a cash basis during the first half of fiscal 2024 totaled $2.0 million and were mostly related to machinery and equipment associated with our mattress fabrics segment. Capital expenditures on a cash basis during the first half of fiscal 2023 totaled $1.1 million and pertained to machinery and equipment associated with our former upholstery cut and sew operation located in Haiti, manufacturing equipment associated with our mattress fabrics segment, and IT equipment associated with both our business segments.

Depreciation expense was $3.3 million during the first half of fiscal 2024, compared with $3.5 million for the same period a year ago. Depreciation expense mostly related to our mattress fabrics segment for both periods.

For the remainder of fiscal 2024, our planned capital spending will be centered on our mattress fabrics segment, with a strategic focus on capital projects that will increase efficiencies and improve the quality of our products. Funding for capital expenditures is expected to be from cash provided by operating activities.

Accounts Payable – Capital Expenditures

As of October 29, 2023, we had amounts due regarding capital expenditures totaling $298,000 that pertained to outstanding vendor invoices, none of which were financed. The total amount outstanding of $298,000 is required to be paid based on normal credit terms.

Purchase Commitments – Capital Expenditures

As of October 29, 2023, we had open purchase commitments to acquire equipment for our mattress fabrics segment totaling $1.6 million.

Critical Accounting Policies and Recent Accounting Developments

As of October 29, 2023, there were no changes in our significant accounting policies or the application of those policies from those reported in our annual report on Form 10-K for the year ended April 30, 2023.

Refer to Note 2 of the consolidated financial statements for recently adopted and issued accounting pronouncements, if any, since the filing of our Form 10-K for the year ended April 30, 2023.

Contractual Obligations

There were no significant or new contractual obligations since those reported in our annual report on Form 10-K for the year ended April 30, 2023.

Inflation

Any significant increase in our raw material costs, utility/energy costs, and general economic inflation could have a material adverse impact on the company, because competitive conditions have limited our ability to pass significant operating cost increases on to customers.

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During fiscal 2023 and continuing through the second quarter of fiscal 2024, raw material costs started to decline due to lower oil prices and slowing global demand; however, higher costs and lower availability of labor remained challenging during fiscal 2023 and continuing through the second quarter of fiscal 2024.

Inflationary pressures also affected consumer spending during fiscal 2023 and through the second quarter of fiscal 2024, causing a slowdown in business in both the mattress industry and the residential home furnishings industry. This slowdown has caused reduced demand for our mattress fabrics and residential upholstery fabrics products during fiscal 2023 and during the first half of fiscal 2024.

We are unable to predict how long these trends will last, or to what extent inflationary pressures may affect the economic and purchasing cycle for home furnishing products (and therefore affect demand for our products) over the short and long term.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rates

We are exposed to market risk from changes in interest rates with regards to our revolving credit agreements.

Effective January 19, 2023, we entered into a second amended and restated U.S. revolving credit agreement (the “Amended Agreement”) that established an asset-based revolving credit facility that required interest to be charged at a rate (applicable interest rate of 6.80% as of October 29, 2023) calculated using an applicable margin over the Federal Reserve Bank of New York’s secured overnight fund rate, as defined in the Amended Agreement. As of October 29, 2023, there were no outstanding borrowings under the Amended Agreement.

Our revolving credit line associated with our operations located in China bears interest at a rate determined by the Chinese government at the time of borrowing. As of October 29, 2023, there were no borrowings outstanding under our revolving credit agreement associated with our operations located in China.

Foreign Currency

We are exposed to market risk from changes in the value of foreign currencies related to our subsidiaries domiciled in Canada and China. We try to maintain a natural hedge by keeping a balance of our assets and liabilities denominated in the local currency of our subsidiaries domiciled in Canada and China. However, there is no assurance that we will be able to continually maintain this natural hedge. Our foreign subsidiaries use the United States dollar as their functional currency. A substantial portion of the company’s imports purchased outside the United States are denominated in U.S. dollars. A 10% change in the above exchange rates as of October 29, 2023, would not have materially affected our results of operations or financial position.

ITEM 4. CONTROLS AND PROCEDURES

As of October 29, 2023, we conducted an evaluation of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This evaluation was conducted under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective as of such date, in all material respects, to ensure that information required to be disclosed in the reports filed by us and submitted under the Exchange Act, is recorded, processed, summarized, and reported as and when required, and that these disclosure controls and procedures were effective as of such date to ensure that information required to be disclosed in reports filed by us under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, in a manner to allow timely decisions regarding the required disclosure.

During the quarter ended October 29, 2023, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II – Other Information

Item 1. Legal Proceedings

There have not been any material changes to our legal proceedings during the three months ended October 29, 2023. Our legal proceedings are disclosed in the company’s annual report on Form 10-K filed with the Securities and Exchange Commission on July 14, 2023, for the fiscal year ended April 30, 2023.

Item 1A. Risk Factors

There have not been any material changes to our risk factors during the three months ended October 29, 2023. Our risk factors are disclosed in Item 1A “Risk Factors” of the company’s annual report on Form 10-K filed with the Securities and Exchange Commission on July 14, 2023, for the fiscal year ended April 30, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

ISSUER PURCHASES OF EQUITY SECURITIES

			(c)	(d)
			Total Number of	Approximate
	(a)		Shares Purchased	Dollar Value of
	Total	(b)	as Part of	Shares that May
	Number	Average	Publicly	Yet Be Purchased
	of Shares	Price Paid	Announced Plans	Under the Plans or
Period	Purchased	per Share	or Programs	Programs (1)
July 31, 2023 to September 3, 2023	—	—	—	$3,248,094
September 4, 2023 to October 1, 2023	—	—	—	$3,248,094
October 2, 2023 to October 29, 2023	—	—	—	$3,248,094
Total	—	—	—	$3,248,094

(1)In March 2020, our board of directors approved an authorization for us to acquire up to $5.0 million of our common stock.

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Item 6. Exhibits

The following exhibits are submitted as part of this report.

10.1 Form of Annual Incentive Award Agreement

10.2 Form of Restricted Stock Unit Agreement for restricted stock units granted to executive officers pursuant to the

Amended and Restated Equity Incentive Plan

10.3 Written Description of Outside Director Compensation

10.4 Form of Restricted Stock Unit Agreement for restricted stock units granted to outside directos pursuant to the

Amended and Restated Equity Incentive Plan

31.1 Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a).

31.2 Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a).

32.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.

32.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.

101.INS Inline XBRL Instance Document

101.SCH Inline XBRL Taxonomy Extension Schema Document

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document

104 Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		CULP, INC. (Registrant)
Date: December 8, 2023	By:	/s/ Kenneth R. Bowling
		Kenneth R. Bowling
		Executive Vice President and Chief Financial Officer
		(Authorized to sign on behalf of the registrant and also signing as principal financial officer and principal accounting officer)

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EX-10.1

EXHIBIT 10.1

ANNUAL INCENTIVE AWARD AGREEMENT

THIS ANNUAL INCENTIVE AWARD AGREEMENT (the “Agreement”), dated as of ______________, is between CULP, INC.,a North Carolina corporation (the “Corporation”), and ____________________ (“Recipient”).

Background Statement

The Corporation desires to grant to Recipient an Annual Incentive Award (the “Award”) pursuant to the Culp, Inc. Amended and Restated Equity Incentive Plan (the “Plan”). Capitalized terms used but not defined in this Agreement shall have the meanings given to them in the Plan.

STATEMENT OF AGREEMENT

NOW, THEREFORE, the parties hereby agree as follows:

Section 1.Grant of Award. The Corporation hereby grants to Recipient the Award described below.

The Award will pay an incentive bonus for the Performance Period stated below to Recipient upon final determination by the Compensation Committee (the “Committee”) of the Corporation’s board of directors that a bonus payment is due pursuant to the terms of this Agreement and the Plan.

The bonus payment due hereunder is calculated with reference to the Total Bonus Percentage for the Reporting Unit in which Recipient participates. The bonus due to Recipient is the Total Bonus Percentage for Recipient’s Reporting Unit multiplied by Recipient’s Bonus Opportunity, as such terms are defined in Schedule A attached hereto.

Performance Period: The Corporation’s fiscal year ending ___________.

Reporting Unit: _________

Bonus Opportunity: Recipient’s Bonus Opportunity is _____% of Recipient’s base salary during the Performance Period.

The maximum Total Bonus Percentage for this award for each Reporting Unit is 200%. In addition, the Committee shall have the authority to, in its discretion, reduce the amount of any Recipient’s bonus payment based upon any considerations the Committee deems relevant.

Section 2.Vesting. The bonus amount to be paid hereunder will vest and become payable upon final determination of the amount to be paid by the Corporation and the Committee, provided, however, that if such determination is made by the Committee prior to the Corporation’s filing with the Securities and Exchange Commission (“SEC”) of its annual report on Form 10-K that relates to the financial results for the applicable Performance Period, then the bonus amount to be paid hereunder will not vest and become payable until after such filing is complete.

Notwithstanding the foregoing, all unvested Awards (and a bonus payment at Recipient’s Bonus Opportunity) shall immediately vest and become payable upon the occurrence of the following:

(a)termination of Recipient’s employment by reason of the death or Disability of Recipient; or

(b)Recipient’s employment is terminated by the Corporation in anticipation of a Change of Control, or

(c)Recipient is employed by the Corporation or an affiliate thereof at the time a Change of Control occurs, and at any time during the 18-month period following such Change of Control (provided that the bonus payment provided for hereunder shall have not already become due and been paid):

(i)Recipient’s employment is terminated by the Corporation or an affiliate thereof for any reason other than for death, Disability or Cause, or

(ii)Recipient terminates his/her employment for Good Reason within one year following the initial existence of the conditions giving rise to such Good Reason;

provided, however, that in the event any of the foregoing triggering events occurs after the end of the Performance Period but prior to the vesting of the Awards, then the amount of the bonus payment to Recipient shall be the amount that would be due hereunder based on the performance of the Recipient’s Reporting Unit calculated in accordance with the Bonus Percentages set forth in Schedule A hereto (i.e., it shall not be paid at Recipient’s Bonus Opportunity, but shall be paid based on the Total Bonus Percentage for Recipient’s Reporting Unit multiplied by Recipient’s Bonus Opportunity), and such award shall not vest and become payable until final determination of the amount to be paid by the Corporation and the Committee (or, if such determination is made prior to the Corporation’s filing with the SEC of its annual report on Form 10-K that relates to the financial results for the applicable Performance Period, then after such filing is complete).

Additional Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated below:

“Cause” shall mean (i) the commission by Recipient of a felony (or crime involving moral turpitude); (ii) theft, conversion, embezzlement or misappropriation by Recipient of funds or other assets of the Corporation or its Subsidiaries or any other act of fraud with respect to the Corporation or its Subsidiaries (including without limitation the acceptance of bribes or kickbacks or other acts of self-dealing); (iii) intentional, grossly negligent or unlawful misconduct by Recipient that causes significant harm to the Corporation or its Subsidiaries; or (iv) repeated instances of intoxication with alcohol or drugs while conducting business during regular business hours.

“Change of Control” shall have the meaning given to such term in the Plan. In addition, for an award that vests according to any Financial Reporting Measure of a

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Division, “Change of Control” shall be deemed to have occurred upon consummation of a sale of all or substantially all of the assets of such Division by the Corporation to an unaffiliated third party.

“Disability” shall have the meaning given to such term in the primary disability benefit plan of the Corporation in which Recipient participates. In the absence of any such plan, “Disability” shall mean any physical or mental impairment that renders Recipient unable to perform the essential functions of Recipient’s job with the Corporation and its Subsidiaries for a period of at least 120 days, either with or without reasonable accommodation. At the Corporation’s request, Recipient shall submit to an examination by a duly licensed physician who is mutually acceptable to the Corporation and Recipient for the purpose of ascertaining the existence of a Disability, and shall authorize the physician to release the results of Recipient’s examination to the Corporation.

“Good Reason” shall mean, without Recipient’s express written consent, the existence of any of the following conditions unless such conditions are fully corrected within 30 days after Recipient notifies the Corporation of the existence of such conditions as hereinafter provided:

(d)a material diminution in Recipient’s authority, duties or responsibilities;

(e)a material diminution in the authority, duties or responsibilities of the supervisor to whom Recipient is required to report;

(f)a material diminution in Recipient’s base salary, other than as a result of across-the-board salary reductions similarly affecting all management personnel of the Corporation; or

(g)a material change in the geographic location at which Recipient must regularly perform services for the Corporation.

Recipient shall notify the Corporation that he/she believes that one or more of the conditions described above exists, and of his/her intention to terminate employment for Good Reason as a result thereof, within 60 days after the time that he/she gains knowledge of such conditions. Recipient shall not deliver a notice of termination of employment for Good Reason until 30 days after he/she delivers the notice described in the preceding sentence, and Recipient may do so only if the conditions described in such notice have not been fully corrected by the Corporation.

“Financial Reporting Measures” shall mean measures that are determined and presented in accordance with the accounting principles used in preparing the Corporation’s financial statements, and all other measures that are derived wholly or in part from such measures. Stock price and total shareholder return (and any measures that are derived wholly or in part from stock price or total shareholder return) shall for purposes of this Agreement be considered Financial Reporting Measures. For the avoidance of doubt, a measure need not be presented in the Corporation’s financial

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statements or included in a filing with the SEC in order to be considered a Financial Reporting Measure.

“Incentive-Based Compensation” means any compensation that is granted, earned or vested based wholly or in part upon the attainment of a Financial Reporting Measure.

Section 3.Settlement.

As soon as reasonably practicable following (i) a determination by the Corporation and the Committee that a bonus payment is due hereunder and (ii) the Corporation’s filing with the SEC of its annual report on Form 10-K that relates to the financial results for the applicable Performance Period of the Award, the bonus will be paid in cash, or will be paid in accordance with any proper and valid election under the Culp, Inc. Deferred Compensation Plan for Key Employees, but only if such election has been made in accordance with the policies and procedures of the Corporation pursuant to such plan.

Section 4.Forfeiture. All bonus amounts that do not vest pursuant to Section 2 shall automatically be cancelled and forfeited by Recipient effective as of the earlier to occur of (a) the first day after the end of the Performance Period (to the extent that none of Adjusted Operating Income, Adjusted Operating Cash Flow, or Net Sales for the relevant Reporting Unit is sufficient to cause any bonus payment to vest pursuant to the terms of this Agreement), (b) the date on which the Committee determines in its discretion as set forth in Section 1 that no bonus is payable pursuant to this Agreement, (c) the termination by Recipient of his/her employment with the Corporation or its Subsidiaries for any reason, except as otherwise determined by the Committee, in its sole discretion (for example, under circumstances in which Recipient will continue providing Services to the Corporation as a director, consultant, or independent contractor following any such termination by Recipient, or such other circumstances as determined by the Committee), or (d) the termination by the Corporation of Recipient’s employment with the Corporation or its Subsidiaries for any reason (including with or without Cause) (each such event being referred to herein as a “Forfeiture Event”). Upon the occurrence of a Forfeiture Event, all unvested bonus amounts shall automatically, without further action by the Corporation or Recipient, be cancelled and forfeited.

Section 5.Tax Matters.

(a)Recipient shall promptly pay to the Corporation all federal, state and local income, social security and payroll taxes of any kind required by law to be withheld with respect to the vesting or payment of a bonus hereunder, and the Corporation, to the extent permitted by law, have the right to deduct from any payment of any kind otherwise due to Recipient all federal, state and local income, social security and payroll taxes of any kind required by law to be withheld with respect to the vesting or payment of a bonus earned hereunder.

(b)Notwithstanding anything in this Agreement to the contrary, if a Change of Control occurs and if Recipient is entitled under any agreement or arrangement (including, without limitation, this Agreement) to receive compensation that would constitute a parachute payment (including, without limitation, the vesting of any rights)

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within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) but for the operation of this sentence, then the amount of all such payments shall be reduced, as determined by the Corporation, to the extent necessary to cause the aggregate present value of all payments in the nature of compensation to Recipient that are contingent on a change in the ownership or effective control of the Corporation, or in the ownership of a substantial portion of the assets of the Corporation, not to exceed 2.99 times Recipient’s “base amount,” all within the meaning of Section 280G of the Code and the regulations promulgated thereunder. The parties intend for the immediately preceding sentence to be interpreted and applied so as to prevent Recipient from receiving, with respect to a Change of Control, an excess parachute payment within the meaning of Section 280G of the Code.

Section 6.Clawback.

(a)If the Corporation’s reported financial or operating results become subject to a material negative restatement, the Committee, in its discretion, may require Recipient to pay to the Corporation an amount corresponding to the amount that the Committee determines would not have been vested or paid if the Corporation’s results as originally published had been equal to the Corporation’s results as subsequently restated; provided that any requirement or claim under this Section 6(a) must be made, if at all, within five years after the date the amount claimed was originally vested or paid, whichever is later.

In addition, pursuant to the Corporation’s Dodd-Frank Clawback Policy (as amended from time to time, the “Clawback Policy”), if the Committee determines that recoupment of compensation paid hereunder is required pursuant to the Clawback Policy, the Committee will require Recipient to repay or return compensation awarded hereunder. By acceptance of any Award or bonus payment hereunder, Recipient expressly acknowledges and agrees that any and all amounts paid to Recipient hereunder, and any other Incentive-Based Compensation paid by the Corporation to the Recipient, are and will be fully subject to the terms of the Clawback Policy (provided that Recipient is, or becomes, an individual that is subject to the Clawback Policy) and agrees to cooperate fully with the Corporation to facilitate the recovery of any and all amounts paid pursuant to this Agreement and any other Incentive-Based Compensation paid by the Corporation that the Committee determines in its sole discretion is required to be recovered pursuant to the terms of the Clawback Policy.

The obligations of Recipient to make payments or return bonus amounts paid hereunder pursuant to this Section 6(a) are independent of any involvement by such Recipient in events that led to the restatement. The provisions of this Section 6(a) are in addition to, not in lieu of, any remedies that the Corporation may have against any persons whose misconduct caused or contributed to a need to restate the Corporation’s reported results.

(b)If at any time within three years of the vesting or payment of any award to Recipient under this Agreement, whichever is later, Recipient’s employment is terminated for Cause (or, if such termination is deemed not to be for Cause, but the Corporation determines at any time during such three-year period that the Corporation could have terminated Recipient’s employment for Cause based on Recipient’s conduct

5

during his or her time of employment with the Corporation), then if any part of the underlying conduct or circumstances giving rise to such determination of Cause by the Corporation took place at any time during the applicable vesting period for each such award, as specified in this Agreement, then the Committee may require Recipient to pay to the Corporation an amount corresponding to each award that vested or was paid to Recipient pursuant to this Agreement.

By acceptance of any Award or bonus payment hereunder, Recipient expressly acknowledges and agrees that any and all amounts paid to Recipient hereunder are and will be fully subject to the terms of the foregoing clawback provisions, and agrees to cooperate fully with the Corporation to facilitate the recovery of any such amounts that the Committee requires to be recovered pursuant to the foregoing.

Section 7.Miscellaneous.

(a)Governing Law. This Agreement shall be construed, administered and governed in all respects under and by the applicable internal laws of the State of North Carolina, without giving effect to the principles of conflicts of laws thereof.

(b)Entire Agreement; Amendment and Waiver. This Agreement and the Award granted hereunder shall be subject to the terms of the Plan, which hereby is incorporated into this Agreement as though set forth in full herein. Recipient hereby acknowledges receipt of a copy of the Plan. This Agreement and the Plan reflect the entire agreement between the parties hereto and supersede any prior or contemporaneous written or oral understanding or agreement regarding the subject matter hereof. This Agreement may not be modified, amended, supplemented or waived except by a writing signed by the parties hereto, and such writing must refer specifically to this Agreement.

(c)Assignment; Binding Effect. Except as permitted by the Plan, this Agreement and the Award granted hereunder may not be assigned, pledged, hypothecated or transferred by Recipient in any manner. This Agreement, as amended from time to time, shall be binding upon, inure to the benefit of and be enforceable by the heirs, successors and assigns of the parties hereto; provided, however, that this provision shall not permit any assignment in contravention of the terms contained elsewhere herein.

(d)No Right to Employment. Nothing in this Agreement shall confer on Recipient any right to continue in the employ of the Corporation or any of its Subsidiaries.

(e)Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of this Agreement by facsimile or other electronic device shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by facsimile or other electronic device shall also deliver an original executed counterpart of this Agreement, but the failure to deliver an original executed counterpart of this Agreement shall not affect the validity, enforceability and binding effect of this Agreement.

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(f)Notices. Any notice hereunder to the Corporation shall be addressed to the Corporation’s principal executive office, Attention: Compensation Committee, and any notice hereunder to Recipient shall be addressed to Recipient at his last address in the records of the Corporation, subject to the right of either party to designate at any time hereafter in writing a different address. Any notice shall be deemed to have been given when delivered personally, one (1) day after dispatch if sent by reputable overnight courier, fees prepaid, or three (3) days following mailing if sent by registered mail, return receipt requested, postage prepaid and addressed as set forth above.

[Signature page is the next page.]

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IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written above.

CULP, INC.,

a North Carolina corporation

By:

Name:

Title:

RECIPIENT

_________________________

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EX-10.2

EXHIBIT 10.2

RESTRICTED STOCK UNIT AGREEMENT

THIS RESTRICTED STOCK UNIT AGREEMENT (the “Agreement”), dated as of _____________________, is between CULP, INC.,a North Carolina corporation (the “Corporation”), and _________________ (“Recipient”).

Background Statement

The Corporation desires to grant to Recipient Restricted Stock Units (the “Units”) pursuant to the Culp, Inc. Amended and Restated Equity Incentive Plan (the “Plan”). Capitalized terms used but not defined in this Agreement shall have the meanings given to them in the Plan.

STATEMENT OF AGREEMENT

NOW, THEREFORE, the parties hereby agree as follows:

Section 1.Grant of Units. On _________________ (the “Grant Date”), the Corporation hereby grants to Recipient ______ Units, ______ of which shall vest in accordance with Section 2(a) herein (the “Time-Based Units”) upon a final determination by the Compensation Committee (the “Committee”) of the satisfaction of the vesting conditions set forth herein and the number of Time-Based Units that have vested in connection therewith; and ______ of which shall vest in accordance with Section 2 herein and Schedule A attached hereto (the “Performance-Based Units”) upon a final determination by the Committee of the satisfaction of the vesting conditions set forth herein and the number of Performance-Based Units that have vested in connection therewith, in each case pursuant to the terms set forth in this Agreement and the Plan. Each Time-Based Unit shall entitle Recipient to receive, upon vesting thereof in accordance with this Agreement and the Plan, one (1) share of common stock, par value $0.05 per share, of the Corporation (“Common Stock”). Each Performance-Based Unit shall entitle Recipient to receive, upon vesting thereof in accordance with this Agreement and the Plan, up to two shares of Common Stock. Except as permitted by the Plan, the Units may not be assigned, pledged, hypothecated or transferred in any manner. Recipient shall not have, with respect to any Units, any rights of a shareholder of the Corporation, including without limitation any right to vote as a shareholder of the Corporation or any right to receive distributions from the Corporation in respect of the Units. The Units are granted to the Recipient in connection with Recipient’s employment with the Corporation.

Section 2.Vesting.

(a)Time-Based Units. Except as may otherwise be provided in the Plan or this Agreement, the Time-Based Units shall vest in the amounts set forth below:

On _______________ ___________ shares of Common Stock.

The Corporation shall, as soon as practicable upon the vesting of any Time-Based Units (but in no event later than sixty (60) days following the date on which such Time-Based Units vest), effect delivery of the shares of Common Stock with respect to such vested Time-Based Units to the Recipient (or, in the event of the Time-Based Units have

passed to the estate or beneficiary of the Recipient or a permitted transferee, by such estate or beneficiary or permitted transferee) and, following such delivery of such shares, such vested Time-Based Units shall cease to be outstanding.

(b)Performance-Based Units. Except as may otherwise be provided in the Plan or this Agreement, the Performance-Based Units shall vest, if at all, based on the formula set forth in Schedule A attached hereto, which sets out the performance goals for each Fiscal Year within the Performance Period. Each Performance-Based Unit, if it vests, grants the Recipient the conditional right to receive, without payment and pursuant to and subject to the terms and conditions set forth in this Agreement and in the Plan, between zero and two shares of Common Stock, depending upon the performance of the Reporting Unit during the Performance Period as set forth in Schedule A attached hereto.

(c)The determination of whether, and the extent to which, the performance goals have been satisfied with respect to the Performance-Based Units, including the applicability of any modifiers as set forth in Schedule A hereto, will be made by the Committee in its sole and absolute discretion, following the end of the Performance Period, pursuant to the terms set forth in this Agreement and the Plan. The Corporation shall, as soon as practicable upon the determination by the Committee, pursuant to this Section 2 and Schedule A attached hereto, of the extent to which the performance goals for the Performance Period have been satisfied and the number of shares of Common Stock determined to be earned upon vesting of such Performance-Based Units (but, not later than sixty (60) days thereafter), effect delivery of such shares of Common Stock to the Recipient (or, in the event of the Performance-Based Units have passed to the estate or beneficiary of the Recipient or a permitted transferee, by such estate or beneficiary or permitted transferee) and, following such delivery of such shares, the Performance-Based Units shall cease to be outstanding. If the final determination of the satisfaction of the vesting conditions for any Performance-Based Units is made by the Committee prior to the Corporation’s filing with the Securities and Exchange Commission (“SEC”) of its annual report on Form 10-K that relates to the financial results for any portion of the applicable Performance Period with respect to any Performance-Based Units, then no Performance-Based Units will vest, and no Common Stock will be issued, until after such filing is complete. The Committee may in its sole discretion increase or decrease the number of shares of Common Stock that vest with respect to a Performance Share for the Performance Cycle to equitably account for any events or developments affecting achievement of the performance goals occurring during the Performance Cycle that were not anticipated at the Grant Date.

(d)Notwithstanding the foregoing, all unvested Units (at the rate of one (1) share of Common Stock per Unit for Time-Based Units and at the number of shares at the Target level set forth in Schedule A for each Fiscal Year of the Performance Period with respect to Performance-Based Units) shall immediately vest upon:

(i)termination of Recipient’s employment by reason of the death or Disability of Recipient; or

(ii)Recipient’s employment is terminated by the Corporation in anticipation of a Change of Control, or

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(iii)Recipient is employed by the Corporation or an affiliate thereof at the time a Change of Control occurs, and at any time during the three-year period following such Change of Control (provided that the Units granted hereunder and related shares have not otherwise vested):

(1)Recipient’s employment is terminated by the Corporation or an affiliate thereof for any reason other than for death, Disability or Cause, or

(2)Recipient terminates his/her employment for Good Reason within one year following the initial existence of the conditions giving rise to such Good Reason;

provided, however, that in the event any of the foregoing triggering events occurs after the end of the Performance Period but prior to the vesting of the Units, then the number of Performance-Based Units that shall vest will be the actual number of Performance-Based Units that would have vested hereunder pursuant to Section 2(b) if the Recipient had been employed by the Corporation as of the vesting date (i.e., the number of Performance-Based Units shall not vest at the Target level, but shall vest based on the performance of the Reporting Unit as set forth in Schedule A hereto), and such Units shall not vest, and the associated number of shares shall not become issuable by the Corporation, until final determination by the Committee of the number of Units that have vested and shares issuable in connection therewith pursuant to the terms set forth in this Agreement and the Plan (or, if such determination is made prior to the Corporation’s filing with the SEC of its annual report on Form 10-K that relates to the financial results for any portion of the applicable Performance Period, then after such filing is complete).

Section 3.Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated below:

“Cause” shall mean (i) the commission by Recipient of a felony (or crime involving moral turpitude); (ii) theft, conversion, embezzlement or misappropriation by Recipient of funds or other assets of the Corporation or its Subsidiaries or any other act of fraud with respect to the Corporation or its Subsidiaries (including without limitation the acceptance of bribes or kickbacks or other acts of self-dealing); (iii) intentional, grossly negligent or unlawful misconduct by Recipient that causes significant harm to the Corporation or its Subsidiaries; or (iv) repeated instances of intoxication with alcohol or drugs while conducting business during regular business hours.

“Change of Control” shall have the meaning given to such term in the Plan. In addition, for an award that vests according to any Financial Reporting Measure of a Division, “Change of Control” shall be deemed to have occurred upon consummation of a sale of all or substantially all of the assets of such Division by the Corporation to an unaffiliated third party.

