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Segment Information (Tables)

6 Months Ended

Oct. 29, 2023

Schedule of Operating Segments Information

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. Restructuring 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. Restructuring 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.