Segment Information (Tables)

9 Months Ended

Feb. 02, 2020

Schedule of Operating Segments Information

Financial information for the company’s operating segments follows:

		Three months ended
		February 2, 2020				January 27, 2019
Net sales:
Mattress Fabrics		$	33,105			$	35,732
Upholstery Fabrics			34,987				37,104
Home Accessories			3,906				4,390
		$	71,998			$	77,226
Gross profit:
Mattress Fabrics		$	4,614			$	5,963
Upholstery Fabrics			6,906				7,624
Home Accessories			864				1,050
Total segment gross profit		$	12,384			$	14,637
Restructuring related charges			—		(4)		(514	)
		$	12,384			$	14,123
Selling, general, and administrative expenses
Mattress Fabrics		$	2,836			$	2,755
Upholstery Fabrics			3,876				3,825
Home Accessories			1,046				1,361
Unallocated corporate expenses			2,194				1,628
Total segment selling, general, and administrative expenses		$	9,952			$	9,569
Other non-recurring charges			—		(5)		429
Restructuring related charges			—		(5)		40
		$	9,952			$	10,038
Income (loss) from operations:
Mattress Fabrics		$	1,777			$	3,208
Upholstery Fabrics			3,030				3,799
Home Accessories			(181	)			(311	)
Unallocated corporate expenses			(2,194	)			(1,628	)
Total segment income from operations			2,432				5,068
Asset impairments	(1)		(13,639	)			—
Reversal of contingent consideration - earn-out obligation	(2)		6,081				—
Restructuring credit and restructuring related charges	(3)		35		(6)		(340	)
Other non-recurring charges			—		(5)		(429	)
Total (loss) income from operations			(5,091	)			4,299
Interest expense			(8	)			—
Interest income			242				251
Other expense			(267	)			(288	)
(Loss) income before income taxes		$	(5,124	)		$	4,262

(1)	Our home accessories segment incurred asset impairment charges totaling $13.6 million, of which $11.2 million and $2.4 million pertained to this segment’s goodwill and tradename, respectively.

(2)	We recorded a reversal of $6.1 million that pertained to a contingent earn-out obligation associated with the purchase of our 80% ownership interest in eLuxury, LLC.

(3)	The $35 restructuring credit pertains to employee termination benefits associated with our closed Anderson, SC upholstery fabrics facility.

(4)	Cost of sales for the three-month period ending January 27, 2019, includes a $514 restructuring related charge for operating costs associated with our closed upholstery fabrics facility located in Anderson, SC.

(5)

Selling, general, and administrative expenses for the three-months ending January 27, 2019, includes a $469 non-recurring charge associated with the accelerated vesting of certain stock-based compensation agreements. Of this $469 non-recurring charge, $429 and $40 pertain to unallocated corporate expenses and a restructuring related charge, respectively, associated with our closed Anderson, SC upholstery fabrics plant facility.

(6)

The $340 represents restructuring related charges totaling $554 disclosed in notes 4 and 5 above, partially offset by a restructuring credit of $214. The $214 restructuring credit represents a $362 gain on the sale of the building and land associated with our Anderson, SC upholstery fabrics facility, partially offset by a charge of $148 for employee termination benefits.

		Nine months ended
		February 2, 2020				January 27, 2019
Net sales:
Mattress Fabrics		$	107,250			$	107,335
Upholstery Fabrics			100,730				106,611
Home Accessories			11,485				11,759
		$	219,465			$	225,705
Gross profit:
Mattress Fabrics		$	16,553			$	17,050
Upholstery Fabrics			20,905				20,031
Home Accessories			2,395				3,435
Total segment gross profit		$	39,853			$	40,516
Other non-recurring charges			—		(8)		(159	)
Restructuring related charges			—		(9)		(2,349	)
		$	39,853			$	38,008
Selling, general, and administrative expenses
Mattress Fabrics		$	8,860			$	8,141
Upholstery Fabrics			11,528				10,985
Home Accessories			3,462				3,690
Unallocated corporate expenses			6,933				4,800
Total segment selling, general, and administrative expenses		$	30,783			$	27,616
Other non-recurring charges			—		(10)		518
Restructuring related charges			—		(5)		40
		$	30,783			$	28,174
Income (loss) from operations:
Mattress Fabrics		$	7,693			$	8,910
Upholstery Fabrics			9,378				9,044
Home Accessories			(1,068	)			(254	)
Unallocated corporate expenses			(6,933	)			(4,800	)
Total segment income from operations			9,070				12,900
Asset impairments	(1)		(13,639	)			—
Reversal of contingent consideration - earn-out obligation	(2)		6,081				—
Restructuring credit and restructuring related charges	(7)		70		(11)		(1,563	)
Other non-recurring charges			—		(12)		(678	)
Total income from operations			1,582				10,659
Interest expense			(47	)			(38	)
Interest income			732				552
Other expense			(441	)			(688	)
Income before income taxes		$	1,826			$	10,485

(7)	The $70 restructuring credit pertains to employee termination benefits associated with our closed Anderson, SC upholstery fabrics facility.

(8)	The $159 represents a non-recurring charge regarding employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment.