“Disability” shall have the meaning given to such term in the primary disability benefit plan of the Corporation in which Recipient participates. In the absence of any such plan, “Disability” shall mean any physical or mental impairment that renders Recipient unable to perform the essential functions of Recipient’s job with the Corporation and its Subsidiaries for a period of at least 120 days, either with or without reasonable accommodation. At the Corporation’s request, Recipient shall submit to an

3

examination by a duly licensed physician who is mutually acceptable to the Corporation and Recipient for the purpose of ascertaining the existence of a Disability, and shall authorize the physician to release the results of Recipient’s examination to the Corporation.

“Good Reason” shall mean, without Recipient’s express written consent, the existence of any of the following conditions unless such conditions are fully corrected within 30 days after Recipient notifies the Corporation of the existence of such conditions as hereinafter provided:

(a)a material diminution in Recipient’s authority, duties or responsibilities;

(b)a material diminution in the authority, duties or responsibilities of the supervisor to whom Recipient is required to report, including a requirement that Recipient report to a Corporation officer or employee instead of reporting directly to the Corporation’s board of directors;

(c)a material diminution in Recipient’s base salary, other than as a result of across-the-board salary reductions similarly affecting all management personnel of the Corporation; or

(d)a material change in the geographic location at which Recipient must regularly perform services for the Corporation.

Recipient shall notify the Corporation that he/she believes that one or more of the conditions described above exists, and of his/her intention to terminate employment for Good Reason as a result thereof, within 60 days after the time that he/she gains knowledge of such conditions. Recipient shall not deliver a notice of termination of employment for Good Reason until 30 days after he/she delivers the notice described in the preceding sentence, and Recipient may do so only if the conditions described in such notice have not been fully corrected by the Corporation.

“Fiscal Year” means the fiscal year of the Corporation, which is the 52- or 53-week period ending on the Sunday closest to April 30.

“Financial Reporting Measures” shall mean measures that are determined and presented in accordance with the accounting principles used in preparing the Corporation’s financial statements, and all other measures that are derived wholly or in part from such measures. Stock price and total shareholder return (and any measures that are derived wholly or in part from stock price or total shareholder return) shall for purposes of this Agreement be considered Financial Reporting Measures. For the avoidance of doubt, a measure need not be presented in the Corporation’s financial statements or included in a filing with the SEC in order to be considered a Financial Reporting Measure.

“Incentive-Based Compensation” means any compensation that is granted, earned or vested based wholly or in part upon the attainment of a Financial Reporting Measure.

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“Performance Period” shall mean the Corporation’s three Fiscal Years beginning _________________, and ending _______________ (the “Performance Period”), with the first Fiscal Year within such Performance Period being referred to herein as “Year 1,” the second Fiscal Year within such Performance Period being referred to herein as “Year 2,” and the third Fiscal Year within such Performance Period being referred to herein as “Year 3.”

Reporting Unit: __________________

Section 4.Settlement. Subject to the terms herein, including in Schedule A hereto, as soon as reasonably practicable following (i) a determination by the Committee that all or some of the Units have vested pursuant to the terms of this Agreement, and (ii) the Corporation’s filing with the SEC of its annual report on Form 10-K that relates to the financial results for the applicable Performance Period for the Performance-Based Units granted hereunder, the Corporation shall issue directly to the Recipient shares of Common Stock with respect to all such Units that have vested. Such shares of Common Stock shall not be treated as issued and outstanding until such shares have been issued by the Corporation in accordance with all applicable laws and the Corporation’s bylaws and articles of incorporation. Any certificate(s) evidencing shares of Common Stock shall bear such legends as the Corporation shall determine to be necessary to comply with all laws, including all applicable federal and state securities laws. All such shares of Common Stock issued pursuant to this Agreement shall be fully paid and nonassessable.

Section 5.Forfeiture. All Units that have not vested pursuant to Section 2 and Schedule A hereto shall automatically be cancelled and forfeited by Recipient effective as of the earlier to occur of (a) with respect to the Performance-Based Units, the first day after the end of the Performance Period (to the extent that the Committee determines that such Performance-Based Units will not vest pursuant to the terms of this Agreement), (b) the termination by Recipient of his/her employment with the Corporation or its Subsidiaries for any reason, except as otherwise determined by the Committee, in its sole discretion (for example, under circumstances in which Recipient will continue providing Services to the Corporation as a director, consultant, or independent contractor following any such termination by Recipient, or such other circumstances as determined by the Committee), or (c) the termination by the Corporation of Recipient’s employment with the Corporation or its Subsidiaries for any reason (including with or without Cause) (each such event being referred to herein as a “Forfeiture Event”). Upon the occurrence of a Forfeiture Event, all unvested Units shall automatically, without further action by the Corporation or Recipient, be cancelled and forfeited.

Section 6.Tax Matters.

(a)Recipient shall promptly pay to the Corporation all federal, state and local income, social security and payroll taxes of any kind required by law to be withheld with respect to the vesting of any Units and the issuance of shares of Common Stock in respect thereof. Subject to the approval of the Committee, Recipient may elect to satisfy this obligation by having the Corporation withhold shares of Common Stock that would otherwise be issued to Recipient with respect to any Units that have vested, which shares of Common Stock shall have a Fair Market Value (as of the date that the amount of the withholding requirement is to be determined) equal to the amount of such withholding

5

requirement. If Recipient fails to make such payments as required (whether in cash or having shares of Common Stock withheld), the Corporation shall, to the extent permitted by law, have the right to deduct from any payment of any kind otherwise due to Recipient all federal, state and local income, social security and payroll taxes of any kind required by law to be withheld with respect to the vesting of Units and the issuance of shares of Common Stock in respect thereof.

(b)Notwithstanding anything in this Agreement to the contrary, if a Change of Control occurs and if Recipient is entitled under any agreement or arrangement (including, without limitation, this Agreement) to receive compensation that would constitute a parachute payment (including, without limitation, the vesting of any rights) within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) but for the operation of this sentence, then the amount of all such payments shall be reduced, as determined by the Corporation, to the extent necessary to cause the aggregate present value of all payments in the nature of compensation to Recipient that are contingent on a change in the ownership or effective control of the Corporation, or in the ownership of a substantial portion of the assets of the Corporation, not to exceed 2.99 times Recipient’s “base amount,” all within the meaning of Section 280G of the Code and the regulations promulgated thereunder. The parties intend for the immediately preceding sentence to be interpreted and applied so as to prevent Recipient from receiving, with respect to a Change of Control, an excess parachute payment within the meaning of Section 280G of the Code.

Section 7.Clawback.

(a)If the Corporation’s reported financial or operating results become subject to a material negative restatement, the Committee may require Recipient to pay to the Corporation an amount corresponding to each award to the Recipient under this Agreement, or otherwise return such Units or Common Stock, that the Committee determines would not have been vested or paid if the Corporation’s results as originally published had been equal to the Corporation’s results as subsequently restated; provided that any requirement or claim under this Section 7(a) must be made, if at all, within five years after the date the amount claimed was originally vested or paid, whichever is later.

In addition, pursuant to the Corporation’s Dodd-Frank Clawback Policy (as amended from time to time, the “Clawback Policy”), if the Committee determines that recoupment of compensation paid hereunder is required pursuant to the Clawback Policy, the Committee will require Recipient to repay or return compensation awarded hereunder. By acceptance of any Award or bonus payment hereunder, Recipient expressly acknowledges and agrees that any and all amounts paid to Recipient hereunder, and any other Incentive-Based Compensation paid by the Corporation to the Recipient, are and will be fully subject to the terms of the Clawback Policy (provided that Recipient is, or becomes, an individual that is subject to the Clawback Policy) and agrees to cooperate fully with the Corporation to facilitate the recovery of any and all amounts paid pursuant to this Agreement and any other Incentive-Based Compensation paid by the Corporation that the Committee determines in its sole discretion is required to be recovered pursuant to the terms of the Clawback Policy.

6

The obligations of Recipient to make payments or return Common Stock pursuant to this Section 7(a) are independent of any involvement by such Recipient in events that led to the restatement. The provisions of this Section (a) are in addition to, not in lieu of, any remedies that the Corporation may have against any persons whose misconduct caused or contributed to a need to restate the Corporation’s reported results.

(b)If at any time within three years of the vesting or payment of any award to Recipient under this Agreement, whichever is later, Recipient’s employment is terminated for Cause (or, if such termination is deemed not to be for Cause, but the Corporation determines at any time during such three-year period that the Corporation could have terminated Recipient’s employment for Cause based on Recipient’s conduct during his or her time of employment with the Corporation), then if any part of the underlying conduct giving rise to such determination of Cause by the Corporation took place at any time during the applicable vesting period for each such award, as specified in this Agreement, then the Committee may require Recipient to pay to the Corporation an amount corresponding to each award that vested or was paid to Recipient pursuant to this Agreement, or to otherwise return such Units or Common Stock.

(c)By acceptance of any award or Units hereunder, Recipient expressly acknowledges and agrees that any and all Units or Common Stock, as well as the Award-Equivalent Value thereof, are and will be fully subject to the terms of the foregoing clawback provisions, and agrees to cooperate fully with the Corporation to facilitate the recovery of any Units or Common Stock and/or Award-Equivalent Value that the Committee requires to be recovered pursuant to the foregoing.

Section 8.Miscellaneous.

(a)Governing Law. This Agreement shall be construed, administered and governed in all respects under and by the applicable internal laws of the State of North Carolina, without giving effect to the principles of conflicts of laws thereof.

(b)Entire Agreement; Amendment and Waiver. This Agreement and the Units granted hereunder shall be subject to the terms of the Plan, which hereby is incorporated into this Agreement as though set forth in full herein. Recipient hereby acknowledges receipt of a copy of the Plan. This Agreement and the Plan reflect the entire agreement between the parties hereto and supersede any prior or contemporaneous written or oral understanding or agreement regarding the subject matter hereof. This Agreement may not be modified, amended, supplemented or waived except by a writing signed by the parties hereto, and such writing must refer specifically to this Agreement.

(c)Assignment; Binding Effect. Except as permitted by the Plan, this Agreement and the Units granted hereunder may not be assigned, pledged, hypothecated or transferred by Recipient in any manner. This Agreement, as amended from time to time, shall be binding upon, inure to the benefit of and be enforceable by the heirs, successors and assigns of the parties hereto; provided, however, that this provision shall not permit any assignment in contravention of the terms contained elsewhere herein.

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(d)No Right to Employment. Nothing in this Agreement shall confer on Recipient any right to continue in the employ of the Corporation or any of its Subsidiaries.

(e)Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of this Agreement by facsimile or other electronic device shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by facsimile or other electronic device shall also deliver an original executed counterpart of this Agreement, but the failure to deliver an original executed counterpart of this Agreement shall not affect the validity, enforceability and binding effect of this Agreement.

(f)Notices. Any notice hereunder to the Corporation shall be addressed to the Corporation’s principal executive office, Attention: Compensation Committee, and any notice hereunder to Recipient shall be addressed to Recipient at his/her last address in the records of the Corporation, subject to the right of either party to designate at any time hereafter in writing a different address. Any notice shall be deemed to have been given when delivered personally, one (1) day after dispatch if sent by reputable overnight courier, fees prepaid, or three (3) days following mailing if sent by registered mail, return receipt requested, postage prepaid and addressed as set forth above.

[Signature page is the next page.]

8

IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written above.

CULP, INC.,

a North Carolina corporation

By:

Name:

Title:

RECIPIENT

___________________________

9

EX-10.3

Exhibit 10.3

Summary of Non-Employee Director Compensation

Each non-employee director is paid during each year an annual cash retainer of $55,000 (except the Lead Director, who receives a $60,000 retainer), plus an annual grant of restricted stock units (which, upon vesting, shall convert into one share of the Company’s common stock per RSU) valued at $55,000 ($60,000 for the Lead Director) as of the date of grant.

The cash retainer is paid on a quarterly basis on the first business day of October, January, April and July of each year during the director’s service on the board of directors.

The amount of cash paid each quarter is 25% of the yearly cash retainer.

The restricted stock units are granted annually on the first business day immediately following the Company’s annual meeting of shareholders, and vest on the earlier of (i) the one-year anniversary of the date of grant and (ii) the next annual meeting of shareholders which is at least 50 weeks after the immediately preceding year’s annual meeting, provided that the non-employee director remains as a director of the Company through the vesting date, except in certain limited circumstances set forth in the related award agreement between the Company and the non-employee director.

The number of restricted stock units granted is the number of shares of the Company’s common stock valued at 100% of the annual RSU grant amount, to be determined with reference to the closing price of the Company’s common stock on the grant date, with partial shares rounded to the nearest whole number of shares. The restricted stock units are granted under the Company’s Amended and Restated Equity Incentive Plan and are granted pursuant to an award agreement between the Company and the non-employee director.

11838741v1 02340.00010

EX-10.4

Exhibit10.4

RESTRICTED STOCK UNIT AGREEMENT

THIS RESTRICTED STOCK UNIT AGREEMENT (the “Agreement”), dated as of______________, is between CULP, INC.,a North Carolina corporation (the “Corporation”), and_________________ (“Recipient”).

Background Statement

The Corporation desires to grant to Recipient Restricted Stock Units (the “Units”) pursuant to the Culp, Inc. Amended and Restated Equity Incentive Plan (the “Plan”). Capitalized terms used but not defined in this Agreement shall have the meanings given to them in the Plan.

STATEMENT OF AGREEMENT

NOW, THEREFORE, the parties hereby agree as follows:

Section 1.Grant of Units. The Corporation hereby grants to Recipient ______ Units. Each Unit shall entitle Recipient to receive, upon vesting thereof in accordance with this Agreement and the Plan, one (1) share of common stock, par value $0.05 per share, of the Corporation (“Common Stock”). Except as permitted by the Plan, the Units may not be assigned, pledged, hypothecated or transferred in any manner. Recipient shall not have, with respect to any Units, any rights of a shareholder of the Corporation, including without limitation any right to vote as a shareholder of the Corporation or any right to receive distributions from the Corporation in respect of the Units.

Section 2.Vesting. Except as may otherwise be provided in the Plan or this Agreement, the Units shall vest in the amounts set forth below:

On the earlier of (i) the one-year anniversary of the date of grant and (ii) the next annual meeting of shareholders which is at least 50 weeks after the immediately preceding year’s annual meeting, ___________ shares of Common Stock shall vest.

Notwithstanding the foregoing, all unvested Units (at the rate of one (1) share of Common Stock per Unit) shall immediately vest upon:

(a)termination of Recipient’s service as a director of the Corporation by reason of the death or Disability of Recipient; or

(b)Recipient is removed as a director of the Corporation in anticipation of a Change of Control; or

(c)Recipient is serving as a director of the Corporation at the time a Change of Control occurs, and at any time during the one-year period following such Change of Control (provided that the Units granted hereunder and related shares have not otherwise vested), Recipient is removed as a director of the Corporation for any reason other than for death, Disability or Cause.

Section 3.Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated below:

“Cause” shall mean (i) the commission by Recipient of a felony (or crime involving moral turpitude); (ii) theft, conversion, embezzlement or misappropriation by Recipient of funds or other assets of the Corporation or its Subsidiaries or any other act of fraud with respect to the Corporation or its Subsidiaries (including without limitation the acceptance of bribes or kickbacks or other acts of self-dealing); (iii) intentional, grossly negligent or unlawful misconduct by Recipient that causes significant harm to the Corporation or its Subsidiaries; or (iv) repeated instances of intoxication with alcohol or drugs while conducting business during regular business hours.

“Change of Control” shall have the meaning given to such term in the Plan.

“Disability” shall have the meaning given to such term in the primary disability benefit plan of the Corporation in which Recipient participates. In the absence of any such plan, “Disability” shall mean any physical or mental impairment that renders Recipient unable to perform the essential functions of Recipient’s job with the Corporation and its Subsidiaries for a period of at least 120 days, either with or without reasonable accommodation. At the Corporation’s request, Recipient shall submit to an examination by a duly licensed physician who is mutually acceptable to the Corporation and Recipient for the purpose of ascertaining the existence of a Disability, and shall authorize the physician to release the results of Recipient’s examination to the Corporation.

Section 4.Settlement. As soon as reasonably practicable following a determination by the Corporation and the Compensation Committee (the “Committee”) of the Corporation’s board of directors that all or part of the Units have vested pursuant to the terms of this Agreement, the Corporation shall issue directly to the Recipient shares of Common Stock with respect to all such Units that have vested. Such shares of Common Stock shall not be treated as issued and outstanding until such shares have been issued by the Corporation in accordance with all applicable laws and the Corporation’s bylaws and articles of incorporation. Any certificate(s) evidencing shares of Common Stock shall bear such legends as the Corporation shall determine to be necessary to comply with all laws, including all applicable federal and state securities laws. All such shares of Common Stock issued pursuant to this Agreement shall be fully paid and nonassessable.

Section 5.Forfeiture. All Units that do not vest pursuant to Section 2 shall automatically be cancelled and forfeited by Recipient effective as of the date Recipient ceases to serve as a director of the Corporation for any reason, except as otherwise determined by the Committee, in its sole discretion (such event being referred to herein as a “Forfeiture Event”). Upon the occurrence of a Forfeiture Event, all unvested Units shall automatically, without further action by the Corporation or Recipient, be cancelled and forfeited.

Section 6.Tax Matters.

(a)Recipient shall promptly pay to the Corporation all federal, state and local income, social security and payroll taxes of any kind required by law to be withheld with

2

respect to the vesting of any Units and the issuance of shares of Common Stock in respect thereof. Subject to the approval of the Committee, Recipient may elect to satisfy this obligation by having the Corporation withhold shares of Common Stock that would otherwise be issued to Recipient with respect to any Units that have vested, which shares of Common Stock shall have a Fair Market Value (as of the date that the amount of the withholding requirement is to be determined) equal to the amount of such withholding requirement. If Recipient fails to make such payments as required (whether in cash or having shares of Common Stock withheld), the Corporation shall, to the extent permitted by law, have the right to deduct from any payment of any kind otherwise due to Recipient all federal, state and local income, social security and payroll taxes of any kind required by law to be withheld with respect to the vesting of Units and the issuance of shares of Common Stock in respect thereof.

(b)Notwithstanding anything in this Agreement to the contrary, if a Change of Control occurs and if Recipient is entitled under any agreement or arrangement (including, without limitation, this Agreement) to receive compensation that would constitute a parachute payment (including, without limitation, the vesting of any rights) within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) but for the operation of this sentence, then the amount of all such payments shall be reduced, as determined by the Corporation, to the extent necessary to cause the aggregate present value of all payments in the nature of compensation to Recipient that are contingent on a change in the ownership or effective control of the Corporation, or in the ownership of a substantial portion of the assets of the Corporation, not to exceed 2.99 times Recipient’s “base amount,” all within the meaning of Section 280G of the Code and the regulations promulgated thereunder. The parties intend for the immediately preceding sentence to be interpreted and applied so as to prevent Recipient from receiving, with respect to a Change of Control, an excess parachute payment within the meaning of Section 280G of the Code.

Section 7.Clawback. If at any time within three years of the vesting or payment of any award to Recipient under this Agreement, whichever is later, the Recipient is removed by the shareholders as a director of the Corporation (or voluntarily resigns as a director of the Corporation) for Cause (or, if such removal or resignation is deemed not to be for Cause, but the Corporation determines at any time during such three-year period that the shareholders of the Corporation could have sought to remove Recipient as a director of the Corporation for Cause based on Recipient’s conduct during his or her time as a director of the Corporation), then if any part of the underlying conduct giving rise to such determination of Cause took place at any time during the applicable vesting period for each such award, as specified in this Agreement, then the Committee may require Recipient to pay to the Corporation an amount corresponding to each award that vested or was paid to Recipient pursuant to this Agreement, or to otherwise return such Units or Common Stock.

By acceptance of any award or Units hereunder, Recipient expressly acknowledges and agrees that any and all Units or Common Stock, as well as the equivalent cash value thereof with respect to any and all such Units or Common Stock, that have become vested, exercised, free of restriction or otherwise released to and/or monetized by or for the benefit of Recipient or any transferee or assignee thereof (collectively, the “Award-Equivalent Value”), are and will be

3

fully subject to the terms of the foregoing clawback provision, and agrees to cooperate fully with the Corporation to facilitate the recovery of any Units or Common Stock and/or Award-Equivalent Value that the Committee requires to be recovered pursuant to the foregoing.

Section 8.Miscellaneous.

(a)Governing Law. This Agreement shall be construed, administered and governed in all respects under and by the applicable internal laws of the State of North Carolina, without giving effect to the principles of conflicts of laws thereof.

(b)Entire Agreement; Amendment and Waiver. This Agreement and the Units granted hereunder shall be subject to the terms of the Plan, which hereby is incorporated into this Agreement as though set forth in full herein. Recipient hereby acknowledges receipt of a copy of the Plan. This Agreement and the Plan reflect the entire agreement between the parties hereto and supersede any prior or contemporaneous written or oral understanding or agreement regarding the subject matter hereof. This Agreement may not be modified, amended, supplemented or waived except by a writing signed by the parties hereto, and such writing must refer specifically to this Agreement.

(c)Assignment; Binding Effect. Except as permitted by the Plan, this Agreement and the Units granted hereunder may not be assigned, pledged, hypothecated or transferred by Recipient in any manner. This Agreement, as amended from time to time, shall be binding upon, inure to the benefit of and be enforceable by the heirs, successors and assigns of the parties hereto; provided, however, that this provision shall not permit any assignment in contravention of the terms contained elsewhere herein.

(d)Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of this Agreement by facsimile or other electronic device shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by facsimile or other electronic device shall also deliver an original executed counterpart of this Agreement, but the failure to deliver an original executed counterpart of this Agreement shall not affect the validity, enforceability and binding effect of this Agreement.

(e)Notices. Any notice hereunder to the Corporation shall be addressed to the Corporation’s principal executive office, Attention: Compensation Committee, and any notice hereunder to Recipient shall be addressed to Recipient at his/her last address in the records of the Corporation, subject to the right of either party to designate at any time hereafter in writing a different address. Any notice shall be deemed to have been given when delivered personally, one (1) day after dispatch if sent by reputable overnight courier, fees prepaid, or three (3) days following mailing if sent by registered mail, return receipt requested, postage prepaid and addressed as set forth above.

[Signature page is the next page.]

4

IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written above.

CULP, INC.,

a North Carolina corporation

By:

Name:

Title:

RECIPIENT

___________________________

5

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Robert G. Culp, IV, certify that:

1.I have reviewed this Form 10-Q of Culp, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Robert G. Culp, IV

Robert G. Culp, IV

President and Chief Executive Officer

(Principal Executive Officer)

Date: December 8, 2023

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Kenneth R. Bowling, certify that:

1.I have reviewed this Form 10-Q of Culp, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Kenneth R. Bowling

Kenneth R. Bowling

Executive Vice President and

Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

Date: December 8, 2023

EX-32.1

Exhibit 32.1

Certification Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Culp, Inc. (the “Company”) on Form 10-Q for the period ended October 29, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert G. Culp, IV, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Robert G. Culp, IV

Robert G. Culp, IV

President and Chief Executive Officer

December 8, 2023

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906 has been provided to Culp, Inc. and will be retained by Culp, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Certification Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Culp, Inc. (the “Company”) on Form 10-Q for the period ended October 29, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kenneth R. Bowling, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Kenneth R. Bowling

Kenneth R. Bowling

Executive Vice President and Chief Financial Officer

December 8, 2023

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906 has been provided to Culp, Inc. and will be retained by Culp, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

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Document and Entity Information - shares	6 Months Ended
	Oct. 29, 2023	Dec. 06, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Oct. 29, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Entity Registrant Name	CULP INC
Entity Central Index Key	0000723603
Current Fiscal Year End Date	--04-30
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Trading Symbol	CULP
Entity Common Stock, Shares Outstanding		12,469,903
Entity File Number	1-12597
Entity Tax Identification Number	56-1001967
Entity Address, Address Line One	1823 Eastchester Drive
Entity Address, City or Town	High Point
Entity Address, State or Province	NC
Entity Address, Postal Zip Code	27265-1402
City Area Code	336
Local Phone Number	889-5161
Entity Incorporation State Country Code	NC
Title of 12(b) Security	Common Stock, par value $.05/ Share
Security Exchange Name	NYSE
Document Quarterly Report	true
Document Transition Report	false

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CONSOLIDATED STATEMENTS OF NET LOSS - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Oct. 29, 2023		Oct. 30, 2022		Oct. 29, 2023		Oct. 30, 2022
Income Statement [Abstract]
Net sales	$ 58,725		$ 58,381		$ 115,387		$ 120,985
Cost of sales	(50,775)		(60,594)		(100,352)		(119,071)
Gross profit (loss)	7,950		(2,213)		15,035		1,914
Selling, general and administrative expenses	(10,045)		(9,103)		(19,874)		(17,968)
Restructuring expense	(144)	[1]	(615)	[1]	(482)	[2]	(615)	[2]
Loss from operations	(2,239)		(11,931)		(5,321)		(16,669)
Interest income	282		79		627		96
other income	49		829		145		747
Loss before income taxes	(1,908)		(11,023)		(4,549)		(15,826)
Income tax expense	(516)		(1,150)		(1,217)		(2,046)
Net (loss) income	$ (2,424)		$ (12,173)		$ (5,766)		$ (17,872)
Net (loss) income per share - basic	$ (0.19)		$ (0.99)		$ (0.47)		$ (1.46)
Net (loss) income per share - diluted	$ (0.19)		$ (0.99)		$ (0.47)		$ (1.46)
Average shares outstanding, basic	12,456,000		12,280,000		12,394,000		12,259,000
Average shares outstanding, diluted	12,456,000		12,280,000		12,394,000		12,259,000

[1] Restructuring expense of $144,000 for the three months ended October 29, 2023, represents a $142,000 impairment charge related to equipment and $2,000 of employee termination benefits related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Restructuring expense of $615,000 for the three-months ended October 30, 2022, represents $468,000 for employee termination benefits, $80,000 related to a loss on disposal of equipment, $47,000 for lease termination costs, and $20,000 of other associated costs related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China.

