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Segment Information | 12 Months Ended
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May 02, 2021
Segment Reporting [Abstract] |
Segment Information |
1 8. | SEGMENT INFORMATION
Overall Continuing Operations Our continuing operations are classified into two business segments: mattress fabrics and upholstery fabrics. Mattress Fabrics The mattress fabrics segment manufactures, sources, and sells fabrics and mattress covers primarily to bedding manufacturers. Upholstery Fabrics The upholstery fabrics segment develops, manufactures, sources, and sells fabrics primarily to residential and commercial furniture manufacturers. In addition, this segment includes Read, which provides window treatments and sourcing of upholstery fabrics and other products, as well as measuring and installation services of Read’s own products, to customers in the hospitality and commercial industries. Read also supplies soft goods such as decorative top sheets, coverlets, duvet covers, bed skirts, bolsters, and pillows. Discontinued Operation – Home Accessories Segment As disclosed in Note 3 of the consolidated financial statements, we sold our entire ownership interest in eLuxury on March 31, 2020, and consequently our home accessories segment was eliminated at such time. Additionally, the results of operations associated with our home accessories segment were excluded from our continuing operations and presented as a discontinued operation in our consolidated financial statements for fiscal years 2020 and 2019. Our former home accessories segment was our finished products business that manufactured, sourced, and sold bedding accessories and home goods directly to consumers and businesses through global e-commerce, business-to-business, and other sales channels. See Note 3 of the consolidated financial statements for detailed financial information of our former home accessories segment. A reconciliation is provided in Note 3 that contains detailed income statement information and is reconciled to net loss from discontinued operation presented in the Consolidated Statements of Net Income (Loss) for fiscal years 2020 and 2019. Net Sales Geographic Concentration Net sales denominated in U.S. dollars accounted for 91%, 93%, and 90% of total consolidated net sales in fiscal 2021, 2020, and 2019, respectively. International sales accounted for 27%, 26%, and 26% of net sales during fiscal 2021, 2020, and 2019, respectively, and are summarized by geographic area as follows:
(dollars in thousands) |  | 2021 |  |  | 2020 |  |  | 2019 |
north america (excluding USA) (1) |  | $ | 32,925 |  |  | $ | 27,637 |  |  | $ | 29,247 |
far east and asia (2) |  |  | 43,764 |  |  |  | 36,470 |  |  |  | 39,277 |
all other areas |  |  | 5,558 |  |  |  | 2,986 |  |  |  | 3,712 |
|  | $ | 82,247 |  |  | $ | 67,093 |  |  | $ | 72,236 |
(1) | Of this amount, $27.2 million, $21.7 million, and $22.5 million are attributable to shipments to Mexico in fiscal 2021, 2020, and 2019, respectively.
(2) | Of this amount $28.1 million, $21.4 million, and $29.8 million are attributable to shipments to China in fiscal 2021, 2020, and 2019, respectively.
