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Segment Information
 9 Months Ended
Jan. 29, 2012
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)
   January 29, 2012   January 30, 2011
Net sales:
              
Mattress Fabrics
   $ 34,719     $ 27,991    
Upholstery Fabrics
     25,731       23,661    
    $ 60,450     $ 51,652    
Gross profit:
                  
Mattress Fabrics
   $ 5,104     $ 4,596    
Upholstery Fabrics
     3,407       3,643    
    $ 8,511     $ 8,239    
Selling, general, and administrative expenses:
                  
Mattress Fabrics
   $ 1,970     $ 1,780    
Upholstery Fabrics
     2,653       2,517    
Total segment selling, general, and administrative expenses
     4,623       4,297    
Unallocated corporate expenses
     895       832    
    $ 5,518     $ 5,129    
Income from operations:
                  
Mattress Fabrics
   $ 3,134     $ 2,816    
Upholstery Fabrics
     754       1,126    
Total segment income from operations
     3,888       3,942    
Unallocated corporate expenses
     (895 )     (832 )  
Restructuring expense
     -       (7 ) (1)
Total income from operations
     2,993       3,103    
Interest expense
     (181 )      (224 )  
Interest income     148       57    
Other expense     (83 )      (28 )  
Income before income taxes
   $ 2,877     $ 2,908    
 
(1)
The $7 restructuring charge represents $17 for lease termination and other exit costs offset by a credit of $10 for sales proceeds received on equipment with no carrying value. This restructuring charge relates to the Upholstery Fabrics segment.
 
   
Nine months ended
(dollars in thousands)
   January 29, 2012   January 30, 2011
Net sales:
                
Mattress Fabrics
   $ 102,130       $ 87,244    
Upholstery Fabrics
     76,603         69,199    
    $ 178,733       $ 156,443    
Gross profit:
                    
Mattress Fabrics
   $ 16,180       $ 15,616    
Upholstery Fabrics
     9,932         9,941    
Total segment gross profit
   $ 26,112       $ 25,557    
Other non-recurring charges
    
(77
 ) (2)    
-
    
    $
26,035
       $
25,557
    
Selling, general, and administrative expenses:
                    
Mattress Fabrics
   $ 6,094       $ 5,480    
Upholstery Fabrics
     8,186         6,394    
Total segment selling, general, and administrative expenses
     14,280         11,874    
Unallocated corporate expenses
     2,715         2,670    
    $ 16,995       $ 14,544    
Income from operations:
                    
Mattress Fabrics
   $ 10,087       $ 10,136    
Upholstery Fabrics
     1,745         3,547    
Total segment income from operations
     11,832         13,683    
Unallocated corporate expenses
     (2,715 )       (2,670 )  
Other non-recurring charges
     (77 )  (2)     -    
Total income from operations
     9,040         11,013    
Interest expense
     (590 )        (659 )  
Interest income     387         144    
Other expense     (132 )        (111 )  
Income before income taxes
   $ 8,705       $ 10,387    
 
(2)
 The $77 other non-recurring charge represents employee termination benefits associated with our Anderson, SC plant facility. This non-recurring charge relates to the Upholstery Fabrics segment.
 
Balance sheet information for the company’s operating segments follow:
 
(dollars in thousands)
  
January 29, 2012
  
May 1, 2011
Segment assets:
            
Mattress Fabrics
            
Current assets (3)
   $ 28,638     $ 25,456  
Assets held for sale
     14       14  
Non-compete agreements, net
     369       480  
Goodwill
     11,462       11,462  
Property, plant and equipment (4)
     28,210       28,581  
Total mattress fabrics assets
     68,693       65,993  
Upholstery Fabrics
                
Current assets (3)
     26,284       23,476  
Assets held for sale
     31       61  
Property, plant and equipment (5)
     1,246       967  
Total upholstery fabrics assets
     27,561       24,504  
Total segment assets
     96,254       90,497  
Non-segment assets:
                
Cash and cash equivalents
     15,096       23,181  
Short-term investments
     8,511       7,699  
Income taxes receivable
     -       79  
Deferred income taxes
     6,670       3,899  
Other current assets
     2,522       2,376  
Property, plant and equipment (6)
     829       748  
Other assets
     1,575       1,572  
Total assets
   $ 131,457     $ 130,051  
 
    Nine months ended
(dollars in thousands)
   January 29, 2012   January 30, 2011
Capital expenditures (7):
            
Mattress Fabrics
   $ 2,761     $ 5,040  
Upholstery Fabrics
     481       170  
Unallocated Corporate
     351       193  
Total capital expenditures
   $ 3,593     $ 5,403  
Depreciation expense:
                
Mattress Fabrics
   $ 3,163     $ 2,795  
Upholstery Fabrics
     437       410  
Total depreciation expense
   $ 3,600     $ 3,205  
 
(3)  
Current assets represent accounts receivable and inventory for the respective segment.

(4)  
The $28.2 million at January 29, 2012, represents property, plant, and equipment of $19.8 million and $8.4 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 January 29, 2012, represents property, plant, and equipment located in the U.S. of $957, located in China of $179, and located in Poland of $110. 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 $829 and $748 at January 29, 2012 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.