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Segment Information | 6 Months Ended
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Oct. 29, 2023
Segment Reporting [Abstract] |
Segment Information | 13. 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 (loss) income from operations before certain unallocated corporate expenses 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 executives and their support staff, all costs associated with being a public company, amortization of intangible assets, and other miscellaneous expenses. Segment assets include assets used in the operations of each segment and consist of accounts receivable, inventories, property, plant, and equipment, and right of use assets. 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 29, 2023 |  |  | October 30, 2022 |
net sales by segment: |  |  |  |  |  |
mattress fabrics |  | $ | 31,377 |  |  | $ | 26,230 |
upholstery fabrics |  |  | 27,348 |  |  |  | 32,151 |
net sales |  | $ | 58,725 |  |  | $ | 58,381 |
gross profit (loss): |  |  |  |  |  |
mattress fabrics |  | $ | 2,483 |  |  | $ | (6,057 | )
upholstery fabrics |  |  | 5,389 |  |  |  | 3,942 |
segment gross profit (loss): |  |  | 7,872 |  |  |  | (2,115 | )
restructuring related credit (charge) (1) |  |  | 78 |  |  |  | (98 | )
gross profit (loss) |  | $ | 7,950 |  |  | $ | (2,213 | )
selling, general, and administrative expenses by segment: |  |  |  |  |  |
mattress fabrics |  | $ | 3,419 |  |  | $ | 2,945 |
upholstery fabrics |  |  | 3,998 |  |  |  | 3,680 |
unallocated corporate expenses |  |  | 2,628 |  |  |  | 2,478 |
selling, general, and administrative expenses |  | $ | 10,045 |  |  | $ | 9,103 |
(loss) income from operations by segment: |  |  |  |  |  |
mattress fabrics |  | $ | (936 | ) |  | $ | (9,002 | )
upholstery fabrics |  |  | 1,391 |  |  |  | 262 |
unallocated corporate expenses |  |  | (2,628 | ) |  |  | (2,478 | )
total segment loss from operations |  | $ | (2,173 | ) |  | $ | (11,218 | )
restructuring related credit (charge) (1) |  |  | 78 |  |  |  | (98 | )
restructuring expense (2) |  |  | (144 | ) |  |  | (615 | )
loss from operations |  | $ | (2,239 | ) |  | $ | (11,931 | )
interest income |  |  | 282 |  |  |  | 79 |
other income |  |  | 49 |  |  |  | 829 |
loss before income taxes |  | $ | (1,908 | ) |  | $ | (11,023 | )
(1) Gross profit and loss from operations for the three months ending October 29, 2023, includes restructuring related credits of $78,000 for the gain on disposal of inventory related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Gross loss and loss from operations for the three months ending October 30, 2022, includes restructuring related charges totaling $98,000 for loss on disposal and markdowns of inventory associated with the exit of our cut and sewn upholstery fabrics operation located in Shanghai, China. (2) Restructuring expense of $144,000 for the three months ended October 29, 2023, represents a $142,000 impairment charge related to equipment and $2,000 of employee termination benefits related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Re structuring expense of $615,000 for the three-months ended October 30, 2022, represents $468,000 for employee termination benefits, $80,000 related to a loss on disposal of equipment, $47,000 for lease termination costs, and $20,000 of other associated costs related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China.