[2] Restructuring expense of $482,000 for the six months ended October 29, 2023, represents a $379,000 impairment charge associated with equipment and $103,000 for employee termination benefits related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Restructuring expense of $615,000 for the six-months ended October 30, 2022, represents $468,000 for employee termination benefits, $80,000 related to a loss on disposal of equipment, $47,000 for lease termination costs, and $20,000 of other associated costs related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Oct. 29, 2023	Oct. 30, 2022	Oct. 29, 2023	Oct. 30, 2022
Consolidated Statements of Comprehensive (Loss) Income
Net loss	$ (2,424)	$ (12,173)	$ (5,766)	$ (17,872)
Unrealized holding loss on investments, net of tax	(82)	(46)	(25)	(53)
Comprehensive loss	$ (2,506)	$ (12,219)	$ (5,791)	$ (17,925)

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CONSOLIDATED BALANCE SHEETS - USD ($)	Oct. 29, 2023	Apr. 30, 2023		Oct. 30, 2022
Current assets:
Cash and cash equivalents	$ 15,214,000	$ 20,964,000	[1]	$ 19,137,000
Short-term investments - rabbi trust	937,000	1,404,000	[1]	2,237,000
Accounts receivable, net	23,036,000	24,778,000	[1]	22,443,000
Inventories	44,465,000	45,080,000	[1]	52,224,000
Short-term note receivable	256,000	219,000	[1]
Current income taxes receivable	340,000			510,000
Other current assets	4,346,000	3,071,000	[1]	3,462,000
Total current assets	88,594,000	95,516,000	[1]	100,013,000
Property, plant and equipment, net	34,664,000	36,111,000	[1]	38,832,000
Right of use assets	6,874,000	8,191,000	[1]	11,609,000
Intangible assets	2,064,000	2,252,000	[1]	2,440,000
Long-term investments - rabbi trust	6,995,000	7,067,000	[1]	7,526,000
Long-term note receivable	1,596,000	1,726,000	[1]
Deferred income taxes	472,000	480,000	[1]	493,000
Other assets	901,000	840,000	[1]	717,000
Total assets	142,160,000	152,183,000	[1]	161,630,000
Current liabilities:
Accounts payable - trade	27,903,000	29,442,000	[1]	24,298,000
Accounts payable - capital expenditures	298,000	56,000	[1]	200,000
Operating lease liability - current	2,540,000	2,640,000	[1]	2,655,000
Deferred compensation - current	937,000	1,404,000	[1]	2,237,000
Deferred revenue	853,000	1,192,000	[1]	1,527,000
Accrued expenses	8,106,000	8,533,000	[1]	7,594,000
Accrued restructuring costs				33,000
Income taxes payable - current	998,000	753,000	[1]	969,000
Total current liabilities	41,635,000	44,020,000	[1]	39,513,000
Operating lease liability - noncurrent	2,431,000	3,612,000	[1]	4,194,000
Income taxes payable - long-term	2,055,000	2,675,000	[1]	2,629,000
Deferred income taxes	5,663,000	5,954,000	[1]	5,700,000
Deferred compensation - long-term	6,748,000	6,842,000	[1]	7,486,000
Total liabilities	58,532,000	63,103,000	[1]	59,522,000
Commitments and Contingencies (Notes 10, 16, and 17)
Shareholders' equity
Preferred stock, $0.05 par value, authorized 10,000,000
Common stock, $0.05 par value, authorized 40,000,000 shares, issued and outstanding 12,469,903 at October 29, 2023; 12,293,762 at October 30, 2022, and 12,327,414 at April 30, 2023	624,000	616,000	[1]	615,000
Capital contributed in excess of par value	44,581,000	44,250,000	[1]	43,671,000
Accumulated earnings	38,429,000	44,195,000	[1]	57,843,000
Accumulated other comprehensive (loss) income	(6,000)	19,000	[1]	(21,000)
Total shareholders' equity	83,628,000	89,080,000	[1]	102,108,000
Total liabilities and shareholders' equity	$ 142,160,000	$ 152,183,000	[1]	$ 161,630,000

[1] Derived from audited consolidated financial statements.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Oct. 29, 2023	Apr. 30, 2023	[1]	Oct. 30, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.05	$ 0.05		$ 0.05
Preferred stock, authorized shares	10,000,000	10,000,000		10,000,000
Common stock, par value	$ 0.05	$ 0.05		$ 0.05
Common stock, authorized shares	40,000,000	40,000,000		40,000,000
Common stock, issued	12,469,903	12,327,414		12,293,762
Common stock, outstanding	12,469,903	12,327,414		12,293,762

[1] Derived from audited consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Oct. 29, 2023	Oct. 30, 2022
Cash flows from operating activities:
Net loss	$ (5,766)	$ (17,872)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation	3,251	3,489
Non-cash inventory (credits) charges	(2,001)	6,439
Amortization	193	214
Stock-based compensation	485	565
Deferred income taxes	(283)	(269)
Gain sale of equipment	(278)	(232)
Non-cash restructuring expenses	379
Foreign currency exchange gain	(697)	(1,168)
Changes in assets and liabilities:
Accounts receivable	1,644	(443)
Inventories	2,304	7,192
Other current assets	(1,355)	(728)
Other assets	(123)	58
Accounts payable – trade	(495)	6,027
Deferred revenue	(339)	1,007
Accrued restructuring costs		33
Accrued expenses and deferred compensation	(762)	1,254
Income taxes	(633)	601
Net cash (used in) provided by operating activities	(4,476)	6,167
Cash flows from investing activities:
Capital expenditures	(1,972)	(1,051)
Proceeds from the sale of equipment	309	465
Proceeds from note receivable	150
Proceeds from the sale of investments (rabbi trust)	986	46
Purchase of investments (rabbi trust)	(472)	(505)
Net cash used in investing activities	(999)	(1,045)
Cash flows from financing activities:
Common stock surrendered for withholding taxes payable	(146)	(33)
Payments of debt issuance costs		(206)
Net cash used in financing activities	(146)	(239)
Effect of exchange rate changes on cash and cash equivalents	(129)	(296)
(Decrease) increase in cash and cash equivalents	(5,750)	4,587
Cash and cash equivalents at beginning of year	20,964	14,550
Cash and cash equivalents at end of period	$ 15,214	$ 19,137

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands		Total		Common Stock		Capital Contributed in Excess of Par Value		Accumulated Earnings		Accumulated Other Comprehensive Income
Balance at May. 01, 2022	[1]	$ 119,501		$ 611		$ 43,143		$ 75,715		$ 32
Balance (in shares) at May. 01, 2022	[1]			12,228,629
Net loss		(5,699)						(5,699)
Stock-based compensation		252				252
Unrealized gain (loss) on investments		(7)								(7)
Common stock issued in connection with vesting of performance based restricted stock units (in shares)				913
Common stock issued in connection with the vesting of time-based restricted stock units				$ 2		(2)
Common stock issued in connection with the vesting of time-based restricted stock units (in shares)				32,199
Common stock surrendered in connection with payroll withholding taxes		(52)				(52)
Common stock surrendered in connection with payroll withholding taxes (in shares)				(6,708)
Immediately vested common stock award				$ 1		(1)
Immediately vested common stock award, (in shares)				19,753
Balance at Jul. 31, 2022		113,995		$ 614		43,340		70,016		25
Balance (in shares) at Jul. 31, 2022				12,274,786
Balance at May. 01, 2022	[1]	119,501		$ 611		43,143		75,715		32
Balance (in shares) at May. 01, 2022	[1]			12,228,629
Net loss		(17,872)
Balance at Oct. 30, 2022		102,108		$ 615		43,671		57,843		(21)
Balance (in shares) at Oct. 30, 2022				12,293,762
Balance at Jul. 31, 2022		113,995		$ 614		43,340		70,016		25
Balance (in shares) at Jul. 31, 2022				12,274,786
Net loss		(12,173)						(12,173)
Stock-based compensation		313				313
Unrealized gain (loss) on investments		(46)								(46)
Common stock issued in connection with vesting of performance based restricted stock units (in shares)				69
Common stock issued in connection with the vesting of time-based restricted stock units (in shares)				600
Common stock surrendered in connection with payroll withholding taxes		19				19
Common stock surrendered in connection with payroll withholding taxes (in shares)				(20)
Immediately vested common stock award				$ 1		(1)
Immediately vested common stock award, (in shares)				18,327
Balance at Oct. 30, 2022		102,108		$ 615		43,671		57,843		(21)
Balance (in shares) at Oct. 30, 2022				12,293,762
Balance at Apr. 30, 2023		89,080	[2]	$ 616	[3]	44,250	[3]	44,195	[3]	19	[3]
Balance (in shares) at Apr. 30, 2023	[3]			12,327,414
Net loss		(3,342)						(3,342)
Stock-based compensation		322				322
Unrealized gain (loss) on investments		57								57
Immediately vested common stock award				$ 1		(1)
Immediately vested common stock award, (in shares)				16,616
Balance at Jul. 30, 2023		86,117		$ 617		44,571		40,853		76
Balance (in shares) at Jul. 30, 2023				12,344,030
Balance at Apr. 30, 2023		89,080	[2]	$ 616	[3]	44,250	[3]	44,195	[3]	19	[3]
Balance (in shares) at Apr. 30, 2023	[3]			12,327,414
Net loss		(5,766)
Balance at Oct. 29, 2023		83,628		$ 624		44,581		38,429		(6)
Balance (in shares) at Oct. 29, 2023				12,469,903
Balance at Jul. 30, 2023		86,117		$ 617		44,571		40,853		76
Balance (in shares) at Jul. 30, 2023				12,344,030
Net loss		(2,424)						(2,424)
Stock-based compensation		163				163
Unrealized gain (loss) on investments		(82)								(82)
Common stock issued in connection with the vesting of time-based restricted stock units				$ 8		(8)
Common stock issued in connection with the vesting of time-based restricted stock units (in shares)				151,653
Common stock surrendered in connection with payroll withholding taxes		(146)		$ (1)		(145)
Common stock surrendered in connection with payroll withholding taxes (in shares)				(25,780)
Balance at Oct. 29, 2023		$ 83,628		$ 624		$ 44,581		$ 38,429		$ (6)
Balance (in shares) at Oct. 29, 2023				12,469,903

[1] Derived from audited consolidated financial statements.

[2] Derived from audited consolidated financial statements.

[3] Derived from audited consolidated financial statements.

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Basis of Presentation

6 Months Ended

Oct. 29, 2023

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Basis of Presentation

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Culp, Inc. and its majority-owned subsidiaries (the “company”) include all adjustments that are, in the opinion of management, necessary for fair presentation of the results of operations and financial position. All these adjustments are of a normal recurring nature. Results of operations for interim periods may not be indicative of future results. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements that are included in the company’s annual report on Form 10-K filed with the Securities and Exchange Commission on July 14, 2023, for the fiscal year ended April 30, 2023.

The company’s six-months ended October 29, 2023, and October 30, 2022, each represent 26-week periods.

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Significant Accounting Policies

6 Months Ended

Oct. 29, 2023

Accounting Policies [Abstract]

Significant Accounting Policies

2. Significant Accounting Policies

As of October 29, 2023, there were no changes in the nature of our significant accounting policies or the application of those policies from those reported in our annual report on Form 10-K for the year then ended April 30, 2023.

Recently Adopted Accounting Pronouncements

There were no recently adopted accounting pronouncements during the first half of fiscal 2024.

Recently Issued Accounting Pronouncements

Effective November 27, 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07 Improvements to Reportable Segment Disclosures which enhances disclosure requirements to segment reporting including (i) significant segment expenses that are regularly provided to the Chief Operating Decision Maker (CODM) that are included within each measure of segment profit or loss, (ii) other segment items by reportable segment as defined by ASU 2023-07, and (iii) the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of each segment's profit or loss in assessing segment performance and deciding how to allocate resources. ASU 2023-07 is effective for public entities starting in annual periods beginning after December 15, 2023 (i.e., our fiscal 2025 annual report) and interim periods beginning after December 15, 2024 (i.e., first quarter of fiscal 2026 interim report). Management is currently evaluating the effects ASU 2023-07 will have on the notes to the consolidated financial statements.

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Allowance for Doubtful Accounts

6 Months Ended

Oct. 29, 2023

Receivables [Abstract]

Allowance for Doubtful Accounts

3. Allowance for Doubtful Accounts

A summary of the activity in the allowance for doubtful accounts follows:

	Six Months Ended
(dollars in thousands)	October 29, 2023			October 30, 2022
Beginning balance	$	342		$	292
Provision for bad debts		228			49
Write-offs, net of recoveries		(29	)		(53	)
Ending balance	$	541		$	288

During the six-month periods ended October 29, 2023, and October 30, 2022, we assessed the credit risk of our customers within our accounts receivable portfolio. Our risk assessment includes the respective customers’ (i) financial position; (ii) past payment history; (iii) management’s general ability; and (iv) historical loss experience; as well as (v) any other ongoing economic conditions. After our risk assessment was completed, we assigned credit grades to our customers, which in turn, were used to determine our allowance for doubtful accounts totaling $541,000 and $288,000 as of October 29, 2023, and October 30, 2022, respectively.

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Revenue from Contracts with Customers

6 Months Ended

Oct. 29, 2023

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

4. Revenue from Contracts with Customers

Nature of Performance Obligations

Our operations are classified into two business segments: mattress fabrics and upholstery fabrics. The mattress fabrics segment manufactures, sources, and sells fabrics and mattress covers primarily to bedding manufacturers. The upholstery fabrics segment

develops, manufactures, sources, and sells fabrics primarily to residential and commercial furniture manufacturers. In addition, the upholstery fabrics segment includes Read Window Products LLC (“Read”), which provides window treatments and sourcing of upholstery fabrics and other products, as well as measuring and installation services for Read’s products, to customers in the hospitality and commercial industries. Read also supplies soft goods such as decorative top sheets, coverlets, duvet covers, bed skirts, bolsters, and pillows.

Our primary performance obligations include the sale of mattress fabrics and upholstery fabrics, as well as the performance of customized fabrication and installation services for Read’s products associated with window treatments.

Contract Assets & Liabilities

Certain contracts, primarily those for customized fabrication and installation services associated with Read, require upfront customer deposits that result in a contract liability which is recorded in the Consolidated Balance Sheets as deferred revenue. Our terms are customary within the industries in which we operate and are not considered financing arrangements. There were no contract assets recognized as of October 29, 2023, October 30, 2022, or April 30, 2023.

A summary of the activity associated with deferred revenue follows:

	Six months ended
(dollars in thousands)	October 29, 2023			October 30, 2022
Beginning balance	$	1,192		$	520
Revenue recognized on contract liabilities		(1,986	)		(1,747	)
Payments received for services not yet rendered		1,647			2,754
Ending balance	$	853		$	1,527

Disaggregation of Revenue

The following table presents our disaggregated revenue by segment, timing of revenue recognition, and product sales versus services rendered for the three-month period ending October 29, 2023:

	Mattress		Upholstery
(dollars in thousands)	Fabrics		Fabrics		Total
Products transferred at a point in time	$	31,377	$	24,194	$	55,571
Services transferred over time		—		3,154		3,154
Total Net Sales	$	31,377	$	27,348	$	58,725

The following table presents our disaggregated revenue by segment, timing of revenue recognition, and product sales versus services rendered for the six-month period ending October 29, 2023:

	Mattress		Upholstery
(dollars in thousands)	Fabrics		Fabrics		Total
Products transferred at a point in time	$	60,599	$	48,968	$	109,567
Services transferred over time		—		5,820		5,820
Total Net Sales	$	60,599	$	54,788	$	115,387

The following table presents our disaggregated revenue by segment, timing of revenue recognition, and product sales versus services rendered for the three-month period ending October 30, 2022:

	Mattress		Upholstery
(dollars in thousands)	Fabrics		Fabrics		Total
Products transferred at a point in time	$	26,230	$	29,883	$	56,113
Services transferred over time		—		2,268		2,268
Total Net Sales	$	26,230	$	32,151	$	58,381

The following table presents our disaggregated revenue by segment, timing of revenue recognition, and product sales versus services rendered for the six-month period ending October 30, 2022:

	Mattress		Upholstery
(dollars in thousands)	Fabrics		Fabrics		Total
Products transferred at a point in time	$	55,602	$	61,406	$	117,008
Services transferred over time		—		3,977		3,977
Total Net Sales	$	55,602	$	65,383	$	120,985

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Inventories

6 Months Ended

Oct. 29, 2023

Inventory Disclosure [Abstract]

Inventories

5. Inventories

Inventories are carried at the lower of cost or net realizable value. Cost is determined using the FIFO (first-in, first-out) method.

A summary of inventories follows:

(dollars in thousands)	October 29, 2023		October 30, 2022		April 30, 2023
Raw materials	$	8,433	$	9,859	$	7,908
Work-in-process		2,196		3,724		2,602
Finished goods		33,836		38,641		34,570
	$	44,465	$	52,224	$	45,080

Measurement of Inventory to Net Realizable Value

We recorded a non-cash inventory (credit) charge of $(1.3) million and $5.3 million for the three months ended October 29, 2023 and October 30, 2022, respectively. The non-cash inventory credit of $(1.3) million for the three months ended October 29, 2023 represented a $(1.2) million credit related to adjustments made to our inventory markdowns reserve estimated based on our policy for aged inventory for both our mattress and upholstery fabrics segments, as well as a credit of ($78,000) for the gain on disposal of inventory related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. The non-cash inventory charge of $5.3 million for the three months ended October 30, 2022 represented a $2.9 million write down of inventory to its net realizable value associated with our mattress fabrics segment, $2.3 million related to our inventory markdowns reserve estimated based on our policy for aged inventory for both our mattress and upholstery fabrics segments and a $98,000 charge for the loss on disposal and markdowns of inventory related to our exit of our cut and sew upholstery fabrics operation located in Shanghai, China. Of the $(1.3) million non-cash inventory credit for the second quarter of fiscal 2024, $(801,000) and $(482,000) pertained to our mattress fabrics and upholstery fabrics segments, respectively. Of the $5.3 million non-cash inventory charge for the second quarter of 2023, $3.8 million and $1.5 million pertained to our mattress fabrics and upholstery fabrics segments, respectively.

We recorded a non-cash inventory (credit) charge of $(2.0) million and $6.4 million for the six months ended October 29, 2023, and October 30, 2022, respectively. The non-cash inventory credit of $(2.0) million for the six months ended October 29, 2023, represented a $(2.1) million credit 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 net restructuring related charge of $101,000. This net restructuring related charge represents markdowns of inventory totaling $179,000 during the first quarter of fiscal 2024, partially offset by a gain on disposal of inventory totaling $78,000 during the second quarter of fiscal 2024, both of which related to the discontinuation of production of cut and sewn upholstery kits at our facility in Ouanaminthe, Haiti during the respective periods. The non-cash inventory charge of $6.4 million for the six months ended October 30, 2022, represented a $2.9 million write down of inventory to its net realizable value associated with our mattress fabrics segment, a $3.4 million charge related to markdowns of inventory estimated based on our policy for aged inventory for both our mattress and upholstery fabrics segments, and a $98,000 charge related to the loss on disposal and markdowns of inventory related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China. Of the $(2.0) million non-cash inventory credit for the first half of fiscal 2024, $(1.5) million and $(453,000) pertained to our mattress fabrics and upholstery fabrics segments, respectively. Of the $6.4 million non-cash inventory charge for the first half of fiscal 2023, $4.2 million and $2.2 million pertained to our mattress fabrics and upholstery fabrics segments, respectively.

Mattress Fabrics Segment - Net Realizable Value

During the second quarter of fiscal 2023, our mattress fabrics segment experienced a 35.8% decline in net sales compared with the second quarter of fiscal 2022. This decline in net sales led to a significant decrease in gross margin to (8.7%) (excluding a non-cash inventory charge of $3.8 million disclosed above) during the second quarter of fiscal 2023, as compared with gross margin of 15.0% during the second quarter of fiscal 2022. The significant decline in net sales and profitability during the second quarter of

fiscal 2023 stemmed from a greater than anticipated decline in consumer discretionary spending on mattress products, which we believe was driven by the following factors: (i) inflationary effects of commodities such as gas, food, and other necessities; (ii) a significant increase in interest rates; (iii) the pulling forward of demand for home goods products during the early years of the COVID-19 pandemic, which demand then shifted to travel, leisure, and other services; and (iv) excess inventory held by customers due to the decline in consumer demand. Based on this evidence, management conducted a thorough review of its mattress fabrics inventory and, as a result, recorded a charge of $2.9 million within cost of sales to write down inventory to its net realizable value. This $2.9 million charge was based on management's best estimates of product sales prices, customer demand trends, and its plans to transition to new products.

Assessment

As of October 29, 2023, we reviewed our mattress fabrics and upholstery fabrics inventories to determine if any additional write-downs, 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 three months and six months ended October 29, 2023, other than the markdowns of inventory associated with our upholstery fabrics segment restructuring activity described more fully in Note 9 of the consolidated financial statements.

Based on the current unfavorable macroeconomic conditions, 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 its results. These differences could result in higher than expected markdowns of inventory, which could adversely affect the company’s results of operations and financial condition in the near term.

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Intangible Assets

6 Months Ended

Oct. 29, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

6. Intangible Assets

A summary of intangible assets follows:

(dollars in thousands)	October 29, 2023		October 30, 2022		April 30, 2023
Tradename	$	540	$	540	$	540
Customer relationships, net		1,185		1,486		1,335
Non-compete agreement, net		339		414		377
	$	2,064	$	2,440	$	2,252

Tradename

Our 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 October 29, 2023, no indicators of impairment existed, and therefore we did not record any asset impairment charges associated with our tradename through the second quarter of fiscal 2024.

Customer Relationships

A summary of the change in the carrying amount of our customer relationships follows:

	Six months ended
(dollars in thousands)	October 29, 2023			October 30, 2022
Beginning balance, net	$	1,335		$	1,636
Amortization expense		(150	)		(150	)
Ending balance, net	$	1,185		$	1,486

Our customer relationships are amortized on a straight-line basis over useful lives ranging from nine to seventeen years.

The gross carrying amount of our customer relationships was $3.1 million as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively. Accumulated amortization for these customer relationships was $1.9 million, $1.6 million, and $1.8 million as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively.

The remaining amortization expense for the next five fiscal years and thereafter are as follows: FY 2024 - $151,000; FY 2025 - $301,000; FY 2026 - $301,000; FY 2027 - $278,000; FY 2028 - $52,000; and thereafter - $102,000.

The weighted average amortization period for our customer relationships was 4.3 years as of October 29, 2023.

Non-Compete Agreement

A summary of the change in the carrying amount of our non-compete agreement follows:

	Six months ended
(dollars in thousands)	October 29, 2023			October 30, 2022
Beginning balance, net	$	377		$	452
Amortization expense		(38	)		(38	)
Ending balance, net	$	339		$	414

Our non-compete agreement is associated with a prior acquisition by our mattress fabrics segment and is amortized on a straight-line basis over the fifteen-year life of the agreement.

The gross carrying amount of our non-compete agreement was $2.0 million as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively. Accumulated amortization for our non-compete agreement was $1.7 million, $1.6 million, and $1.6 million as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively.

The remaining amortization expense for the next five years and thereafter follows: FY 2024 - $38,000; FY 2025 - $76,000; FY 2026 - $76,000; FY 2027 - $76,000; FY 2028 - $73,000.

The weighted average amortization period for the non-compete agreement was 4.5 years as of October 29, 2023.

Impairment

As of October 29, 2023, management reviewed the long-lived assets associated with our mattress fabrics segment, which consisted of property, plant, and equipment, right of use assets, and finite-lived intangible assets (collectively known as the "Mattress Asset Group"), for impairment, as events and changes in circumstances occurred that indicated the carrying amount of the Mattress Asset Group may not be recoverable. The mattress fabrics segment experienced a significant cumulative operating loss totaling $18.1 million commencing in the second quarter of fiscal 2023, and continuing through the second quarter of fiscal 2024. We believe the significant decline in profitability for the mattress fabrics segment stemmed from a decline in consumer discretionary spending on mattress products, which we believe was driven by the following factors: (i) inflationary effects of commodities such as gas, food, and other necessities; (ii) a significant increase in interest rates; (iii) the pulling forward of demand for home goods products during the early years of the COVID-19 pandemic, which demand has now shifted to travel, leisure, and other services; and (iv) excess inventory held by customers due to the decline in consumer demand.

Based on the above evidence, we were required to determine the recoverability of the Mattress Asset Group, which is classified as held and used, by comparing the carrying amount of the Mattress Asset Group to the sum of the future undiscounted cash flows expected to result from its use and eventual disposition. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized for the excess of the carrying amount over the sum of the undiscounted future cash flows of the asset group. The carrying amount of the Mattress Asset Group totaled $35.5 million, which relates to property, plant, and equipment of $32.8 million, right of use assets of $2.0 million, customer relationships of $332,000, and a non-compete agreement of $339,000. The total carrying amount of the Mattress Asset Group did not exceed the sum of its future undiscounted cash flows from its use and disposition. As a result, we determined no impairment associated with the Mattress Asset Group existed as of October 29, 2023.

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Note Receivable

6 Months Ended

Oct. 29, 2023

Receivables [Abstract]

Note Receivable

7. Note Receivable

In connection with the restructuring activity of our upholstery fabrics cut and sew operation located in Ouanaminthe, Haiti, effective January 24, 2023, Culp Upholstery Fabrics Haiti, Ltd. (“CUF Haiti”) entered into an agreement to terminate a lease of a facility (“Termination Agreement”). See Note 9 of the consolidated financial statements for further details regarding this restructuring activity.

Pursuant to the terms of the original lease agreement (the “Original Lease”), CUF Haiti was required to pay in advance $2.8 million for the full amount of rent due prior to the commencement of the Original Lease, with the initial lease term set to expire on December 31, 2029. Pursuant to the terms of the Termination Agreement, the Original Lease was formally terminated when CUF

Haiti vacated and returned possession of the leased facility to the lessor. After CUF Haiti vacated and returned possession of the leased facility, a third party (the “Lessee”) took possession of this facility, and the Lessee agreed to pay CUF Haiti $2.4 million in the form of a note receivable over a period commencing on April 1, 2023, and ending on December 31, 2029, based on the terms stated in the Termination Agreement. In connection with Termination Agreement, an affiliate of the Lessee has guaranteed payment in full of all amounts due and payable to CUF Haiti by the Lessee, and CUF Haiti has been fully and unconditionally discharged from all of its remaining obligations under the Original Lease.

As of the end of our third quarter of fiscal 2023, the gross carrying amount of the note receivable totaling $2.4 million was 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. Consequently, since the fair value of the note receivable was less than its carrying amount, we recorded a restructuring charge of $434,000 during the third quarter of fiscal 2023 to reduce the note receivable’s carrying amount to its reported fair value.

We used an interest rate of 6.0% to determine the present value of the future discounted cash flows, which was 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 11 for further explanation of the fair value hierarchy).

The following table represents the remaining future principal payments as of October 29, 2023:

(dollars in thousands)
2024	$	180
2025		360
2026		360
2027		360
2028		360
Thereafter		600
Undiscounted value of note receivable	$	2,220
Less: unearned interest income		(368	)
Present value of note receivable	$	1,852

As of October 29, 2023, we believe there is no expected credit loss related to the collectibility of our note receivable, as the Lessee has made all required principal payments stated in the Termination Agreement. We will continue to evaluate the facts and circumstances at the end of each reporting period to determine if an expected credit loss is deemed necessary.

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Accrued Expenses

6 Months Ended

Oct. 29, 2023

Text Block [Abstract]

Accrued Expenses

8. Accrued Expenses

A summary of accrued expenses follows:

(dollars in thousands)	October 29, 2023		October 30, 2022		April 30, 2023
Compensation, commissions and related benefits	$	4,540	$	4,489	$	5,800
Other accrued expenses		3,566		3,105		2,733
	$	8,106	$	7,594	$	8,533

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Upholstery Fabrics Segment Restructuring

6 Months Ended

Oct. 29, 2023

Restructuring and Related Activities [Abstract]

Upholstery Fabrics Segment Restructuring

9. Upholstery Fabrics Segment Restructuring

Ouanaminthe, Haiti

During the third quarter of fiscal 2023, CUF Haiti entered into an agreement to terminate a lease associated with a facility located in Ouanaminthe, Haiti and, in turn, moved the production of upholstery cut and sewn kits to an existing facility leased by Culp Home Fashions Haiti, Ltd. (“CHF Haiti”) during the fourth quarter of fiscal 2023. Both CUF Haiti and CHF Haiti are indirect wholly-owned subsidiaries of the company. During the first quarter of fiscal 2024, demand for upholstery cut and sewn kits

declined more than previously anticipated, resulting in the strategic action to discontinue the production of upholstery cut and sew kits in Haiti.

The following summarizes our restructuring expense and restructuring related (credits) charges from the restructuring activities associated with our upholstery fabrics operations located in Haiti for the three months and six months ending October 29, 2023:

	Three Months Ended			Six Months Ended
(dollars in thousands)	October 29, 2023			October 29, 2023
Employee termination benefits	$	2		$	103
Impairment loss - equipment		142			379
(Gain) loss on disposal and markdowns of inventory		(78	)		101
Restructuring expense and restructuring related (credits) charges (1) (2)	$	66		$	583

(1) Of the total $66,000, $144,000 and ($78,000) were recorded within restructuring expense and cost of sales, respectively, in the Consolidated Statement of Net Loss for the three-month period ending October 29, 2023.

(2) Of the total $583,000, $482,000 and $101,000 were recorded within restructuring expense and cost of sales, respectively, in the Consolidated Statement of Net Loss for the six-month period ending October 29, 2023.

The restructuring activity related to the discontinuation of production of upholstery cut and sew kits in Haiti was completed as of October 29, 2023. As a result of our strategic decision to discontinue this production, we incurred a cumulative amount of $1.4 million in restructuring expense and restructuring related charges.

The following summarizes the activity in accrued restructuring costs for the six-month period ending October 29, 2023:

	Employee
	Termination
(dollars in thousands)	Benefits			Total
Beginning balance	$	—		$	—
Expenses incurred		103			103
Payments		(103	)		(103	)
Ending balance	$	—		$	—

Shanghai, China

During the second quarter of fiscal 2023, we closed our cut and sew upholstery fabrics operation located in Shanghai, China, which included the termination of an agreement to lease a building. This strategic action, along with the further use of our Asian supply chain, was taken in order to adjust our operating costs to better align with the declining customer demand for cut and sewn products.

