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Segment Information
 6 Months Ended
Oct. 30, 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)
  
October 30, 2011
    
October 31, 2010
  
Net sales:
  
 
 
    
 
 
  
Mattress Fabrics   $ 35,242     $ 28,335  
Upholstery Fabrics
     22,771       20,544  
    $ 58,013     $ 48,879  
Gross profit:
                
Mattress Fabrics   $ 5,938     $ 5,030  
Upholstery Fabrics     2,785       2,579  
Total segment gross profit   $ 8,723     $ 7,609  
Other non-recurring charges
     (77 ) (1)     -  
    $ 8,646     $ 7,609  
 
Selling, general, and administrative expenses:
              
Mattress Fabrics
   $ 2,132       $ 1,704  
Upholstery Fabrics
     2,766         1,777  
Total segment selling, general, and
administrative expenses
     4,898         3,481  
Unallocated corporate expenses
     822         721  
    $ 5,720       $ 4,202  
Income from operations:
                  
Mattress Fabrics
   $ 3,806       $ 3,326  
Upholstery Fabrics
     19         802  
Total segment income from operations
     3,825         4,128  
Unallocated corporate expenses
     (822 )       (721 )
Other non-recurring charges
     (77 ) (1)     -  
Total income from operations
     2,926         3,407  
Interest expense
     (188 )       (225 )
Interest income
     110         49  
Other (income) expense
     15         (30 )
Income before income taxes
   $ 2,863       $ 3,201  
 
(1)
Our other non-recurring charges represent employee termination benefits associated with Anderson, SC plant facility.  This restructuring credit relates to the Upholstery Fabrics segment.
 
   
Six months ended
  
(dollars in thousands)
  
October 30, 2011
    
October 31, 2010
  
Net sales:
            
Mattress Fabrics
   $ 67,412     $ 59,253  
Upholstery Fabrics
     50,871       45,538  
    $ 118,283     $ 104,791  
                 
                 
Gross profit:
                
Mattress Fabrics
   $ 11,076     $ 11,020  
Upholstery Fabrics
     6,525       6,298  
Total segment gross profit
   $ 17,601     $ 17,318  
Other non-recurring charges
     (77 ) (1)     -  
    $ 17,524     $ 17,318  
                 
                 
Selling, general, and administrative expenses:
                
Mattress Fabrics
   $ 4,123     $ 3,701  
Upholstery Fabrics
     5,534       3,878  
Total segment selling, general, and
                
   administrative expenses
     9,657       7,579  
Unallocated corporate expenses
     1,820       1,837  
    $ 11,477     $ 9,416  
 
Income from operations:
            
Mattress Fabrics
   $ 6,953     $ 7,319  
Upholstery Fabrics
     991       2,420  
Total segment income from operations
     7,944       9,739  
Unallocated corporate expenses
     (1,820 )     (1,837 )
Other non-recurring charges
     (77 )  (1)     -  
Restructuring credit
     -       8   (2)
Total income from operations
     6,047       7,910  
Interest expense
     (409 )     (435 )
Interest income
     238       87  
Other expense
     (49 )     (83 )
Income before income taxes
   $ 5,827     $ 7,479  
 
(2)
The $8 restructuring credit primarily represents a credit of $15 for employee termination benefits and a charge of $7 for lease termination and other exit costs. This restructuring credit relates to the Upholstery Fabrics segment.

Balance sheet information for the company’s operating segments follow:
 
(dollars in thousands)
  
October 30, 2011
    
May 1, 2011
  
Segment assets:
        
 
  
Mattress Fabrics            
Current assets (3)
   $ 27,674     $ 25,456  
Assets held for sale
     14       14  
Non-compete agreements, net
     406       480  
Goodwill
     11,462       11,462  
Property, plant and equipment (4)
     28,643       28,581  
Total mattress fabrics assets
     68,199       65,993  
Upholstery Fabrics                
Current assets (3)
     22,343       23,476  
Assets held for sale
     61       61  
Property, plant and equipment (5)
     1,221       967  
Total upholstery fabrics assets
     23,625       24,504  
Total segment assets
     91,824       90,497  
Non-segment assets:                 
Cash and cash equivalents
     13,795       23,181  
Short-term investments
     10,482       7,699  
Income taxes receivable
     79       79  
Deferred income taxes
     7,199       3,899  
Other current assets
     1,602       2,376  
Property, plant and equipment (6)
     567       748  
Other assets
     1,576       1,572  
Total assets
   $ 127,124     $ 130,051  
 
   
Six months ended
  
(dollars in thousands)
  
October 30, 2011
    
October 31, 2010
  
Capital expenditures (7):            
Mattress Fabrics
   $ 2,113     $ 4,720  
Upholstery Fabrics
     395       120  
Unallocated Corporate
     17       110  
Total capital expenditures
   $ 2,525     $ 4,950  
Depreciation expense:                 
Mattress Fabrics
   $ 2,082     $ 1,822  
Upholstery Fabrics
     304       275  
Total depreciation expense
   $ 2,386     $ 2,097  

(3)
Current assets represent accounts receivable and inventory for the respective segment.

(4)
The $28.6 million at October 30, 2011, represents property, plant, and equipment of $19.8 million and $8.8 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.

(5)
The $1.2 million at October 30, 2011, represents property, plant, and equipment located in the U.S. of $921, located in China of $189, and located in Poland of $111. 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.

(6)
The $567 and $748 at October 30, 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.

(7)
Capital expenditure amounts are stated on the accrual basis. See Consolidated Statement of Cash Flows for capital expenditure amounts on a cash basis.