|  | Six months ended |
|  | October 29, 2023 |  |  | October 30, 2022 |
net sales by segment: |  |  |  |  |  |
mattress fabrics |  | $ | 60,599 |  |  | $ | 55,602 |
upholstery fabrics |  |  | 54,788 |  |  |  | 65,383 |
net sales |  | $ | 115,387 |  |  | $ | 120,985 |
gross profit (loss): |  |  |  |  |  |
mattress fabrics |  | $ | 4,477 |  |  | $ | (6,093 | )
upholstery fabrics |  |  | 10,659 |  |  |  | 8,105 |
total segment gross profit |  | $ | 15,136 |  |  | $ | 2,012 |
restructuring related charge (1) |  |  | (101 | ) |  |  | (98 | )
gross profit |  | $ | 15,035 |  |  | $ | 1,914 |
selling, general, and administrative expenses by segment: |  |  |  |  |  |
mattress fabrics |  | $ | 6,811 |  |  | $ | 5,829 |
upholstery fabrics |  |  | 7,939 |  |  |  | 7,302 |
unallocated corporate expenses |  |  | 5,124 |  |  |  | 4,837 |
selling, general, and administrative expenses |  | $ | 19,874 |  |  | $ | 17,968 |
(loss) income from operations by segment: |  |  |  |  |  |
mattress fabrics |  | $ | (2,334 | ) |  | $ | (11,922 | )
upholstery fabrics |  |  | 2,720 |  |  |  | 803 |
unallocated corporate expenses |  |  | (5,124 | ) |  |  | (4,837 | )
total segment loss from operations |  | $ | (4,738 | ) |  | $ | (15,956 | )
restructuring related charge (1) |  |  | (101 | ) |  |  | (98 | )
restructuring expense (2) |  |  | (482 | ) |  |  | (615 | )
loss from operations |  | $ | (5,321 | ) |  | $ | (16,669 | )
interest income |  |  | 627 |  |  |  | 96 |
other income |  |  | 145 |  |  |  | 747 |
loss before income taxes |  | $ | (4,549 | ) |  | $ | (15,826 | )
(1) Gross profit and loss from operations for the six months ending October 29, 2023, includes a net restructuring related charge of $101,000, which represents a markdown of inventory totaling $179,000 during the first quarter of fiscal 2024, partially offset by a gain on disposal of inventory totaling $78,000 during the second quarter of fiscal 2024, both of which related to the discontinuation of production of cut and sewn upholstery kits at our facility located in Ouanaminthe, Haiti. Gross profit and loss from operations for the six months ending October 30, 2022 includes restructuring related charges totaling $98,000 for loss on disposal and markdowns of inventory associated with the exit of our cut and sewn upholstery fabrics operation located in Shanghai, China. (2) Restructuring expense of $482,000 for the six months ended October 29, 2023, represents a $379,000 impairment charge associated with equipment and $103,000 for employee termination benefits related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. R estructuring expense of $615,000 for the six-months ended October 30, 2022, represents $468,000 for employee termination benefits, $80,000 related to a loss on disposal of equipment, $47,000 for lease termination costs, and $20,000 of other associated costs related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China. Balance sheet information for our operating segments follows:
(dollars in thousands) |  | October 29, 2023 |  |  | October 30, 2022 |  |  | April 30, 2023 |
Segment assets: |  |  |  |  |  |  |  |  |
Mattress Fabrics: |  |  |  |  |  |  |  |  |
Accounts receivable, net |  | $ | 11,303 |  |  | $ | 8,700 |  |  | $ | 12,396 |
Inventory |  |  | 27,195 |  |  |  | 30,300 |  |  |  | 25,674 |
Property, plant and equipment (1) |  |  | 32,862 |  |  |  | 35,853 |  |  |  | 33,749 |
Right of use assets (2) |  |  | 1,969 |  |  |  | 2,087 |  |  |  | 2,308 |
Total mattress fabrics assets |  |  | 73,329 |  |  |  | 76,940 |  |  |  | 74,127 |
Upholstery Fabrics: |  |  |  |  |  |  |  |  |
Accounts receivable, net |  |  | 11,733 |  |  |  | 13,743 |  |  |  | 12,382 |
Inventory |  |  | 17,270 |  |  |  | 21,924 |  |  |  | 19,406 |
Property, plant and equipment (3) |  |  | 1,175 |  |  |  | 2,150 |  |  |  | 1,671 |
Right of use assets (4) |  |  | 1,992 |  |  |  | 5,898 |  |  |  | 2,618 |
Total upholstery fabrics assets |  |  | 32,170 |  |  |  | 43,715 |  |  |  | 36,077 |
Total segment assets |  |  | 105,499 |  |  |  | 120,655 |  |  |  | 110,204 |
Non-segment assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  |  | 15,214 |  |  |  | 19,137 |  |  |  | 20,964 |