The following summarizes our restructuring expense and restructuring related charges from the restructuring activities associated with our upholstery fabrics operations located in China for the three months and six months ending October 29, 2022:

	Three and Six Months Ended
(dollars in thousands)	October 30, 2022
Employee termination benefits	$	468
Loss on disposal and markdowns of inventory		98
Loss on disposal of equipment		80
Lease termination costs		47
Other associated costs		20
Restructuring expense and restructuring related charges (3)	$	713

(3) Of the total $713,000, $615,000 and $98,000 were recorded to restructuring expense and cost of sales, respectively, in the Consolidated Statement of Net Loss for the three-month and six-month periods ending October 30, 2022.

The following summarizes the activity in accrued restructuring costs for the three-month and six-month periods ending October 30, 2022:

	Employee			Lease			Other
	Termination			Termination			Associated
(dollars in thousands)	Benefits			Costs			Costs			Total
Beginning balance	$	—		$	—		$	—		$	—
Accrual established in fiscal 2023		468			47			—			515
Expenses incurred		—			—			20			20
Payments		(468	)		(16	)		(18	)		(502	)
Ending balance	$	—		$	31		$	2		$	33

The restructuring activity related to the discontinuation of operations of the upholstery cut and sew kits in China was completed in the third quarter of fiscal 2023.

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Lines of Credit

6 Months Ended

Oct. 29, 2023

Debt Disclosure [Abstract]

Lines of Credit

10. Lines of Credit

Revolving Credit Agreement – United States

On January 19, 2023, Culp, Inc., as borrower (the “company”), and Read, as guarantor (the “Guarantor”), entered into a Second Amended and Restated Credit Agreement (the “ABL Credit Agreement”), by and among the company, the Guarantor and Wells Fargo Bank, National Association, as the lender (the “Lender”), to establish an asset-based revolving credit facility (the “ABL Facility”). The proceeds from the ABL Facility may be used to pay fees and expenses related to the ABL Facility and will provide funding for ongoing working capital and general corporate purposes. The ABL Credit Agreement amends, restates and supersedes, and serves as a replacement for, the Amended and Restated Credit Agreement (the “Amended Agreement”), dated as of June 24, 2022, and the First Amendment to the Amended Agreement dated as of August 19, 2022, as amended, by and between the company and the Lender.

The ABL Facility may be used for revolving credit loans and letters of credit from time to time up to a maximum principal amount of $35.0 million, subject to the limitations described below. The ABL Facility contains a sub-facility that allows the company to issue letters of credit in an aggregate amount not to exceed $1 million. The amount available under the ABL Facility is limited by a borrowing base consisting of certain eligible accounts receivable and inventory, reduced by specified reserves, as follows:

•85% of eligible accounts receivable, plus

•the least of:

othe sum of:

▪lesser of (i) 65% of eligible inventory valued at cost based on a first-in first-out basis (net of intercompany profits) and (ii) 85% of the net-orderly-liquidation value percentage of eligible inventory, plus

▪the least of (i) 65% of eligible in-transit inventory valued at cost based on a first-in first-out basis (net of intercompany profits), (ii) 85% of the net-orderly-liquidation value percentage of eligible in-transit inventory, and (iii) $5.0 million, plus

▪the lesser of (i) 65% of eligible raw material inventory valued at cost based on a first-in first-out basis (net of intercompany profits) and (ii) 85% of the net-orderly-liquidation value percentage of eligible raw material inventory

In each case, the net-orderly-liquidation value is calculated based on the lower of (i) a first-in first-out basis and (ii) market value, and is (A) net of intercompany profits, (B) net of write-ups and write-downs in value with respect to foreign currency exchange rates and (C) consistent with most recent appraisals received and acceptable to Lender.

o$22.5 million; and

oAn amount equal to 200% of eligible accounts receivable,

minus

•applicable reserves.

The ABL Facility permits both base rate borrowings and borrowings based upon daily simple SOFR (the secured overnight financing rate administered by the Federal Reserve Bank of New York (or its successor)). Borrowings under the ABL Facility bear interest at an annual rate equal to daily simple SOFR plus 150 basis points (if the average monthly excess availability under the ABL Facility is greater than 50%) or 175 basis points (if the average monthly excess availability under the ABL Facility is less than or equal to 50%) or 50 basis points above base rate (if the average monthly excess availability under the ABL Facility is greater than 50%) or 75 basis points above base rate (if the average monthly excess availability under the ABL Facility is less than or equal to 50%), as applicable, with a fee on unutilized commitments at an annual rate of 37.5 basis points and an annual servicing fee of $12,000.

The ABL Facility matures on January 19, 2026. The ABL Facility may be prepaid from time to time, in whole or in part, without a prepayment penalty or premium. In addition, customary mandatory prepayments of the loans under the ABL Facility are required upon the occurrence of certain events including, without limitation, outstanding borrowing exposures exceeding the borrowing base and certain dispositions of assets outside of the ordinary course of business. Accrued interest is payable monthly in arrears.

The company’s obligations under the ABL Facility (and certain related obligations) are (a) guaranteed by the Guarantor and each of the company’s future domestic subsidiaries is required to guarantee the ABL Facility on a senior secured basis (such guarantors and the company, the “Loan Parties”) and (b) secured by all assets of the Loan Parties, subject to certain exceptions. The liens and other security interests granted by the Loan Parties on the collateral for the benefit of the Lender under the ABL Facility are, subject to certain permitted liens, first-priority.

Cash Dominion. Under the terms of the ABL Facility, if (i) an event of default has occurred or (ii) excess borrowing availability under the ABL Facility (based on the lesser of $35.0 million and the borrowing base) (the “Excess Availability”) falls below $7.0 million at such time, the Loan Parties will become subject to cash dominion, which will require prepayment of loans under the ABL Facility with the cash deposited in certain deposit accounts of the Loan Parties, including a concentration account, and will restrict the Loan Parties’ ability to transfer cash from their concentration account. Such cash dominion period (a “Dominion Period”) shall end when Excess Availability shall be equal to or greater than $7.0 million for a period of 60 consecutive days and no event of default is continuing.

Financial Covenants. The ABL Facility contains a springing covenant requiring that the company’s fixed charge coverage ratio be no less than 1.10 to 1.00 during any period that (i) an event of default has occurred or (ii) Excess Availability under the ABL Facility falls below $5.25 million at such time. Such compliance period shall end when Excess Availability shall be equal to or greater than $5.25 million for a period of 60 consecutive days and no event of default is continuing.

Affirmative and Restrictive Covenants. The ABL Credit Agreement governing the ABL Facility contains customary representations and warranties, affirmative and negative covenants (subject, in each case, to exceptions and qualifications), and events of defaults, including covenants that limit the company’s ability to, among other things:

•incur additional indebtedness;

•make investments;

•pay dividends and make other restricted payments;

•sell certain assets;

•create liens;

•consolidate, merge, sell or otherwise dispose of all or substantially all of the company’s assets; and

•enter into transactions with affiliates.

Overall

Effective January 19, 2023, interest was charged under the ABL Credit Agreement at a rate (applicable interest rate of 6.80% and 6.30% as of October 29, 2023 and April 30, 2023, respectively) calculated using the Applicable Margin over SOFR based on the company’s excess availability under the ABL Facility, as defined in the ABL Credit Agreement. Under the Amended Agreement, interest was charged at a rate (4.38% as of October 30, 2022) calculated using the Applicable Margin over SOFR based on the ratio of company’s consolidated debt to consolidated EBITDA, as defined in the Amended Agreement.

There were $535,000, $275,000, and $275,000 of outstanding letters of credit provided by the ABL Credit Agreement and the Amended Agreement, as applicable, as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively. As of October 29, 2023, we had $465,000 remaining for the issuance of additional letters of credit under the ABL Credit Agreement.

There were no borrowings outstanding under either the ABL Credit Agreement or the Amended Credit Agreement, as applicable, as of October 29, 2023, October 30, 2022, or April 30, 2023, respectively.

As of October 29, 2023, our available borrowings calculated under the provisions of the ABL Credit Agreement totaled $26.2 million.

Revolving Credit Agreement – China Operations

Denominated in Chinese Yuan Renminbi (“RMB”)

We have an unsecured credit agreement denominated in RMB with a bank located in China that provides for a line of credit of up to 35 million RMB ($4.8 million USD as of October 29, 2023). Interest charged under this agreement is based on an interest rate determined by the Chinese government at the time of borrowing. This agreement is set to expire on October 24, 2024. Our borrowing capacity of 35 million RMB is restricted to certain consolidated net sales and consolidated profitability requirements as defined in the agreement. These requirements relate to our total consolidated Culp Inc. entity as a whole. Currently, Culp Inc. does not meet the consolidated net sales and consolidated profitability requirements set forth in the agreement, therefore, we cannot borrow under this agreement.

There were no borrowings outstanding under this agreement as of October 29, 2023, October 30, 2022, or April 30, 2023, respectively.

Overall

Our loan agreements require, among other things, that we maintain compliance with certain financial covenants. As of October 29, 2023, we complied with our financial covenants.

No interest payments were made during the first half of fiscal 2024. Interest paid during the first half of fiscal 2023 totaled $8,000.

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Fair Value

6 Months Ended

Oct. 29, 2023

Fair Value Disclosures [Abstract]

Fair Value

11. Fair Value

Accounting Standard Codification ("ASC") Topic 820, Fair Value Measurement establishes a fair value hierarchy that distinguishes between assumptions based on market data (observable inputs) and the company’s assumptions (unobservable inputs). Determining where an asset or liability falls within that hierarchy depends on the lowest level input that is significant to the fair value measurement as a whole. An adjustment to the pricing method used within either level 1 or level 2 inputs could generate a fair value measurement that effectively falls in a lower level in the hierarchy.

The hierarchy consists of three broad levels as follows:

Level 1 – Quoted market prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than level 1 inputs that are either directly or indirectly observable; and

Level 3 – Unobservable inputs developed using the company’s estimates and assumptions, which reflect those that market participants would use.

The determination of where an asset or liability falls in the hierarchy requires significant judgment. We evaluate our hierarchy disclosures each quarter based on various factors, and it is possible that an asset or liability may be classified differently from quarter to quarter. However, we expect that changes in classifications between different levels will be rare.

Recurring Basis

The following tables present information about assets measured at fair value on a recurring basis:

	Fair value measurements as of October 29, 2023, using:
	Quoted prices		Significant
	in active		other	Significant
	markets for		observable	unobservable
	identical assets		inputs	inputs
(amounts in thousands)	Level 1		Level 2	Level 3	Total
Assets:
U.S. Government Money Market Fund	$	7,060	N/A	N/A	$	7,060
Growth Allocation Mutual Funds		560	N/A	N/A		560
Moderate Allocation Mutual Fund		46	N/A	N/A		46
Other		266	N/A	N/A		266

	Fair value measurements as of October 30, 2022, using:
	Quoted prices		Significant
	in active		other	Significant
	markets for		observable	unobservable
	identical assets		inputs	inputs
(amounts in thousands)	Level 1		Level 2	Level 3	Total
Assets:
U.S. Government Money Market Fund	$	9,089	N/A	N/A	$	9,089
Growth Allocation Mutual Funds		438	N/A	N/A		438
Moderate Allocation Mutual Fund		77	N/A	N/A		77
Other		159	N/A	N/A		159

	Fair value measurements as of April 30, 2023, using:
	Quoted prices		Significant
	in active		other	Significant
	markets for		observable	unobservable
	identical assets		inputs	inputs
(amounts in thousands)	Level 1		Level 2	Level 3	Total
Assets:
U.S. Government Money Market Fund	$	7,649	N/A	N/A	$	7,649
Growth Allocation Mutual Funds		528	N/A	N/A		528
Moderate Allocation Mutual Fund		86	N/A	N/A		86
Other		208	N/A	N/A		208

Investments - Rabbi Trust

We have a rabbi trust (the “Trust”) for the participants of our deferred compensation plan (the “Plan”), that enables participants to direct their contributions to various investment options under the Plan. The investments associated with the Trust consist of a money market fund and various mutual funds that are classified as available-for-sale.

As of October 29, 2023, our investments associated with the Trust totaled $7.9 million, of which $937,000 and $7.0 million were classified as short-term and long-term, respectively. As of October 30, 2022, our investments associated with the Trust totaled $9.8 million, of which $2.2 million and $7.6 million were classified as short-term and long-term, respectively. As of April 30, 2023, our investments associated with the Trust totaled $8.5 million, of which $1.4 million and $7.1 million were classified as short-term and long-term, respectively. The investments associated with the Trust had an accumulated unrealized loss of $6,000, an accumulated unrealized loss of $21,000, and an accumulated unrealized gain of $19,000 as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively.

The fair value of our investments associated with the Trust approximates their cost basis.

Other

The carrying amount of our cash and cash equivalents, accounts receivable, other current assets, accounts payable, and accrued expenses approximated their fair value because of the short maturity of these financial instruments.

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Net Loss Per Share

6 Months Ended

Oct. 29, 2023

Earnings Per Share [Abstract]

Net Loss Per Share

12. Net Loss Per Share

Basic net loss per share is computed using the weighted-average number of shares outstanding during the period. Diluted net loss per share uses the weighted-average number of shares outstanding during the period plus the dilutive effect of stock-based compensation calculated using the treasury stock method.

Weighted average shares used in the computation of basic and diluted net loss per share were 12,456,000 and 12,280,000 for the three months ending October 29, 2023, and October 30, 2022, respectively.

Shares of unvested common stock that were not included in the computation of diluted net loss per share consist of the following:

	Three months ended
(in thousands)	October 29, 2023		October 30, 2022
antidilutive effect from decrease in the price per share of our common stock		11		42
antidilutive effect from net loss incurred during the fiscal year		136		35
total unvested shares of common stock not included in      computation of diluted net loss per share		147		77

Weighted average shares used in the computation of basic and diluted net loss per share were 12,394,000 and 12,259,000 for the six months ending October 29, 2023, and October 30, 2022, respectively.

Shares of unvested common stock that were not included in the computation of diluted net loss per share consist of the following:

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Segment Information

6 Months Ended

Oct. 29, 2023

Segment Reporting [Abstract]

Segment Information

13. Segment Information

Overall

Our operations are classified into two business segments: mattress fabrics and upholstery fabrics. The mattress fabrics segment manufactures, sources, and sells fabrics and mattress covers primarily to bedding manufacturers. The upholstery fabrics segment develops, manufactures, sources, and sells fabrics primarily to residential and commercial furniture manufacturers. In addition, this segment includes Read, which provides window treatments and sourcing of upholstery fabrics and other products, as well as measuring and installation services for Read’s products, to customers in the hospitality and commercial industries. Read also supplies soft goods such as decorative top sheets, coverlets, duvet covers, bed skirts, bolsters, and pillows.

Financial Information

We evaluate the operating performance of our business segments based upon (loss) income from operations before certain unallocated corporate expenses and other items that are not expected to occur on a regular basis. Cost of sales for each segment includes costs to develop, manufacture, or source our products, including costs such as raw material and finished goods purchases, direct and indirect labor, overhead, and incoming freight charges. Unallocated corporate expenses primarily represent compensation and benefits for certain executives and their support staff, all costs associated with being a public company, amortization of intangible assets, and other miscellaneous expenses. Segment assets include assets used in the operations of each segment and consist of accounts receivable, inventories, property, plant, and equipment, and right of use assets. Intangible assets are not included in segment assets as these assets are not used by the Chief Operating Decision Maker to evaluate the respective segment’s operating performance, allocate resources to individual segments, or determine executive compensation.

Statements of operations for our operating segments are as follows:

	Three months ended
	October 29, 2023			October 30, 2022
net sales by segment:
mattress fabrics	$	31,377		$	26,230
upholstery fabrics		27,348			32,151
net sales	$	58,725		$	58,381
gross profit (loss):
mattress fabrics	$	2,483		$	(6,057	)
upholstery fabrics		5,389			3,942
segment gross profit (loss):		7,872			(2,115	)
restructuring related credit (charge) (1)		78			(98	)
gross profit (loss)	$	7,950		$	(2,213	)
selling, general, and administrative expenses by segment:
mattress fabrics	$	3,419		$	2,945
upholstery fabrics		3,998			3,680
unallocated corporate expenses		2,628			2,478
selling, general, and administrative expenses	$	10,045		$	9,103
(loss) income from operations by segment:
mattress fabrics	$	(936	)	$	(9,002	)
upholstery fabrics		1,391			262
unallocated corporate expenses		(2,628	)		(2,478	)
total segment loss from operations	$	(2,173	)	$	(11,218	)
restructuring related credit (charge) (1)		78			(98	)
restructuring expense (2)		(144	)		(615	)
loss from operations	$	(2,239	)	$	(11,931	)
interest income		282			79
other income		49			829
loss before income taxes	$	(1,908	)	$	(11,023	)

(1) Gross profit and loss from operations for the three months ending October 29, 2023, includes restructuring related credits of $78,000 for the gain on disposal of inventory related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Gross loss and loss from operations for the three months ending October 30, 2022, includes restructuring related charges totaling $98,000 for loss on disposal and markdowns of inventory associated with the exit of our cut and sewn upholstery fabrics operation located in Shanghai, China.

(2) Restructuring expense of $144,000 for the three months ended October 29, 2023, represents a $142,000 impairment charge related to equipment and $2,000 of employee termination benefits related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Restructuring expense of $615,000 for the three-months ended October 30, 2022, represents $468,000 for employee termination benefits, $80,000 related to a loss on disposal of equipment, $47,000 for lease termination costs, and $20,000 of other associated costs related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China.

	Six months ended
	October 29, 2023			October 30, 2022
net sales by segment:
mattress fabrics	$	60,599		$	55,602
upholstery fabrics		54,788			65,383
net sales	$	115,387		$	120,985
gross profit (loss):
mattress fabrics	$	4,477		$	(6,093	)
upholstery fabrics		10,659			8,105
total segment gross profit	$	15,136		$	2,012
restructuring related charge (1)		(101	)		(98	)
gross profit	$	15,035		$	1,914
selling, general, and administrative expenses by segment:
mattress fabrics	$	6,811		$	5,829
upholstery fabrics		7,939			7,302
unallocated corporate expenses		5,124			4,837
selling, general, and administrative expenses	$	19,874		$	17,968
(loss) income from operations by segment:
mattress fabrics	$	(2,334	)	$	(11,922	)
upholstery fabrics		2,720			803
unallocated corporate expenses		(5,124	)		(4,837	)
total segment loss from operations	$	(4,738	)	$	(15,956	)
restructuring related charge (1)		(101	)		(98	)
restructuring expense (2)		(482	)		(615	)
loss from operations	$	(5,321	)	$	(16,669	)
interest income		627			96
other income		145			747
loss before income taxes	$	(4,549	)	$	(15,826	)

(1) Gross profit and loss from operations for the six months ending October 29, 2023, includes a net restructuring related charge of $101,000, which represents a markdown of inventory totaling $179,000 during the first quarter of fiscal 2024, partially offset by a gain on disposal of inventory totaling $78,000 during the second quarter of fiscal 2024, both of which related to the discontinuation of production of cut and sewn upholstery kits at our facility located in Ouanaminthe, Haiti. Gross profit and loss from operations for the six months ending October 30, 2022 includes restructuring related charges totaling $98,000 for loss on disposal and markdowns of inventory associated with the exit of our cut and sewn upholstery fabrics operation located in Shanghai, China.

(2) Restructuring expense of $482,000 for the six months ended October 29, 2023, represents a $379,000 impairment charge associated with equipment and $103,000 for employee termination benefits related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Restructuring expense of $615,000 for the six-months ended October 30, 2022, represents $468,000 for employee termination benefits, $80,000 related to a loss on disposal of equipment, $47,000 for lease termination costs, and $20,000 of other associated costs related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China.

Balance sheet information for our operating segments follows:

(dollars in thousands)	October 29, 2023		October 30, 2022		April 30, 2023
Segment assets:
Mattress Fabrics:
Accounts receivable, net	$	11,303	$	8,700	$	12,396
Inventory		27,195		30,300		25,674
Property, plant and equipment (1)		32,862		35,853		33,749
Right of use assets (2)		1,969		2,087		2,308
Total mattress fabrics assets		73,329		76,940		74,127
Upholstery Fabrics:
Accounts receivable, net		11,733		13,743		12,382
Inventory		17,270		21,924		19,406
Property, plant and equipment (3)		1,175		2,150		1,671
Right of use assets (4)		1,992		5,898		2,618
Total upholstery fabrics assets		32,170		43,715		36,077
Total segment assets		105,499		120,655		110,204
Non-segment assets:
Cash and cash equivalents		15,214		19,137		20,964
Short-term investments - rabbi trust		937		2,237		1,404
Short-term note receivable		256		—		219
Current income taxes receivable		340		510		—
Other current assets		4,346		3,462		3,071
Long-term note receivable		1,596		—		1,726
Deferred income taxes		472		493		480
Property, plant and equipment (5)		627		829		691
Right of use assets (6)		2,913		3,624		3,265
Intangible assets		2,064		2,440		2,252
Long-term investments - rabbi trust		6,995		7,526		7,067
Other assets		901		717		840
Total assets	$	142,160	$	161,630	$	152,183

(1)The $32.9 million as of October 29, 2023, represents property, plant, and equipment of $22.2 million, $10.0 million, and $661,000 located in the U.S., Canada, and Haiti, respectively. The $35.9 million as of October 30, 2022, represents property, plant, and equipment of $23.8 million, $11.4 million, and $679,000 located in the U.S., Canada, and Haiti, respectively. The $33.7 million as of April 30, 2023, represents property, plant, and equipment of $22.7 million, $10.4 million, and $608,000 located in the U.S., Canada, and Haiti, respectively.

(2)The $2.0 million as of October 29, 2023, represents right of use assets of $1.3 million and $663,000 located in Haiti and Canada, respectively. The $2.1 million as of October 30, 2022, represents right of use assets of $1.8 million, $167,000, and $164,000 located in Haiti, Canada, and the U.S., respectively. The $2.3 million as of April 30, 2023, represents right of use assets of $1.5 million and $776,000 located in Haiti and Canada, respectively.

(3)The $1.2 million as of October 29, 2023, represents property, plant, and equipment of $1.0 million and $140,000 located in the U.S. and China, respectively. The $2.2 million as of October 30, 2022, represents property, plant, and equipment of $1.0 million, $1.0 million, and $137,000 located in the U.S., Haiti, and China, respectively. The $1.7 million as of April 30, 2023, represents property, plant, and equipment of $974,000, $592,000, and $105,000 located in the U.S., Haiti, and China, respectively.

(4)The $2.0 million as of October 29, 2023, represents right of use assets of $1.2 million and $818,000 located in China and the U.S., respectively. The $5.9 million as of October 30, 2022, represents right of use assets of $2.5 million, $2.0 million, and $1.4 million located in Haiti, China, and the U.S., respectively. The $2.6 million as of April 30, 2023, represents right of use assets of $1.5 million and $1.1 million located in China and the U.S., respectively.

(5)The $627,000, $829,000, and $691,000 as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively, represent property, plant, and equipment associated with unallocated corporate department and corporate departments shared by our mattress fabrics and upholstery fabrics segments. Property, plant, and equipment associated with our corporate departments reside in the U.S.

(6)The $2.9 million, $3.6 million, and $3.3 million as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively, represent right of use assets located in the U.S.

Information about capital expenditures and depreciation expense for our operating segments follows:

	Six months ended
(dollars in thousands)	October 29, 2023		October 30, 2022
Capital expenditures (1):
Mattress Fabrics	$	1,948	$	267
Upholstery Fabrics		185		447
Unallocated Corporate		80		60
Total capital expenditures	$	2,213	$	774
Depreciation expense:
Mattress Fabrics	$	2,922	$	3,088
Upholstery Fabrics		329		401
Total depreciation expense	$	3,251	$	3,489

(1)Capital expenditure amounts are stated on the accrual basis. See Consolidated Statements of Cash Flows for capital expenditure amounts on a cash basis.

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Income Taxes

6 Months Ended

Oct. 29, 2023

Income Tax Disclosure [Abstract]

Income Taxes

14. Income Taxes

Effective Income Tax Rate

We recorded income tax expense of $1.2 million, or (26.8%) of loss before income taxes, for the six-month period ending October 29, 2023, compared with income tax expense of $2.0 million, or (12.9%) of loss before income taxes, for the six-month period ending October 30, 2022.

Our effective income tax rates for the six-month periods ended October 29, 2023, and October 30, 2022, were based upon the estimated effective income tax rate applicable for the full year after giving effect to any significant items related specifically to interim periods. When calculating the annual estimated effective income tax rates for the six-month periods ended October 29, 2023, and October 30, 2022, we were subject to loss limitation rules. These loss limitation rules require any taxable loss associated with our U.S. or foreign operations to be excluded from the annual estimated effective income tax rate calculation if it was determined that no income tax benefit could be recognized during the current fiscal year. The effective income tax rate can be affected over the fiscal year by the mix and timing of actual earnings from our U.S. operations and foreign subsidiaries located in China, Canada, and Haiti as compared to annual projections, as well as changes in foreign currency exchange rates in relation to the U.S. dollar.

The following schedule summarizes the principal differences between income tax expense at the U.S. federal income tax rate and the effective income tax rate reflected in the consolidated financial statements for the six-month periods ending October 29, 2023, and October 30, 2022:

	October 29,			October 30,
	2023			2022
U.S. federal income tax rate		21.0	%		21.0	%
U.S. valuation allowance		(32.8	)		(36.7	)
Withholding taxes associated with foreign jurisdictions		(9.9	)		(3.3	)
Foreign income tax rate differential		(5.7	)		3.2
Stock-based compensation		(4.2	)		(0.6	)
Tax effects of local currency foreign exchange gains		5.1			4.7
Other		(0.3	)		(1.2	)
	(26.8%)			(12.9)%

Our consolidated effective income tax rates during the first half of fiscal 2024 and the first half of fiscal 2023 were both adversely affected by the mix of earnings between our U.S. operations and foreign subsidiaries, as our taxable income stems from our operations located in China and Canada, which have higher income tax rates than the U.S. In addition, during the first half of fiscal 2024 and the first half of fiscal 2023, we incurred pre-tax losses associated with our U.S. operations, for which an income tax benefit was not recorded due to the full valuation allowance applied against our U.S. net deferred income tax assets. However, the income tax charge associated with the full valuation allowance applied against our U.S. net deferred income tax assets was lower during the first half of fiscal 2024 compared with the first half of fiscal 2023, as our $(11.8) million U.S. pre-tax loss incurred during the first half of fiscal 2024 was significantly lower than the $(20.7) million U.S. pre-tax loss incurred during the first half of fiscal 2023.

During the first half of fiscal 2024, we incurred a lower consolidated pre-tax loss totaling $(4.5) million, compared with $(15.8) million during the first half of fiscal 2023. As a result, the principal differences between income tax expense at the U.S. federal income tax rate and the effective income tax rate reflected in the consolidated financial statements were more pronounced during the first half of fiscal 2024, as compared with the first half of fiscal 2023.

U.S. Valuation Allowance

We evaluate the realizability of our U.S. net deferred income tax assets to determine if a valuation allowance is required. We assess whether a valuation allowance should be established based on the consideration of all available evidence using a “more-likely-than-not” standard, with significant weight being given to evidence that can be objectively verified. Since the company operates in multiple jurisdictions, we assess the need for a valuation allowance on a jurisdiction-by-jurisdiction basis, considering the effects of local tax law.

As of October 29, 2023, we evaluated the realizability of our U.S. net deferred income tax assets to determine if a full valuation allowance was required. Based on our assessment, we determined we still have a recent history of significant cumulative U.S. pre-tax losses, in that we experienced U.S. pre-tax losses during each of the last three fiscal years from 2021 through 2023, and we are currently expecting significant U.S. pre-tax losses to continue during fiscal 2024. As a result of the significant weight of this

negative evidence, we believe it is more likely than not that our U.S. deferred income tax assets will not be fully realizable, and therefore we provided for a full valuation allowance against our U.S. net deferred income tax assets.

