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Segment Information
 6 Months Ended
Oct. 31, 2021
Segment Reporting [Abstract]  
Segment Information

12. Segment Information

Overall

Our operations are classified into two business segments: mattress fabrics and upholstery fabrics. The mattress fabrics segment manufactures, sources, and sells fabrics and mattress covers primarily to bedding manufacturers. 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 for Read’s 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.

Financial Information

 

We evaluate the operating performance of our business segments based upon income (loss) from operations before certain unallocated corporate expenses, asset impairments, restructuring credit (expense) and related charges, and other items that are not expected to occur on a regular basis. Cost of sales for each segment includes 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 executive officers and their support staff, all costs associated with being a public company, and other miscellaneous expenses. Segment assets include assets used in the 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 its investment in an unconsolidated joint venture as of November 1, 2020.  Intangible assets are not included in segment assets as these assets are not used by the Chief Operating Decision Maker to evaluate the respective segment’s operating performance, allocate resources to individual segments, or determine executive compensation.

 

 

Statements of operations for our operating segments are as follows:

 

 

 

Three months ended

 

 

 

October 31, 2021

 

 

November 1, 2020

 

net sales by segment:

 

 

 

 

 

 

 

 

mattress fabrics

 

$

40,883

 

 

$

40,030

 

upholstery fabrics

 

 

33,678

 

 

 

36,821

 

net sales

 

$

74,561

 

 

$

76,851

 

gross profit:

 

 

 

 

 

 

 

 

mattress fabrics

 

$

6,146

 

 

$

7,584

 

upholstery fabrics

 

 

4,581

 

 

 

6,677

 

gross profit

 

$

10,727

 

 

$

14,261

 

selling, general, and administrative expenses by segment:

 

 

 

 

 

 

 

 

mattress fabrics

 

$

3,007

 

 

$

3,202

 

upholstery fabrics

 

 

3,553

 

 

 

3,390

 

unallocated corporate expenses

 

 

2,527

 

 

 

3,151

 

selling, general, and administrative expenses

 

$

9,087

 

 

$

9,743

 

income (loss) from operations by segment:

 

 

 

 

 

 

 

 

mattress fabrics

 

$

3,139

 

 

$

4,382

 

upholstery fabrics

 

 

1,028

 

 

 

3,287

 

unallocated corporate expenses

 

 

(2,527

)

 

 

(3,151

)

income from operations

 

 

1,640

 

 

 

4,518

 

interest income

 

 

59

 

 

 

59

 

other expense

 

 

(404

)

 

 

(680

)

income before income taxes

 

$

1,295

 

 

$

3,897

 

 

 

 

Six months ended

 

 

 

October 31, 2021

 

 

November 1, 2020

 

net sales by segment:

 

 

 

 

 

 

 

 

mattress fabrics

 

$

83,941

 

 

$

76,133

 

upholstery fabrics

 

 

73,667

 

 

 

65,182

 

net sales

 

$

157,608

 

 

$

141,315

 

gross profit by segment:

 

 

 

 

 

 

 

 

mattress fabrics

 

$

12,941

 

 

$

12,191

 

upholstery fabrics

 

 

10,285

 

 

 

11,971

 

gross profit

 

$

23,226

 

 

$

24,162

 

selling, general, and administrative expenses by segment:

 

 

 

 

 

 

 

 

mattress fabrics

 

$

6,191

 

 

$

5,964

 

upholstery fabrics

 

 

6,990

 

 

 

6,570

 

unallocated corporate expenses

 

 

5,087

 

 

 

5,227

 

selling, general, and administrative expenses

 

$

18,268

 

 

$

17,761

 

income (loss) from operations by segment:

 

 

 

 

 

 

 

 

mattress fabrics

 

$

6,750

 

 

$

6,227

 

upholstery fabrics

 

 

3,295

 

 

 

5,401

 

unallocated corporate expenses

 

 

(5,087

)

 

 

(5,227

)

income from operations

 

 

4,958

 

 

 

6,401

 

interest expense

 

 

—

 

 

 

(51

)

interest income

 

 

132

 

 

 

117

 

other expense

 

 

(640

)

 

 

(1,046

)

income before income taxes

 

$

4,450

 

 

$

5,421

 

 

 

Balance sheet information for our operating segments follows:

 

(dollars in thousands)

 

October 31, 2021

 

 

November 1, 2020

 

 

May 2, 2021

 

Segment assets:

 

 

 

 

 

 

 

 

 

 

 

 

Mattress Fabrics:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

$

16,639

 

 

$

15,914

 

 

$

20,427

 

Inventory

 

 

34,498

 

 

 

24,200

 

 

 

30,047

 

Property, plant and equipment (1)

 

 

40,243

 

 

 

