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Segment Information | 12 Months Ended
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Apr. 28, 2024
Segment Reporting [Abstract] |
Segment Information | 17. SEGMENT INFORMATION Overall Our 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 to customers in the residential, commercial, and hospitality industries. 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. Net Sales Geographic Concentration Net sales denominated in U.S. dollars accounted for 92%, 91%, and 90% of total consolidated net sales in fiscal 2024, 2023, and 2022, respectively. International sales accounted for 32%, 29%, and 31% of net sales during fiscal 2024, 2023, and 2022, respectively, and are summarized by geographic area as follows:
(dollars in thousands) |  | 2024 |  |  | 2023 |  |  | 2022 |
north america (excluding USA) (1) |  | $ | 29,357 |  |  | $ | 29,756 |  |  | $ | 39,256 |
far east and asia (2) |  |  | 36,334 |  |  |  | 31,339 |  |  |  | 43,015 |
all other areas |  |  | 6,011 |  |  |  | 8,032 |  |  |  | 8,114 |
|  | $ | 71,702 |  |  | $ | 69,127 |  |  | $ | 90,385 |
(1) Of this amount, $25.1 million, $24.9 million, and $33.5 million are attributable to shipments to Mexico in fiscal 2024, 2023, and 2022, respectively. (2) Of this amount $18.3 million, $20.0 million, and $26.9 million are attributable to shipments to China in fiscal 2024, 2023, and 2022, 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 12%, 15%, and 13% of consolidated net sales during fiscal 2024, 2023, and 2022, respectively. No customers within the upholstery fabrics segment accounted for greater than 10% of the consolidated accounts receivable, net balance as of April 28, 2024, or April 30, 2023. No customers within the mattress fabrics segment represented greater than 10% of consolidated net sales during fiscal 2024, 2023, or fiscal 2022. No customers within the mattress fabrics segment accounted for greater than 10% of the consolidated accounts receivable, net balance as of April 28, 2024, or April 30, 2023. Employee Workforce Concentration Hourly employees associated with our manufacturing facility located in Quebec, Canada (approximately 14% of our workforce) are represented by a local unaffiliated union with a collective bargaining agreement that expires on February 1, 2026. On April 29, 2024 (first quarter of fiscal 2025), our board of directors made a decision to gradually discontinue the operations and sale of the company's manufacturing facility located in Quebec, Canada. During this gradual discontinuation of operations, hourly employees will be entitled to compensation and benefits in accordance with the collective bargaining agreement noted above. 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. Statements of operations for our business segments are as follows:
(dollars in thousands) |  | 2024 |  |  | 2023 |  |  | 2022 |
net sales by segment: |  |  |  |  |  |  |  |  |
mattress fabrics |  | $ | 116,370 |  |  | $ | 110,995 |  |  | $ | 152,159 |
upholstery fabrics |  |  | 108,963 |  |  |  | 123,939 |  |  |  | 142,680 |
net sales |  | $ | 225,333 |  |  | $ | 234,934 |  |  | $ | 294,839 |
gross profit (loss): |  |  |  |  |  |  |  |  |
mattress fabrics |  | $ | 6,289 |  |  | $ | (6,739 | ) |  | $ | 16,458 |
upholstery fabrics |  |  | 21,690 |  |  |  | 17,733 |  |  |  | 19,635 |
total segment gross profit |  |  | 27,979 |  |  |  | 10,994 |  |  |  | 36,093 |
restructuring related charge (1) (3) |  |  | (40 | ) |  |  | (98 | ) |  |  | — |
gross profit |  | $ | 27,939 |  |  | $ | 10,896 |  |  | $ | 36,093 |
selling, general, and administrative expenses by segment: |  |  |  |  |  |  |  |  |
mattress fabrics |  | $ | 13,134 |  |  | $ | 11,942 |  |  | $ | 12,246 |
upholstery fabrics |  |  | 15,903 |  |  |  | 15,739 |  |  |  | 14,009 |
unallocated corporate |  |  | 9,574 |  |  |  | 10,297 |  |  |  | 9,160 |
selling, general, and administrative expenses |  | $ | 38,611 |  |  | $ | 37,978 |  |  | $ | 35,415 |
(loss) income from operations by segment: |  |  |  |  |  |  |  |  |
mattress fabrics |  | $ | (6,845 | ) |  | $ | (18,681 | ) |  | $ | 4,212 |
upholstery fabrics |  |  | 5,787 |  |  |  | 1,994 |  |  |  | 5,626 |
unallocated corporate expenses |  |  | (9,574 | ) |  |  | (10,297 | ) |  |  | (9,160 | )
total segment (loss) income from operations |  |  | (10,632 | ) |  |  | (26,984 | ) |  |  | 678 |
restructuring related charge (1) (3) |  |  | (40 | ) |  |  | (98 | ) |  |  | — |
restructuring expense (2) (4) |  |  | (636 | ) |  |  | (1,396 | ) |  |  | — |
loss from operations |  | $ | (11,308 | ) |  | $ | (28,478 | ) |  | $ | 678 |
interest expense |  |  | (11 | ) |  |  | — |  |  |  | (17 | )
interest income |  |  | 1,174 |  |  |  | 531 |  |  |  | 373 |
other expense |  |  | (625 | ) |  |  | (443 | ) |  |  | (1,359 | )
loss before income taxes |  | $ | (10,770 | ) |  | $ | (28,390 | ) |  | $ | (325 | )
