Home Accessories Segment - Discontinued Operation (Tables)

9 Months Ended

Jan. 31, 2021

Discontinued Operations And Disposal Groups [Abstract]

Summary of Disposal of Discontinued Operation on Consolidated Balance Sheet

The following is a summary of the assets and liabilities of the disposal group that are presented separately as a discontinued operation on the Consolidated Balance Sheet as of February 2, 2020.

	February 2,
(dollars in thousands)	2020
ASSETS
current assets:
cash and cash equivalents	$	232
accounts receivable		766
inventories		3,566
other current assets		174
total current assets - discontinued operation		4,738
property, plant, and equipment		1,728
goodwill		2,442
intangible asset		4,121
right of use asset		950
total noncurrent assets - discontinued operation		9,241
total assets	$	13,979
LIABILITIES AND NET ASSETS
current liabilities:
accounts payable	$	1,415
operating lease liability - current		194
accrued expenses		485
total current liabilities - discontinued operation		2,094
loan payable - Culp Inc.		1,800
subordinated loan payable - noncontrolling interest		925
operating lease liability - long-term		776
total noncurrent liabilities - discontinued operation		3,501
total liabilities		5,595
total net assets of discontinued operation	$	8,384

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

The following is a summary of the major classes of financial statement line items constituting loss before income taxes from discontinued operation that are presented in the Consolidated Statements of Net Income (Loss) for the three-month and nine-month periods ending February 2, 2020:

	Three Months Ended
	February 2,
(dollars in thousands)	2020
net sales	$	3,906
cost of sales		(3,042	)
gross profit		864
selling, general and administrative expenses		(1,121	)
asset impairments (1)		(13,639	)
reversal of contingent consideration (2)		6,081
interest expense (3)		(24	)
other income		15
loss before income taxes from discontinued    operation		(7,824	)
income tax benefit		2,592
net loss from discontinued operation	$	(5,232	)

	Nine Months Ended
	February 2,
(dollars in thousands)	2020
net sales	$	11,484
cost of sales		(9,090	)
gross profit		2,394
selling, general and administrative expenses		(3,686	)
asset impairments (1)		(13,639	)
reversal of contingent consideration (2)		6,081
interest expense (3)		(71	)
other income		35
loss before income taxes from discontinued    operation		(8,886	)
income tax benefit		2,984
net loss from discontinued operation	$	(5,902	)

(1) During the three-month and nine-month periods ended February 2, 2020, we recorded asset impairment charges totaling $13.6 million, of which $11.2 million and $2.4 million pertained to goodwill and tradename, respectively. See Notes 7, 8, and 12 of the consolidated financial statements for further details of our assessments that resulted in the impairment of the goodwill and tradename associated with this discontinued operation.

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

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

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

The following is a summary of net income from continuing operations, net loss from discontinued operation, and net income (loss) attributable to Culp, Inc. common shareholders and the noncontrolling interest associated with our discontinued operation for the three-month and nine-month periods ending January 31, 2021, and February 2, 2020:

	Three Months Ended
	January 31,		February 2,
(dollars in thousands)	2021		2020
net income from continuing operations	$	2,082	$	1,025
net loss from continuing operations attributable to    noncontrolling interest		—		—
net income from continuing operations attributable    to Culp, Inc. common shareholders	$	2,082	$	1,025
net loss from discontinued operation	$	—	$	(5,232	)
net loss from discontinued operation attributable to    noncontrolling interest		—		4,149
net loss from discontinued operation attributable to Culp, Inc.    common shareholders	$	—	$	(1,083	)
net income (loss)	$	2,082	$	(4,207	)
net loss from noncontrolling interest associated with a    discontinued operation		—		4,149
net income (loss) attributable to Culp, Inc.    common shareholders	$	2,082	$	(58	)

	Nine Months Ended
	January 31,		February 2,
(dollars in thousands)	2021		2020
net income from continuing operations	$	1,733	$	5,061
net loss from continuing operations attributable to    noncontrolling interest		—		—
net income from continuing operations attributable    to Culp, Inc. common shareholders	$	1,733	$	5,061
net loss from discontinued operation	$	—	$	(5,902	)
net loss from discontinued operation attributable to    noncontrolling interest		—		4,421
net loss from discontinued operation attributable to Culp, Inc.    common shareholders	$	—	$	(1,481	)
net income (loss)	$	1,733	$	(841	)
net loss from noncontrolling interest associated with a    discontinued operation		—		4,421
net income attributable to Culp, Inc.    common shareholders	$	1,733	$	3,580