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Segment Information (Tables)

9 Months Ended

Jan. 28, 2024

Schedule of Operating Segments Information

Statements of operations for our operating segments are as follows:


	Three months ended
	January 28, 2024			January 29, 2023
net sales by segment:
mattress fabrics	$	30,021		$	24,697
upholstery fabrics		30,397			27,826
net sales	$	60,418		$	52,523
gross profit (loss):
mattress fabrics	$	1,520		$	(1,237	)
upholstery fabrics		6,122			3,330
segment gross profit		7,642			2,093
restructuring related credit (1)		61			—
gross profit	$	7,703		$	2,093
selling, general, and administrative expenses by segment:
mattress fabrics	$	3,102		$	2,992
upholstery fabrics		4,030			3,750
unallocated corporate expenses		2,361			2,423
selling, general, and administrative expenses	$	9,493		$	9,165
(loss) income from operations by segment:
mattress fabrics	$	(1,582	)	$	(4,229	)
upholstery fabrics		2,092			(420	)
unallocated corporate expenses		(2,361	)		(2,423	)
total segment loss from operations	$	(1,851	)	$	(7,072	)
restructuring related credit (1)		61			—
restructuring credit (expense) (2)		50			(711	)
loss from operations	$	(1,740	)	$	(7,783	)
interest income		284			196
other expense		(705	)		(1,095	)
loss before income taxes	$	(2,161	)	$	(8,682	)

(1) Gross profit and loss from operations for the three months ending January 28, 2024, includes a restructuring related credit of $61,000 for the gain on disposal of inventory related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti.

(2) The restructuring credit of $50,000 for the three months ended January 28, 2024, represents a gain on disposal of equipment related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti. Restructuring expense of $711,000 for the three months ended January 29, 2023, represents lease termination costs of $434,000 and an impairment loss regarding leasehold improvements totaling $277,000 that related to the consolidation of certain leased facilities located in Ouanaminthe, Haiti.


	Nine months ended
	January 28, 2024			January 29, 2023
net sales by segment:
mattress fabrics	$	90,619		$	80,299
upholstery fabrics		85,185			93,209
net sales	$	175,804		$	173,508
gross profit (loss):
mattress fabrics	$	5,997		$	(7,330	)
upholstery fabrics		16,780			11,436
total segment gross profit	$	22,777		$	4,106
restructuring related charge (1)		(40	)		(98	)
gross profit	$	22,737		$	4,008
selling, general, and administrative expenses by segment:
mattress fabrics	$	9,913		$	8,821
upholstery fabrics		11,969			11,053
unallocated corporate expenses		7,484			7,259
selling, general, and administrative expenses	$	29,366		$	27,133
(loss) income from operations by segment:
mattress fabrics	$	(3,916	)	$	(16,151	)
upholstery fabrics		4,811			383
unallocated corporate expenses		(7,484	)		(7,259	)
total segment loss from operations	$	(6,589	)	$	(23,027	)
restructuring related charge (1)		(40	)		(98	)
restructuring expense (2)		(432	)		(1,326	)
loss from operations	$	(7,061	)	$	(24,451	)
interest income		911			292
other expense		(560	)		(348	)
loss before income taxes	$	(6,710	)	$	(24,507	)

(1) Gross profit and loss from operations for the nine months ending January 28, 2024, includes a restructuring related charge of $40,000, representing markdowns of inventory 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 nine months ending January 29, 2023, includes a restructuring related charge of $98,000 that represents a loss on disposal and markdowns of inventory related to the exit of our cut and sew upholstery fabrics operation located in Shanghai, China, which occurred during the second quarter of fiscal 2023.

(2) Restructuring expense of $432,000 for the nine months ending January 28, 2024, represents a $329,000 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 $1.3 million for the nine months ending January 29, 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 quarter of fiscal 2023. Restructuring expense consists of lease termination costs of $481,000, employee termination benefits of $468,000, impairment losses totaling $357,000 that relate to leasehold improvements and equipment, and $20,000 for other associated costs.

Balance sheet information for our operating segments follows:


(dollars in thousands)	January 28, 2024		January 29, 2023		April 30, 2023
Segment assets:
Mattress Fabrics:
Accounts receivable	$	11,463	$	8,314	$	12,396
Inventory		27,925		28,757		25,674
Property, plant and equipment (1)		32,263		34,661		33,749
Right of use assets (2)		1,798		2,476		2,308
Total mattress fabrics assets		73,449		74,208		74,127
Upholstery Fabrics:
Accounts receivable		12,223		12,927		12,382
Inventory		18,952		18,870		19,406
Property, plant and equipment (3)		1,155		1,794		1,671
Right of use assets (4)		2,345		2,995		2,618
Assets held for sale (5)		—		1,950		—
Total upholstery fabrics assets		34,675		38,536		36,077
Total segment assets		108,124		112,744		110,204
Non-segment assets:
Cash and cash equivalents		12,585		16,725		20,964
Short-term investments - rabbi trust		937		2,420		1,404
Short-term note receivable		260		—		219
Current income taxes receivable		476		238		—
Other current assets		4,237		2,839		3,071
Long-term note receivable		1,530		—		1,726
Deferred income taxes		531		463		480
Property, plant and equipment (6)		603		737		691
Right of use assets (7)		2,809		3,442		3,265
Intangible assets		1,970		2,346		2,252
Long-term investments - rabbi trust		7,083		7,725		7,067
Other assets		853		919		840
Total assets	$	141,998	$	150,598	$	152,183

(1)

The $32.3 million as of January 28, 2024, represents property, plant, and equipment of $21.9 million, $9.8 million, and $600,000 located in the U.S., Canada, and Haiti, respectively. The $34.7 million as of January 29, 2023, represents property, plant, and equipment of $23.1 million, $10.9 million, and $651,000 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 $1.8 million as of January 28, 2024, represents right of use assets of $1.2 million and $604,000 located in Haiti and Canada, respectively. The $2.5 million as of January 29, 2023, represents right of use assets of $1.6 million and $833,000 located in Haiti and Canada, 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 January 28, 2024, represents property, plant, and equipment of $1.1 million and $134,000 located in the U.S. and China, respectively. The $1.8 million as of January 29, 2023, represents property, plant, and equipment of $1.0 million, $630,000, and $121,000 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 $2.3 million as of January 28, 2024, represents right of use assets of $944,000 and $1.4 million located in China and the U.S., respectively. The $3.0 million as of January 29, 2023, represents right of use assets of $1.7 million and $1.3 million located in 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 $2.0 million as of January 29, 2023, represents a right of use asset classified as held for sale located in Haiti.

(6)

The $603,000, $737,000, and $691,000 as of January 28, 2024, January 29, 2023, and April 30, 2023, respectively, represent property, plant, and equipment associated with the 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.

(7)

The $2.8 million, $3.4 million, and $3.3 million as of January 28, 2024, January 29, 2023, 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:


	Nine months ended
(dollars in thousands)	January 28, 2024		January 29, 2023
Capital expenditures (1):
Mattress Fabrics	$	2,828	$	612
Upholstery Fabrics		219		465
Unallocated Corporate		167		75
Total capital expenditures	$	3,214	$	1,152
Depreciation expense:
Mattress Fabrics	$	4,422	$	4,624
Upholstery Fabrics		475		604
Total depreciation expense	$	4,897	$	5,228

(1)

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