v3.26.1
BUSINESS COMBINATION
 6 Months Ended
Jun. 30, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
BUSINESS COMBINATION BUSINESS COMBINATION
New Classic Home Furnishings, Inc. (“New Classic”)
In January 2026, the Group completed its acquisition of New Classic, a U.S. based wholesaler primarily serving the domestic home furnishings market (the “Acquisition”). The Group acquired 100% of the outstanding equity of New Classic for total consideration of $18.7 million after net working capital adjustments, inclusive of a post-close earnout to be paid in 2027. The acquisition was completed on a debt free basis and was funded using cash on hand from operations. The acquisition of New Classic had no impact on the Group’s weighted-average shares as no shares were issued.
The following table summarizes the estimated fair value of the assets acquired and liabilities assumed as of the acquisition date:

Amount
(In thousands)
Cash and cash equivalents$71 
Accounts receivable, net
8,891 
Inventories
12,039 
Prepayments and other current assets870 
Operating lease right-of-use assets
5,720 
Property and equipment, net
838 
Intangible assets270 
Deferred tax assets1,524 
Total assets acquired$30,223 
Accounts payable(3,916)
Current operating lease liabilities
(4,842)
Accrued expenses and other current liabilities
(1,947)
Operating lease liabilities, non-current
(878)
Finance lease obligations, non-current(274)
Total liabilities assumed$(11,857)
Total identifiable net assets$18,366 
Goodwill314 
Total purchase price$18,680 
The following table summarizes the consideration paid/payable for the New Classic acquisition as of the acquisition date:

Amount
(In thousands)
Cash paid
$14,400 
Cash payable
955 
Contingent consideration
3,325 
Total purchase price$18,680 
During the three months ended June 30, 2026, the Group paid the outstanding consideration payable of $955 thousand as of the acquisition date.
The New Classic acquisition agreement includes an earnout provision requiring a $3.6 million payment to the seller upon achieving $60.0 million in net revenue within the twelve-month period beginning after the closing of the Acquisition. The earnout will be paid on a pro-rated basis if net revenue falls between $50.7 million and $60.0 million, and will not be paid if net revenue falls below $50.7 million. Any such payments will be made to the Seller no later than April 15, 2027. The Group determined the fair value of the contingent payment to be $3.3 million as of the acquisition date, using a probability weighted scenario approach based on the aforementioned earnout provisions and discounting the potential payments to their present value.
The intangible assets acquired of $270 thousand consist of customer relationships (amortized over 10 years), which was measured at fair value following the income approach.
The carrying value of accounts receivable, prepayments and other current assets, and accounts payable approximate their fair value.
Goodwill of $314 thousand represents the excess purchase price over the estimated fair value assigned to tangible and identifiable intangible assets acquired and liabilities assumed. Goodwill is attributable to expected synergies from future growth.
Acquisition-related costs for New Classic were approximately $265 thousand. Acquisition-related costs were expensed as incurred and are included in general and administrative expenses within the unaudited condensed consolidated statements of comprehensive income.