Sales attributed to individual countries are based upon the location that the company ships its products to for delivery to customers. Customer Concentration One customer within the upholstery fabrics segment represented 13%, 12%, and 11% of consolidated net sales during fiscal 2021, 2020, and 2019, respectively. No customers within the upholstery fabrics segment accounted for greater than 10% of the consolidated net accounts receivable balance as of May 2, 2021, or May 3, 2020. No customers within the mattress fabrics segment represented greater than 10% of consolidated net sales during fiscal 2021, 2020, or fiscal 2019. One customer within the mattress fabrics segment accounted for 12% of the consolidated net accounts receivable balance as of May 2, 2021. No customers within the mattress fabrics segment accounted for greater than 10% of the consolidated net accounts receivable balance as of May 3, 2020. Employee Workforce Concentration The hourly employees associated with our manufacturing facility located in Canada (approximately 12% of our workforce) are represented by a local, unaffiliated union. The collective bargaining agreement for these employees expires on February 1, 2023. We are not aware of any efforts to organize any more of our employees, and we believe our relations with our employees are good. Financial Information We evaluate the operating performance of our current business segments based upon income (loss) from continuing operations before certain unallocated corporate expenses, asset impairment charges, restructuring expense (credit) and related charges, and other non-recurring items. Cost of sales in each of our current business segments include costs to develop, 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 senior executives and their support staff, all costs associated with being a public company, and other miscellaneous expenses. Segment assets include assets used in operations of each segment and primarily consist of accounts receivable, inventories, property, plant, and equipment, and right of use assets. The mattress fabrics segment also included in segment assets their investment in an unconsolidated joint venture as of May 3, 2020. During fiscal 2019, we elected to no longer include goodwill and intangible assets in segment assets, as these assets are not used by the Chief Operating Decision Maker to evaluate the respective segment’s operating performance, to allocate resources to the individual segments, or determine executive compensation. Statements of operations for our current operating segments are as follows:
(dollars in thousands) |  | 2021 |  |  | 2020 |  |  | 2019 |
net sales by segment: |  |  |  |  |  |  |  |  |  |  |  |
upholstery fabrics |  | $ | 142,049 |  |  | $ | 124,754 |  |  |  | 135,654 |
mattress fabrics |  |  | 157,671 |  |  |  | 131,412 |  |  |  | 145,671 |
total net sales |  | $ | 299,720 |  |  | $ | 256,166 |  |  |  | 281,325 |
gross profit from continuing operations by segment: |  |  |  |  |  |  |  |  |  |  |  |
upholstery fabrics |  | $ | 25,968 |  |  | $ | 24,220 |  |  |  | 25,373 |
mattress fabrics |  |  | 23,864 |  |  |  | 16,278 |  |  |  | 22,904 |
total segment gross profit |  |  | 49,832 |  |  |  | 40,498 |  |  |  | 48,277 |
other non-recurring charges (1) |  |  | — |  |  |  | — |  |  |  | (159 | )
restructuring related charges (2) |  |  | — |  |  |  | — |  |  |  | (2,349 | )
total gross profit from continuing operations |  | $ | 49,832 |  |  | $ | 40,498 |  |  |  | 45,769 |
selling, general, and administrative expenses by segment: |  |  |  |  |  |  |  |  |  |  |  |
upholstery fabrics |  | $ | 14,092 |  |  | $ | 14,353 |  |  |  | 14,551 |
mattress fabrics |  |  | 12,066 |  |  |  | 11,354 |  |  |  | 11,296 |
unallocated corporate |  |  | 11,598 |  |  |  | 8,717 |  |  |  | 6,838 |
total segment selling, general, and administrative expenses |  |  | 37,756 |  |  |  | 34,424 |  |  |  | 32,685 |
other non-recurring charges (3) |  |  | — |  |  |  | — |  |  |  | 518 |
restructuring related charges (4) |  |  | — |  |  |  | — |  |  |  | 40 |
total selling, general, and administrative expenses |  | $ | 37,756 |  |  | $ | 34,424 |  |  |  | 33,243 |
income (loss) from continuing operations: |  |  |  |  |  |  |  |  |  |  |  |
upholstery fabrics |  | $ | 11,876 |  |  | $ | 9,867 |  |  |  | 10,823 |
mattress fabrics |  |  | 11,798 |  |  |  | 4,924 |  |  |  | 11,607 |
unallocated corporate expenses |  |  | (11,598 | ) |  |  | (8,717 | ) |  |  | (6,838 | )
total segment income from continuing operations |  |  | 12,076 |  |  |  | 6,074 |  |  |  | 15,592 |
asset impairments (7) |  |  | — |  |  |  | (13,712 | ) |  |  | — |
other non-recurring charges (1) (3) |  |  | — |  |  |  | — |  |  |  | (678 | )
restructuring credit and related charges (5) (6) |  |  | — |  |  |  | 70 |  |  |  | (1,563 | )
total income (loss) from continuing operations |  |  | 12,076 |  |  |  | (7,568 | ) |  |  | 13,351 |
interest expense |  |  | (51 | ) |  |  | (106 | ) |  |  | (35 | )
interest income |  |  | 244 |  |  |  | 897 |  |  |  | 789 |
gain on bargain purchase (8) |  |  | 819 |  |  |  | — |  |  |  | — |
other expense |  |  | (2,208 | ) |  |  | (902 | ) |  |  | (1,383 | )
income (loss) before income taxes from continuing operations |  | $ | 10,880 |  |  | $ | (7,679 | ) |  |  | 12,722 |
(1) | The $159,000 represents employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment.
