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Segment Information | 9 Months Ended
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Jan. 26, 2025
Segment Reporting [Abstract] |
Segment Information | 14. 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, sources, manufactures, 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. 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. The mattress fabrics segment also includes assets held for sale associated with property, plant, and equipment related to the Fiscal 2025 Restructuring Plan announced on April 29, 2024 (see Note 10 to the consolidated financial statements for further details regarding this restructuring plan). 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 |
|  | January 26, 2025 |  |  | January 28, 2024 |
Net sales by segment: |  |  |  |  |  |
Mattress fabrics |  | $ | 28,642 |  |  | $ | 30,021 |
Upholstery fabrics |  |  | 23,611 |  |  |  | 30,397 |
Net sales |  | $ | 52,253 |  |  | $ | 60,418 |
Gross profit: |  |  |  |  |  |
Mattress fabrics |  | $ | 2,743 |  |  | $ | 1,520 |
Upholstery fabrics |  |  | 4,228 |  |  |  | 6,122 |
Segment gross profit |  |  | 6,971 |  |  |  | 7,642 |
Restructuring related (charge) credit (1)(2) |  |  | (624 | ) |  |  | 61 |
Gross profit |  | $ | 6,347 |  |  | $ | 7,703 |
Selling, general, and administrative expenses by segment: |  |  |  |  |  |
Mattress fabrics |  | $ | 3,176 |  |  | $ | 3,102 |
Upholstery fabrics |  |  | 3,549 |  |  |  | 4,030 |
Unallocated corporate expenses |  |  | 1,854 |  |  |  | 2,361 |
Selling, general, and administrative expenses |  | $ | 8,579 |  |  | $ | 9,493 |
(Loss) income from operations by segment: |  |  |  |  |  |
Mattress fabrics |  | $ | (433 | ) |  | $ | (1,582 | )
Upholstery fabrics |  |  | 679 |  |  |  | 2,092 |
Unallocated corporate expenses |  |  | (1,854 | ) |  |  | (2,361 | )
Total segment loss from operations |  | $ | (1,608 | ) |  | $ | (1,851 | )
Restructuring related (charge) credit (1) (2) |  |  | (624 | ) |  |  | 61 |
Restructuring expense (3)(4) |  |  | (1,655 | ) |  |  | 50 |
Loss from operations |  | $ | (3,887 | ) |  | $ | (1,740 | )
Interest expense |  |  | (63 | ) |  |  | — |
Interest income |  |  | 255 |  |  |  | 284 |
Other income (expense) |  |  | 15 |  |  |  | (705 | )
Loss before income taxes |  | $ | (3,680 | ) |  | $ | (2,161 | )
(1) During the three months ended January 26, 2025, gross profit includes restructuring related charges totaling $624,000 for losses on the disposal and valuation of inventory related to the gradual discontinuation of operations at our manufacturing facility located in Quebec, Canada. (2) During the three months ended January 28, 2024, gross profit 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 at the company's facility located in Ouanaminthe, Haiti. (3) During the three months ended January 26, 2025, restructuring expense of $1.7 million mostly relates to the mattress fabrics segment. The $1.7 million restructuring expense represents (i) $1.5 million for the consolidation of our mattress fabrics operations located in Quebec, Canada into our facility located in Stokesdale, North Carolina and (ii) $176,000 for employee termination benefits, partially offset by (iii) a net gain of $(33,000) for the impairment and sale of equipment. See Note 10 to the consolidated financial statements for further details and description of our Fiscal 2025 Restructuring Plan. (4)The restructuring credit of $50,000 for the three months ended January 28, 2024, represents a gain on the sale of equipment related to the discontinuation of production of cut and sewn upholstery kits in Ouanaminthe, Haiti.
