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Note 27 - Business Segment Information

6 Months Ended

Dec. 23, 2012

Segment Reporting Disclosure [Text Block]

27. Business Segment Information

The Company has three operating segments which are also its reportable segments. Each reportable segment derives its revenues as follows:

The Polyester segment manufactures Chip, POY, textured, dyed, twisted and beamed yarns, virgin and recycled, with sales primarily to other yarn manufacturers, knitters and weavers that produce yarn and/or fabric for the apparel, hosiery, automotive upholstery, home furnishing, industrial and other end-use markets. The Polyester segment consists of manufacturing operations in the U.S. and El Salvador.

The Nylon segment manufactures textured nylon and covered spandex yarns with sales to knitters and weavers that produce fabric for the apparel, hosiery, sock and other end-use markets. The Nylon segment consists of manufacturing operations in the U.S. and Colombia.

The International segment’s products primarily include textured polyester and various types of resale yarns and staple fiber. The International segment sells its yarns to knitters and weavers that produce fabric for the apparel, automotive upholstery, home furnishing, industrial and other end-use markets primarily in the South American and Asian regions. This segment includes manufacturing and sales offices in Brazil and a sales office in China.

The Company evaluates the operating performance of its segments based upon Segment Adjusted Profit which is defined as segment gross profit plus segment depreciation and amortization less segment SG&A and segment other adjustments. Segment operating profit represents segment net sales less cost of sales, restructuring and other charges and SG&A expenses. The accounting policies for the segments are consistent with the Company’s accounting policies. Intersegment sales are accounted for at current market prices. Selected financial information for the Polyester, Nylon and International segments is presented below:

	For the Three Months Ended December 23, 2012
	Polyester		Nylon		International		Total
Net sales	$	97,322	$	39,541	$	35,208	$	172,071
Cost of sales		88,885		35,525		30,970		155,380
Gross profit		8,437		4,016		4,238		16,691
Selling, general and administrative expenses		7,177		2,466		1,889		11,532
Segment operating profit	$	1,260	$	1,550	$	2,349	$	5,159

	For the Three Months Ended December 25, 2011
	Polyester			Nylon		International		Total
Net sales	$	95,105		$	38,816	$	33,189	$	167,110
Cost of sales		92,844			34,289		29,095		156,228
Gross profit		2,261			4,527		4,094		10,882
Selling, general and administrative expenses		6,577			2,215		2,194		10,986
Segment operating (loss) profit	$	(4,316	)	$	2,312	$	1,900	$	(104	)

The reconciliations of Segment operating profit (loss) to consolidated Income (loss) before income taxes are as follows:

	For the Three Months Ended
	December 23, 2012			December 25, 2011
Polyester	$	1,260		$	(4,316	)
Nylon		1,550			2,312
International		2,349			1,900
Segment operating profit (loss)		5,159			(104	)
Provision for bad debts		73			357
Other operating expense, net		580			490
Operating income (loss)		4,506			(951	)
Interest income		(144	)		(495	)
Interest expense		1,361			4,222
Loss on extinguishment of debt		114			—
Loss on previously held equity interest		—			3,656
Other non-operating income		—			(1,479	)
Equity in earnings of unconsolidated affiliates		(1,258	)		(844	)
Income (loss) before income taxes	$	4,433		$	(6,011	)

	For the Six Months Ended December 23, 2012
	Polyester		Nylon		International		Total
Net sales	$	190,358	$	79,554	$	75,059	$	344,971
Cost of sales		173,714		71,468		65,078		310,260
Gross profit		16,644		8,086		9,981		34,711
Selling, general and administrative expenses		13,928		4,802		3,949		22,679
Segment operating profit	$	2,716	$	3,284	$	6,032	$	12,032

	For the Six Months Ended December 25, 2011
	Polyester			Nylon		International		Total
Net sales	$	187,633		$	79,777	$	70,713	$	338,123
Cost of sales		181,682			70,898		62,831		315,411
Gross profit		5,951			8,879		7,882		22,712
Selling, general and administrative expenses		12,641			4,325		4,391		21,357
Segment operating (loss) profit	$	(6,690	)	$	4,554	$	3,491	$	1,355

The reconciliations of Segment operating profit to consolidated Income (loss) before income taxes are as follows:

	For the Six Months Ended
	December 23, 2012			December 25, 2011
Polyester	$	2,716		$	(6,690	)
Nylon		3,284			4,554
International		6,032			3,491
Segment operating profit		12,032			1,355
Provision for bad debts		183			562
Other operating expense, net		1,161			449
Operating income		10,688			344
Interest income		(268	)		(1,142	)
Interest expense		2,805			8,602
Loss on extinguishment of debt		356			462
Loss on previously held equity interest		—			3,656
Other non-operating income		—			(1,479	)
Equity in earnings of unconsolidated affiliates		(1,929	)		(4,303	)
Income (loss) before income taxes	$	9,724		$	(5,452	)

The reconciliations of Segment depreciation and amortization expense to consolidated Depreciation and amortization expense are as follows:

	For the Three Months Ended				For the Six Months Ended
	December 23, 2012		December 25, 2011		December 23, 2012		December 25, 2011
Polyester	$	4,697	$	4,735	$	9,378	$	9,534
Nylon		755		770		1,513		1,553
International		820		926		1,686		1,899
Segment depreciation and amortization expense		6,272		6,431		12,577		12,986
Depreciation and amortization included in other operating expense, net		45		31		91		37
Amortization included in interest expense		163		224		329		445
Depreciation and amortization expense	$	6,480	$	6,686	$	12,997	$	13,468

Segment other adjustments for each of the reportable segments consist of the following:

	For the Three Months Ended				For the Six Months Ended
	December 23, 2012		December 25, 2011		December 23, 2012		December 25, 2011
Polyester	$	—	$	—	$	94	$	—
Nylon		—		—		—		—
International		56		104		56		104
Segment other adjustments	$	56	$	104	$	150	$	104

Other adjustments include amounts recorded for employee severance expenses and certain domestic retiree and post-employment medical liabilities.

Segment Adjusted Profit for each of the reportable segments consists of the following:

	For the Three Months Ended				For the Six Months Ended
	December 23, 2012		December 25, 2011		December 23, 2012		December 25, 2011
Polyester	$	5,957	$	419	$	12,188	$	2,844
Nylon		2,305		3,082		4,797		6,107
International		3,225		2,930		7,774		5,494
Segment Adjusted Profit	$	11,487	$	6,431	$	24,759	$	14,445

Intersegment Sales for each of the reportable segments consist of the following:

	For the Three Months Ended				For the Six Months Ended
	December 23, 2012		December 25, 2011		December 23, 2012		December 25, 2011
Polyester	$	348	$	438	$	969	$	890
Nylon		52		219		174		227
International		106		560		399		561
Intersegment sales	$	506	$	1,217	$	1,542	$	1,678

The reconciliations of Segment capital expenditures to consolidated Capital expenditures are as follows:

	For the Three Months Ended				For the Six Months Ended
	December 23, 2012		December 25, 2011		December 23, 2012		December 25, 2011
Polyester	$	1,189	$	1,488	$	1,918	$	1,677
Nylon		114		119		170		190
International		124		202		289		1,007
Segment capital expenditures		1,427		1,809		2,377		2,874
Unallocated corporate capital expenditures		354		328		495		385
Capital expenditures	$	1,781	$	2,137	$	2,872	$	3,259

The reconciliations of Segment total assets to consolidated Total assets are as follows:

	December 23, 2012		June 24, 2012
Polyester	$	181,576	$	198,321
Nylon		71,241		74,569
International		85,556		88,040
Segment total assets		338,373		360,930
All other current assets		9,302		9,424
Unallocated corporate PP&E		11,734		10,404
All other non-current assets		5,329		5,712
Investments in unconsolidated affiliates		96,212		95,763
Total assets	$	460,950	$	482,233

Geographic Data:

Geographic information for net sales is as follows:

	For the Three Months Ended				For the Six Months Ended
	December 23, 2012		December 25, 2011		December 23, 2012		December 25, 2011
U.S.	$	126,202	$	123,049	$	248,789	$	246,969
Brazil		28,406		27,320		60,927		60,465
All other foreign		17,463		16,741		35,255		30,689
Total	$	172,071	$	167,110	$	344,971	$	338,123

The information for net sales is based on the operating locations from where the items were produced or distributed. Export sales from the Company’s U.S. operations to external customers were $22,578 and $20,234 for the three months ended December 23, 2012 and December 25, 2011, respectively. Export sales from the Company’s U.S. operations to external customers were $45,563 and $39,562 for the six months ended December 23, 2012 and December 25, 2011, respectively.

Geographic information for long-lived assets is as follows:

	December 23, 2012		June 24, 2012
U.S.	$	208,031	$	215,910
Brazil		17,386		19,121
All other foreign		9,516		7,915
Total	$	234,933	$	242,946

Long-lived assets are comprised of Property, plant and equipment, net, Intangible assets, net, Investments in unconsolidated affiliates and Other non-current assets.