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Segment Information
 6 Months Ended
Oct. 28, 2012
Segment Information
12.  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 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, goodwill and a non-compete agreements associated with an acquisition.

Financial information for the company’s operating segments follows:
 
       
    Three months ended  
(dollars in thousands)
October 28, 2012
  
October 30, 2011
  
Net sales:
            
 
Mattress Fabrics
   $ 39,697     $ 35,242      
 
Upholstery Fabrics
     25,863       22,771      
      $ 65,560     $ 58,013      
         
         
Gross profit:
                    
 
Mattress Fabrics
   $ 7,539     $ 5,938      
 
Upholstery Fabrics
     4,338       2,785      
 
Total segment gross profit
   $ 11,877     $ 8,723      
Other non-recurring charges
     -       (77 ) (1 )
      $ 11,877     $ 8,646      
         
         
Selling, general, and administrative expenses:                    
 
Mattress Fabrics
   $ 2,424     $ 2,132      
 
Upholstery Fabrics
     3,157       2,766      
 
Total segment selling, general, and
                    
 
    administrative expenses
     5,581       4,898      
 
Unallocated corporate expenses
     1,628       822      
      $ 7,209     $ 5,720      
         
Income from operations:
                    
 
Mattress Fabrics
   $ 5,115     $ 3,806      
 
Upholstery Fabrics
     1,181       19      
  Total segment income from operations     6,296       3,825      
 
Unallocated corporate expenses
     (1,628 )     (822 )    
 
Other non-recurring charges
     -       (77 )    
 
Total income from operations
     4,668       2,926      
 
Interest expense
     (156 )     (188 )    
 
Interest income
     96       110      
 
Other expense (income)
     (76 )     15      
 
Income before income taxes
   $ 4,532     $ 2,863      
       
(1)
Other non-recurring charges represent employee termination benefits associated with our Anderson, SC plant facility. This non-recurring charges relates to the Upholstery Fabrics segment.
 
     
 
Six months ended
  
(dollars in thousands)
October 28, 2012
  
October 30, 2011
  
Net sales:
        
Mattress Fabrics
   $ 77,662     $ 67,412  
Upholstery Fabrics
     57,082       50,871  
    $ 134,744     $ 118,283  
   
   
Gross profit:                
Mattress Fabrics
   $ 15,161     $ 11,076  
Upholstery Fabrics
     9,837       6,525  
Total segment gross profit   $ 24,998     $ 17,601  
Other non-recurring charges
     -       (77 ) (1)
    $ 24,998     $ 17,524  
   
   
Selling, general, and administrative expenses:
                
Mattress Fabrics
   $ 4,814     $ 4,123  
Upholstery Fabrics
     6,498       5,534  
Total segment selling, general, and
                
administrative expenses
     11,312       9,657  
Unallocated corporate expenses
     3,538       1,820  
    $ 14,850     $ 11,477  
   
   
Income from operations:
                
Mattress Fabrics
   $ 10,347     $ 6,953  
Upholstery Fabrics
     3,339       991  
Total segment income from operations
     13,686       7,944  
Unallocated corporate expenses
     (3,538 )     (1,820 )
Other non-recurring charges
     -       (77 ) (1)
Total income from operations
     10,148       6,047  
Interest expense
     (346 )     (409 )
Interest income
     222       238  
Other expense
     (121 )     (49 )
Income before income taxes   $ 9,903     $ 5,827  
 
Balance sheet information for the company’s operating segments follow:
         
(dollars in thousands)
October 28, 2012
  
April 29, 2012
  
Segment assets:
        
Mattress Fabrics
        
Current assets (1)
   $ 33,553     $ 29,909  
Assets held for sale
     -       15  
Non-compete agreements, net
     259       333  
Goodwill
     11,462       11,462  
Property, plant and equipment (2)
     28,737       29,237  
Total mattress fabrics assets
     74,011       70,956  
Upholstery Fabrics
                
Current assets (1)
     25,386       31,519  
Property, plant and equipment (3)
     1,028       1,124  
Total upholstery fabrics assets
     26,414       32,643  
Total segment assets
     100,425       103,599  
Non-segment assets:
                
Cash and cash equivalents
     23,464       25,023  
Short-term investments
     5,241       5,941  
Deferred income taxes
     9,208       5,672  
Other current assets
     1,640       1,989  
Property, plant and equipment (4)
     856       918  
Other assets
     1,609       1,574  
Total assets
   $ 142,443     $ 144,716  
   
 
Six months ended
  
(dollars in thousands)
October 28, 2012
  
October 30, 2011
  
Capital expenditures (5):
                
Mattress Fabrics
   $ 1,720     $ 2,113  
Upholstery Fabrics
     40       395  
Unallocated Corporate
     121       17  
Total capital expenditures
   $ 1,881     $ 2,525  
Depreciation expense:
                
Mattress Fabrics
   $ 2,219     $ 2,082  
Upholstery Fabrics
     320       304  
Total depreciation expense
   $ 2,539     $ 2,386  
 
(1)  
Current assets represent accounts receivable and inventory for the respective segment.

(2)  
The $28.7 million at October 28, 2012, represents property, plant, and equipment of $21.2 million and $7.5 million located in the U.S. and Canada, respectively. The $29.2 million at April 29, 2012, represents property, plant, and equipment of $21.2 million and $8.0 million located in the U.S. and Canada, respectively.

(3)  
The $1.0 million at October 28, 2012, represents property, plant, and equipment located in the U.S. of $776, located in China of $160, and located in Poland of $92. 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.

(4)  
The $856 and $918 at October 28, 2012 and April 29, 2012, 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.

(5)  
Capital expenditure amounts are stated on the accrual basis. See Consolidated Statement of Cash Flows for capital expenditure amounts on a cash basis.