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INVESTMENT IN UNCONSOLIDATED JOINT VENTURE

12 Months Ended

Apr. 28, 2019

Equity Method Investments and Joint Ventures [Abstract]

INVESTMENT IN UNCONSOLIDATED JOINT VENTURE

9. INVESTMENT IN UNCONSOLIDATED JOINT VENTURE

Culp International Holdings, Ltd. (Culp), a wholly-owned subsidiary of the company, entered into a joint venture agreement, pursuant to which Culp owns fifty percent of CLASS International Holdings, Ltd (CLIH). CLIH produces cut and sewn mattress covers, and its operations are located in a modern industrial park on the northeastern border of Haiti, which borders the Dominican Republic. CLIH commenced production in the second quarter of fiscal 2018 (October 2017) and complements our mattress fabric operations with a mirrored platform that enhances our ability to meet customer demand while adding a lower cost operation to our platform.

CLIH incurred a net loss of $227,000, $532,000 and $46,000 in fiscal 2019, 2018 and 2017, respectively. CLIH’s net loss in fiscal 2018 and fiscal 2017 included a significant amount of initial start- up operating expenses. Culp’s equity interests in these net losses were $114,000, $266,000 and $23,000 in fiscal 2019, 2018 and 2017, respectively.

The following table summarizes information of assets, liabilities and members’ equity of our equity method investment in CLIH:

(dollars in thousands)		April 28, 2019				April 29, 2018
total assets		$	3,126			$	3,130
total liabilities		$	111			$	128
total members’ equity		$	3,015			$	3,002

At April 28, 2019 and April 29, 2018, our investment in CLIH totaled $1.5 million, which represents the company’s fifty percent ownership in CLIH.

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- Definition

The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-URI http://asc.fasb.org/topic&trid=2196965

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