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Segment Information
 9 Months Ended
Jan. 27, 2013
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)  
January 27, 2013
    
January 29, 2012
  
Net sales:            
Mattress Fabrics
   $ 35,513     $ 34,719  
Upholstery Fabrics
     28,182       25,731  
    $ 63,695     $ 60,450  
                 
                 
Gross profit:                
Mattress Fabrics
   $ 6,548     $ 5,104  
Upholstery Fabrics
     5,137       3,407  
                 
    $ 11,685     $ 8,511  
                 
                 
Selling, general, and administrative expenses:                
Mattress Fabrics
   $ 2,382     $ 1,970  
Upholstery Fabrics
     3,360       2,653  
Total segment selling, general, and
                
  administrative expenses
     5,742       4,623  
Unallocated corporate expenses
     1,080       895  
    $ 6,822     $ 5,518  
                 
Income form operations:                
Mattress Fabrics
   $ 4,166     $ 3,134  
Upholstery Fabrics
     1,777       754  
Total segment income from operations
     5,943       3,888  
Unallocated corporate expenses
     (1,080 )     (895 )
Total income from operations
     4,863       2,993  
Interest expense
     (145 )     (181 )
Interest income
     105       148  
Other expense
     (300 )     (83 )
Income before income taxes
   $ 4,523     $ 2,877  
 
             
   
Nine months ended
  
(dollars in thousands)
  
January 27, 2013
    
January 29, 2012
  
Net sales:
            
Mattress Fabrics
   $ 113,175     $ 102,130  
Upholstery Fabrics
     85,264       76,603  
    $ 198,439     $ 178,733  
                 
Gross profit:
                
Mattress Fabrics
   $ 21,708     $ 16,180  
Upholstery Fabrics
     14,974       9,932  
Total segment gross profit
   $ 36,682     $ 26,112  
Other non-recurring charges
     -       (77 ) (1)
    $ 36,682     $ 26,035  
                 
                 
Selling, general, and administrative expenses:
                
Mattress Fabrics
   $ 7,197     $ 6,094  
Upholstery Fabrics
     9,857       8,186  
Total segment selling, general, and
                
  administrative expenses
     17,054       14,280  
Unallocated corporate expenses
     4,618       2,715  
    $ 21,672     $ 16,995  
                 
                 
Income from operations:
                
Mattress Fabrics
   $ 14,512     $ 10,087  
Upholstery Fabrics
     5,116       1,745  
Total segment income from operations
     19,628       11,832  
Unallocated corporate expenses
     (4,618 )     (2,715 )
Other non-recurring charges
     -       (77 ) (1)
Total income from operations
     15,010       9,040  
Interest expense
     (491 )     (590 )
Interest income
     328       387  
Other expense
     (421 )     (132 )
Income before income taxes
   $ 14,426     $ 8,705  
 
(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.
 
Balance sheet information for the company’s operating segments follow:
 
             
(dollars in thousands)
  
January 27, 2013
    
April 29, 2012
  
Segment assets:
            
Mattress Fabrics
            
Current assets (1)
   $ 34,595     $ 29,909  
Assets held for sale
     -       15  
Non-compete agreements, net
     222       333  
Goodwill
     11,462       11,462  
Property, plant and equipment (2)
     28,116       29,237  
Total mattress fabrics assets
     74,395       70,956  
Upholstery Fabrics
                
Current assets (1)
     31,839       31,519  
Property, plant and equipment (3)
     1,147       1,124  
Total upholstery fabrics assets
     32,986       32,643  
Total segment assets
     107,381       103,599  
Non-segment assets:
                
Cash and cash equivalents
     19,489       25,023  
Short-term investments
     5,237       5,941  
Deferred income taxes
     8,270       5,672  
Other current assets
     1,655       1,989  
Property, plant and equipment (4)
     792       918  
Other assets
     973       1,574  
Total assets
   $ 143,797     $ 144,716  
 
    Nine months ended  
(dollars in thousands)
  
January 27, 2013
    
January 29, 2012
  
Capital expenditures (5):
            
Mattress Fabrics
   $ 2,223     $ 2,761  
Upholstery Fabrics
     222       481  
Unallocated Corporate
     149       351  
Total capital expenditures
   $ 2,594     $ 3,593  
Depreciation expense:
                
Mattress Fabrics
   $ 3,344     $ 3,163  
Upholstery Fabrics
     474       437  
Total depreciation expense
   $ 3,818     $ 3,600  
 
(1)  
Current assets represent accounts receivable and inventory for the respective segment.

(2)  
The $28.1 million at January 27, 2013, represents property, plant, and equipment of $20.6 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 $1.1 million at January 27, 2013, represents property, plant, and equipment located in the U.S. of $906, located in China of $155, and located in Poland of $86. 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 $792 and $918 at January 27, 2013 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.