On April 29, 2024 (first quarter of fiscal 2025), our board of directors made a decision to: (i) consolidate the company's North American bedding operations, including the closure and sale of the Property located in Quebec, Canada; (ii) move a portion of the knitting and finishing capacity from the company's manufacturing facility located in Quebec, Canada, to the company's manufacturing facility located in Stokesdale, North Carolina; (iii) transition the bedding segment's weaving operation to a strategic sourcing model through the company's long-standing supply partners; (iv) consolidate the company's sewn mattress cover operation located in Ouanaminthe, Haiti, from two leased facilities into one building and reduce other operating expenses at this location; as well as (v) reduce unallocated corporate and shared service expenses.

These restructuring activities were completed by the end of the second quarter of fiscal 2026, including the sale of the Property located in Quebec, Canada. Accordingly, we recorded a gain from the sale of this Property totaling $4.0 million that was classified within restructuring credit in the Consolidated Statement of Net Loss for the three-month period ended August 3, 2025. See notes 7 and 8 of the consolidated financial statements for further details regarding the Sales Agreement associated with the sale of the Property and determination of its fair value.

Since inception of this restructuring initiative, we incurred cumulative restructuring and restructuring related charges totaling $5.3 million, most of which is related to the bedding segment. Of this total $5.3 million, $7.2 million represents a cash restructuring and restructuring related charge partially offset by a $(1.9) million non-cash restructuring credit.

On April 24, 2025 (fourth quarter of fiscal 2025), the company announced a strategic transformation of its operating model that combined certain activities within the bedding and upholstery segments and created one integrated Culp-branded business. As part of this strategic transformation, we closed a leased facility located in Burlington, North Carolina, and a leased facility located in Knoxville, Tennessee, each operated by our upholstery segment, and transitioned their production and distribution activities to a shared management model within our owned facility located in Stokesdale, North Carolina, which had historically been operated solely by our bedding segment.

These restructuring activities were completed by the end of the fourth quarter of fiscal 2026. Since inception of this restructuring initiative, we have incurred cumulative restructuring and restructuring related charges totaling $2.7 million, of which $1.4 million represents a cash restructuring and restructuring related charge and $1.3 million represents a non-cash restructuring charge.

The following summarizes restructuring credit associated with the above announcements for the three-month period ended August 3, 2025:


	Three months ended
(dollars in thousands)	August 3, 2025
Additional depreciation expense for shortened useful lives	$	22
Employee termination benefits		(4	)
Lease termination costs		62
Facility consolidation and relocation expenses		52
Net gain from the sale and impairment of property, plant, and equipment		(3,747	)
Other associated costs		107
Restructuring credit (1)	$	(3,508	)

The following summarizes the activity in accrued restructuring costs for the three-month period ended August 2, 2026:


	Employee			Facility Consolidation
	Termination			and Relocation
(dollars in thousands)	Benefits			Costs		Total
Beginning balance	$	37		$	10	$	47
Payments		(37	)		—		(37	)
Ending Balance	$	—		$	10	$	10

The following summarizes the activity in accrued restructuring costs for the three-month period ended August 3, 2025:


	Employee			Other			Facility Consolidation
	Termination			Associated			and Relocation
(dollars in thousands)	Benefits			Costs			Costs			Total
Beginning balance	$	522		$	88		$	—		$	610
Expenses incurred		—			84			52			136
Change in estimate adjustments		(4	)		23			—			19
Payments		(446	)		(163	)		(52	)		(661	)
Foreign currency exchange remeasurement		—			1			—			1
Ending Balance	$	72		$	33		$	—		$	105