(2) | The $2.3 million represents a restructuring related charge of $1.6 million for inventory markdowns and $784,000 for other operating costs associated with our closed Anderson, SC upholstery fabrics facility.
(3) | The $518,000 represents a non-recurring charge of $429,000 for the accelerated vesting of certain stock-based compensation agreements associated with a senior executive and was recorded in unallocated corporate expenses. Additionally, the $518,000 includes $89,000 for employee termination benefits and operational reorganizational costs associated with our mattress fabrics segment.
(4) | The $40,000 represents a restructuring related charge for the accelerated vesting for certain stock-based compensation agreements associated with an employee that was located at our closed Anderson, SC upholstery fabrics facility.
(5) | The $1.6 million represent charges and credits that were associated our closed Anderson, SC upholstery fabrics facility and include $1.6 million for inventory markdowns, $784,000 for other operating costs, $661,000 for employee termination benefits, and $40,000 for the accelerated vesting of certain stock-based compensation agreements associated an employee, partially offset by a $1.5 million gain on the sale of property, plant, and equipment.
(6) | Of this total net charge of $1.6 million, a charge of $2.3 million, a charge of $40,000 and a credit of $825,000 were recorded in cost of sales, selling, general, and administrative expenses, and restructuring credit, respectively, in the fiscal 2019 Consolidated Statement of Net Income.
(7) | During fiscal 2020, we incurred asset impairment charges totaling $13.7 million, of which $13.6 million and $143,000 pertained to goodwill associated with our mattress and upholstery fabric segments and a tradename associated Read, respectively. Of this $13.7 million, $11.5 million and $2.2 million pertained to the mattress fabrics segment and upholstery fabrics segment, respectively.
(8) | Effective February 1, 2021, we acquired the remaining fifty percent ownership interest in our former unconsolidated joint venture located in Haiti. Pursuant to this transaction, we are now the sole owner with full control over this operation. The gain on bargain purchase represents the net assets acquired from this transaction that were more than the $954,000 total purchase price.
Balance sheet information for our current operating segments follow:
(dollars in thousands) |  | May 2, 2021 |  |  |  | May 3, 2020 |  |
segment assets |  |  |  |  |  |  |  |  |  |
mattress fabrics |  |  |  |  |  |  |  |  |  |
accounts receivable |  | $ | 20,427 |  |  |  | $ | 12,212 |  |
inventory |  |  | 30,047 |  |  |  |  | 26,620 |  |
property, plant, and equipment |  |  | 41,264 |  | (1) |  |  | 40,682 |  | (2)
right of use assets |  |  | 4,278 |  | (3) |  |  | 362 |  | (4)
investment in unconsolidated joint venture |  |  | — |  |  |  |  | 1,602 |  |
total mattress fabrics assets |  |  | 96,016 |  |  |  |  | 81,478 |  |
upholstery fabrics |  |  |  |  |  |  |  |  |  |
accounts receivable |  |  | 17,299 |  |  |  |  | 12,881 |  |
inventory |  |  | 25,870 |  |  |  |  | 21,287 |  |
property, plant, and equipment |  |  | 1,925 |  | (5) |  |  | 1,633 |  | (6)
right of use assets |  |  | 5,945 |  | (7) |  |  | 1,633 |  | (8)
total upholstery fabrics assets |  |  | 51,039 |  |  |  |  | 37,434 |  |
total segment assets |  |  | 147,055 |  |  |  |  | 118,912 |  |
non-segment assets |  |  |  |  |  |  |  |  |  |
cash and cash equivalents |  |  | 37,009 |  |  |  |  | 69,790 |  |
short-term investments – available for sale |  |  | 5,542 |  |  |  |  | 923 |  |
