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SEGMENT INFORMATION | 12 Months Ended
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Apr. 29, 2012
SEGMENT INFORMATION |
18. | SEGMENT INFORMATION
The company’s 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. Net sales denominated in U.S. dollars accounted for 86%, 83% and 84% of total consolidated net sales in 2012, 2011, and 2010, respectively. International sales accounted for 21%, 22% and 22% of net sales in 2012, 2011, and 2010, respectively, and are summarized by geographic area as follows:
(dollars in thousands) |  | 2012 |  |  | 2011 |  |  | 2010 |
north america (excluding USA) |  | $ | 10,417 |  |  |  | 10,505 |  |  |  | 11,654 |
far east and asia |  |  | 38,279 |  |  |  | 36,587 |  |  |  | 31,856 |
all other areas |  |  | 5,353 |  |  |  | 1,502 |  |  |  | 2,546 |
|  | $ | 54,049 |  |  |  | 48,594 |  |  |  | 46,056 |
The company evaluates the operating performance of its segments based upon income from operations before restructuring and related charges (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 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. Statements of operations for the company’s operating segments are as follows:
(dollars in thousands) |  | 2012 |  |  | 2011 |  |  | 2010 |
net sales: |  |  |  |  |  |  |  |  |
upholstery fabrics |  | $ | 108,924 |  |  |  | 94,375 |  |  |  | 91,568 |
mattress fabrics |  |  | 145,519 |  |  |  | 122,431 |  |  |  | 114,848 |
|  | $ | 254,443 |  |  |  | 216,806 |  |  |  | 206,416 |
gross profit: |  |  |  |  |  |  |  |  |  |  |  |
upholstery fabrics |  | $ | 14,984 |  |  |  | 13,592 |  |  |  | 15,183 |
mattress fabrics |  |  | 24,825 |  |  |  | 23,248 |  |  |  | 23,652 |
total segment gross profit |  |  | 39,809 |  |  |  | 36,840 |  |  |  | 38,835 |
other non-recurring charges |  |  | (77 | ) (1) |  |  | - |  |  |  | (58 | ) (3)
|  | $ | 39,732 |  |  |  | 36,840 |  |  |  | 38,777 |
(dollars in thousands) |  |  | 2012 |  |  |  | 2011 |  |  |  | 2010 |
selling, general, and administrative expenses: |  |  |  |  |  |  |  |  |  |  |  |
upholstery fabrics |  | $ | 11,453 |  |  |  | 9,233 |  |  |  | 9,227 |
mattress fabrics |  |  | 9,061 |  |  |  | 7,875 |  |  |  | 8,178 |
unallocated corporate |  |  | 4,512 |  |  |  | 3,961 |  |  |  | 5,400 |
total selling, general, and administrative |  |  |  |  |  |  |  |  |  |  |  |
expenses |  | $ | 25,026 |  |  |  | 21,069 |  |  |  | 22,805 |
Income from operations: |  |  |  |  |  |  |  |  |  |  |  |
upholstery fabrics |  | $ | 3,531 |  |  |  | 4,359 |  |  |  | 5,956 |
mattress fabrics |  |  | 15,764 |  |  |  | 15,373 |  |  |  | 15,474 |
total segment income from operations |  |  | 19,295 |  |  |  | 19,732 |  |  |  | 21,430 |
unallocated corporate expenses |  |  | (4,512 | ) |  |  | (3,961 | ) |  |  | (5,400 | )
other non-recurring charges |  |  | (77 | ) (1) |  |  | (28 | ) (2) |  |  | 312 | (4)
total income from operations |  |  | 14,706 |  |  |  | 15,743 |  |  |  | 16,342 |
interest expense |  |  | (780 | ) |  |  | (881 | ) |  |  | (1,314 | )
interest income |  |  | 508 |  |  |  | 240 |  |  |  | 116 |
other expense |  |  | (236 | ) |  |  | (40 | ) |  |  | (828 | )
income before income taxes |  | $ | 14,198 |  |  |  | 15,062 |  |  |  | 14,316 |
(1) | The $77 represents employee termination benefits associated with our Anderson, SC plant facility. This charge was recorded in cost of sales in the 2012 Consolidated Statement of Net Income and relates to the upholstery fabrics segment.
(2) | The $28 represents an impairment charge related to equipment that is classified as held for sale, a charge of $24 for lease termination and other exit costs, offset by a credit of $14 for employee termination benefits, and a credit of $10 for sales proceeds received on equipment with no carrying value. This charge was recorded in restructuring expense in the 2011 Consolidated Statement of Net Income and relates to the upholstery fabrics segment.
(3) | The $58 represents a restructuring related charge of $108 for other operating costs associated with closed plant facilities, offset by a credit of $50 for the sale of inventory previously reserved for. This charge was recorded in cost of sales in the 2010 Consolidated Statement of Net Income and relates to the upholstery fabrics segment.
(4) | The $312 represents a restructuring credit of $186 for employee termination benefits, a credit of $170 for sales proceeds received on equipment with no carrying value, a credit of $50 for the sale of inventory previously reserved for, a credit of $14 for lease termination and other exit costs, offset by a charge of $108 for other operating costs associated with closed plant facilities. Of this total credit, a charge of $58 was recorded to cost of sales and a credit of $370 was recorded in restructuring credit in the 2010 Consolidated Statement of Net Income. This credit relates to the upholstery fabrics segment.