Based on our assessments as of October 29, 2023, October 30, 2022, and April 30, 2023, valuation allowances against our net deferred income tax assets pertain to the following:

(dollars in thousands)	October 29, 2023		October 30, 2022		April 30, 2023
U.S. federal and state net deferred income tax assets	$	17,839	$	13,958	$	16,345
U.S. capital loss carryforward		2,330		2,330		2,330
	$	20,169	$	16,288	$	18,675

Undistributed Earnings

We assess whether the undistributed earnings from our foreign subsidiaries will be reinvested indefinitely or eventually distributed to our U.S. parent company and whether we are required to record a deferred income tax liability for those undistributed earnings from foreign subsidiaries that will not be reinvested indefinitely. As of October 29, 2023, we assessed the liquidity requirements of our U.S. parent company and determined that our undistributed earnings and profits from our foreign subsidiaries would not be reinvested indefinitely and would eventually be distributed to our U.S. parent company. The conclusion reached from this assessment was consistent with prior reporting periods.

As a result of the 2017 Tax Cuts and Jobs Act, a U.S. corporation is allowed a 100% dividend received deduction for earnings and profits received from a 10% owned foreign corporation. Therefore, a deferred income tax liability will be required only for unremitted withholding taxes associated with earnings and profits generated by our foreign subsidiaries that will ultimately be repatriated to the U.S. parent company. As a result, as of October 29, 2023, October 30, 2022, and April 30, 2023, we recorded a deferred income tax liability of $4.6 million, $4.0 million, and $4.2 million, respectively.

Uncertain Income Tax Positions

An unrecognized income tax benefit for an uncertain income tax position can be recognized in the first interim period if the more-likely-than-not recognition threshold is met by the end of the reporting period, or is effectively settled through examination, negotiation, or litigation, or the statute of limitations for the relevant taxing authority to examine and challenge the tax position has expired. If it is determined that any of the above conditions occur regarding our uncertain income tax positions, an adjustment to our unrecognized income tax benefit will be recorded at that time.

As of October 29, 2023, we had a $1.2 million total gross unrecognized income tax benefit, of which the entire amount was classified as income taxes payable – long-term in the accompanying Consolidated Balance Sheets. As of October 30, 2022, we had a $1.1 million total gross unrecognized income tax benefit, of which the entire amount was recorded to income taxes payable – long-term in the accompanying Consolidated Balance Sheets. As of April 30, 2023, we had a $1.2 million total gross unrecognized income tax benefit, of which the entire amount was classified as income taxes payable – long-term in the accompanying Consolidated Balance Sheets. These unrecognized income tax benefits would favorably affect income tax expense in future periods by $1.2 million, $1.1 million, and $1.2 million, as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively.

Our gross unrecognized income tax benefit of $1.2 million as of October 29, 2023, relates to income tax positions for which significant change is currently not expected within the next year.

Income Taxes Paid

The following table sets forth taxes paid by jurisdiction:

	Six Months Ended		Six Months Ended
	October 29,		October 30,
(dollars in thousands)	2023		2022
United States Transition Tax Payment	$	499	$	265
China Income Taxes, Net of Refunds		1,278		1,286
Canada Income Taxes, Net of Refunds		336		161
	$	2,113	$	1,712

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Stock-Based Compensation

6 Months Ended

Oct. 29, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

15. Stock-Based Compensation

Equity Incentive Plan Description

On September 16, 2015, our shareholders approved an equity incentive plan titled the Culp, Inc. 2015 Equity Incentive Plan (the “2015 Plan”). The 2015 Plan authorizes the grant of stock options intended to qualify as incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based units, and other equity and cash related awards as determined by the Compensation Committee of our board of directors. An aggregate of 1,200,000 shares of common stock were authorized for issuance under the 2015 Plan, with certain sub-limits that would apply with respect to specific types of awards that may be issued as defined in the 2015 Plan. Effective September 27, 2023, our shareholders approved an amendment and restatement of the 2015 Plan (the "Amended and Restated Plan"). The Amended and Restated Plan authorizes the issuance of an additional 960,000 shares of common stock in addition to the shares of common stock still available for issuance under the 2015 Plan. The Amended and Restated Plan also removed certain sub-limits that previously applied with respect to specific type of awards that may be issued under the plan.

As of October 29, 2023, there were 765,399 shares available for future equity-based grants under the Amended and Restated Plan.

Performance-Based Restricted Stock Units

Senior Executives

We grant performance-based restricted stock units to senior executives which could earn up to a certain number of shares of common stock if certain performance targets are met over a three-fiscal year performance period as defined in the related restricted stock unit award agreements. The number of shares of common stock that are earned based on performance targets that have been achieved may be adjusted based on a market-based total shareholder return component as defined in the related restricted stock unit award agreements.

Our performance-based restricted stock units granted to senior executives were measured based on their fair market value on the date of grant. The fair market value per share was determined using the Monte Carlo simulation model for the market-based total shareholder return component and the closing price of our common stock for the performance-based component.

The following table provides assumptions used to determine the fair market value of the market-based total shareholder return component using the Monte Carlo simulation model on our outstanding performance-based restricted stock units granted to senior executives on September 28, 2023, August 10, 2022 and July 22, 2021:

	September 28,	August 10,	July 22,
	2023	2022	2021
Closing price of our common stock	$5.59	$5.06	$14.75
Expected volatility of our common stock	37.3%	48.2%	54.2%
Expected volatility of peer companies	35.7%-91.5%	41.6%-105.1%	45.7%-101.5%
Risk-free interest rate	4.90%	3.13%	0.33%
Dividend yield	0.00%	0.00%	3.00%
Correlation coefficient of peer companies	0.01-0.21	0.05-0.23	0.03-0.35

Key Employees

We grant performance-based restricted stock units to key employees which could earn up to a certain number of shares of common stock if certain performance targets are met over a three-fiscal year performance period as defined in the related restricted stock unit award agreements. Our performance-based restricted stock units granted to key employees were measured based on the fair market value (the closing price of our common stock) on the date of grant. No market-based total shareholder return component was included in these awards.

Overall

The following table summarizes information related to our grants of performance-based restricted stock units associated with senior executives and key employees that were unvested as of October 29, 2023:

	(3)		(4)
	Performance-Based		Restricted Stock
	Restricted Stock		Units Expected
Date of Grant	Units Awarded		to Vest		Price Per Share			Vesting Period
September 28, 2023 (1)		227,497		121,740	$	6.43	(5)	34 months
August 10, 2022 (1)		178,714		—	$	5.77	(6)	3 years
July 22, 2021 (1)		122,476		—	$	15.93	(7)	3 years
July 22, 2021 (2)		20,500		—	$	14.75	(8)	3 years

(1)Performance-based restricted stock units awarded to senior executives.

(2)Performance-based restricted stock units awarded to key employees.

(3)Amounts represent the maximum number of common stock shares that could be earned if certain performance targets are met as defined in the related restricted stock unit agreements.

(4)Compensation cost is based on an assessment each reporting period to determine the probability of whether or not certain performance goals will be met and how many shares are expected to be earned as of the end of the vesting period. These amounts represent the number of shares that were expected to vest as of October 29, 2023.

(5)Price per share represents the fair market value per share ($1.15 per $1, or an increase of $0.84 to the closing price of our common stock on the date of grant) determined using the Monte Carlo simulation model for the market-based total shareholder return component and the closing price of our common stock ($5.59) for the performance-based component of the performance-based restricted stock units granted to senior executives on September 28, 2023.

(6)Price per share represents the fair market value per share ($1.14 per $1, or an increase of $0.71 to the closing price of our common stock on the date of grant) determined using the Monte Carlo simulation model for the market-based total shareholder return component and the closing price of our common stock ($5.06) for the performance-based component of the performance-based restricted stock units granted to senior executives on August 10, 2022.

(7)Price per share represents the fair market value per share ($1.08 per $1, or an increase of $1.18 to the closing price of our common stock on the date of grant) determined using the Monte Carlo simulation model for the market-based total shareholder return component and the closing price of our common stock ($14.75) for the performance-based component of the performance-based restricted stock units granted to senior executives on July 22, 2021.

(8)Price per share represents the closing price of our common stock on the date of grant.

There were no performance-based restricted stock units that vested during the six-month period ended October 29, 2023. The following table summarizes information related to our performance-based restricted stock units that vested during the six-month period ended October 30, 2022:

	Performance-Based				(4)
	Restricted Stock		(3)		Price
Fiscal Year	Units Vested		Fair Value		Per Share
Fiscal 2023 (1)		545	$	3	$	5.10
Fiscal 2023 (2)		437	$	2	$	5.10

(1)Performance-based restricted stock units vested by senior executives.

(2)Performance-based restricted stock units vested by key employees.

(3)Dollar amounts are in thousands.

(4)Price per share is derived from the closing price of our common stock on the date the respective performance-based restricted stock units vested.

We recorded compensation expense of $23,000 and $2,000 within selling, general, and administrative expenses associated with our performance-based restrictive stock units for the six-month periods ended October 29, 2023, and October 30, 2022, respectively. Compensation expense is recorded based on an assessment each reporting period to determine the probability of whether or not certain performance targets will be met and how many shares are expected to be earned as of the end of the vesting period. If certain performance goals are not expected to be achieved, compensation expense would not be recorded, and any previously recognized compensation expense would be reversed.

As of October 29, 2023, the remaining unrecognized compensation expense related to our performance-based restricted stock units was $759,000, which is expected to be recognized over a weighted average vesting period of 2.7 years. As of October 29, 2023, the performance-based restricted stock units that are expected to vest had a fair value totaling $674,000.

Time-Based Restricted Stock Units

The following table summarizes information related to our grants of time-based restricted stock unit awards associated with senior executives, key employees, and outside directors that were unvested as of October 29, 2023:

	Time-Based
	Restricted Stock		(1)
Date of Grant	Units Awarded		Price Per Share		Vesting Period
September 28, 2023 (2)		100,068	$	5.59	34 months
September 28, 2023 (3)		59,928	$	5.59	1 year
September 6, 2022 (2)		25,114	$	4.58	2 to 3 years
August 10, 2022 (2)		78,225	$	5.06	3 years
July 22, 2021 (2)		30,835	$	14.75	3 years

(1)Price per share represents closing price of common stock on the date the respective award was granted.

(2)Time-based restricted stock units awarded to senior executives and key employees.

(3)Time-based restricted stock units awarded to outside directors.

The following table summarizes information related to our time-based restricted stock units that vested during the six-month periods ending October 29, 2023, and October, 30, 2022, respectively:

	Time-Based				(2)
	Restricted Stock		(1)		Price
Fiscal Year	Units Vested		Fair Value		Per Share
Fiscal 2024		151,653	$	857	$	5.65
Fiscal 2023		32,799	$	167	$	5.10

(1)Dollar amounts are in thousands.

(2)Price per share is derived from the closing price of our common stock on the date the respective time-based restricted stock units vested.

We recorded compensation expense of $378,000 and $396,000 within selling, general, and administrative expenses associated with our time-based restricted stock unit awards for the six-month periods ended October 29, 2023, and October 30, 2022, respectively.

As of October 29, 2023, the remaining unrecognized compensation expense related to our time-based restricted stock units was $1.3 million, which is expected to be recognized over a weighted average vesting period of 1.9 years. As of October 29, 2023, the time-based restricted stock units that are expected to vest had a fair value totaling $1.6 million.

Immediately Vested Common Stock Awards

We granted a total of 16,616 shares of common stock to our outside directors on July 3, 2023. These shares of common stock vested immediately and were measured at their fair value on the date of the grant. The fair value of these awards was $5.04 per share on July 3, 2023, which represents the closing price of our common stock on the date of grant.

We granted a total of 18,326 and 19,753 shares of common stock to our outside directors on October 3, 2022, and July 1, 2022, respectively. These shares of common stock vested immediately and were measured at their fair value on the date of the grant. The

fair value of these awards was $4.57 and $4.24 per share on October 3,2022, and July 1, 2022, respectively, which represents the closing price of our common stock on the date of grant.

We recorded $84,000 and $167,000 of compensation expense within selling, general, and administrative expenses for common stock awards to our outside directors for the six-month periods ended October 29, 2023, and October 30, 2022, respectively.

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Leases

6 Months Ended

Oct. 29, 2023

Assets and Liabilities, Lessee [Abstract]

Leases

16. Leases

Overview

We lease manufacturing facilities, showroom and office space, distribution centers, and equipment under operating lease arrangements. Our operating leases have remaining lease terms of one to eight years, with renewal options for additional periods ranging up to twelve years.

Balance Sheet

The right of use assets and lease liabilities associated with our operating leases as of October 29, 2023, October 30, 2022, and April 30, 2023, are as follows:

(dollars in thousands)	October 29, 2023		October 30, 2022		April 30, 2023
Right of use assets	$	6,874	$	11,609	$	8,191
Operating lease liability - current		2,540		2,655		2,640
Operating lease liability – noncurrent		2,431		4,194		3,612

Supplemental Cash Flow Information

	Six Months Ended		Six Months Ended
(dollars in thousands)	October 29, 2023		October 30, 2022
Operating lease liability payments	$	1,330	$	1,068
Right of use assets exchanged for lease liabilities		157		—

Operating lease expense for the three-month periods ended October 29, 2023, and October 30, 2022, was $781,000 and $959,000, respectively. Operating lease expense for the six-month periods ended October 29, 2023, and October 30, 2022, was $1.6 million and $2.0 million, respectively. Short-term lease and variable lease expenses were immaterial for the three-month and six-month periods ended October 29, 2023, and October 30, 2022.

Other Information

Maturity of our operating lease liabilities for the remainder of fiscal 2024, the subsequent next four fiscal years, and thereafter follows:

(dollars in thousands)
2024	$	1,269
2025		1,917
2026		638
2027		342
2028		225
Thereafter		804
	$	5,195
Less: interest		(224	)
Present value of lease liabilities	$	4,971

As of October 29, 2023, the weighted average remaining lease term and discount rate for our operating leases follows:

	October 29, 2023
Weighted average lease term (in years)	3.79
Weighted average discount rate		3.46	%

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Commitments and Contingencies

6 Months Ended

Oct. 29, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

17. Commitments and Contingencies

Litigation

The company is involved in legal proceedings and claims which have arisen in the ordinary course of business. Management has determined that it is not reasonably possible that these actions, when ultimately concluded and settled, will have a material adverse effect upon the consolidated financial position, consolidated results of operations, or consolidated cash flows of the company.

Accounts Payable – Capital Expenditures

As of October 29, 2023, October 30, 2022, and April 30, 2023, we had amounts due regarding capital expenditures totaling $298,000, $200,000, and $56,000, respectively, which pertained to outstanding vendor invoices, none of which were financed.

Purchase Commitments – Capital Expenditures

As of October 29, 2023, we had open purchase commitments to acquire equipment for our mattress fabrics segment totaling $1.6 million.

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Statutory Reserves

6 Months Ended

Oct. 29, 2023

Text Block [Abstract]

Statutory Reserves

18. Statutory Reserves

Our subsidiary located in China was required to transfer 10% of its net income, as determined in accordance with the People’s Republic of China (PRC) accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reached 50% of the company’s registered capital. As of October 29, 2023, the statutory surplus reserve fund represents the 50% registered capital requirement, and therefore, our subsidiary located in China is no longer required to transfer 10% of its net income in accordance with PRC accounting rules and regulations.

The transfer to this reserve must be made before distributions of any dividend to shareholders. As of October 29, 2023, the company’s statutory surplus reserve was $4.0 million. The statutory surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any. The statutory surplus reserve fund may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them provided that the remaining reserve balance after such issue is not less than 25% of the registered capital.

The company’s subsidiary located in China can transfer funds to the parent company, except for the statutory surplus reserve of $4.0 million, to assist with debt repayment, capital expenditures, and other expenses of the company’s business.

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Common Stock Repurchase Program

6 Months Ended

Oct. 29, 2023

Text Block [Abstract]

Common Stock Repurchase Program

19. Common Stock Repurchase Program

In March 2020, our board of directors approved an authorization for us to acquire up to $5.0 million of our common stock. Under the common stock repurchase program, shares may be purchased from time to time in open market transactions, block trades, through plans established under the Securities Exchange Act Rule 10b5-1, or otherwise. The number of shares purchased and the timing of such purchases are based on working capital requirements, market and general business conditions, and other factors, including alternative investment opportunities.

We did not repurchase any shares of common stock during the six-month periods ending October 29, 2023, and October 30, 2022, respectively.

As of October 29, 2023, $3.2 million is available for additional repurchases of our common stock.

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Significant Accounting Policies (Policies)

6 Months Ended

Oct. 29, 2023

Accounting Policies [Abstract]

Recently Adopted and Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

There were no recently adopted accounting pronouncements during the first half of fiscal 2024.

Recently Issued Accounting Pronouncements

Effective November 27, 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07 Improvements to Reportable Segment Disclosures which enhances disclosure requirements to segment reporting including (i) significant segment expenses that are regularly provided to the Chief Operating Decision Maker (CODM) that are included within each measure of segment profit or loss, (ii) other segment items by reportable segment as defined by ASU 2023-07, and (iii) the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of each segment's profit or loss in assessing segment performance and deciding how to allocate resources. ASU 2023-07 is effective for public entities starting in annual periods beginning after December 15, 2023 (i.e., our fiscal 2025 annual report) and interim periods beginning after December 15, 2024 (i.e., first quarter of fiscal 2026 interim report). Management is currently evaluating the effects ASU 2023-07 will have on the notes to the consolidated financial statements.

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Allowance for Doubtful Accounts (Tables)

6 Months Ended

Oct. 29, 2023

Receivables [Abstract]

Summary of the Activity in the Allowance for Doubtful Accounts

A summary of the activity in the allowance for doubtful accounts follows:

	Six Months Ended
(dollars in thousands)	October 29, 2023			October 30, 2022
Beginning balance	$	342		$	292
Provision for bad debts		228			49
Write-offs, net of recoveries		(29	)		(53	)
Ending balance	$	541		$	288

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Revenue from Contracts with Customers (Tables)

6 Months Ended

Oct. 29, 2023

Revenue from Contract with Customer [Abstract]

Summary of Activity Associated with Deferred Revenue

A summary of the activity associated with deferred revenue follows:

	Six months ended
(dollars in thousands)	October 29, 2023			October 30, 2022
Beginning balance	$	1,192		$	520
Revenue recognized on contract liabilities		(1,986	)		(1,747	)
Payments received for services not yet rendered		1,647			2,754
Ending balance	$	853		$	1,527

Summary of Disaggregation of Revenue

The following table presents our disaggregated revenue by segment, timing of revenue recognition, and product sales versus services rendered for the three-month period ending October 29, 2023:

	Mattress		Upholstery
(dollars in thousands)	Fabrics		Fabrics		Total
Products transferred at a point in time	$	31,377	$	24,194	$	55,571
Services transferred over time		—		3,154		3,154
Total Net Sales	$	31,377	$	27,348	$	58,725

The following table presents our disaggregated revenue by segment, timing of revenue recognition, and product sales versus services rendered for the six-month period ending October 29, 2023:

	Mattress		Upholstery
(dollars in thousands)	Fabrics		Fabrics		Total
Products transferred at a point in time	$	60,599	$	48,968	$	109,567
Services transferred over time		—		5,820		5,820
Total Net Sales	$	60,599	$	54,788	$	115,387

The following table presents our disaggregated revenue by segment, timing of revenue recognition, and product sales versus services rendered for the three-month period ending October 30, 2022:

	Mattress		Upholstery
(dollars in thousands)	Fabrics		Fabrics		Total
Products transferred at a point in time	$	26,230	$	29,883	$	56,113
Services transferred over time		—		2,268		2,268
Total Net Sales	$	26,230	$	32,151	$	58,381

The following table presents our disaggregated revenue by segment, timing of revenue recognition, and product sales versus services rendered for the six-month period ending October 30, 2022:

	Mattress		Upholstery
(dollars in thousands)	Fabrics		Fabrics		Total
Products transferred at a point in time	$	55,602	$	61,406	$	117,008
Services transferred over time		—		3,977		3,977
Total Net Sales	$	55,602	$	65,383	$	120,985

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Inventories (Tables)

6 Months Ended

Oct. 29, 2023

Inventory Disclosure [Abstract]

Summary of Inventories

A summary of inventories follows:

(dollars in thousands)	October 29, 2023		October 30, 2022		April 30, 2023
Raw materials	$	8,433	$	9,859	$	7,908
Work-in-process		2,196		3,724		2,602
Finished goods		33,836		38,641		34,570
	$	44,465	$	52,224	$	45,080

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Intangible Assets (Tables)

6 Months Ended

Oct. 29, 2023

Summary of Intangible Assets

A summary of intangible assets follows:

(dollars in thousands)	October 29, 2023		October 30, 2022		April 30, 2023
Tradename	$	540	$	540	$	540
Customer relationships, net		1,185		1,486		1,335
Non-compete agreement, net		339		414		377
	$	2,064	$	2,440	$	2,252

Customer Relationships [Member]

Summary of Change in Carrying Amount of Finite-Lived Intangible Assets

A summary of the change in the carrying amount of our customer relationships follows:

	Six months ended
(dollars in thousands)	October 29, 2023			October 30, 2022
Beginning balance, net	$	1,335		$	1,636
Amortization expense		(150	)		(150	)
Ending balance, net	$	1,185		$	1,486

Non-Compete Agreement [Member]

Summary of Change in Carrying Amount of Finite-Lived Intangible Assets

A summary of the change in the carrying amount of our non-compete agreement follows:

	Six months ended
(dollars in thousands)	October 29, 2023			October 30, 2022
Beginning balance, net	$	377		$	452
Amortization expense		(38	)		(38	)
Ending balance, net	$	339		$	414

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Note Receivable (Tables)

6 Months Ended

Oct. 29, 2023

Receivables [Abstract]

Summary of Remaining Future Principal Payments

The following table represents the remaining future principal payments as of October 29, 2023:

(dollars in thousands)
2024	$	180
2025		360
2026		360
2027		360
2028		360
Thereafter		600
Undiscounted value of note receivable	$	2,220
Less: unearned interest income		(368	)
Present value of note receivable	$	1,852

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Accrued Expenses (Tables)

6 Months Ended

Oct. 29, 2023

Text Block [Abstract]

Summary of Accrued Expenses

A summary of accrued expenses follows:

(dollars in thousands)	October 29, 2023		October 30, 2022		April 30, 2023
Compensation, commissions and related benefits	$	4,540	$	4,489	$	5,800
Other accrued expenses		3,566		3,105		2,733
	$	8,106	$	7,594	$	8,533

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Upholstery Fabrics Segment Restructuring (Tables)

6 Months Ended

Oct. 29, 2023

Ouanaminthe, Haiti [Member]

Restructuring Cost and Reserve [Line Items]

Summary of Restructuring Expense and Restructuring Related (Credits) Charges

The following summarizes our restructuring expense and restructuring related (credits) charges from the restructuring activities associated with our upholstery fabrics operations located in Haiti for the three months and six months ending October 29, 2023:

	Three Months Ended			Six Months Ended
(dollars in thousands)	October 29, 2023			October 29, 2023
Employee termination benefits	$	2		$	103
Impairment loss - equipment		142			379
(Gain) loss on disposal and markdowns of inventory		(78	)		101
Restructuring expense and restructuring related (credits) charges (1) (2)	$	66		$	583

(1) Of the total $66,000, $144,000 and ($78,000) were recorded within restructuring expense and cost of sales, respectively, in the Consolidated Statement of Net Loss for the three-month period ending October 29, 2023.

(2) Of the total $583,000, $482,000 and $101,000 were recorded within restructuring expense and cost of sales, respectively, in the Consolidated Statement of Net Loss for the six-month period ending October 29, 2023.

Summary of Activity in Accrued Restructuring

The following summarizes the activity in accrued restructuring costs for the six-month period ending October 29, 2023:

	Employee
	Termination
(dollars in thousands)	Benefits			Total
Beginning balance	$	—		$	—
Expenses incurred		103			103
Payments		(103	)		(103	)
Ending balance	$	—		$	—

Shanghai, China [Member]

Restructuring Cost and Reserve [Line Items]

Summary of Restructuring Expense and Restructuring Related (Credits) Charges

	Three and Six Months Ended
(dollars in thousands)	October 30, 2022
Employee termination benefits	$	468
Loss on disposal and markdowns of inventory		98
Loss on disposal of equipment		80
Lease termination costs		47
Other associated costs		20
Restructuring expense and restructuring related charges (3)	$	713

(3) Of the total $713,000, $615,000 and $98,000 were recorded to restructuring expense and cost of sales, respectively, in the Consolidated Statement of Net Loss for the three-month and six-month periods ending October 30, 2022.

Summary of Activity in Accrued Restructuring

The following summarizes the activity in accrued restructuring costs for the three-month and six-month periods ending October 30, 2022:

	Employee			Lease			Other
	Termination			Termination			Associated
(dollars in thousands)	Benefits			Costs			Costs			Total
Beginning balance	$	—		$	—		$	—		$	—
Accrual established in fiscal 2023		468			47			—			515
Expenses incurred		—			—			20			20
Payments		(468	)		(16	)		(18	)		(502	)
Ending balance	$	—		$	31		$	2		$	33

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Fair Value (Tables)

15 Months Ended

Oct. 29, 2023

Fair Value Disclosures [Abstract]

Schedule of Assets Measured at Fair Value on a Recurring Basis

The following tables present information about assets measured at fair value on a recurring basis:

	Fair value measurements as of October 29, 2023, using:
	Quoted prices		Significant
	in active		other	Significant
	markets for		observable	unobservable
	identical assets		inputs	inputs
(amounts in thousands)	Level 1		Level 2	Level 3	Total
Assets:
U.S. Government Money Market Fund	$	7,060	N/A	N/A	$	7,060
Growth Allocation Mutual Funds		560	N/A	N/A		560
Moderate Allocation Mutual Fund		46	N/A	N/A		46
Other		266	N/A	N/A		266

	Fair value measurements as of October 30, 2022, using:
	Quoted prices		Significant
	in active		other	Significant
	markets for		observable	unobservable
	identical assets		inputs	inputs
(amounts in thousands)	Level 1		Level 2	Level 3	Total
Assets:
U.S. Government Money Market Fund	$	9,089	N/A	N/A	$	9,089
Growth Allocation Mutual Funds		438	N/A	N/A		438
Moderate Allocation Mutual Fund		77	N/A	N/A		77
Other		159	N/A	N/A		159

	Fair value measurements as of April 30, 2023, using:
	Quoted prices		Significant
	in active		other	Significant
	markets for		observable	unobservable
	identical assets		inputs	inputs
(amounts in thousands)	Level 1		Level 2	Level 3	Total
Assets:
U.S. Government Money Market Fund	$	7,649	N/A	N/A	$	7,649
Growth Allocation Mutual Funds		528	N/A	N/A		528
Moderate Allocation Mutual Fund		86	N/A	N/A		86
Other		208	N/A	N/A		208

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Net Loss Per Share (Tables)

6 Months Ended

Oct. 29, 2023

Earnings Per Share [Abstract]

Schedule of Unvested Common Stock not Included in the Computation of Diluted Net Loss Per Share

Shares of unvested common stock that were not included in the computation of diluted net loss per share consist of the following:

	Three months ended
(in thousands)	October 29, 2023		October 30, 2022
antidilutive effect from decrease in the price per share of our common stock		11		42
antidilutive effect from net loss incurred during the fiscal year		136		35
total unvested shares of common stock not included in      computation of diluted net loss per share		147		77

	Six months ended
(in thousands)	October 29, 2023		October 30, 2022
antidilutive effect from decrease in the price per share of our common stock		20		38
antidilutive effect from net loss incurred during the fiscal year		105		47
total unvested shares of common stock not included in      computation of diluted net loss per share		125		85

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Segment Information (Tables)

6 Months Ended

Oct. 29, 2023

Segment Reporting [Abstract]

Schedule of Operating Segments Information

Statements of operations for our operating segments are as follows:

	Three months ended
	October 29, 2023			October 30, 2022
net sales by segment:
mattress fabrics	$	31,377		$	26,230
upholstery fabrics		27,348			32,151
net sales	$	58,725		$	58,381
gross profit (loss):
mattress fabrics	$	2,483		$	(6,057	)
upholstery fabrics		5,389			3,942
segment gross profit (loss):		7,872			(2,115	)
restructuring related credit (charge) (1)		78			(98	)
gross profit (loss)	$	7,950		$	(2,213	)
selling, general, and administrative expenses by segment:
mattress fabrics	$	3,419		$	2,945
upholstery fabrics		3,998			3,680
unallocated corporate expenses		2,628			2,478
selling, general, and administrative expenses	$	10,045		$	9,103
(loss) income from operations by segment:
mattress fabrics	$	(936	)	$	(9,002	)
upholstery fabrics		1,391			262
unallocated corporate expenses		(2,628	)		(2,478	)
total segment loss from operations	$	(2,173	)	$	(11,218	)
restructuring related credit (charge) (1)		78			(98	)
restructuring expense (2)		(144	)		(615	)
loss from operations	$	(2,239	)	$	(11,931	)
interest income		282			79
other income		49			829
loss before income taxes	$	(1,908	)	$	(11,023	)

(1) Gross profit and loss from operations for the three months ending October 29, 2023, includes restructuring related credits of $78,000 for the gain on disposal of inventory related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Gross loss and loss from operations for the three months ending October 30, 2022, includes restructuring related charges totaling $98,000 for loss on disposal and markdowns of inventory associated with the exit of our cut and sewn upholstery fabrics operation located in Shanghai, China.