38,818

 

 

 

41,264

 

Right of use assets (2)

 

 

3,838

 

 

 

1,186

 

 

 

4,278

 

Investment in unconsolidated joint venture

 

 

—

 

 

 

1,859

 

 

 

—

 

Total mattress fabrics assets

 

 

95,218

 

 

 

81,977

 

 

 

96,016

 

Upholstery Fabrics:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

15,677

 

 

 

17,046

 

 

 

17,299

 

Inventory

 

 

29,283

 

 

 

23,526

 

 

 

25,870

 

Property, plant and equipment (3)

 

 

2,110

 

 

 

2,014

 

 

 

1,925

 

Right of use assets (4)

 

 

5,472

 

 

 

3,269

 

 

 

5,945

 

Total upholstery fabrics assets

 

 

52,542

 

 

 

45,855

 

 

 

51,039

 

Total segment assets

 

 

147,760

 

 

 

127,832

 

 

 

147,055

 

Non-segment assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

16,956

 

 

 

45,288

 

 

 

37,009

 

Short-term investments - available for sale

 

 

9,709

 

 

 

5,462

 

 

 

5,542

 

Short-term investments - held-to-maturity

 

 

1,564

 

 

 

5,005

 

 

 

3,161

 

Current income taxes receivable

 

 

613

 

 

 

—

 

 

 

—

 

Other current assets

 

 

3,811

 

 

 

3,509

 

 

 

3,852

 

Deferred income taxes

 

 

452

 

 

 

645

 

 

 

545

 

Property, plant and equipment (5)

 

 

912

 

 

 

767

 

 

 

814

 

Right of use assets (6)

 

 

4,339

 

 

 

1,710

 

 

 

1,507

 

Intangible assets

 

 

2,816

 

 

 

3,192

 

 

 

3,004

 

Long-term investments - rabbi trust

 

 

9,036

 

 

 

8,060

 

 

 

8,415

 

Long-term investments - held-to-maturity

 

 

8,353

 

 

 

759

 

 

 

1,141

 

Other assets

 

 

3,004

 

 

 

547

 

 

 

2,035

 

Total assets

 

$

209,325

 

 

$

202,776

 

 

$

214,080

 

 

 

 

 

Six months ended

 

(dollars in thousands)

 

October 31, 2021

 

 

November 1, 2020

 

Capital expenditures (7):

 

 

 

 

 

 

 

 

Mattress Fabrics

 

$

2,030

 

 

$

1,710

 

Upholstery Fabrics

 

 

397

 

 

 

181

 

Unallocated Corporate

 

 

1,302

 

 

 

111

 

Total capital expenditures

 

$

3,729

 

 

$

2,002

 

Depreciation expense:

 

 

 

 

 

 

 

 

Mattress Fabrics

 

$

3,071

 

 

$

3,132

 

Upholstery Fabrics

 

 

400

 

 

 

406

 

Total depreciation expense

 

$

3,471

 

 

$

3,538

 

(1)

The $40.2 million as of October 31, 2021, represents property, plant, and equipment of $26.8 million, $12.6 million, and $836,000 located in the U.S., Canada, and Haiti, respectively. The $38.8 million as of November 1, 2020, represents property, plant, and equipment of $26.5 million and $12.3 million located in the U.S. and Canada, respectively. 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 $3.8 million as of October 31, 2021, represents right of use assets of $2.2 million, $1.3 million, and $309,000 located in Haiti, the U.S., and Canada, respectively.  The $1.2 million as of November 1, 2020, represents right of use assets of $696,000 and $490,000 located in the U.S. and Canada, respectively.  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.  

(3)

The $2.1 million as of October 31, 2021, represents property, plant, and equipment of $1.1 million, $798,000, and $242,000 located in the U.S., China, and Haiti, respectively. The $2.0 million as of November 1, 2020, represents property, plant, and equipment of $1.1 million and $904,000 located in the U.S. and China, respectively. 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.

(4)

The $5.5 million as of October 31, 2021, represents right of use assets of $4.3 million and $1.2 million located in China and the U.S., respectively.  The $3.3 million as of November 1, 2020, represents right of use assets of $2.7 million and $561,000 located in China and the U.S., respectively.  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.

(5)

The $912,000, $767,000, and $814,000 as of October 31, 2021, November 1, 2020, and May 2, 2021, respectively, represent property, plant, and equipment associated with unallocated corporate departments and corporate departments shared by our mattress fabrics and upholstery fabrics segments. Property, plant, and equipment associated with our corporate departments reside in the U.S.

(6)

The $4.3 million, $1.7 million, and $1.5 million as of October 31, 2021, November1, 2020, and May 2, 2021, respectively, represent right of use assets located in the U.S.

(7)

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