(1) Cost of sales for fiscal 2024 includes a restructuring related charge totaling $40,000, which pertained to markdowns of inventory related to the discontinuation of production of cut and sewn upholstery kits at the company's facility in Ouanaminthe, Haiti. (2) Restructuring expense of $636,000 for fiscal 2024 represents impairment charges related to equipment of $329,000 and employee termination benefits of $103,000 related to the discontinuation of production of cut and sewn upholstery kits at the company's facility in Ouanaminthe, Haiti. In addition, during the fourth quarter of fiscal 2024, restructuring expense of $204,000 was incurred for employee termination benefits related to the closure of the upholstery fabrics finishing operation located in Shanghai, China. (3) Cost of sales for fiscal 2023 includes a restructuring related charge totaling $98,000, which pertained to a loss on disposal and markdowns of inventory related to the exit of our cut and sew upholstery fabrics operations located in Shanghai, China. (4) Restructuring expense of $1.4 million for fiscal 2023 relates to both our restructuring activities for our cut and sew upholstery fabrics operations located in Shanghai, China, which occurred during the second quarter of fiscal 2023, and located in Ouanaminthe, Haiti, which occurred during the third and fourth quarters of fiscal 2023. Restructuring expense represents employee termination benefits of $507,000, lease termination costs of $481,000, impairment losses totaling $357,000 that relate to leasehold improvements and equipment, and $51,000 for other associated costs. Balance sheet information for our business segments follow:
(dollars in thousands) |  | April 28, 2024 |  |  |  | April 30, 2023 |  |
segment assets |  |  |  |  |  |  |  |
mattress fabrics |  |  |  |  |  |  |  |
accounts receivable |  | $ | 10,003 |  |  |  | $ | 12,396 |  |
inventory |  |  | 27,671 |  |  |  |  | 25,674 |  |
property, plant, and equipment |  |  | 31,472 |  | (1) |  |  | 33,749 |  | (2)
right of use assets |  |  | 1,627 |  | (3) |  |  | 2,308 |  | (4)
total mattress fabrics assets |  |  | 70,773 |  |  |  |  | 74,127 |  |
upholstery fabrics |  |  |  |  |  |  |  |
accounts receivable |  |  | 11,135 |  |  |  |  | 12,382 |  |
inventory |  |  | 17,172 |  |  |  |  | 19,406 |  |
property, plant, and equipment |  |  | 1,125 |  | (5) |  |  | 1,671 |  | (6)
right of use assets |  |  | 1,952 |  | (7) |  |  | 2,618 |  | (8)
total upholstery fabrics assets |  |  | 31,384 |  |  |  |  | 36,077 |  |
total segment assets |  |  | 102,157 |  |  |  |  | 110,204 |  |
non-segment assets |  |  |  |  |  |  |  |
cash and cash equivalents |  |  | 10,012 |  |  |  |  | 20,964 |  |
short-term investments – rabbi trust |  |  | 903 |  |  |  |  | 1,404 |  |
short-term note receivable |  |  | 264 |  |  |  |  | 219 |  |
current income taxes receivable |  |  | 350 |  |  |  |  | — |  |
other current assets |  |  | 3,371 |  |  |  |  | 3,071 |  |
long-term note receivable |  |  | 1,462 |  |  |  |  | 1,726 |  |
deferred income taxes |  |  | 518 |  |  |  |  | 480 |  |
property, plant, and equipment (9) |  |  | 585 |  |  |  |  | 691 |  |
right of use assets (10) |  |  | 2,624 |  |  |  |  | 3,265 |  |
intangible assets |  |  | 1,876 |  |  |  |  | 2,252 |  |
long-term investments - rabbi trust |  |  | 7,102 |  |  |  |  | 7,067 |  |
other assets |  |  | 830 |  |  |  |  | 840 |  |
total assets |  | $ | 132,054 |  |  |  | $ | 152,183 |  |
(1) The $31.5 million as of April 28, 2024, represents property, plant, and equipment of $21.5 million, $9.4 million, and $555,000 located in the U.S., Canada, and Haiti, respectively. (2) 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. (3) The $1.6 million as of April 28, 2024, represents right of use assets of $1.1 million and $545,000 located in Haiti and Canada, respectively. (4) 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. (5) The $1.1 million as of April 28, 2024, represents property, plant, and equipment of $1.0 million and $120,000 located in the U.S. and China, respectively. (6) 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. (7) The $2.0 million as of April 28, 2024, represents right of use assets of $1.3 million and $709,000 located in the U.S. and China, respectively. (8) 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. (9) The $585,000 as of April 28, 2024, and $691,000 as of April 30, 2023, 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 $2.6 million as of April 28, 2024, and $3.3 million as of April 30, 2023, represent right of use assets associated with unallocated corporate departments and corporate departments shared by both the mattress fabrics and upholstery fabrics segments located in the U.S. Capital expenditures and depreciation expense information for our business segments follow:
(dollars in thousands) |  | 2024 |  |  | 2023 |  |  | 2022 |
capital expenditures (1): |  |  |  |  |  |  |  |  |
mattress fabrics |  | $ | 3,474 |  |  | $ | 1,125 |  |  | $ | 3,383 |
upholstery fabrics |  |  | 271 |  |  |  | 467 |  |  |  | 1,032 |
unallocated corporate |  |  | 255 |  |  |  | 97 |  |  |  | 1,406 |
total capital expenditures |  | $ | 4,000 |  |  | $ | 1,689 |  |  | $ | 5,821 |
depreciation expense |  |  |  |  |  |  |  |  |
mattress fabrics |  | $ | 5,883 |  |  | $ | 6,050 |  |  | $ | 6,200 |
upholstery fabrics |  |  | 638 |  |  |  | 795 |  |  |  | 794 |
total depreciation expense |  | $ | 6,521 |  |  | $ | 6,845 |  |  | $ | 6,994 |
(1) 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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