|  | Nine months ended |
|  | January 26, 2025 |  |  | January 28, 2024 |
Net sales by segment: |  |  |  |  |  |
Mattress fabrics |  | $ | 86,792 |  |  | $ | 90,619 |
Upholstery fabrics |  |  | 77,672 |  |  |  | 85,185 |
Net sales |  | $ | 164,464 |  |  | $ | 175,804 |
Gross profit: |  |  |  |  |  |
Mattress fabrics |  | $ | 4,862 |  |  | $ | 5,997 |
Upholstery fabrics |  |  | 14,061 |  |  |  | 16,780 |
Total segment gross profit |  | $ | 18,923 |  |  | $ | 22,777 |
Restructuring related charge (1) (2) |  |  | (1,509 | ) |  |  | (40 | )
Gross profit |  | $ | 17,414 |  |  | $ | 22,737 |
Selling, general, and administrative expenses by segment: |  |  |  |  |  |
Mattress fabrics |  | $ | 9,880 |  |  | $ | 9,913 |
Upholstery fabrics |  |  | 11,056 |  |  |  | 11,969 |
Unallocated corporate expenses |  |  | 6,299 |  |  |  | 7,484 |
Selling, general, and administrative expenses |  | $ | 27,235 |  |  | $ | 29,366 |
(Loss) income from operations by segment: |  |  |  |  |  |
Mattress fabrics |  | $ | (5,018 | ) |  | $ | (3,916 | )
Upholstery fabrics |  |  | 3,005 |  |  |  | 4,811 |
Unallocated corporate expenses |  |  | (6,299 | ) |  |  | (7,484 | )
Total segment loss from operations |  | $ | (8,312 | ) |  | $ | (6,589 | )
Restructuring related charge (1) (2) |  |  | (1,509 | ) |  |  | (40 | )
Restructuring expense (3) (4) |  |  | (6,317 | ) |  |  | (432 | )
Loss from operations |  | $ | (16,138 | ) |  | $ | (7,061 | )
Interest expense |  |  | (121 | ) |  |  | — |
Interest income |  |  | 761 |  |  |  | 911 |
Other expense |  |  | (898 | ) |  |  | (560 | )
Loss before income taxes |  | $ | (16,396 | ) |  | $ | (6,710 | )
(1) During the nine months ended January 26, 2025, gross profit includes restructuring related charges totaling $1.5 million for losses on the disposal and valuation of inventory related to the gradual discontinuation of operations at our manufacturing facility located in Quebec, Canada. (2) During the nine months ending January 28, 2024, gross profit includes a restructuring related charge of $40,000, which represents markdowns of inventory related to the discontinuation of production of cut and sewn upholstery kits at the company's facility located in Ouanaminthe, Haiti. 3) During the nine months ending January 26, 2025, restructuring expense of $6.3 million mostly relates to the mattress fabrics segment. The $6.3 million restructuring expense represents (i) $2.7 million for the consolidation of our mattress fabrics operations located in Quebec, Canada into our facility located in Stokesdale, North Carolina, (ii) $1.5 million for impairment of and accelerated depreciation related to property, plant, and equipment, (iii) $1.4 million for employee termination benefits, and (iv) $849,000 for lease termination costs, partially offset by a gain on sale and disposal of equipment totaling $(174,000). See Note 10 to the consolidated financial statements for further details and description of our Fiscal 2025 Restructuring Plan. (4) 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. Balance sheet information for our operating segments follows:
(dollars in thousands) |  | January 26, 2025 |  |  | January 28, 2024 |  |  | April 28, 2024 |
Segment assets: |  |  |  |  |  |  |  |  |
Mattress Fabrics: |  |  |  |  |  |  |  |  |
Accounts receivable |  | $ | 11,607 |  |  | $ | 11,463 |  |  | $ | 10,003 |
Inventory |  |  | 31,377 |  |  |  | 27,925 |  |  |  | 27,671 |
Property, plant and equipment (1) |  |  | 24,210 |  |  |  | 32,263 |  |  |  | 31,472 |
Right of use assets (2) |  |  | 200 |  |  |  | 1,798 |  |  |  | 1,627 |
Assets held for sale (3) |  |  | 2,214 |  |  |  | — |  |  |  | — |
Total mattress fabrics assets |  |  | 69,608 |  |  |  | 73,449 |  |  |  | 70,773 |
Upholstery Fabrics: |  |  |  |  |  |  |  |  |
Accounts receivable |  |  | 11,552 |  |  |  | 12,223 |  |  |  | 11,135 |
Inventory |  |  | 17,222 |  |  |  | 18,952 |  |  |  | 17,172 |
