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Intangible Assets | 12 Months Ended
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Apr. 28, 2024
Goodwill And Intangible Assets Disclosure [Abstract] |
Intangible Assets | 6. INTANGIBLE ASSETS A summary of intangible assets follows:
(dollars in thousands) |  | April 28, 2024 |  |  | April 30, 2023 |  |
Tradename |  | $ | 540 |  |  | $ | 540 |  |
Customer relationships, net |  |  | 1,035 |  |  |  | 1,335 |  |
Non-compete agreement, net |  |  | 301 |  |  |  | 377 |  |
|  | $ | 1,876 |  |  | $ | 2,252 |  |
Tradename Our tradename pertains to Read, a separate reporting unit within our upholstery fabrics segment. This tradename was determined to have an indefinite useful life at the time of its acquisition, and therefore is not being amortized. However, we are required to assess this tradename annually or between annual tests if we believe indicators of impairment exist. Accordingly, on the annual testing date, April 28, 2024, we performed an impairment assessment of Read's tradename. Our assessment consisted of a quantitative impairment test utilizing the relief from royalty method to determine the fair value of Read's tradename and comparing the fair value of the tradename to its respective carrying amount. Based on this quantitative test, the fair value of the trade name exceeded its carrying amount and consequently no impairment was recorded during the twelve months ending April 28, 2024. Customer Relationships A summary of the change in the carrying amount of our customer relationships follows:
(dollars in thousands) |  | 2024 |  |  | 2023 |  |  | 2022 |
beginning balance |  | $ | 1,335 |  |  | $ | 1,636 |  |  | $ | 1,937 |
amortization expense |  |  | (300 | ) |  |  | (301 | ) |  |  | (301 | )
ending balance |  |  | 1,035 |  |  |  | 1,335 |  |  |  | 1,636 |
Our customer relationships are amortized on a straight-line basis over useful lives ranging from nine to seventeen years. The gross carrying amount of our customer relationships was $3.1 million as of April 28, 2024, and April 30, 2023. Accumulated amortization for these customer relationships was $2.1 million and $1.8 million as of April 28, 2024, and April 30, 2023, respectively. The remaining amortization expense for the next five fiscal years and thereafter follows: FY 2025 - $301,000; FY 2026 - $301,000; FY 2027 - $279,000; FY 2028 - $52,000; FY 2029 - $51,000; and thereafter - $51,000. The weighted average amortization period for our customer relationships is 3.8 years as of April 28, 2024. Non-Compete Agreement A summary of the change in the carrying amount of our non-compete agreement follows:
(dollars in thousands) |  | 2024 |  |  | 2023 |  |  | 2022 |
beginning balance |  | $ | 377 |  |  | $ | 452 |  |  | $ | 527 |
amortization expense |  |  | (76 | ) |  |  | (75 | ) |  |  | (75 | )
ending balance |  | $ | 301 |  |  | $ | 377 |  |  | $ | 452 |
Our non-compete agreement is associated with a prior acquisition by our mattress fabrics segment and is amortized on a straight-line basis over the fifteen-year life of the agreement. The gross carrying amount of this non-compete agreement was $2.0 million as of April 28, 2024, and April 30, 2023. Accumulated amortization for this non-compete agreement was $1.7 million and $1.6 million as of April 28, 20 24, and April 30, 2023. The remaining amortization expense for the next five years and thereafter follows: FY 2025 - $76,000; FY 2026 - $76,000; FY 2027 - $76,000; and FY 2028 - $73,000. The weighted average amortization period for the non-compete agreement is 4.0 years as of April 28, 2024. Impairment of Definite Lived Assets - Mattress Fabrics Segment As of April 28, 2024, management reviewed the long-lived assets associated with our mattress fabrics segment, which consisted of property, plant, and equipment, right of use assets, and definite-lived intangible assets (collectively known as the "Mattress Asset Group"), for impairment, as events and changes in circumstances occurred that indicated the carrying amount of the Mattress Asset Group may not be recoverable. The mattress fabrics segment experienced a significant cumulative operating loss totaling $22.6 million commencing in the second quarter of fiscal 2023, and continuing through the fourth quarter of fiscal 2024. We believe this significant cumulative operating loss stemmed from a decline in consumer discretionary spending on mattress products, which we believe was driven by the following factors: (i) inflationary effects of commodities such as gas, food, and other necessities; (ii) a significant increase in interest rates; (iii) the pulling forward of demand for home goods products during the early years of the COVID-19 pandemic, which demand has now shifted to travel, leisure, and other services; and (iv) excess inventory held by customers due to the decline in consumer demand. Based on the above evidence, we were required to determine the recoverability of the Mattress Asset Group, which is classified as held and used, by comparing the carrying amount of the Mattress Asset Group to the sum of the future undiscounted cash flows expected to result from its use and eventual disposition. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized for the excess of the carrying amount over the fair value of the asset group. The carrying amount of the Mattress Asset Group totaled $33.7 million, which represents property, plant, and equipment of $31.5 million, right of use assets of $1.6 million, customer relationships of $306,000, and a non-compete agreement of $301,000. The total carrying amount of the Mattress Asset Group did not exceed the sum of its future undiscounted cash flows from its use and disposition. As a result, we determined there was no impairment associated with the Mattress Asset Group as of April 28, 2024. Impairment of Definite Lived Assets - Read As of April 28, 2024, management reviewed the long-lived assets associated with Read, a separate reporting unit within our upholstery fabrics segment. Read's long-lived assets consist of property, plant, and equipment, a right of use asset, and finite-lived intangible assets (collectively known as "Read's Asset Group"). Read's Asset Group was reviewed for impairment because events and changes in circumstances occurred that indicated the carrying amount of the Read's Asset Group may not be recoverable. As a result, we performed an assessment to determine if any impairment indicators existed. Based on this assessment we concluded that indicators of impairment did exist, such as unfavorable financial performance in that we have incurred net operating losses during the last three fiscal years, which stem from (i) a tight labor supply and wage inflation, (ii) processing and pricing inefficiencies associated with customization and installation services, (iii) an unfavorable mix of small scale and larger scale projects; and (iv) changes in management and key personnel. Based on the above evidence, we were required to determine the recoverability of Read's Asset Group, which is classified as held and used, by comparing the carrying amount of Read's Asset Group to the sum of the future undiscounted cash flows expected to result from its use and eventual disposition. If the carrying amount of an asset group exceeds its estimated future undiscounted cash flows, an impairment charge is recognized for the excess of the carrying amount over the fair value of the asset group. As of April 28, 2024, the carrying amount of Read's Asset Group totaled $1.8 million, which represents customer relationships of $728,000, right of use asset of $725,000, and property, plant, and equipment of $390,000. The total carrying amount of Read's Asset Group did not exceed the sum of its future undiscounted cash flows from its use and eventual disposition. As a result, we determined there was no impairment associated with Read's Asset Group as of April 28, 2024.

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