One customer within the upholstery fabrics segment represented 13%, 12%, and 12% of consolidated net sales in each of fiscal 2012, 2011, and 2010, respectively. Two customers within the mattress fabrics segment represented 22%, 23%, and 22% of consolidated net sales in fiscal 2012, 2011 and 2010, respectively. One customer within the upholstery fabrics segment represented 12% and 13% of net accounts receivable at April 29, 2012 and May 1, 2011, respectively. No customers within the mattress fabrics accounted for 10% or more of net accounts receivable as of April 29, 2012 or May 1, 2011. Balance sheet information for the company’s operating segments follow:
(dollars in thousands) |  | 2012 |  |  | 2011 |  |  | 2010 |
segment assets |  |  |  |  |  |  |  |  |
mattress fabrics |  |  |  |  |  |  |  |  |
current assets (5) |  | $ | 29,909 |  |  |  | 25,455 |  |  |  | 22,307 |
assets held for sale |  |  | 15 |  |  |  | 15 |  |  |  | 34 |
non-compete agreements, net |  |  | 333 |  |  |  | 480 |  |  |  | 843 |
goodwill |  |  | 11,462 |  |  |  | 11,462 |  |  |  | 11,462 |
property, plant, and equipment |  |  | 29,237 | (6) |  |  | 28,581 | (7) |  |  | 26,720 | (8)
total mattress fabrics assets |  | $ | 70,956 |  |  |  | 65,993 |  |  |  | 61,366 |
upholstery fabrics |  |  |  |  |  |  |  |  |  |  |  |
current assets (5) |  | $ | 31,519 |  |  |  | 23,477 |  |  |  | 23,517 |
assets held for sale |  |  | - |  |  |  | 60 |  |  |  | 89 |
property, plant, and equipment |  |  | 1,124 | (9) |  |  | 967 | (10) |  |  | 989 | (11)
total upholstery fabrics assets |  | $ | 32,643 |  |  |  | 24,504 |  |  |  | 24,595 |
total segment assets |  |  | 103,599 |  |  |  | 90,497 |  |  |  | 85,961 |
non-segment assets |  |  |  |  |  |  |  |  |  |  |  |
cash and cash equivalents |  |  | 25,023 |  |  |  | 23,181 |  |  |  | 18,295 |
short-term investments |  |  | 5,941 |  |  |  | 7,699 |  |  |  | 3,023 |
income taxes receivable |  |  | - |  |  |  | 79 |  |  |  | 728 |
deferred income taxes |  |  | 5,672 |  |  |  | 3,899 |  |  |  | 474 |
other current assets |  |  | 1,989 |  |  |  | 2,376 |  |  |  | 1,698 |
property, plant, and equipment |  |  | 918 | (12) |  |  | 748 | (12) |  |  | 694 | (12)
other assets |  |  | 1,574 |  |  |  | 1,572 |  |  |  | 1,725 |
total assets |  | $ | 144,716 |  |  |  | 130,051 |  |  |  | 112,598 |
capital expenditures (13): |  |  |  |  |  |  |  |  |  |  |  |
mattress fabrics |  | $ | 4,875 |  |  |  | 5,714 |  |  |  | 6,600 |
upholstery fabrics |  |  | 512 |  |  |  | 311 |  |  |  | 481 |
unallocated corporate |  |  | 532 |  |  |  | 277 |  |  |  | 316 |
|  | $ | 5,919 |  |  |  | 6,302 |  |  |  | 7,397 |
depreciation expense |  |  |  |  |  |  |  |  |  |  |  |
mattress fabrics |  | $ | 4,275 |  |  |  | 3,820 |  |  |  | 3,458 |
upholstery fabrics |  |  | 590 |  |  |  | 552 |  |  |  | 552 |
total segment depreciation expense |  | $ | 4,865 |  |  |  | 4,372 |  |  |  | 4,010 |
(5) | Current assets represent accounts receivable and inventory.
(6) | The $29.2 million at April 29, 2012 represents property, plant, and equipment located in the U.S. of $21.2 million and located in Canada of $8.0 million. The increase in this segment’s property, plant, and equipment balance at April 29, 2012, compared with May 1, 2011 is primarily due to fiscal 2011 capital spending of $4.9 million, offset by depreciation expense of $4.3 million.
(7) | The $28.6 million at May 1, 2011, represents property, plant, and equipment located in the U.S. of $20.0 million and located in Canada of $8.6 million. The increase in this segment’s property, plant, and equipment balance at May 1, 2011 compared with May 2, 2010 is primarily due to fiscal 2011 capital spending of $5.7 million, offset by depreciation expense of $3.8 million.
(8) | The $26.7 million at May 2, 2010, represents property, plant, and equipment located in the U.S. of $18.8 million and located in Canada of $7.9 million.
(9) | The $1.1 million at April 29, 2012, represents property, plant, and equipment located in the U.S. of $837, located in China of $183, and located in Poland of $104.
(10) | 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.
(11) | The $989 at May 2, 2010 represents property, plant, and equipment located in the U.S. of $887 and China of $102.
(12) | The $918, $748 and $694 balance at April 29, 2012, May 1, 2011 and May 2, 2010, represent property, plant, and equipment associated with unallocated corporate departments and corporate departments shared by both the mattress and upholstery fabric segments.
(13) | Capital expenditure amounts are stated on an accrual basis. See Consolidated Statement of Cash Flows for capital expenditure amounts on a cash basis.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 131 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599 + Details
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