4. Revenue from Contracts with Customers

Nature of Performance Obligations

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

In addition, the upholstery segment includes Read Window Products LLC (“Read”), a wholly owned subsidiary that provides window treatments and sourcing of upholstery fabrics and other products, as well as related measuring and installation services to customers in the hospitality and commercial markets. 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 bedding and upholstery products, as well as the performance of customized fabrication and installation services associated with window treatments.

Contract Assets & Liabilities

Certain contracts relating to customized fabrication and installation services associated with Read require upfront customer deposits that result in a contract liability that is recorded in the Consolidated Balance Sheets as deferred revenue. Revenue on contract liabilities associated with customized fabrication and installation services is generally recognized within one year, as the satisfaction of performance obligations is generally one year or less. If upfront deposits or prepayments are not required, customers may be granted terms that generally range from 15 to 60 days. Our terms are customary within the industries in which we operate and are not considered financing arrangements.

We elected the practical expedient to not adjust the transaction price for the effects of a significant financing component because the performance obligation is part of a contract that has an original expected duration of one year or less. We did not disclose the value of unsatisfied performance obligations as substantially all of any unsatisfied performance obligations as of August 2, 2026, will be satisfied within one year or less.

There were no contract assets recognized as of August 2, 2026 or August 3, 2025.

As of August 2, 2026, deferred revenue of $203,000 pertained to upfront customer deposits associated with customized fabrication and installation services. As of August 3, 2025, deferred revenue of $485,000 pertained to: (i) upfront customer deposits associated with customized fabrication and installation services relating to Read totaling $422,000; and (ii) an upfront license fee paid to us for the licensing of a certain trademark to be used by an upholstery customer totaling $63,000.

Revenue recognized during the three-month periods ended August 2, 2026 and August 3, 2025, that was included in the deferred revenue balance at the beginning of each period was $187,000 and $437,000, respectively.

Disaggregation of Revenue