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Segment Information
 3 Months Ended
Jul. 31, 2011
Segment Information
14.  Segment Information

Our operations are classified into two business segments: mattress fabrics and upholstery fabrics.  The mattress fabrics segment manufactures and sells fabrics to bedding manufacturers.  The upholstery fabrics segment manufactures and sells fabrics primarily to residential and commercial (contract) furniture manufacturers.

We evaluate the operating performance of our segments based upon income (loss) from operations before restructuring and related charges or (credits), certain unallocated corporate expenses, and other non-recurring items. Cost of sales in both segments include costs to manufacture or source our products, including costs such as raw material and finished goods purchases, direct and indirect labor, overhead and incoming freight charges.  Unallocated corporate expenses primarily represent compensation and benefits for certain executive officers and all costs related to being a public company.  Segment assets include assets used in the operations of each segment and primarily consist of accounts receivable, inventories, and property, plant and equipment.  The mattress fabrics segment also includes in segment assets, assets held for sale, goodwill and non-compete agreements associated with certain acquisitions.  The upholstery fabrics segment also includes assets held for sale in segment assets.
 
Financial information for the company’s operating segments follows:
 
     
    Three months ended
(dollars in thousands)
  
July 31, 2011
     August 1, 2010    
Net sales:
              
Mattress Fabrics   $ 32,170     $ 30,918    
Upholstery Fabrics     28,100       24,994    
    $ 60,270     $ 55,912    
                   
                   
                   
Gross profit:
                  
Mattress Fabrics   $ 5,137     $ 5,990    
Upholstery Fabrics     3,741       3,719    
    $ 8,878     $ 9,709    
                   
Selling, general, and administrative expenses:
                  
Mattress Fabrics   $ 1,992     $ 1,996    
Upholstery Fabrics     2,766       2,101    
Total segment selling, general, and                  
administrative expenses     4,758       4,097    
Unallocated corporate expenses     999       1,115    
    $ 5,757     $ 5,212    
                   
Income from operations:
                  
Mattress Fabrics   $ 3,146     $ 3,994    
Upholstery Fabrics     974       1,618    
Total segment income from operations     4,120       5,612    
Unallocated corporate expenses     (999 )     (1,115 )  
Restructuring and related credit     -       6   (1)
Total income from operations     3,121       4,503    
Interest expense     (220 )     (210 )  
Interest income     129       38    
Other expense     (65 )     (53 )  
Income before income taxes   $ 2,965     $ 4,278    

(1)  
The $6 restructuring credit primarily represents a credit for employee termination benefits.  This restructuring credit relates to the Upholstery Fabrics segment
 
Balance sheet information for the company’s operating segments follow:
 
             
(dollars in thousands)  
July 31, 2011
    
May 1, 2011
  
Segment assets:            
Mattress Fabrics
            
Current assets (2)
   $ 29,999     $ 25,456  
Assets held for sale
     14       14  
Non-compete agreements, net
     443       480  
Goodwill
     11,462       11,462  
Property, plant and equipment (3)
     28,759       28,581  
Total mattress fabrics assets
     70,677       65,993  
Upholstery Fabrics
                
Current assets (2)
     23,764       23,476  
Assets held for sale
     61       61  
Property, plant and equipment (4)
     1,171       967  
Total upholstery fabrics assets
     24,996       24,504  
Total segment assets
     95,673       90,497  
Non-segment assets:                
Cash and cash equivalents
     14,570       23,181  
Short-term investments
     10,443       7,699  
Income taxes receivable
     79       79  
Deferred income taxes
     3,428       3,899  
Other current assets
     2,862       2,376  
Property, plant and equipment (5)
     685       748  
Other assets
     1,567       1,572  
Total assets
   $ 129,307     $ 130,051  
 

 
   Three months ended
(dollars in thousands)  
July 31, 2011
    
August 1, 2010
  
Capital expenditures (6):            
Mattress Fabrics
   $ 1,205     $ 2,967  
Upholstery Fabrics
     292       85  
Unallocated Corporate
     9       30  
Total capital expenditures
   $ 1,506     $ 3,082  
Depreciation expense:                
Mattress Fabrics
   $ 1,029     $ 877  
Upholstery Fabrics
     158       137  
Total depreciation expense   $ 1,187     $ 1,014  

(2)  
Current assets represent accounts receivable and inventory for the respective segment.

(3)  
The $28.8 million at July 31, 2011, represents property, plant, and equipment of $19.8 million and $9.0 million located in the U.S. and Canada, respectively. The $28.6 million at May 1, 2011, represents property, plant, and equipment of $20.0 million and $8.6 million located in the U.S. and Canada, respectively.

(4)  
The $1.2 million at July 31, 2011, represents property, plant, and equipment located in the U.S. of $891, located in China of $205, and located in Poland of $75. The $967 at May 1, 2011, represents property, plant, and equipment located in the U.S. of $727, located in China of $184, and located in Poland of $56.

(5)  
The $685 and $748 at July 31, 2011 and May 1, 2011, respectively, represent property, plant, and equipment associated with unallocated corporate departments and corporate departments shared by both the mattress and upholstery fabric segments. Property, plant, and equipment associated with corporate are located in the U.S.

(6)  
Capital expenditure amounts are stated on the accrual basis. See Consolidated Statement of Cash Flows for capital expenditure amounts on a cash basis.