Short-term investments - rabbi trust |  |  | 937 |  |  |  | 2,237 |  |  |  | 1,404 |
Short-term note receivable |  |  | 256 |  |  |  | — |  |  |  | 219 |
Current income taxes receivable |  |  | 340 |  |  |  | 510 |  |  |  | — |
Other current assets |  |  | 4,346 |  |  |  | 3,462 |  |  |  | 3,071 |
Long-term note receivable |  |  | 1,596 |  |  |  | — |  |  |  | 1,726 |
Deferred income taxes |  |  | 472 |  |  |  | 493 |  |  |  | 480 |
Property, plant and equipment (5) |  |  | 627 |  |  |  | 829 |  |  |  | 691 |
Right of use assets (6) |  |  | 2,913 |  |  |  | 3,624 |  |  |  | 3,265 |
Intangible assets |  |  | 2,064 |  |  |  | 2,440 |  |  |  | 2,252 |
Long-term investments - rabbi trust |  |  | 6,995 |  |  |  | 7,526 |  |  |  | 7,067 |
Other assets |  |  | 901 |  |  |  | 717 |  |  |  | 840 |
Total assets |  | $ | 142,160 |  |  | $ | 161,630 |  |  | $ | 152,183 |
(1) The $32.9 million as of October 29, 2023, represents property, plant, and equipment of $22.2 million, $10.0 million, and $661,000 located in the U.S., Canada, and Haiti, respectively. The $35.9 million as of October 30, 2022, represents property, plant, and equipment of $23.8 million, $11.4 million, and $679,000 located in the U.S., Canada, and Haiti, respectively. The $33.7 million as of April 30, 2023, represents property, plant, and equipment of $22.7 million, $10.4 million, and $608,000 located in the U.S., Canada, and Haiti, respectively. (2) The $2.0 million as of October 29, 2023, represents right of use assets of $1.3 million and $663,000 located in Haiti and Canada, respectively. The $2.1 million as of October 30, 2022, represents right of use assets of $1.8 million, $167,000, and $164,000 located in Haiti, Canada, and the U.S., respectively. The $2.3 million as of April 30, 2023, represents right of use assets of $1.5 million and $776,000 located in Haiti and Canada, respectively. (3) The $1.2 million as of October 29, 2023, represents property, plant, and equipment of $1.0 million and $140,000 located in the U.S. and China, respectively. The $2.2 million as of October 30, 2022, represents property, plant, and equipment of $1.0 million, $1.0 million, and $137,000 located in the U.S., Haiti, and China, respectively. The $1.7 million as of April 30, 2023, represents property, plant, and equipment of $974,000, $592,000, and $105,000 located in the U.S., Haiti, and China, respectively. (4) The $2.0 million as of October 29, 2023, represents right of use assets of $1.2 million and $818,000 located in China and the U.S., respectively. The $5.9 million as of October 30, 2022, represents right of use assets of $2.5 million, $2.0 million, and $1.4 million located in Haiti, China, and the U.S., respectively. The $2.6 million as of April 30, 2023, represents right of use assets of $1.5 million and $1.1 million located in China and the U.S., respectively. (5) The $627,000, $829,000, and $691,000 as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively, represent property, plant, and equipment associated with unallocated corporate department 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 $2.9 million, $3.6 million, and $3.3 million as of October 29, 2023, October 30, 2022, and April 30, 2023, respectively, represent right of use assets located in the U.S. Information about capital expenditures and depreciation expense for our operating segments follows:
|  | Six months ended |
(dollars in thousands) |  | October 29, 2023 |  |  | October 30, 2022 |
Capital expenditures (1): |  |  |  |  |  |
Mattress Fabrics |  | $ | 1,948 |  |  | $ | 267 |
Upholstery Fabrics |  |  | 185 |  |  |  | 447 |
Unallocated Corporate |  |  | 80 |  |  |  | 60 |
Total capital expenditures |  | $ | 2,213 |  |  | $ | 774 |
Depreciation expense: |  |  |  |  |  |
Mattress Fabrics |  | $ | 2,922 |  |  | $ | 3,088 |
Upholstery Fabrics |  |  | 329 |  |  |  | 401 |
Total depreciation expense |  | $ | 3,251 |  |  | $ | 3,489 |
(1) Capital expenditure amounts are stated on the accrual basis. See Consolidated Statements 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 -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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