(2) Restructuring expense of $144,000 for the three months ended October 29, 2023, represents a $142,000 impairment charge related to equipment and $2,000 of employee termination benefits related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Restructuring expense of $615,000 for the three-months ended October 30, 2022, represents $468,000 for employee termination benefits, $80,000 related to a loss on disposal of equipment, $47,000 for lease termination costs, and $20,000 of other associated costs related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China.

	Six months ended
	October 29, 2023			October 30, 2022
net sales by segment:
mattress fabrics	$	60,599		$	55,602
upholstery fabrics		54,788			65,383
net sales	$	115,387		$	120,985
gross profit (loss):
mattress fabrics	$	4,477		$	(6,093	)
upholstery fabrics		10,659			8,105
total segment gross profit	$	15,136		$	2,012
restructuring related charge (1)		(101	)		(98	)
gross profit	$	15,035		$	1,914
selling, general, and administrative expenses by segment:
mattress fabrics	$	6,811		$	5,829
upholstery fabrics		7,939			7,302
unallocated corporate expenses		5,124			4,837
selling, general, and administrative expenses	$	19,874		$	17,968
(loss) income from operations by segment:
mattress fabrics	$	(2,334	)	$	(11,922	)
upholstery fabrics		2,720			803
unallocated corporate expenses		(5,124	)		(4,837	)
total segment loss from operations	$	(4,738	)	$	(15,956	)
restructuring related charge (1)		(101	)		(98	)
restructuring expense (2)		(482	)		(615	)
loss from operations	$	(5,321	)	$	(16,669	)
interest income		627			96
other income		145			747
loss before income taxes	$	(4,549	)	$	(15,826	)

(1) Gross profit and loss from operations for the six months ending October 29, 2023, includes a net restructuring related charge of $101,000, which represents a markdown of inventory totaling $179,000 during the first quarter of fiscal 2024, partially offset by a gain on disposal of inventory totaling $78,000 during the second quarter of fiscal 2024, both of which related to the discontinuation of production of cut and sewn upholstery kits at our facility located in Ouanaminthe, Haiti. Gross profit and loss from operations for the six months ending October 30, 2022 includes restructuring related charges totaling $98,000 for loss on disposal and markdowns of inventory associated with the exit of our cut and sewn upholstery fabrics operation located in Shanghai, China.

(2) Restructuring expense of $482,000 for the six months ended October 29, 2023, represents a $379,000 impairment charge associated with equipment and $103,000 for employee termination benefits related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Restructuring expense of $615,000 for the six-months ended October 30, 2022, represents $468,000 for employee termination benefits, $80,000 related to a loss on disposal of equipment, $47,000 for lease termination costs, and $20,000 of other associated costs related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China.

Balance sheet information for our operating segments follows:

(dollars in thousands)	October 29, 2023		October 30, 2022		April 30, 2023
Segment assets:
Mattress Fabrics:
Accounts receivable, net	$	11,303	$	8,700	$	12,396
Inventory		27,195		30,300		25,674
Property, plant and equipment (1)		32,862		35,853		33,749
Right of use assets (2)		1,969		2,087		2,308
Total mattress fabrics assets		73,329		76,940		74,127
Upholstery Fabrics:
Accounts receivable, net		11,733		13,743		12,382
Inventory		17,270		21,924		19,406
Property, plant and equipment (3)		1,175		2,150		1,671
Right of use assets (4)		1,992		5,898		2,618
Total upholstery fabrics assets		32,170		43,715		36,077
Total segment assets		105,499		120,655		110,204
Non-segment assets:
Cash and cash equivalents		15,214		19,137		20,964
Short-term investments - rabbi trust		937		2,237		1,404
Short-term note receivable		256		—		219
Current income taxes receivable		340		510		—
Other current assets		4,346		3,462		3,071
Long-term note receivable		1,596		—		1,726
Deferred income taxes		472		493		480
Property, plant and equipment (5)		627		829		691
Right of use assets (6)		2,913		3,624		3,265
Intangible assets		2,064		2,440		2,252
Long-term investments - rabbi trust		6,995		7,526		7,067
Other assets		901		717		840
Total assets	$	142,160	$	161,630	$	152,183

(1)The $32.9 million as of October 29, 2023, represents property, plant, and equipment of $22.2 million, $10.0 million, and $661,000 located in the U.S., Canada, and Haiti, respectively. The $35.9 million as of October 30, 2022, represents property, plant, and equipment of $23.8 million, $11.4 million, and $679,000 located in the U.S., Canada, and Haiti, respectively. The $33.7 million as of April 30, 2023, represents property, plant, and equipment of $22.7 million, $10.4 million, and $608,000 located in the U.S., Canada, and Haiti, respectively.

(2)The $2.0 million as of October 29, 2023, represents right of use assets of $1.3 million and $663,000 located in Haiti and Canada, respectively. The $2.1 million as of October 30, 2022, represents right of use assets of $1.8 million, $167,000, and $164,000 located in Haiti, Canada, and the U.S., respectively. The $2.3 million as of April 30, 2023, represents right of use assets of $1.5 million and $776,000 located in Haiti and Canada, respectively.

(3)The $1.2 million as of October 29, 2023, represents property, plant, and equipment of $1.0 million and $140,000 located in the U.S. and China, respectively. The $2.2 million as of October 30, 2022, represents property, plant, and equipment of $1.0 million, $1.0 million, and $137,000 located in the U.S., Haiti, and China, respectively. The $1.7 million as of April 30, 2023, represents property, plant, and equipment of $974,000, $592,000, and $105,000 located in the U.S., Haiti, and China, respectively.

(4)The $2.0 million as of October 29, 2023, represents right of use assets of $1.2 million and $818,000 located in China and the U.S., respectively. The $5.9 million as of October 30, 2022, represents right of use assets of $2.5 million, $2.0 million, and $1.4 million located in Haiti, China, and the U.S., respectively. The $2.6 million as of April 30, 2023, represents right of use assets of $1.5 million and $1.1 million located in China and the U.S., respectively.

(5)The $627,000, $829,000, and $691,000 as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively, represent property, plant, and equipment associated with unallocated corporate department and corporate departments shared by our mattress fabrics and upholstery fabrics segments. Property, plant, and equipment associated with our corporate departments reside in the U.S.

(6)The $2.9 million, $3.6 million, and $3.3 million as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively, represent right of use assets located in the U.S.

Information about capital expenditures and depreciation expense for our operating segments follows:

	Six months ended
(dollars in thousands)	October 29, 2023		October 30, 2022
Capital expenditures (1):
Mattress Fabrics	$	1,948	$	267
Upholstery Fabrics		185		447
Unallocated Corporate		80		60
Total capital expenditures	$	2,213	$	774
Depreciation expense:
Mattress Fabrics	$	2,922	$	3,088
Upholstery Fabrics		329		401
Total depreciation expense	$	3,251	$	3,489

(1)Capital expenditure amounts are stated on the accrual basis. See Consolidated Statements of Cash Flows for capital expenditure amounts on a cash basis.

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Income Taxes (Tables)

6 Months Ended

Oct. 29, 2023

Income Tax Disclosure [Abstract]

Summary of Differences in Income Tax Expense at Federal Income Tax Rate and Effective Income Tax Rate

The following schedule summarizes the principal differences between income tax expense at the U.S. federal income tax rate and the effective income tax rate reflected in the consolidated financial statements for the six-month periods ending October 29, 2023, and October 30, 2022:

	October 29,			October 30,
	2023			2022
U.S. federal income tax rate		21.0	%		21.0	%
U.S. valuation allowance		(32.8	)		(36.7	)
Withholding taxes associated with foreign jurisdictions		(9.9	)		(3.3	)
Foreign income tax rate differential		(5.7	)		3.2
Stock-based compensation		(4.2	)		(0.6	)
Tax effects of local currency foreign exchange gains		5.1			4.7
Other		(0.3	)		(1.2	)
	(26.8%)			(12.9)%

Summary of Valuation Allowances Against Net Deferred Income Tax Assets

Based on our assessments as of October 29, 2023, October 30, 2022, and April 30, 2023, valuation allowances against our net deferred income tax assets pertain to the following:

(dollars in thousands)	October 29, 2023		October 30, 2022		April 30, 2023
U.S. federal and state net deferred income tax assets	$	17,839	$	13,958	$	16,345
U.S. capital loss carryforward		2,330		2,330		2,330
	$	20,169	$	16,288	$	18,675

Summary of Taxes Paid

The following table sets forth taxes paid by jurisdiction:

	Six Months Ended		Six Months Ended
	October 29,		October 30,
(dollars in thousands)	2023		2022
United States Transition Tax Payment	$	499	$	265
China Income Taxes, Net of Refunds		1,278		1,286
Canada Income Taxes, Net of Refunds		336		161
	$	2,113	$	1,712

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Stock-Based Compensation (Tables)

6 Months Ended

Oct. 29, 2023

Summary of Assumptions Used to Determine Fair Value of Performance Based Restricted Stock Units

The following table provides assumptions used to determine the fair market value of the market-based total shareholder return component using the Monte Carlo simulation model on our outstanding performance-based restricted stock units granted to senior executives on September 28, 2023, August 10, 2022 and July 22, 2021:

	September 28,	August 10,	July 22,
	2023	2022	2021
Closing price of our common stock	$5.59	$5.06	$14.75
Expected volatility of our common stock	37.3%	48.2%	54.2%
Expected volatility of peer companies	35.7%-91.5%	41.6%-105.1%	45.7%-101.5%
Risk-free interest rate	4.90%	3.13%	0.33%
Dividend yield	0.00%	0.00%	3.00%
Correlation coefficient of peer companies	0.01-0.21	0.05-0.23	0.03-0.35

Performance Based Restricted Stock Units [Member]

Summary of Vested Restricted Stock Units

The following table summarizes information related to our performance-based restricted stock units that vested during the six-month period ended October 30, 2022:

	Performance-Based				(4)
	Restricted Stock		(3)		Price
Fiscal Year	Units Vested		Fair Value		Per Share
Fiscal 2023 (1)		545	$	3	$	5.10
Fiscal 2023 (2)		437	$	2	$	5.10

(1)Performance-based restricted stock units vested by senior executives.

(2)Performance-based restricted stock units vested by key employees.

(3)Dollar amounts are in thousands.

(4)Price per share is derived from the closing price of our common stock on the date the respective performance-based restricted stock units vested.

Time-Based Restricted Stock Units [Member]

Summary of Vested Restricted Stock Units

The following table summarizes information related to our time-based restricted stock units that vested during the six-month periods ending October 29, 2023, and October, 30, 2022, respectively:

	Time-Based				(2)
	Restricted Stock		(1)		Price
Fiscal Year	Units Vested		Fair Value		Per Share
Fiscal 2024		151,653	$	857	$	5.65
Fiscal 2023		32,799	$	167	$	5.10

(1)Dollar amounts are in thousands.

(2)Price per share is derived from the closing price of our common stock on the date the respective time-based restricted stock units vested.

Executive officers and key employees [Member]

Summary of Grants of Performance Based Restricted Stock Units

The following table summarizes information related to our grants of performance-based restricted stock units associated with senior executives and key employees that were unvested as of October 29, 2023:

	(3)		(4)
	Performance-Based		Restricted Stock
	Restricted Stock		Units Expected
Date of Grant	Units Awarded		to Vest		Price Per Share			Vesting Period
September 28, 2023 (1)		227,497		121,740	$	6.43	(5)	34 months
August 10, 2022 (1)		178,714		—	$	5.77	(6)	3 years
July 22, 2021 (1)		122,476		—	$	15.93	(7)	3 years
July 22, 2021 (2)		20,500		—	$	14.75	(8)	3 years

(1)Performance-based restricted stock units awarded to senior executives.

(2)Performance-based restricted stock units awarded to key employees.

(3)Amounts represent the maximum number of common stock shares that could be earned if certain performance targets are met as defined in the related restricted stock unit agreements.

(4)Compensation cost is based on an assessment each reporting period to determine the probability of whether or not certain performance goals will be met and how many shares are expected to be earned as of the end of the vesting period. These amounts represent the number of shares that were expected to vest as of October 29, 2023.

(5)Price per share represents the fair market value per share ($1.15 per $1, or an increase of $0.84 to the closing price of our common stock on the date of grant) determined using the Monte Carlo simulation model for the market-based total shareholder return component and the closing price of our common stock ($5.59) for the performance-based component of the performance-based restricted stock units granted to senior executives on September 28, 2023.

(6)Price per share represents the fair market value per share ($1.14 per $1, or an increase of $0.71 to the closing price of our common stock on the date of grant) determined using the Monte Carlo simulation model for the market-based total shareholder return component and the closing price of our common stock ($5.06) for the performance-based component of the performance-based restricted stock units granted to senior executives on August 10, 2022.

(7)Price per share represents the fair market value per share ($1.08 per $1, or an increase of $1.18 to the closing price of our common stock on the date of grant) determined using the Monte Carlo simulation model for the market-based total shareholder return component and the closing price of our common stock ($14.75) for the performance-based component of the performance-based restricted stock units granted to senior executives on July 22, 2021.

(8)Price per share represents the closing price of our common stock on the date of grant.

Senior Executives and Management [Member] | Time-Based Restricted Stock Units [Member]

Summary of Grants of Time-Based Restricted Stock Unit Awards

The following table summarizes information related to our grants of time-based restricted stock unit awards associated with senior executives, key employees, and outside directors that were unvested as of October 29, 2023:

	Time-Based
	Restricted Stock		(1)
Date of Grant	Units Awarded		Price Per Share		Vesting Period
September 28, 2023 (2)		100,068	$	5.59	34 months
September 28, 2023 (3)		59,928	$	5.59	1 year
September 6, 2022 (2)		25,114	$	4.58	2 to 3 years
August 10, 2022 (2)		78,225	$	5.06	3 years
July 22, 2021 (2)		30,835	$	14.75	3 years

(1)Price per share represents closing price of common stock on the date the respective award was granted.

(2)Time-based restricted stock units awarded to senior executives and key employees.

(3)Time-based restricted stock units awarded to outside directors.

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Leases (Tables)

6 Months Ended

Oct. 29, 2023

Assets and Liabilities, Lessee [Abstract]

Summary of right of use assets and lease liabilities

The right of use assets and lease liabilities associated with our operating leases as of October 29, 2023, October 30, 2022, and April 30, 2023, are as follows:

(dollars in thousands)	October 29, 2023		October 30, 2022		April 30, 2023
Right of use assets	$	6,874	$	11,609	$	8,191
Operating lease liability - current		2,540		2,655		2,640
Operating lease liability – noncurrent		2,431		4,194		3,612

Supplemental Cash Flow Information

Supplemental Cash Flow Information

	Six Months Ended		Six Months Ended
(dollars in thousands)	October 29, 2023		October 30, 2022
Operating lease liability payments	$	1,330	$	1,068
Right of use assets exchanged for lease liabilities		157		—

Leases-Other Information

Other Information

Maturity of our operating lease liabilities for the remainder of fiscal 2024, the subsequent next four fiscal years, and thereafter follows:

(dollars in thousands)
2024	$	1,269
2025		1,917
2026		638
2027		342
2028		225
Thereafter		804
	$	5,195
Less: interest		(224	)
Present value of lease liabilities	$	4,971

Summary of weighted average remaining lease term and discount rate

As of October 29, 2023, the weighted average remaining lease term and discount rate for our operating leases follows:

	October 29, 2023
Weighted average lease term (in years)	3.79
Weighted average discount rate		3.46	%

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Allowance for Doubtful Accounts - Summary of the Activity in the Allowance for Doubtful Accounts (Detail) - Allowance for doubtful accounts [Member] - USD ($)	6 Months Ended
	Oct. 29, 2023	Oct. 30, 2022
Valuation and Qualifying Accounts Disclosure [Line Items]
Beginning balance	$ 342,000	$ 292,000
Provision for bad debts	228,000	49,000
Write-offs, net of recoveries	(29,000)	(53,000)
Ending balance	$ 541,000	$ 288,000

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Allowance for Doubtful Accounts - Narrative (Detail) - USD ($)	Oct. 29, 2023	Apr. 30, 2023	Oct. 30, 2022	May 01, 2022
Allowance for doubtful accounts [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Allowance for doubtful accounts	$ 541,000	$ 342,000	$ 288,000	$ 292,000

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Revenue from Contracts with Customers - Narrative (Detail)	6 Months Ended
	Oct. 29, 2023 USD ($) Segment	Apr. 30, 2023 USD ($)	Oct. 30, 2022 USD ($)
Contract Assets and Liabilities [Line Items]
Number of operating segments | Segment	2
Contract assets recognized | $	$ 0	$ 0	$ 0

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Revenue from Contracts with Customers - Summary of the activity associated with deferred revenue (Detail) - USD ($) $ in Thousands	6 Months Ended
	Oct. 29, 2023		Oct. 30, 2022
Revenue from Contract with Customer [Abstract]
Beginning balance	$ 1,192	[1]	$ 520
Revenue recognized on contract liabilities	(1,986)		(1,747)
Payments received for services not yet rendered	1,647		2,754
Ending balance	$ 853		$ 1,527

[1] Derived from audited consolidated financial statements.

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Revenue from Contracts with Customers - Disaggregation of Revenue (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Oct. 29, 2023	Oct. 30, 2022	Oct. 29, 2023	Oct. 30, 2022
Disaggregation of Revenue [Line Items]
Total Net Sales	$ 58,725	$ 58,381	$ 115,387	$ 120,985
Transferred at Point in Time [Member] | Product [Member]
Disaggregation of Revenue [Line Items]
Total Net Sales	55,571	56,113	109,567	117,008
Transferred over Time [Member] | Services [Member]
Disaggregation of Revenue [Line Items]
Total Net Sales	3,154	2,268	5,820	3,977
Mattress Fabrics [Member]
Disaggregation of Revenue [Line Items]
Total Net Sales	31,377	26,230	60,599	55,602
Mattress Fabrics [Member] | Transferred at Point in Time [Member] | Product [Member]
Disaggregation of Revenue [Line Items]
Total Net Sales	31,377	26,230	60,599	55,602
Upholstery Fabrics [Member]
Disaggregation of Revenue [Line Items]
Total Net Sales	27,348	32,151	54,788	65,383
Upholstery Fabrics [Member] | Transferred at Point in Time [Member] | Product [Member]
Disaggregation of Revenue [Line Items]
Total Net Sales	24,194	29,883	48,968	61,406
Upholstery Fabrics [Member] | Transferred over Time [Member] | Services [Member]
Disaggregation of Revenue [Line Items]
Total Net Sales	$ 3,154	$ 2,268	$ 5,820	$ 3,977

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Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands	Oct. 29, 2023	Apr. 30, 2023		Oct. 30, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 8,433	$ 7,908		$ 9,859
Work-in-process	2,196	2,602		3,724
Finished goods	33,836	34,570		38,641
Inventories	$ 44,465	$ 45,080	[1]	$ 52,224

[1] Derived from audited consolidated financial statements.

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Inventories - Narrative (Detail) - USD ($)	3 Months Ended				6 Months Ended
	Oct. 29, 2023	Jul. 30, 2023	Oct. 30, 2022	Oct. 31, 2021	Oct. 29, 2023	Oct. 30, 2022
Inventory [Line Items]
Non-cash inventory charges	$ (1,300,000)		$ 5,300,000		$ (2,000,000)	$ 6,400,000
Non-cash inventory charges					(2,001,000)	6,439,000
Exit of Cut and Sew Upholstery Fabrics Operation [Member] | Ouanaminthe, Haiti [Member]
Inventory [Line Items]
Gain (Loss) on disposal	78,000
Partially offset charge for markdowns of inventory	78,000
Mattress and Upholstery Fabrics [Member]
Inventory [Line Items]
Non-cash inventory charges	(1,300,000)		2,300,000		(2,000,000)	3,400,000
Credit related adjustments to inventory	1,200,000				2,100,000
Restructuring related charge					101,000
Mattress Fabrics [Member]
Inventory [Line Items]
Non-cash inventory charges	(801,000)		$ 3,800,000		(1,500,000)	4,200,000
Percentage of decline in net sales			35.80%
Gross margin percentage excluding non-cash inventory charges			(8.70%)
Gross margin percentage				15.00%
Non-cash inventory charges			$ 2,900,000			2,900,000
Upholstery Fabrics [Member]
Inventory [Line Items]
Non-cash inventory charges	(482,000)		1,500,000		$ (453,000)	2,200,000
Upholstery Fabrics [Member] | Disposal and Markdowns of Inventory [Member] | Ouanaminthe, Haiti [Member]
Inventory [Line Items]
Restructuring related charge	$ 78,000	$ 179,000
Upholstery Fabrics [Member] | Disposal and Markdowns of Inventory [Member] | Shanghai, China [Member]
Inventory [Line Items]
Restructuring related charge			$ 98,000			$ 98,000

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Intangible Assets - Summary of Intangible Assets (Detail) - USD ($) $ in Thousands	Oct. 29, 2023	Apr. 30, 2023		Oct. 30, 2022	May 01, 2022
Intangible Assets [Line Items]
Tradename	$ 540	$ 540		$ 540
Intangible assets	2,064	2,252	[1]	2,440
Customer Relationships [Member]
Intangible Assets [Line Items]
Finite-lived intangible assets, net	1,185	1,335		1,486	$ 1,636
Non-Compete Agreement [Member]
Intangible Assets [Line Items]
Finite-lived intangible assets, net	$ 339	$ 377		$ 414	$ 452

[1] Derived from audited consolidated financial statements.

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Intangible Assets - Narrative (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Oct. 29, 2023	Oct. 30, 2022	Oct. 29, 2023	Oct. 30, 2022	Apr. 30, 2023		May 01, 2022
Intangible Assets [Line Items]
Asset impairment charges			$ 0
Gross carrying amount of customer relationships	$ 3,100,000	$ 3,100,000	3,100,000	$ 3,100,000	$ 3,100,000
Incurred operating losses	(2,239,000)	(11,931,000)	(5,321,000)	(16,669,000)
Gross carrying amount of non-compete agreement	2,000,000	2,000,000	2,000,000	2,000,000	2,000,000
Property, plant and equipment, net	34,664,000	38,832,000	34,664,000	38,832,000	36,111,000	[1]
Right of use assets	6,874,000	11,609,000	6,874,000	11,609,000	8,191,000	[1]
Customer Relationships [Member]
Intangible Assets [Line Items]
Finite-lived intangible assets, net	1,185,000	1,486,000	1,185,000	1,486,000	1,335,000		$ 1,636,000
Accumulated amortization	1,900,000	1,600,000	1,900,000	1,600,000	1,800,000
Remaining amortization expense for the fiscal year	151,000		151,000
Remaining amortization expense for the first fiscal year	301,000		301,000
Remaining amortization expense for the second fiscal year	301,000		301,000
Remaining amortization expense for the third fiscal year	278,000		278,000
Remaining amortization expense for the fourth fiscal year	52,000		52,000
Remaining amortization expense for the fiscal year thereafter	$ 102,000		$ 102,000
Weighted average remaining amortization period	4 years 3 months 18 days		4 years 3 months 18 days
Customer Relationships [Member] | Minimum [Member]
Intangible Assets [Line Items]
Useful life	9 years		9 years
Customer Relationships [Member] | Maximum [Member]
Intangible Assets [Line Items]
Useful life	17 years		17 years
Non-Compete Agreement [Member]
Intangible Assets [Line Items]
Useful life	15 years		15 years
Finite-lived intangible assets, net	$ 339,000	414,000	$ 339,000	414,000	377,000		$ 452,000
Accumulated amortization	1,700,000	1,600,000	1,700,000	$ 1,600,000	$ 1,600,000
Remaining amortization expense for the fiscal year	38,000		38,000
Remaining amortization expense for the first fiscal year	76,000		76,000
Remaining amortization expense for the second fiscal year	76,000		76,000
Remaining amortization expense for the third fiscal year	76,000		76,000
Remaining amortization expense for the fourth fiscal year	$ 73,000		$ 73,000
Weighted average remaining amortization period	4 years 6 months		4 years 6 months
Mattress Asset Group [Member]
Intangible Assets [Line Items]
Carrying amount of asset group, net	$ 35,500,000		$ 35,500,000
Impairment charge			0
Mattress Asset Group [Member] | Mattress Fabrics [Member]
Intangible Assets [Line Items]
Incurred operating losses		$ 18,100,000
Mattress Asset Group [Member] | Customer Relationships [Member] | Mattress Fabrics [Member]
Intangible Assets [Line Items]
Finite-lived intangible assets, net	332,000		332,000
Mattress Asset Group [Member] | Non-Compete Agreement [Member] | Mattress Fabrics [Member]
Intangible Assets [Line Items]
Finite-lived intangible assets, net	339,000		339,000
Mattress Asset Group [Member] | Property, Plant and Equipment [Member]
Intangible Assets [Line Items]
Property, plant and equipment, net	32,800,000		32,800,000
Mattress Asset Group [Member] | Right Of Use Assets [Member]
Intangible Assets [Line Items]
Right of use assets	$ 2,000,000		$ 2,000,000

[1] Derived from audited consolidated financial statements.

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Intangible Assets - Summary of Change in Carrying Amount of Finite-Lived Intangible Assets (Detail) - USD ($) $ in Thousands	6 Months Ended
	Oct. 29, 2023	Oct. 30, 2022
Customer Relationships [Member]
Finite Lived Intangible Assets [Line Items]
Beginning balance, net	$ 1,335	$ 1,636
Amortization expense	(150)	(150)
Ending balance, net	1,185	1,486
Non-Compete Agreement [Member]
Finite Lived Intangible Assets [Line Items]
Beginning balance, net	377	452
Amortization expense	(38)	(38)
Ending balance, net	$ 339	$ 414

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Note Receivable - Narrative (Detail) - USD ($)	3 Months Ended					6 Months Ended
	Oct. 29, 2023		Jan. 29, 2023	Oct. 30, 2022	[1]	Oct. 29, 2023		Oct. 30, 2022	[2]
Note Receivable [Line Items]
Fair value of note receivable	$ 1,852,000					$ 1,852,000
Restructuring expense	144,000	[1]		$ 615,000		$ 482,000	[2]	$ 615,000
Interest rate						6.00%
CUF Haiti [Member]
Note Receivable [Line Items]
Lease rent advance payment	2,800,000					$ 2,800,000
Return possession of leased facility	$ 2,400,000					$ 2,400,000
Lease expiration date						Dec. 31, 2029
Fair value of note receivable			$ 2,000,000
Gross carrying amount of note receivable			2,400,000
CUF Haiti [Member] | Lease Termination Costs [Member]
Note Receivable [Line Items]
Restructuring expense			$ 434,000

[1] Restructuring expense of $144,000 for the three months ended October 29, 2023, represents a $142,000 impairment charge related to equipment and $2,000 of employee termination benefits related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Restructuring expense of $615,000 for the three-months ended October 30, 2022, represents $468,000 for employee termination benefits, $80,000 related to a loss on disposal of equipment, $47,000 for lease termination costs, and $20,000 of other associated costs related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China.

[2] Restructuring expense of $482,000 for the six months ended October 29, 2023, represents a $379,000 impairment charge associated with equipment and $103,000 for employee termination benefits related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Restructuring expense of $615,000 for the six-months ended October 30, 2022, represents $468,000 for employee termination benefits, $80,000 related to a loss on disposal of equipment, $47,000 for lease termination costs, and $20,000 of other associated costs related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China.