Property, plant and equipment (4) |  |  | 1,117 |  |  |  | 1,155 |  |  |  | 1,125 |
Right of use assets (5) |  |  | 2,647 |  |  |  | 2,345 |  |  |  | 1,952 |
Total upholstery fabrics assets |  |  | 32,538 |  |  |  | 34,675 |  |  |  | 31,384 |
Total segment assets |  |  | 102,146 |  |  |  | 108,124 |  |  |  | 102,157 |
Non-segment assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  |  | 5,279 |  |  |  | 12,585 |  |  |  | 10,012 |
Short-term investments - rabbi trust |  |  | 1,753 |  |  |  | 937 |  |  |  | 903 |
Short-term notes receivable |  |  | 526 |  |  |  | 260 |  |  |  | 264 |
Current income taxes receivable |  |  | 1,137 |  |  |  | 476 |  |  |  | 350 |
Other current assets |  |  | 2,619 |  |  |  | 4,237 |  |  |  | 3,371 |
Long-term notes receivable |  |  | 1,254 |  |  |  | 1,530 |  |  |  | 1,462 |
Deferred income taxes |  |  | 490 |  |  |  | 531 |  |  |  | 518 |
Property, plant and equipment (6) |  |  | 612 |  |  |  | 603 |  |  |  | 585 |
Right of use assets (7) |  |  | 3,256 |  |  |  | 2,809 |  |  |  | 2,624 |
Intangible assets |  |  | 1,594 |  |  |  | 1,970 |  |  |  | 1,876 |
Long-term investments - rabbi trust |  |  | 6,250 |  |  |  | 7,083 |  |  |  | 7,102 |
Other assets |  |  | 639 |  |  |  | 853 |  |  |  | 830 |
Total assets |  | $ | 127,555 |  |  | $ | 141,998 |  |  | $ | 132,054 |
(1) The $24.2 million as of January 26, 2025, represents property, plant, and equipment of $23.0 million, $973,000 and $221,000 located in the U.S., Haiti, and Canada, respectively. 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 $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 $200,000 as of January 26, 2025, represents a right of use asset in Haiti. 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 $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. (3) The $2.2 million as of January 26, 2025, represents assets held for sale located in Canada. (4) The $1.1 million as of January 26, 2025, represents property, plant, and equipment of $1.0 million and $83,000 located in the U.S. and China, respectively. 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 $1.1 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. (5) The $2.6 million as of January 26, 2025, represents right of use assets of $1.9 million and $764,000 located in China and the U.S., respectively. 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 $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. (6) The $612,000, $603,000, and $585,000 as of January 26, 2025, January 28, 2024, and April 28, 2024, respectively, represents 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 are located in the U.S. (7) The $3.3 million, $2.8 million, and $2.6 million as of January 26, 2025, January 28, 2024, and April 28, 2024, 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 26, 2025 |  |  | January 28, 2024 |
Capital expenditures (1): |  |  |  |  |  |
Mattress Fabrics |  | $ | 1,469 |  |  | $ | 2,828 |
Upholstery Fabrics |  |  | 280 |  |  |  | 219 |
Unallocated Corporate |  |  | 789 |  |  |  | 167 |
Total capital expenditures |  | $ | 2,538 |  |  | $ | 3,214 |
Depreciation expense: |  |  |  |  |  |
Mattress Fabrics (2) |  | $ | 5,166 |  |  | $ | 4,422 |
Upholstery Fabrics |  |  | 464 |  |  |  | 475 |
Total depreciation expense |  | $ | 5,630 |  |  | $ | 4,897 |
(1) Capital expenditure amounts are stated on an accrual basis. See Consolidated Statements of Cash Flows for capital expenditure amounts on a cash basis. (2) During the nine-month period ended January 26, 2025, depreciation expense for the mattress fabrics segment included additional depreciation expense related to the shortening of useful lives of equipment associated with the gradual discontinuation of operations at our manufacturing facility located in Quebec, Canada. The amount of additional depreciation expense was $1.3 million and was classified as restructuring expense in the Consolidated Statements of Net Loss.

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