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SEGMENT INFORMATION
 12 Months Ended
Apr. 28, 2013
SEGMENT INFORMATION
16.
SEGMENT INFORMATION
 
The company’s operations are classified into two business segments:  mattress fabrics and upholstery fabrics.  The mattress fabrics segment manufactures, sources, and sells fabrics to bedding manufacturers.  The upholstery fabrics segment manufactures, sources, and sells fabrics primarily to residential furniture manufacturers.

Net sales denominated in U.S. dollars accounted for 85%, 86% and 83% of total consolidated net sales in 2013, 2012, and 2011, respectively. International sales accounted for 23%, 21% and 22% of net sales in 2013, 2012, and 2011, respectively, and are summarized by geographic area as follows:
 
 (dollars in thousands)
  
2013
    
2012
    
2011
  
north america (excluding USA)
   $ 11,900       10,417       10,505  
far east and asia
     43,907       38,279       36,587  
all other areas
     5,806       5,353       1,502  
    $ 61,613       54,049       48,594  
 
The company evaluates the operating performance of its segments based upon income 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 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 a non-compete agreement associated with an acquisition. 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)
  
2013
    
2012
    
2011
  
net sales:
                    
    upholstery fabrics
   $ 114,800       108,924       94,375    
    mattress fabrics
     154,014       145,519       122,431    
    $ 268,814       254,443       216,806    
                           
gross profit:
                          
    upholstery fabrics
   $ 19,984       14,984       13,592    
    mattress fabrics
     29,546       24,825       23,248    
      total segment gross profit
     49,530       39,809       36,840    
      other non-recurring charges
     -       (77 ) (1)   -    
    $ 49,530       39,732       36,840    
                           
 (dollars in thousands)
  
2013
    
2012
    
2011
  
selling, general, and administrative expenses:
                          
    upholstery fabrics
   $ 13,031       11,453       9,233    
    mattress fabrics
     9,646       9,061       7,875    
    unallocated corporate
     5,768       4,512       3,961    
          total selling, general, and administrative
                          
           expenses
   $ 28,445       25,026       21,069    
                           
Income from operations:
                          
    upholstery fabrics
   $ 6,953       3,531       4,359    
    mattress fabrics
     19,900       15,764       15,373    
          total segment income from operations
     26,853       19,295       19,732    
          unallocated corporate expenses
     (5,768 )     (4,512 )     (3,961 )  
          other non-recurring charges
     -       (77 ) (1)   (28 )
(2)
          total income from operations
     21,085       14,706       15,743    
                  interest expense
     (632 )     (780 )     (881 )  
                  interest income
     419       508       240    
                  other expense
     (583 )     (236 )     (40 )  
         income before income taxes
   $ 20,289       14,198       15,062    

(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 was 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.
 

One customer within the upholstery fabrics segment represented 13%, 13%, and 12% of consolidated net sales in each of fiscal 2013, 2012, and 2011, respectively.  Two customers within the mattress fabrics segment represented 22%, 22%, and 23% of consolidated net sales in fiscal 2013, 2012 and 2011, respectively. No customers within the upholstery fabrics segment accounted for 10% or more of net accounts receivable as of April 28, 2013. One customer within the upholstery fabrics segment represented 12% of net accounts receivable at April 29, 2012. One customer within the mattress fabrics segment accounted for 10% of net accounts receivable balance at April 28, 2013. No customers within the mattress fabrics segment accounted for 10% or more of net accounts receivable as of April 29, 2012.

Balance sheet information for the company’s operating segments follow:
 
(dollars in thousands)
  
2013
          
2012
          
2011
        
segment assets
                                    
   mattress fabrics
                                    
       current assets (3)
   $ 33,323             29,909             25,455        
       assets held for sale
     -             15             15        
       non-compete agreements, net
     185             333             480        
       goodwill
     11,462             11,462             11,462        
       property, plant, and equipment
     28,578   (4)         29,237   (5)         28,581   (6)    
            total mattress fabrics assets
   $ 73,548             70,956             65,993        
   upholstery fabrics
                                          
       current assets (5)
   $ 28,487             31,519             23,477        
       assets held for sale
     -             -             60        
       property, plant, and equipment
     1,230   (7)         1,124   (8)         967   (9)    
            total upholstery fabrics assets
   $ 29,717             32,643             24,504        
            total segment assets
     103,265             103,599             90,497        
non-segment assets
                                          
     cash and cash equivalents
     23,530             25,023             23,181        
     short-term investments
     5,286             5,941             7,699        
     income taxes receivable
     318             -             79        
     deferred income taxes
     8,462             5,672             3,899        
     other current assets
     2,093             1,989             2,376        
     property, plant, and equipment
     786   (10)         918   (10)         748   (10)    
     other assets
     966             1,574             1,572        
            total assets
   $ 144,706             144,716             130,051        
capital expenditures (11):
                                          
    mattress fabrics
   $ 3,805             4,875             5,714        
    upholstery fabrics
     425             512             311        
    unallocated corporate
     227             532             277        
    $ 4,457             5,919             6,302        
depreciation expense
                                          
    mattress fabrics
   $ 4,487             4,275             3,820        
    upholstery fabrics
     628             590             552        
             total segment depreciation expense
   $ 5,115             4,865             4,372        
 
(3)
Current assets represent accounts receivable and inventory.
(4)
The $28.6 million at April 28, 2013 represents property, plant, and equipment located in the U.S. of $20.4 million and located in Canada of $8.2 million.
(5)
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.
(6)
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.
(7)
The $1.2 million at April 28, 2013, represents property, plant, and equipment located in the U.S. of $908, located in China of $265, and located in Poland of $57.
(8)
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.
(9)
The $967 at May 1, 2011 represents property, plant, and equipment located in the U.S. of $727, China of $184, and located in Poland of $56.
(10)
The $786, $918 and $748 balance at April 28, 2013, April 29, 2012 and May 1, 2011, represent property, plant, and equipment associated with unallocated corporate departments and corporate departments shared by both the mattress and upholstery fabric segments.
(11)
Capital expenditure amounts are stated on an accrual basis. See Consolidated Statement of Cash Flows for capital expenditure amounts on a cash basis.