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Note Receivable - Summary of Remaining Future Principal Payments (Details) $ in Thousands	Oct. 29, 2023 USD ($)
Note Receivable [Line Items]
2024	$ 180
2025	360
2026	360
2027	360
2028	360
Thereafter	600
Undiscounted value of note receivable	2,220
Less: unearned interest income	(368)
Present value of note receivable	$ 1,852

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Accrued Expenses - Summary of Accrued Expenses (Detail) - USD ($) $ in Thousands	Oct. 29, 2023	Apr. 30, 2023		Oct. 30, 2022
Payables and Accruals [Abstract]
Compensation, commissions and related benefits	$ 4,540	$ 5,800		$ 4,489
Other accrued expenses	3,566	2,733		3,105
Accrued expenses	$ 8,106	$ 8,533	[1]	$ 7,594

[1] Derived from audited consolidated financial statements.

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Upholstery Fabrics Segment Restructuring - Summary of Restructuring Expense and Restructuring Related (Credits) Charges (Detail) - USD ($)		3 Months Ended					6 Months Ended				9 Months Ended
		Oct. 29, 2023		Jul. 30, 2023	Oct. 30, 2022		Oct. 29, 2023		Oct. 30, 2022		Oct. 29, 2023
Restructuring related charge
Restructuring expense		$ 144,000	[1]		$ 615,000	[1]	$ 482,000	[2]	$ 615,000	[2]
Ouanaminthe, Haiti [Member]
Restructuring related charge
Restructuring expense		144,000					482,000
Restructuring expense and restructuring related (credits) charges											$ 1,400,000
Ouanaminthe, Haiti [Member] | Upholstery Fabrics [Member]
Restructuring related charge
Restructuring expense		144,000					482,000
Shanghai, China [Member]
Restructuring related charge
Restructuring expense					615,000				615,000
Shanghai, China [Member] | Upholstery Fabrics [Member]
Restructuring related charge
Restructuring expense					615,000				615,000
Exit and Disposal Activity [Member] | Ouanaminthe, Haiti [Member]
Restructuring related charge
Restructuring expense							103,000
Restructuring expense and restructuring related (credits) charges	[3],[4]	66,000					583,000
Exit and Disposal Activity [Member] | Shanghai, China [Member]
Restructuring related charge
Restructuring expense					20,000				20,000
Restructuring expense and restructuring related (credits) charges					713,000				713,000
Exit and Disposal Activity [Member] | Shanghai, China [Member] | Upholstery Fabrics [Member]
Restructuring related charge
Restructuring expense and restructuring related (credits) charges	[5]				713,000				713,000
Employee Termination Benefits [Member] | Ouanaminthe, Haiti [Member] | Upholstery Fabrics [Member]
Restructuring related charge
Restructuring expense		2,000					103,000
Employee Termination Benefits [Member] | Shanghai, China [Member] | Upholstery Fabrics [Member]
Restructuring related charge
Restructuring expense					468,000				468,000
Employee Termination Benefits [Member] | Exit and Disposal Activity [Member] | Ouanaminthe, Haiti [Member]
Restructuring related charge
Restructuring expense		2,000					103,000
Employee Termination Benefits [Member] | Exit and Disposal Activity [Member] | Shanghai, China [Member] | Upholstery Fabrics [Member]
Restructuring related charge
Restructuring expense					468,000				468,000
Impairment Loss - Equipment [Member] | Exit and Disposal Activity [Member] | Ouanaminthe, Haiti [Member]
Restructuring related charge
Restructuring expense		142,000					379,000
(Gain) Loss on Disposal and Markdowns of Inventory [Member] | Ouanaminthe, Haiti [Member] | Upholstery Fabrics [Member]
Restructuring related charge
Restructuring related charge		78,000		$ 179,000
(Gain) Loss on Disposal and Markdowns of Inventory [Member] | Shanghai, China [Member] | Upholstery Fabrics [Member]
Restructuring related charge
Restructuring related charge					98,000				98,000
(Gain) Loss on Disposal and Markdowns of Inventory [Member] | Exit and Disposal Activity [Member] | Ouanaminthe, Haiti [Member]
Restructuring related charge
Restructuring related charge		$ (78,000)					$ 101,000
(Gain) Loss on Disposal and Markdowns of Inventory [Member] | Exit and Disposal Activity [Member] | Shanghai, China [Member] | Upholstery Fabrics [Member]
Restructuring related charge
Restructuring related charge					98,000				98,000
Loss on Disposal of Equipment [Member] | Shanghai, China [Member] | Upholstery Fabrics [Member]
Restructuring related charge
Restructuring expense					80,000				80,000
Loss on Disposal of Equipment [Member] | Exit and Disposal Activity [Member] | Shanghai, China [Member] | Upholstery Fabrics [Member]
Restructuring related charge
Restructuring expense					80,000				80,000
Lease Termination Costs [Member] | Shanghai, China [Member] | Upholstery Fabrics [Member]
Restructuring related charge
Restructuring expense					47,000				47,000
Lease Termination Costs [Member] | Exit and Disposal Activity [Member] | Shanghai, China [Member] | Upholstery Fabrics [Member]
Restructuring related charge
Restructuring expense					47,000				47,000
Other Associated Costs [Member] | Exit and Disposal Activity [Member] | Shanghai, China [Member]
Restructuring related charge
Restructuring expense					20,000				20,000
Other Associated Costs [Member] | Exit and Disposal Activity [Member] | Shanghai, China [Member] | Upholstery Fabrics [Member]
Restructuring related charge
Restructuring expense					$ 20,000				$ 20,000

[1] Restructuring expense of $144,000 for the three months ended October 29, 2023, represents a $142,000 impairment charge related to equipment and $2,000 of employee termination benefits related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Restructuring expense of $615,000 for the three-months ended October 30, 2022, represents $468,000 for employee termination benefits, $80,000 related to a loss on disposal of equipment, $47,000 for lease termination costs, and $20,000 of other associated costs related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China.

[2] Restructuring expense of $482,000 for the six months ended October 29, 2023, represents a $379,000 impairment charge associated with equipment and $103,000 for employee termination benefits related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Restructuring expense of $615,000 for the six-months ended October 30, 2022, represents $468,000 for employee termination benefits, $80,000 related to a loss on disposal of equipment, $47,000 for lease termination costs, and $20,000 of other associated costs related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China.

[3] Of the total $583,000, $482,000 and $101,000 were recorded within restructuring expense and cost of sales, respectively, in the Consolidated Statement of Net Loss for the six-month period ending October 29, 2023.

[4] Of the total $66,000, $144,000 and ($78,000) were recorded within restructuring expense and cost of sales, respectively, in the Consolidated Statement of Net Loss for the three-month period ending October 29, 2023.

[5] Of the total $713,000, $615,000 and $98,000 were recorded to restructuring expense and cost of sales, respectively, in the Consolidated Statement of Net Loss for the three-month and six-month periods ending October 30, 2022.

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Upholstery Fabrics Segment Restructuring - Summary of Restructuring Expense and Restructuring Related Charges (Parenthetical) (Detail) - USD ($)		3 Months Ended				6 Months Ended				9 Months Ended
		Oct. 29, 2023		Oct. 30, 2022		Oct. 29, 2023		Oct. 30, 2022		Oct. 29, 2023
Restructuring Cost and Reserve [Line Items]
Restructuring expense		$ 144,000	[1]	$ 615,000	[1]	$ 482,000	[2]	$ 615,000	[2]
Ouanaminthe, Haiti [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring expense and restructuring related charges										$ 1,400,000
Restructuring expense		144,000				482,000
Shanghai, China [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring expense				615,000				615,000
Exit and Disposal Activity [Member] | Ouanaminthe, Haiti [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring expense and restructuring related charges	[3],[4]	66,000				583,000
Restructuring expense						103,000
Exit and Disposal Activity [Member] | Shanghai, China [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring expense and restructuring related charges				713,000				713,000
Restructuring expense				20,000				20,000
Cost of Sales [Member] | Exit and Disposal Activity [Member] | Ouanaminthe, Haiti [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring related charge		$ (78,000)				$ 101,000
Cost of Sales [Member] | Exit and Disposal Activity [Member] | Shanghai, China [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring related charge				$ 98,000				$ 98,000

[1] Restructuring expense of $144,000 for the three months ended October 29, 2023, represents a $142,000 impairment charge related to equipment and $2,000 of employee termination benefits related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Restructuring expense of $615,000 for the three-months ended October 30, 2022, represents $468,000 for employee termination benefits, $80,000 related to a loss on disposal of equipment, $47,000 for lease termination costs, and $20,000 of other associated costs related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China.

[2] Restructuring expense of $482,000 for the six months ended October 29, 2023, represents a $379,000 impairment charge associated with equipment and $103,000 for employee termination benefits related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Restructuring expense of $615,000 for the six-months ended October 30, 2022, represents $468,000 for employee termination benefits, $80,000 related to a loss on disposal of equipment, $47,000 for lease termination costs, and $20,000 of other associated costs related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China.

[3] Of the total $583,000, $482,000 and $101,000 were recorded within restructuring expense and cost of sales, respectively, in the Consolidated Statement of Net Loss for the six-month period ending October 29, 2023.

[4] Of the total $66,000, $144,000 and ($78,000) were recorded within restructuring expense and cost of sales, respectively, in the Consolidated Statement of Net Loss for the three-month period ending October 29, 2023.

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Upholstery Fabrics Segment Restructuring - Narrative (Detail) $ in Millions	9 Months Ended
	Oct. 29, 2023 USD ($)
Ouanaminthe, Haiti [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring expense and restructuring related charges	$ 1.4

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Upholstery Fabrics Segment Restructuring - Summary of Activity in Accrued Restructuring (Detail) - USD ($)	3 Months Ended				6 Months Ended
	Oct. 29, 2023		Oct. 30, 2022		Oct. 29, 2023		Oct. 30, 2022
Restructuring Cost and Reserve [Line Items]
Expenses incurred	$ 144,000	[1]	$ 615,000	[1]	$ 482,000	[2]	$ 615,000	[2]
Ouanaminthe, Haiti [Member]
Restructuring Cost and Reserve [Line Items]
Expenses incurred	144,000				482,000
Shanghai, China [Member]
Restructuring Cost and Reserve [Line Items]
Expenses incurred			615,000				615,000
Exit and Disposal Activity [Member] | Ouanaminthe, Haiti [Member]
Restructuring Cost and Reserve [Line Items]
Expenses incurred					103,000
Payments					(103,000)
Exit and Disposal Activity [Member] | Shanghai, China [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve, Beginning Balance
Accrual established in fiscal 2023			515,000				515,000
Expenses incurred			20,000				20,000
Payments			(502,000)				(502,000)
Restructuring Reserve, Ending Balance			33,000				33,000
Employee Termination Benefits [Member] | Exit and Disposal Activity [Member] | Ouanaminthe, Haiti [Member]
Restructuring Cost and Reserve [Line Items]
Expenses incurred	$ 2,000				103,000
Payments					$ (103,000)
Employee Termination Benefits [Member] | Exit and Disposal Activity [Member] | Shanghai, China [Member]
Restructuring Cost and Reserve [Line Items]
Accrual established in fiscal 2023			468,000				468,000
Payments			(468,000)				(468,000)
Lease Termination Costs [Member] | Exit and Disposal Activity [Member] | Shanghai, China [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve, Beginning Balance
Accrual established in fiscal 2023			47,000				47,000
Payments			(16,000)				(16,000)
Restructuring Reserve, Ending Balance			31,000				31,000
Other Associated Costs [Member] | Exit and Disposal Activity [Member] | Shanghai, China [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve, Beginning Balance
Expenses incurred			20,000				20,000
Payments			(18,000)				(18,000)
Restructuring Reserve, Ending Balance			$ 2,000				$ 2,000

[1] Restructuring expense of $144,000 for the three months ended October 29, 2023, represents a $142,000 impairment charge related to equipment and $2,000 of employee termination benefits related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Restructuring expense of $615,000 for the three-months ended October 30, 2022, represents $468,000 for employee termination benefits, $80,000 related to a loss on disposal of equipment, $47,000 for lease termination costs, and $20,000 of other associated costs related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China.

[2] Restructuring expense of $482,000 for the six months ended October 29, 2023, represents a $379,000 impairment charge associated with equipment and $103,000 for employee termination benefits related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Restructuring expense of $615,000 for the six-months ended October 30, 2022, represents $468,000 for employee termination benefits, $80,000 related to a loss on disposal of equipment, $47,000 for lease termination costs, and $20,000 of other associated costs related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China.

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Lines of Credit - Narrative (Detail) ¥ in Millions		6 Months Ended
	Jan. 19, 2023 USD ($)	Oct. 29, 2023 USD ($)	Oct. 30, 2022 USD ($)	Oct. 29, 2023 CNY (¥)	Apr. 30, 2023 USD ($)
Revolving Credit Facility [Member] | United States [Member]
Line Of Credit Facility [Line Items]
Applicable interest rate at end of period		6.80%	4.38%	6.80%	6.30%
Reference rate on which the interest rate is based		SOFR
Letters of credit, outstanding amount		$ 535,000	$ 275,000		$ 275,000
Line of credit facility, available borrowing		26,200,000
Outstanding amount		0	0		0
Interest paid during the year		$ 0	8,000
Revolving Credit Facility [Member] | United States [Member] | ABL Credit Agreement [Member]
Line Of Credit Facility [Line Items]
Maximum borrowing capacity	$ 35,000,000.0
Expiration date	Jan. 19, 2026
Maximum amount of letters of credit	$ 1,000,000
Line of credit facility, accounts receivable, borrowing base percentage	85.00%
Line of credit facility, borrowing base percentage of eligible inventory value	65.00%
Line of credit facility, borrowing base percentage of net-orderly-liquidation value of eligible inventory value	85.00%
Line of credit facility, borrowing base percentage of eligible in-transit inventory value	65.00%
Line of credit facility, borrowing base percentage of net-orderly-liquidation value of eligible in-transit inventory value	85.00%
Line of credit facility, borrowing base percentage of eligible raw material inventory value	65.00%
Line of credit facility, borrowing base percentage of net-orderly-liquidation value of eligible raw material inventory value	85.00%
Line of credit facility, borrowing base eligible in-transit inventory value	$ 5,000,000
Line of credit stated amount to determine borrowing base	22,500,000
Debt instrument, interest rate terms		The ABL Facility permits both base rate borrowings and borrowings based upon daily simple SOFR (the secured overnight financing rate administered by the Federal Reserve Bank of New York (or its successor)). Borrowings under the ABL Facility bear interest at an annual rate equal to daily simple SOFR plus 150 basis points (if the average monthly excess availability under the ABL Facility is greater than 50%) or 175 basis points (if the average monthly excess availability under the ABL Facility is less than or equal to 50%) or 50 basis points above base rate (if the average monthly excess availability under the ABL Facility is greater than 50%) or 75 basis points above base rate (if the average monthly excess availability under the ABL Facility is less than or equal to 50%), as applicable, with a fee on unutilized commitments at an annual rate of 37.5 basis points and an annual servicing fee of $12,000.
Annual servicing fee	$ 12,000
Line of credit facility, equal to eligible accounts receivable, borrowing base percent	200.00%
Threshold amount to determine excess borrowing availability	$ 35,000,000
Number of consecutive days in which if no event of default occurs, the compliance period ends	60 days
Line of credit facility, fixed charge ratio	1.1
Line of credit facility, commitment fee percentage	37.50%
Revolving Credit Facility [Member] | United States [Member] | Letters of Credit [Member]
Line Of Credit Facility [Line Items]
Remaining letters of credit		$ 465,000
Revolving Credit Facility [Member] | Minimum [Member] | United States [Member] | ABL Credit Agreement [Member]
Line Of Credit Facility [Line Items]
Line of credit facility, excess borrowing ability	$ 7,000,000
Line of credit facility, covenant, excess borrowing availability	$ 5,250,000
Revolving Credit Facility [Member] | Minimum [Member] | United States [Member] | Base Rate [Member] | ABL Credit Agreement [Member]
Line Of Credit Facility [Line Items]
Debt instrument, basis spread on interest rate	50.00%
Revolving Credit Facility [Member] | Minimum [Member] | United States [Member] | SOFR [Member] | ABL Credit Agreement [Member]
Line Of Credit Facility [Line Items]
Debt instrument, basis spread on interest rate	150.00%
Revolving Credit Facility [Member] | Maximum [Member] | United States [Member] | ABL Credit Agreement [Member]
Line Of Credit Facility [Line Items]
Line of credit facility minimum excess borrowing ability cash dominion period	$ 7,000,000
Line of credit facility, minimum excess borrowing ability compliance period	$ 5,250,000
Revolving Credit Facility [Member] | Maximum [Member] | United States [Member] | Base Rate [Member] | ABL Credit Agreement [Member]
Line Of Credit Facility [Line Items]
Debt instrument, basis spread on interest rate	75.00%
Revolving Credit Facility [Member] | Maximum [Member] | United States [Member] | SOFR [Member] | ABL Credit Agreement [Member]
Line Of Credit Facility [Line Items]
Debt instrument, basis spread on interest rate	175.00%
Revolving credit agreements [Member] | China [Member] | Chinese Yuan Renminbi [Member]
Line Of Credit Facility [Line Items]
Maximum borrowing capacity | ¥				¥ 35
Expiration date		Oct. 24, 2024
Interest rate description		Interest charged under this agreement is based on an interest rate determined by the Chinese government at the time of borrowing.
Outstanding amount		$ 0	$ 0		$ 0
Revolving credit agreements [Member] | China [Member] | United States Dollar [Member]
Line Of Credit Facility [Line Items]
Maximum borrowing capacity		$ 4,800,000

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Fair Value - Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands	Oct. 29, 2023	Apr. 30, 2023	Oct. 30, 2022
U.S. Government Money Market Fund [Member]
Assets:
Investments at fair value	$ 7,060	$ 7,649	$ 9,089
Growth Allocation Mutual Funds [Member]
Assets:
Investments at fair value	560	528	438
Moderate Allocation Mutual Fund [Member]
Assets:
Investments at fair value	46	86	77
Other [Member]
Assets:
Investments at fair value	266	208	159
Quoted prices in active markets for identical assets - Level 1 [Member] | U.S. Government Money Market Fund [Member]
Assets:
Investments at fair value	7,060	7,649	9,089
Quoted prices in active markets for identical assets - Level 1 [Member] | Growth Allocation Mutual Funds [Member]
Assets:
Investments at fair value	560	528	438
Quoted prices in active markets for identical assets - Level 1 [Member] | Moderate Allocation Mutual Fund [Member]
Assets:
Investments at fair value	46	86	77
Quoted prices in active markets for identical assets - Level 1 [Member] | Other [Member]
Assets:
Investments at fair value	$ 266	$ 208	$ 159

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Fair Value - Narrative (Detail) - USD ($)	Oct. 29, 2023	Apr. 30, 2023		Oct. 30, 2022
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Investments (Rabbi Trust) - available for sale	$ 7,900,000	$ 8,500,000		$ 9,800,000
Long-term investments (Rabbi Trust) - available for sale	7,000,000	7,100,000		7,600,000
Short-term investments (Rabbi Trust) - available for sale	937,000	1,404,000	[1]	2,237,000
Accumulated unrealized gain (loss) on investments	$ (6,000)	$ 19,000		$ (21,000)
Investment, Type [Extensible Enumeration]	Investments [Member]	Investments [Member]		Investments [Member]

[1] Derived from audited consolidated financial statements.

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Net Loss Per Share - Narrative (Detail) - shares	3 Months Ended		6 Months Ended
	Oct. 29, 2023	Oct. 30, 2022	Oct. 29, 2023	Oct. 30, 2022
Earnings Per Share [Abstract]
Weighted average shares used in the computation of basic, net loss per share	12,456,000	12,280,000	12,394,000	12,259,000
Weighted average shares used in the computation of diluted, net loss per share	12,456,000	12,280,000	12,394,000	12,259,000

XML

Net Loss Per Share - Schedule of Unvested Common Stock not Included in the Computation of Diluted Net Loss Per Share (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Oct. 29, 2023	Oct. 30, 2022	Oct. 29, 2023	Oct. 30, 2022
Earnings Per Share [Abstract]
antidilutive effect from decrease in the price per share of our common stock	11	42	20	38
antidilutive effect from net loss incurred during the fiscal year	136	35	105	47
total unvested shares of common stock not included in computation of diluted net loss per share	147	77	125	85

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Segment Information - Narrative (Detail)	6 Months Ended
	Oct. 29, 2023 Segment
Segment Reporting [Abstract]
Number of operating segments	2
Description of changes in reporting intangible assets in segment assets	Intangible assets are not included in segment assets as these assets are not used by the Chief Operating Decision Maker to evaluate the respective segment’s operating performance, allocate resources to individual segments, or determine executive compensation.

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Segment Information - Statement of Operations for Operating Segments (Detail) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Oct. 29, 2023		Oct. 30, 2022		Oct. 29, 2023		Oct. 30, 2022
Segment Reporting Information [Line Items]
net sales	$ 58,725		$ 58,381		$ 115,387		$ 120,985
gross profit (loss)	7,950		(2,213)		15,035		1,914
restructuring related credit (charge)	78	[1]	(98)	[1]	(101)	[2]	(98)	[2]
selling, general, and administrative expenses	10,045		9,103		19,874		17,968
loss from operations	(2,239)		(11,931)		(5,321)		(16,669)
restructuring expense	(144)	[3]	(615)	[3]	(482)	[4]	(615)	[4]
interest income	282		79		627		96
other income	49		829		145		747
Loss before income taxes	(1,908)		(11,023)		(4,549)		(15,826)
Mattress Fabrics [Member]
Segment Reporting Information [Line Items]
net sales	31,377		26,230		60,599		55,602
Upholstery Fabrics [Member]
Segment Reporting Information [Line Items]
net sales	27,348		32,151		54,788		65,383
Operating Segments [Member]
Segment Reporting Information [Line Items]
gross profit (loss)	7,872		(2,115)		15,136		2,012
loss from operations	(2,173)		(11,218)		(4,738)		(15,956)
Operating Segments [Member] | Mattress Fabrics [Member]
Segment Reporting Information [Line Items]
net sales	31,377		26,230		60,599		55,602
gross profit (loss)	2,483		(6,057)		4,477		(6,093)
selling, general, and administrative expenses	3,419		2,945		6,811		5,829
loss from operations	(936)		(9,002)		(2,334)		(11,922)
Operating Segments [Member] | Upholstery Fabrics [Member]
Segment Reporting Information [Line Items]
net sales	27,348		32,151		54,788		65,383
gross profit (loss)	5,389		3,942		10,659		8,105
selling, general, and administrative expenses	3,998		3,680		7,939		7,302
loss from operations	1,391		262		2,720		803
Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
gross profit (loss)	78	[1]	(98)	[1]	(101)	[2]	(98)	[2]
Unallocated Corporate [Member]
Segment Reporting Information [Line Items]
selling, general, and administrative expenses	2,628		2,478		5,124		4,837
loss from operations	$ (2,628)		$ (2,478)		$ (5,124)		$ (4,837)

[1] Gross profit and loss from operations for the three months ending October 29, 2023, includes restructuring related credits of $78,000 for the gain on disposal of inventory related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Gross loss and loss from operations for the three months ending October 30, 2022, includes restructuring related charges totaling $98,000 for loss on disposal and markdowns of inventory associated with the exit of our cut and sewn upholstery fabrics operation located in Shanghai, China.

[2] Gross profit and loss from operations for the six months ending October 29, 2023, includes a net restructuring related charge of $101,000, which represents a markdown of inventory totaling $179,000 during the first quarter of fiscal 2024, partially offset by a gain on disposal of inventory totaling $78,000 during the second quarter of fiscal 2024, both of which related to the discontinuation of production of cut and sewn upholstery kits at our facility located in Ouanaminthe, Haiti. Gross profit and loss from operations for the six months ending October 30, 2022 includes restructuring related charges totaling $98,000 for loss on disposal and markdowns of inventory associated with the exit of our cut and sewn upholstery fabrics operation located in Shanghai, China.

[3] Restructuring expense of $144,000 for the three months ended October 29, 2023, represents a $142,000 impairment charge related to equipment and $2,000 of employee termination benefits related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Restructuring expense of $615,000 for the three-months ended October 30, 2022, represents $468,000 for employee termination benefits, $80,000 related to a loss on disposal of equipment, $47,000 for lease termination costs, and $20,000 of other associated costs related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China.

[4] Restructuring expense of $482,000 for the six months ended October 29, 2023, represents a $379,000 impairment charge associated with equipment and $103,000 for employee termination benefits related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Restructuring expense of $615,000 for the six-months ended October 30, 2022, represents $468,000 for employee termination benefits, $80,000 related to a loss on disposal of equipment, $47,000 for lease termination costs, and $20,000 of other associated costs related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China.

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Segment Information - Statement of Operations for Operating Segments (Parenthetical) (Details) - USD ($)	3 Months Ended					6 Months Ended
	Oct. 29, 2023		Jul. 30, 2023	Oct. 30, 2022		Oct. 29, 2023		Oct. 30, 2022
Segment Reporting Information [Line Items]
Restructuring related credit (charge)	$ 78,000	[1]		$ (98,000)	[1]	$ (101,000)	[2]	$ (98,000)	[2]
Restructuring expense	144,000	[3]		615,000	[3]	482,000	[4]	615,000	[4]
Ouanaminthe, Haiti [Member]
Segment Reporting Information [Line Items]
Restructuring expense	144,000					482,000
Ouanaminthe, Haiti [Member] | Upholstery Fabrics [Member]
Segment Reporting Information [Line Items]
Restructuring related credit (charge)	78,000					(101,000)
Restructuring expense	144,000					482,000
Ouanaminthe, Haiti [Member] | Upholstery Fabrics [Member] | (Gain) Loss on Disposal and Markdowns of Inventory [Member]
Segment Reporting Information [Line Items]
Restructuring related charge	78,000		$ 179,000
Ouanaminthe, Haiti [Member] | Upholstery Fabrics [Member] | Equipment Impairment Charge [Member]
Segment Reporting Information [Line Items]
Restructuring expense	142,000					379,000
Ouanaminthe, Haiti [Member] | Upholstery Fabrics [Member] | Employee Termination Benefits [Member]
Segment Reporting Information [Line Items]
Restructuring expense	$ 2,000					$ 103,000
Shanghai, China [Member]
Segment Reporting Information [Line Items]
Restructuring expense				615,000				615,000
Shanghai, China [Member] | Upholstery Fabrics [Member]
Segment Reporting Information [Line Items]
Restructuring related credit (charge)				(98,000)
Restructuring expense				615,000				615,000
Restructuring expense, other associated costs				20,000				20,000
Shanghai, China [Member] | Upholstery Fabrics [Member] | (Gain) Loss on Disposal and Markdowns of Inventory [Member]
Segment Reporting Information [Line Items]
Restructuring related charge				98,000				98,000
Shanghai, China [Member] | Upholstery Fabrics [Member] | Loss on Disposal of Equipment [Member]
Segment Reporting Information [Line Items]
Restructuring expense				80,000				80,000
Shanghai, China [Member] | Upholstery Fabrics [Member] | Lease Termination Costs [Member]
Segment Reporting Information [Line Items]
Restructuring expense				47,000				47,000
Shanghai, China [Member] | Upholstery Fabrics [Member] | Employee Termination Benefits [Member]
Segment Reporting Information [Line Items]
Restructuring expense				$ 468,000				$ 468,000

[1] Gross profit and loss from operations for the three months ending October 29, 2023, includes restructuring related credits of $78,000 for the gain on disposal of inventory related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Gross loss and loss from operations for the three months ending October 30, 2022, includes restructuring related charges totaling $98,000 for loss on disposal and markdowns of inventory associated with the exit of our cut and sewn upholstery fabrics operation located in Shanghai, China.

[2] Gross profit and loss from operations for the six months ending October 29, 2023, includes a net restructuring related charge of $101,000, which represents a markdown of inventory totaling $179,000 during the first quarter of fiscal 2024, partially offset by a gain on disposal of inventory totaling $78,000 during the second quarter of fiscal 2024, both of which related to the discontinuation of production of cut and sewn upholstery kits at our facility located in Ouanaminthe, Haiti. Gross profit and loss from operations for the six months ending October 30, 2022 includes restructuring related charges totaling $98,000 for loss on disposal and markdowns of inventory associated with the exit of our cut and sewn upholstery fabrics operation located in Shanghai, China.