short-term investments – held-to-maturity |  |  | 3,161 |  |  |  |  | 4,271 |  |
current income taxes receivable |  |  | — |  |  |  |  | 1,585 |  |
deferred income taxes |  |  | 545 |  |  |  |  | 793 |  |
other current assets |  |  | 3,852 |  |  |  |  | 2,116 |  |
property, plant, and equipment (9) |  |  | 814 |  |  |  |  | 832 |  |
right of use assets (10) |  |  | 1,507 |  |  |  |  | 1,908 |  |
intangible assets |  |  | 3,004 |  |  |  |  | 3,380 |  |
long-term investments - held-to-maturity |  |  | 1,141 |  |  |  |  | 2,076 |  |
long-term investments - rabbi trust |  |  | 8,415 |  |  |  |  | 7,834 |  |
other assets |  |  | 2,035 |  |  |  |  | 664 |  |
total assets |  | $ | 214,080 |  |  |  | $ | 215,084 |  |
(dollars in thousands) |  | 2021 |  |  | 2020 |  |  | 2019 |
capital expenditures (11): |  |  |  |  |  |  |  |  |  |  |  |
mattress fabrics |  | $ | 6,226 |  |  | $ | 3,475 |  |  | $ | 2,526 |
upholstery fabrics |  |  | 347 |  |  |  | 348 |  |  |  | 382 |
discontinued operation |  |  | — |  |  |  | 135 |  |  |  | 53 |
unallocated corporate |  |  | 332 |  |  |  | 675 |  |  |  | 14 |
total capital expenditures |  | $ | 6,905 |  |  | $ | 4,633 |  |  | $ | 2,975 |
depreciation expense |  |  |  |  |  |  |  |  |  |  |  |
mattress fabrics |  | $ | 6,014 |  |  | $ | 6,712 |  |  | $ | 7,008 |
upholstery fabrics |  |  | 832 |  |  |  | 765 |  |  |  | 787 |
discontinued operation |  |  | — |  |  |  | 350 |  |  |  | 322 |
total depreciation expense |  | $ | 6,846 |  |  | $ | 7,827 |  |  | $ | 8,117 |
(1) | The $41.3 million as of May 2, 2021, represents property, plant, and equipment of $28.4 million, $12.0 million, and $855,000 located in the U.S., Canada, and Haiti, respectively.
(2) | The $40.7 million as of May 3, 2020, represents property, plant, and equipment of $27.7 million and $13.0 million located in the U.S. and Canada, respectively.
(3) | The $4.3 million as of May 2, 2021, represents right of use assets of $2.4 million, $1.4 million, and $400,000 located in Haiti, the U.S., and Canada, respectively.
(4) | The $362,000 as of May 3, 2020, represents right of use assets located in the U.S.
(5) | The $1.9 million as of May 2, 2021, represents property, plant, and equipment of $1.1 million and $850,000 located in the U.S. and China, respectively.
(6) | The $1.6 million as of May 3, 2020, represents property, plant, and equipment of $1.2 million and $471,000 located in the U.S. and China, respectively.
(7) | The $5.9 million as of May 2, 2021, represents right of use assets of $5.0 million and $952,000 located in China and the U.S., respectively.
(8) | The $1.6 million as of May 3, 2020, represents right of use assets of $857,000 and $776,000 located in the U.S. and China, respectively.
(9) | The $814,000 as of May 2, 2021, and $832,000 as of May 3, 2020, represent property, plant, and equipment associated with unallocated corporate departments and corporate departments shared by both the mattress fabrics and upholstery fabrics segments located in the U.S.
(10) | The $1.5 million as of May 2, 2021, and $1.9 million as of May 3, 2020, represents right of use assets located in the U.S. associated with unallocated corporate departments and corporate departments shared by both the mattress fabrics and upholstery fabrics segments located in the U.S.
(11) | Capital expenditure amounts are stated on an accrual basis. See the Consolidated Statement of Cash Flows for capital expenditure amounts on a cash basis.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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