[1]

We recorded a non-cash impairment charge of $0.4 million during fiscal 2026 related to the impairment of long-lived assets held at two retail design centers. The asset group used in the impairment analysis, which represented the lowest level for which identifiable cash flows were available and largely independent of the cash flows of other groups of assets, was the individual retail design center. We estimated future cash flows based on design center-level historical results, current trends, and operating and cash flow projections.

[2]

Our sawmill operations located in Beecher Falls, Vermont sustained damage from a fire. Losses incurred from the disposal of inventory, damaged equipment and facility cleanup totaled $1.4 million during fiscal 2026. In addition, $2.3 million in insurance proceeds were received by the Company, which lowered the financial impact to a net gain of $0.9 million during fiscal 2026. The insurance proceeds received were classified in the consolidated statements of cash flows based on the nature of the underlying loss, thus $1.1 million received for the reimbursement of cleanup costs was disclosed within operating activities while the remaining $1.2 million received for the reconstruction of the damaged outbuilding was disclosed within investing activities. The fire did not have a material impact on our operations as our Beecher Falls, Vermont facility returned to normal schedule shortly after the incident.

[3]

We recorded restructuring charges of $1.5 million related to early lease termination fees associated with the closing of two retail design centers during fiscal 2026.

[4]

Our retail design center located in Woodbury, Minnesota sustained damage from a flood. Losses incurred from the disposal of inventory and facility cleanup totaled $1.7 million during fiscal 2026. In addition, $2.5 million in insurance proceeds were received by the Company, which lowered the financial impact to a net gain of $0.8 million during fiscal 2026. The insurance proceeds received were classified in the consolidated statements of cash flows based on the nature of the underlying loss, thus $0.5 million received for the reimbursement of cleanup costs was disclosed within operating activities while the remaining $2.0 million received for the reconstruction of the damaged building was reported within investing activities. The Company is currently working to reopen the damaged design center while operating in a nearby temporary location.