[3] Restructuring expense of $144,000 for the three months ended October 29, 2023, represents a $142,000 impairment charge related to equipment and $2,000 of employee termination benefits related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Restructuring expense of $615,000 for the three-months ended October 30, 2022, represents $468,000 for employee termination benefits, $80,000 related to a loss on disposal of equipment, $47,000 for lease termination costs, and $20,000 of other associated costs related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China.

[4] Restructuring expense of $482,000 for the six months ended October 29, 2023, represents a $379,000 impairment charge associated with equipment and $103,000 for employee termination benefits related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Restructuring expense of $615,000 for the six-months ended October 30, 2022, represents $468,000 for employee termination benefits, $80,000 related to a loss on disposal of equipment, $47,000 for lease termination costs, and $20,000 of other associated costs related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China.

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Segment Information - Balance Sheet Information by Operating Segments (Detail) - USD ($)		Oct. 29, 2023		Jul. 30, 2023	Apr. 30, 2023		Oct. 30, 2022
Segment Reporting Information [Line Items]
Accounts receivable, net		$ 23,036,000			$ 24,778,000	[1]	$ 22,443,000
Inventory		44,465,000			45,080,000	[1]	52,224,000
Cash and cash equivalents		15,214,000			20,964,000	[1]	19,137,000
Short-term investments - rabbi trust		937,000			1,404,000	[1]	2,237,000
Short-term note receivable		256,000			219,000	[1]
Current income taxes receivable		340,000					510,000
Other current assets		4,346,000			3,071,000	[1]	3,462,000
Long-term note receivable		1,596,000			1,726,000	[1]
Deferred income taxes		472,000			480,000	[1]	493,000
Property, plant and equipment		34,664,000			36,111,000	[1]	38,832,000
Right of use assets		6,874,000			8,191,000	[1]	11,609,000
Intangible assets		2,064,000			2,252,000	[1]	2,440,000
Long-term investments - rabbi trust		6,995,000			7,067,000	[1]	7,526,000
Other assets		901,000			840,000	[1]	717,000
Total assets		142,160,000			152,183,000	[1]	161,630,000
Operating Segments [Member]
Segment Reporting Information [Line Items]
Total assets		105,499,000			110,204,000		120,655,000
Operating Segments [Member] | Mattress Fabrics [Member]
Segment Reporting Information [Line Items]
Accounts receivable, net		11,303,000			12,396,000		8,700,000
Inventory		27,195,000			25,674,000		30,300,000
Property, plant and equipment		32,862,000	[2]	$ 32,900,000	33,749,000	[2]	35,853,000	[2]
Right of use assets	[3]	1,969,000			2,308,000		2,087,000
Total assets		73,329,000			74,127,000		76,940,000
Operating Segments [Member] | Upholstery Fabrics [Member]
Segment Reporting Information [Line Items]
Accounts receivable, net		11,733,000			12,382,000		13,743,000
Inventory		17,270,000			19,406,000		21,924,000
Property, plant and equipment	[4]	1,175,000			1,671,000		2,150,000
Right of use assets	[5]	1,992,000			2,618,000		5,898,000
Total assets		32,170,000			36,077,000		43,715,000
Unallocated Corporate [Member]
Segment Reporting Information [Line Items]
Cash and cash equivalents		15,214,000			20,964,000		19,137,000
Short-term investments - rabbi trust		937,000			1,404,000		2,237,000
Short-term note receivable		256,000			219,000
Current income taxes receivable		340,000					510,000
Other current assets		4,346,000			3,071,000		3,462,000
Long-term note receivable		1,596,000			1,726,000
Deferred income taxes		472,000			480,000		493,000
Property, plant and equipment	[6]	627,000			691,000		829,000
Right of use assets	[7]	2,913,000			3,265,000		3,624,000
Intangible assets		2,064,000			2,252,000		2,440,000
Long-term investments - rabbi trust		6,995,000			7,067,000		7,526,000
Other assets		$ 901,000			$ 840,000		$ 717,000

[1] Derived from audited consolidated financial statements.

[2] The $32.9 million as of October 29, 2023, represents property, plant, and equipment of $22.2 million, $10.0 million, and $661,000 located in the U.S., Canada, and Haiti, respectively. The $35.9 million as of October 30, 2022, represents property, plant, and equipment of $23.8 million, $11.4 million, and $679,000 located in the U.S., Canada, and Haiti, respectively. The $33.7 million as of April 30, 2023, represents property, plant, and equipment of $22.7 million, $10.4 million, and $608,000 located in the U.S., Canada, and Haiti, respectively.

[3] The $2.0 million as of October 29, 2023, represents right of use assets of $1.3 million and $663,000 located in Haiti and Canada, respectively. The $2.1 million as of October 30, 2022, represents right of use assets of $1.8 million, $167,000, and $164,000 located in Haiti, Canada, and the U.S., respectively. The $2.3 million as of April 30, 2023, represents right of use assets of $1.5 million and $776,000 located in Haiti and Canada, respectively.

[4] The $1.2 million as of October 29, 2023, represents property, plant, and equipment of $1.0 million and $140,000 located in the U.S. and China, respectively. The $2.2 million as of October 30, 2022, represents property, plant, and equipment of $1.0 million, $1.0 million, and $137,000 located in the U.S., Haiti, and China, respectively. The $1.7 million as of April 30, 2023, represents property, plant, and equipment of $974,000, $592,000, and $105,000 located in the U.S., Haiti, and China, respectively.

[5] The $2.0 million as of October 29, 2023, represents right of use assets of $1.2 million and $818,000 located in China and the U.S., respectively. The $5.9 million as of October 30, 2022, represents right of use assets of $2.5 million, $2.0 million, and $1.4 million located in Haiti, China, and the U.S., respectively. The $2.6 million as of April 30, 2023, represents right of use assets of $1.5 million and $1.1 million located in China and the U.S., respectively.

[6] The $627,000, $829,000, and $691,000 as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively, represent property, plant, and equipment associated with unallocated corporate department and corporate departments shared by our mattress fabrics and upholstery fabrics segments. Property, plant, and equipment associated with our corporate departments reside in the U.S.

[7] The $2.9 million, $3.6 million, and $3.3 million as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively, represent right of use assets located in the U.S.

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Segment Information - Balance Sheet Information by Operating Segments (Parenthetical) (Detail) - USD ($)		Oct. 29, 2023		Jul. 30, 2023	Apr. 30, 2023		Oct. 30, 2022
Segment Reporting Information [Line Items]
Property, plant and equipment		$ 34,664,000			$ 36,111,000	[1]	$ 38,832,000
Right of use assets		6,874,000			8,191,000	[1]	11,609,000
Operating Segments [Member] | Mattress Fabrics [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment		32,862,000	[2]	$ 32,900,000	33,749,000	[2]	35,853,000	[2]
Right of use assets	[3]	1,969,000			2,308,000		2,087,000
Operating Segments [Member] | Upholstery Fabrics [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment	[4]	1,175,000			1,671,000		2,150,000
Right of use assets	[5]	1,992,000			2,618,000		5,898,000
Operating Segments [Member] | United States [Member] | Mattress Fabrics [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment		22,200,000			22,700,000		23,800,000
Right of use assets							164,000
Operating Segments [Member] | United States [Member] | Upholstery Fabrics [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment		1,000,000			974,000		1,000,000
Right of use assets		818,000			1,100,000		1,400,000
Operating Segments [Member] | Canada [Member] | Mattress Fabrics [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment		10,000,000			10,400,000		11,400,000
Right of use assets		663,000			776,000		167,000
Operating Segments [Member] | Ouanaminthe, Haiti [Member] | Mattress Fabrics [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment		661,000			608,000		679,000
Right of use assets		1,300,000			1,500,000		1,800,000
Operating Segments [Member] | Ouanaminthe, Haiti [Member] | Upholstery Fabrics [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment					592,000		1,000,000
Right of use assets							2,500,000
Operating Segments [Member] | China [Member] | Upholstery Fabrics [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment		140,000			105,000		137,000
Right of use assets		1,200,000			1,500,000		2,000,000
Unallocated Corporate [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment	[6]	627,000			691,000		829,000
Right of use assets	[7]	2,913,000			3,265,000		3,624,000
Unallocated Corporate [Member] | United States [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment		627,000			691,000		829,000
Right of use assets		$ 2,900,000			$ 3,300,000		$ 3,600,000

[1] Derived from audited consolidated financial statements.

[2] The $32.9 million as of October 29, 2023, represents property, plant, and equipment of $22.2 million, $10.0 million, and $661,000 located in the U.S., Canada, and Haiti, respectively. The $35.9 million as of October 30, 2022, represents property, plant, and equipment of $23.8 million, $11.4 million, and $679,000 located in the U.S., Canada, and Haiti, respectively. The $33.7 million as of April 30, 2023, represents property, plant, and equipment of $22.7 million, $10.4 million, and $608,000 located in the U.S., Canada, and Haiti, respectively.

[3] The $2.0 million as of October 29, 2023, represents right of use assets of $1.3 million and $663,000 located in Haiti and Canada, respectively. The $2.1 million as of October 30, 2022, represents right of use assets of $1.8 million, $167,000, and $164,000 located in Haiti, Canada, and the U.S., respectively. The $2.3 million as of April 30, 2023, represents right of use assets of $1.5 million and $776,000 located in Haiti and Canada, respectively.

[4] The $1.2 million as of October 29, 2023, represents property, plant, and equipment of $1.0 million and $140,000 located in the U.S. and China, respectively. The $2.2 million as of October 30, 2022, represents property, plant, and equipment of $1.0 million, $1.0 million, and $137,000 located in the U.S., Haiti, and China, respectively. The $1.7 million as of April 30, 2023, represents property, plant, and equipment of $974,000, $592,000, and $105,000 located in the U.S., Haiti, and China, respectively.

[5] The $2.0 million as of October 29, 2023, represents right of use assets of $1.2 million and $818,000 located in China and the U.S., respectively. The $5.9 million as of October 30, 2022, represents right of use assets of $2.5 million, $2.0 million, and $1.4 million located in Haiti, China, and the U.S., respectively. The $2.6 million as of April 30, 2023, represents right of use assets of $1.5 million and $1.1 million located in China and the U.S., respectively.

[6] The $627,000, $829,000, and $691,000 as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively, represent property, plant, and equipment associated with unallocated corporate department and corporate departments shared by our mattress fabrics and upholstery fabrics segments. Property, plant, and equipment associated with our corporate departments reside in the U.S.

[7] The $2.9 million, $3.6 million, and $3.3 million as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively, represent right of use assets located in the U.S.

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Segment Information - Capital Expenditures and Depreciation Expense for Operating Segments (Detail) - USD ($) $ in Thousands		6 Months Ended
		Oct. 29, 2023	Oct. 30, 2022
Segment Reporting Information [Line Items]
Capital expenditures	[1]	$ 2,213	$ 774
Depreciation expense		3,251	3,489
Operating Segments [Member] | Mattress Fabrics [Member]
Segment Reporting Information [Line Items]
Capital expenditures	[1]	1,948	267
Depreciation expense		2,922	3,088
Operating Segments [Member] | Upholstery Fabrics [Member]
Segment Reporting Information [Line Items]
Capital expenditures	[1]	185	447
Depreciation expense		329	401
Unallocated Corporate [Member]
Segment Reporting Information [Line Items]
Capital expenditures	[1]	$ 80	$ 60

[1] Capital expenditure amounts are stated on the accrual basis. See Consolidated Statements of Cash Flows for capital expenditure amounts on a cash basis.

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Income Taxes - Effective Income Tax Rate - Narrative (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Oct. 29, 2023	Oct. 30, 2022	Oct. 29, 2023	Oct. 30, 2022
Income Taxes [Line Items]
Income taxes	$ 516	$ 1,150	$ 1,217	$ 2,046
Effective income tax rate			(26.80%)	(12.90%)
Pre-tax income (loss)	$ (1,908)	$ (11,023)	$ (4,549)	$ (15,826)
U.S. [Member]
Income Taxes [Line Items]
Pre-tax income (loss)			$ (11,800)	$ (20,700)

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Income Taxes - Differences Between Income Tax Expense from Continuing Operations at Federal Income Tax Rate and Effective Income Tax Rate (Detail)	6 Months Ended
	Oct. 29, 2023	Oct. 30, 2022
Income Tax Disclosure [Abstract]
U.S. federal income tax rate	21.00%	21.00%
U.S. valuation allowance	(32.80%)	(36.70%)
Withholding taxes associated with foreign jurisdictions	(9.90%)	(3.30%)
Foreign income tax rate differential	(5.70%)	3.20%
Stock-based compensation	(4.20%)	(0.60%)
Tax effects of local currency foreign exchange gains	5.10%	4.70%
Other	(0.30%)	(1.20%)
Effective income tax rate	(26.80%)	(12.90%)

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Income Taxes - Summary of Valuation Allowances Against Net Deferred Income Tax Assets (Detail) - USD ($) $ in Thousands	Oct. 29, 2023	Apr. 30, 2023	Oct. 30, 2022
Valuation Allowance [Line Items]
Valuation allowance	$ 20,169	$ 18,675	$ 16,288
U.S. Capital Loss Carry Forwards [Member]
Valuation Allowance [Line Items]
Valuation allowance	2,330	2,330	2,330
U.S. Federal and State [Member] | Deferred Income Tax Assets [Member]
Valuation Allowance [Line Items]
Valuation allowance	$ 17,839	$ 16,345	$ 13,958

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Income Taxes - Undistributed Earnings - Narrative (Detail) - USD ($) $ in Millions	6 Months Ended
	Oct. 29, 2023	Apr. 30, 2023	Oct. 30, 2022
Income Tax Disclosure [Abstract]
Dividends received deduction percentage for earnings and profits received from foreign corporation	100.00%
Dividends received deduction, foreign corporation ownership percentage	10.00%
Deferred tax liability, undistributed earnings from foreign subsidiaries	$ 4.6	$ 4.2	$ 4.0

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Income Taxes - Uncertain Income Tax Positions - Narrative (Detail) - USD ($) $ in Millions	Oct. 29, 2023	Apr. 30, 2023	Oct. 30, 2022
Income Taxes [Line Items]
Unrecognized tax benefits	$ 1.2
Unrecognized tax benefits that would favorably impact effective income tax rate if recognized	1.2	$ 1.2	$ 1.1
Income Taxes Payable - Long-Term [Member]
Income Taxes [Line Items]
Unrecognized tax benefits	$ 1.2	$ 1.2	$ 1.1

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Income Taxes - Summary of Taxes Paid (Detail) - USD ($) $ in Thousands	6 Months Ended
	Oct. 29, 2023	Oct. 30, 2022
Income Taxes [Line Items]
Total income taxes paid, net of refunds	$ 2,113	$ 1,712
Domestic Tax Authority [Member] | United States [Member]
Income Taxes [Line Items]
United States Transition Tax Payment	499	265
Foreign Tax Authority [Member] | China [Member]
Income Taxes [Line Items]
Total income taxes paid, net of refunds	1,278	1,286
Foreign Tax Authority [Member] | Canada [Member]
Income Taxes [Line Items]
Total income taxes paid, net of refunds	$ 336	$ 161

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Stock-Based Compensation - Narrative (Detail) - USD ($)												6 Months Ended
		Sep. 28, 2023		Sep. 27, 2023	Jul. 03, 2023	Oct. 03, 2022	Aug. 10, 2022		Jul. 01, 2022	Jul. 22, 2021		Oct. 29, 2023	Oct. 30, 2022	Sep. 16, 2015
Performance Based Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation award, vested												0
Remaining unrecognized compensation expense												$ 759,000
Weighted average period over which unrecognized compensation expense is expected to be recognized												2 years 8 months 12 days
Fair value of units expected to vest												$ 674,000
Performance Based Restricted Stock Units [Member] | Senior Executives [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation award, granted	[1],[2]	227,497					178,714			122,476
Share-based compensation award, vested	[3]												545
Price Per Share	[2]	$ 6.43	[4]				$ 5.77	[5]		$ 15.93	[6]
Performance Based Restricted Stock Units [Member] | Key Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation award, granted	[1],[7]									20,500
Share-based compensation award, vested	[8]												437
Price Per Share	[7],[9]									$ 14.75
Performance Based Restricted Stock Units [Member] | Selling, General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense												$ 23,000	$ 2,000
Time-Based Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation award, vested												151,653	32,799
Remaining unrecognized compensation expense												$ 1,300,000
Weighted average period over which unrecognized compensation expense is expected to be recognized												1 year 10 months 24 days
Fair value of units expected to vest												$ 1,600,000
Time-Based Restricted Stock Units [Member] | Outside Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation award, granted	[10]	59,928
Price Per Share	[10],[11]	$ 5.59
Time-Based Restricted Stock Units [Member] | Selling, General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense												378,000	$ 396,000
Common Stock Awards [Member] | Outside Directors [Member] | Immediate Vesting [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation award, granted					16,616	18,326			19,753
Price Per Share					$ 5.04	$ 4.57			$ 4.24
Common Stock Awards [Member] | Selling, General and Administrative Expenses [Member] | Outside Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense												$ 84,000	$ 167,000
2015 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common stock authorized for issuance														1,200,000
Amended and Restated Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common stock authorized for issuance additional				960,000
Number of shares available for future equity based grants												765,399

[1] Amounts represent the maximum number of common stock shares that could be earned if certain performance targets are met as defined in the related restricted stock unit agreements.

[2] Performance-based restricted stock units awarded to senior executives.

[3] Performance-based restricted stock units vested by senior executives.

[4] Price per share represents the fair market value per share ($1.15 per $1, or an increase of $0.84 to the closing price of our common stock on the date of grant) determined using the Monte Carlo simulation model for the market-based total shareholder return component and the closing price of our common stock ($5.59) for the performance-based component of the performance-based restricted stock units granted to senior executives on September 28, 2023.

[5] Price per share represents the fair market value per share ($1.14 per $1, or an increase of $0.71 to the closing price of our common stock on the date of grant) determined using the Monte Carlo simulation model for the market-based total shareholder return component and the closing price of our common stock ($5.06) for the performance-based component of the performance-based restricted stock units granted to senior executives on August 10, 2022.

[6] Price per share represents the fair market value per share ($1.08 per $1, or an increase of $1.18 to the closing price of our common stock on the date of grant) determined using the Monte Carlo simulation model for the market-based total shareholder return component and the closing price of our common stock ($14.75) for the performance-based component of the performance-based restricted stock units granted to senior executives on July 22, 2021.

[7] Performance-based restricted stock units awarded to key employees.

[8] Performance-based restricted stock units vested by key employees.

[9] Price per share represents the closing price of our common stock on the date of grant.

[10] Time-based restricted stock units awarded to outside directors.

[11] Price per share represents closing price of common stock on the date the respective award was granted.

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Stock-Based Compensation - Summary of Assumptions Used to Determine Fair Value of Performance Based Restricted Stock Units (Details) - Executive Officer [Member] - Performance Based Restricted Stock Units [Member] - $ / shares	Sep. 28, 2023	Aug. 10, 2022	Jul. 22, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Closing price of our common stock	$ 5.59	$ 5.06	$ 14.75
Expected volatility of our common stock	37.30%	48.20%	54.20%
Risk-free interest rate	4.90%	3.13%	0.33%
Dividend yield	0.00%	0.00%	3.00%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility of peer companies	91.50%	105.10%	101.50%
Correlation coefficient of peer companies	0.21%	0.23%	0.35%
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility of peer companies	35.70%	41.60%	45.70%
Correlation coefficient of peer companies	0.01%	0.05%	0.03%

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Stock-Based Compensation - Summary of Grants of Performance-Based Restricted Stock Units Associated with Senior Executives and Key Employees (Detail) - Performance Based Restricted Stock Units [Member] - $ / shares		Sep. 28, 2023		Aug. 10, 2022		Jul. 22, 2021
Senior Executives [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance-Based Restricted Stock Units Awarded	[1],[2]	227,497		178,714		122,476
Restricted Stock Units Expected to Vest	[2],[3]	121,740
Price Per Share	[2]	$ 6.43	[4]	$ 5.77	[5]	$ 15.93	[6]
Vesting Period	[2]	34 months		3 years		3 years
Key Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance-Based Restricted Stock Units Awarded	[1],[7]					20,500
Price Per Share	[7],[8]					$ 14.75
Vesting Period	[7]					3 years

[1] Amounts represent the maximum number of common stock shares that could be earned if certain performance targets are met as defined in the related restricted stock unit agreements.

[2] Performance-based restricted stock units awarded to senior executives.

[3] Compensation cost is based on an assessment each reporting period to determine the probability of whether or not certain performance goals will be met and how many shares are expected to be earned as of the end of the vesting period. These amounts represent the number of shares that were expected to vest as of October 29, 2023.

[4] Price per share represents the fair market value per share ($1.15 per $1, or an increase of $0.84 to the closing price of our common stock on the date of grant) determined using the Monte Carlo simulation model for the market-based total shareholder return component and the closing price of our common stock ($5.59) for the performance-based component of the performance-based restricted stock units granted to senior executives on September 28, 2023.

[5] Price per share represents the fair market value per share ($1.14 per $1, or an increase of $0.71 to the closing price of our common stock on the date of grant) determined using the Monte Carlo simulation model for the market-based total shareholder return component and the closing price of our common stock ($5.06) for the performance-based component of the performance-based restricted stock units granted to senior executives on August 10, 2022.

[6] Price per share represents the fair market value per share ($1.08 per $1, or an increase of $1.18 to the closing price of our common stock on the date of grant) determined using the Monte Carlo simulation model for the market-based total shareholder return component and the closing price of our common stock ($14.75) for the performance-based component of the performance-based restricted stock units granted to senior executives on July 22, 2021.

[7] Performance-based restricted stock units awarded to key employees.

[8] Price per share represents the closing price of our common stock on the date of grant.

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Stock-Based Compensation - Summary of Grants of Performance-Based Restricted Stock Units Associated with Senior Executives and Key Employees (Parenthetical) (Detail) - Performance Based Restricted Stock Units [Member] - Senior Executives [Member] - $ / shares	Sep. 28, 2023	Aug. 10, 2022	Jul. 22, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value multiple to closing price per share	$ 1.15	$ 1.14	$ 1.08
Fair value adjustment to closing price of common stock, per share	0.84	0.71	1.18
Closing price of common stock	$ 5.59	$ 5.06	$ 14.75

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Stock-Based Compensation - Summary of Vested Performance-Based Restricted Stock Units (Detail) - Performance Based Restricted Stock Units [Member] - USD ($) $ / shares in Units, $ in Thousands		6 Months Ended
		Oct. 29, 2023	Oct. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units Vested		0
Senior Executives [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units Vested	[1]		545
Fair Value	[1],[2]		$ 3
Price Per Share	[1],[3]		$ 5.1
Key Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units Vested	[4]		437
Fair Value	[2],[4]		$ 2
Price Per Share	[3],[4]		$ 5.1

[1] Performance-based restricted stock units vested by senior executives.

[2] Dollar amounts are in thousands.

[3] Price per share is derived from the closing price of our common stock on the date the respective performance-based restricted stock units vested.

[4] Performance-based restricted stock units vested by key employees.

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Stock-Based Compensation - Summary of Grants of Time-Based Restricted Stock Unit Awards Associated with Senior Executives and Key Employees (Detail) - Time-Based Restricted Stock Units [Member] - $ / shares		Sep. 28, 2023	Sep. 06, 2022	Aug. 10, 2022	Jul. 22, 2021
Senior Executives and Key Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Time-Based Restricted Stock Units Awarded	[1]	100,068	25,114	78,225	30,835
Price Per Share	[1],[2]	$ 5.59	$ 4.58	$ 5.06	$ 14.75
Vesting Period	[1]	34 months		3 years	3 years
Senior Executives and Key Employees [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting Period	[1]		2 years
Senior Executives and Key Employees [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting Period	[1]		3 years
Outside Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Time-Based Restricted Stock Units Awarded	[3]	59,928
Price Per Share	[2],[3]	$ 5.59
Vesting Period	[3]	1 year

[1] Time-based restricted stock units awarded to senior executives and key employees.

[2] Price per share represents closing price of common stock on the date the respective award was granted.

[3] Time-based restricted stock units awarded to outside directors.

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Stock-Based Compensation - Summary of Vested Time-Based Restricted Stock Units (Detail) - Time-Based Restricted Stock Units [Member] - USD ($) $ / shares in Units, $ in Thousands		6 Months Ended
		Oct. 29, 2023	Oct. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units Vested		151,653	32,799
Fair Value	[1]	$ 857	$ 167
Price Per Share	[2]	$ 5.65	$ 5.1

[1] Dollar amounts are in thousands.

[2] Price per share is derived from the closing price of our common stock on the date the respective time-based restricted stock units vested.

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Leases - Narrative (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Oct. 29, 2023	Oct. 30, 2022	Oct. 29, 2023	Oct. 30, 2022
Lessee, operating lease, option to extend			renewal options for additional periods ranging up to twelve years
Operating lease expenses	$ 781,000	$ 959,000	$ 1,600,000	$ 2,000,000
Minimum [Member]
Operating lease remaining lease terms	1 year		1 year
Maximum [Member]
Operating lease remaining lease terms	8 years		8 years

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Leases - Lessee Operating Lease Right of Use Assets and Liabilities (Detail) - USD ($) $ in Thousands	Oct. 29, 2023	Apr. 30, 2023	[1]	Oct. 30, 2022
Assets and Liabilities, Lessee [Abstract]
Right of use assets	$ 6,874	$ 8,191		$ 11,609
Operating lease liability - current	2,540	2,640		2,655
Operating lease liability - noncurrent	$ 2,431	$ 3,612		$ 4,194

[1] Derived from audited consolidated financial statements.

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Leases - Operating Leases of Lessee Disclosure (Details) - USD ($) $ in Thousands	6 Months Ended
	Oct. 29, 2023	Oct. 30, 2022
Lessee Disclosure [Abstract]
Operating lease liability payments	$ 1,330	$ 1,068
Right of use assets exchanged for lease liabilities	$ 157

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Leases - Lessee Operating Lease Liability Maturity (Details) $ in Thousands	Oct. 29, 2023 USD ($)
Lessee Disclosure [Abstract]
2024	$ 1,269
2025	1,917
2026	638
2027	342
2028	225
Thereafter	804
Total	5,195
Less: interest	(224)
Present value of lease liabilities	$ 4,971

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Leases - Weighted Average Lease Term and Discount Rate (Detail)	Oct. 29, 2023
Lessee Disclosure [Abstract]
Weighted average lease term (in years)	3 years 9 months 14 days
Weighted average discount rate	3.46%

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Commitments and Contingencies - Narrative (Detail) - USD ($)	Oct. 29, 2023	Apr. 30, 2023	[1]	Oct. 30, 2022
Commitments and Contingencies Disclosure [Line Items]
Accounts payable for capital expenditures	$ 298,000	$ 56,000		$ 200,000
Mattress Fabrics [Member] | Capital Addition Purchase Commitments [Member]
Commitments and Contingencies Disclosure [Line Items]
Open purchase commitments for equipment	$ 1,600,000

[1] Derived from audited consolidated financial statements.

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Statutory Reserves - Narrative (Detail) - Subisidiary [Member] - China [Member] $ in Millions	6 Months Ended
	Oct. 29, 2023 USD ($)
Statutory Reserves [Line Items]
Percentage of net income required to be transferred to a statutory surplus reserve fund	10.00%
Maximum required percentage of statutory surplus reserve fund to registered capital	50.00%
Percentage of statutory surplus reserve fund to registered capital	50.00%
Statutory surplus reserve fund balance	$ 4.0
Minimum threshold percentage for statutory surplus reserve fund as percentage of registered capital, below which certain capital transactions are prohibited	25.00%

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Common Stock Repurchase Program (Detail) - Common Stock [Member] - USD ($)	6 Months Ended
	Oct. 29, 2023	Oct. 30, 2022	Mar. 31, 2020
Stockholders Equity Note [Line Items]
Common stock repurchased	0	0
Remaining authorized repurchase amount	$ 3,200,000
Stock Repurchase Program March 2020 [Member]
Stockholders Equity Note [Line Items]
Authorization amount for repurchase of common stock			$ 5,000,000