(9)	The $2.4 million consists of restructuring related charges of $1.6 million for inventory markdowns and $784 for other operating costs associated with our closed upholstery fabrics facility located in Anderson, SC.

(10)	The $518 represents non-recurring charges of $429 for the accelerated vesting of a stock-based compensation agreement associated with unallocated corporate expenses and $89 for employee termination benefits and operational reorganization costs associated with our mattress fabrics segment.

(11)

The $1.6 million represents related charges disclosed in note 9 above and $40 associated with the accelerated vesting of a stock-based compensation agreement, partially offset by a restructuring credit of $825. The $825 restructuring credit represents a $1.5 million gain on the sale of property, plant, and equipment associated with our Anderson, SC upholstery fabrics facility, partially offset by a charge of $661 for employee termination benefits.

(12)	The $678 represents non-recurring charges of $429 for the accelerated vesting of a stock-based compensation agreement and $249 regarding employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment.

Balance sheet information for the company’s operating segments follows:

(dollars in thousands)	February 2, 2020		January 27, 2019		April 28, 2019
Segment assets:
Mattress Fabrics
Accounts receivable	$	12,940	$	12,373	$	12,098
Inventory		29,753		26,243		24,649
Assets held for sale		67		—		—
Property, plant and equipment (1)		42,368		45,845		44,266
Right of use assets (2)		426		—		—
Investment in unconsolidated joint venture		1,668		1,512		1,508
Total mattress fabrics assets		87,222		85,973		82,521
Upholstery Fabrics
Accounts receivable		12,908		13,367		11,274
Inventory		24,256		26,067		22,915
Property, plant and equipment (3)		1,675		1,957		1,795
Right of use assets (4)		2,143		—		—
Total upholstery fabrics assets		40,982		41,391		35,984
Home Accessories
Accounts receivable		766		402		379
Inventory		3,566		3,105		3,296
Property, plant and equipment (5)		1,728		1,985		1,910
Right of use assets (6)		949		—		—
Total home accessories assets		7,009		5,492		5,585
Total segment assets		135,213		132,856		124,090
Non-segment assets:
Cash and cash equivalents		21,872		26,418		40,008
Short-term investments (Held-to-Maturity)		3,171		13,544		5,001
Short-term investments (Available for Sale)		7,580		—		—
Current income taxes receivable		776		—		776
Other current assets		3,219		2,954		2,849
Deferred income taxes		920		3,224		457
Property, plant and equipment (7)		609		342		418
Right of use assets (8)		2,006		—		—
Goodwill		16,011		27,222		27,222
Intangible assets		7,738		10,542		10,448
Long-term investments (Rabbi Trust)		7,804		6,834		7,081
Long-term investments (Held-to-Maturity)		2,224		—		—
Noncurrent income taxes receivable		733		—		733
Other assets		464		972		643
Total assets	$	210,340	$	224,908	$	219,726

	Nine months ended
(dollars in thousands)	February 2, 2020		January 27, 2019
Capital expenditures (9):
Mattress Fabrics	$	3,416	$	2,342
Upholstery Fabrics		253		294
Home Accessories		104		33
Unallocated Corporate		398		11
Total capital expenditures	$	4,171	$	2,680
Depreciation expense:
Mattress Fabrics	$	5,017	$	5,265
Upholstery Fabrics		577		595
Home Accessories		286		227
Total depreciation expense	$	5,880	$	6,087

(1)

The $42.4 million at February 2, 2020, represents property, plant, and equipment of $28.7 million and $13.7 million located in the U.S. and Canada, respectively. The $45.8 million at January 27, 2019, represents property, plant, and equipment of $33.5 million and $12.3 million located in the U.S. and Canada, respectively. The $44.3 million at April 28, 2019, represents property, plant, and equipment of $32.4 million and $11.9 million located in the U.S. and Canada, respectively.

(2)	The $426 at February 2, 2020, represents right of use assets located in the U.S.

(3)

The $1.7 million at February 2, 2020, represents property, plant, and equipment of $1.2 million and $469 located in the U.S. and China, respectively. The $2.0 million at January 27, 2019, represents property, plant, and equipment of $1.3 million and $615 located in the U.S. and China, respectively. The $1.8 million at April 28, 2019, represents property, plant, and equipment of $1.2 million and $591 located in the U.S. and China, respectively.

(4)	The $2.1 million at February 2, 2020, represents right of use assets of $1.1 million and $1.0 million located in China and the U.S., respectively

(5)	The $1.7 million at February 2, 2020, $2.0 million at January 27, 2019, and $1.9 million at April 28, 2019, represents property, plant and equipment located in the U.S.

(6)	The $949 million at February 2, 2020, represents right of use assets located in the U.S.

(7)

The $609, $342, and $418 at February 2, 2020, January 27, 2019, and April 28, 2019, respectively, represent property, plant, and equipment associated with unallocated corporate departments and corporate departments shared by our mattress fabrics, upholstery fabrics, and home accessories segments. Property, plant, and equipment associated with our corporate departments reside in the U.S.

(8)	The $2.0 million at February 2, 2020, represents right of use assets located in the U.S.

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