Note 27 - Business Segment Information

9 Months Ended

Mar. 24, 2013

Segment Reporting Disclosure [Text Block]

27. Business Segment Information

The Company has three operating segments which are also its reportable segments.  Each reportable segment derives its revenues as follows:

· The Polyester segment manufactures Chip, POY, textured, dyed, twisted and beamed yarns, virgin and recycled, with sales primarily to other yarn manufacturers, knitters and weavers that produce yarn and/or fabric for the apparel, hosiery, automotive upholstery, home furnishing, industrial and other end-use markets.  The Polyester segment consists of manufacturing operations in the U.S. and El Salvador.

· The Nylon segment manufactures textured nylon and covered spandex yarns with sales to knitters and weavers that produce fabric for the apparel, hosiery, sock and other end-use markets.  The Nylon segment consists of manufacturing operations in the U.S. and Colombia.

· The International segment’s products primarily include textured polyester and various types of resale yarns and staple fiber. The International segment sells its yarns to knitters and weavers that produce fabric for the apparel, automotive upholstery, home furnishing, industrial and other end-use markets primarily in the South American and Asian regions.  This segment includes manufacturing and sales offices in Brazil and a sales office in China.

The Company evaluates the operating performance of its segments based upon Segment Adjusted Profit which is defined as segment gross profit plus segment depreciation and amortization less segment SG&A and segment other adjustments.  Segment operating (loss) profit represents segment net sales less cost of sales, restructuring and other charges and SG&A expenses.  The accounting policies for the segments are consistent with the Company’s accounting policies.  Intersegment sales are accounted for at current market prices.

Selected financial information for the Polyester, Nylon and International segments is presented below:

	For the Three Months Ended March 24, 2013
	Polyester			Nylon		International		Total
Net sales	$	96,389		$	38,007	$	33,853	$	168,249
Cost of sales		91,355			34,326		29,887		155,568
Gross profit		5,034			3,681		3,966		12,681
Selling, general and administrative expenses		6,793			2,297		2,172		11,262
Segment operating (loss) profit	$	(1,759	)	$	1,384	$	1,794	$	1,419

	For the Three Months Ended March 25, 2012
	Polyester			Nylon		International		Total
Net sales	$	102,061		$	39,181	$	37,795	$	179,037
Cost of sales		96,202			35,781		33,464		165,447
Gross profit		5,859			3,400		4,331		13,590
Selling, general and administrative expenses		6,556			2,263		2,329		11,148
Segment operating (loss) profit	$	(697	)	$	1,137	$	2,002	$	2,442

The reconciliations of Segment operating profit to consolidated Income before income taxes are as follows:

	For the Three Months Ended
	March 24, 2013			March 25, 2012
Polyester	$	(1,759	)	$	(697	)
Nylon		1,384			1,137
International		1,794			2,002
Segment operating profit		1,419			2,442
Provision (benefit) for bad debts		74			(144	)
Other operating expense, net		616			669
Operating income		729			1,917
Interest income		(240	)		(571	)
Interest expense		1,236			4,189
Loss on extinguishment of debt		746			—
Loss on previously held equity interest		—			—
Other non-operating expense (income)		96			(9	)
Equity in earnings of unconsolidated affiliates		(4,783	)		(9,863	)
Income before income taxes	$	3,674		$	8,171

Selected financial information for the Polyester, Nylon and International segments is presented below:

	For the Nine Months Ended March 24, 2013
	Polyester		Nylon		International		Total
Net sales	$	286,747	$	117,561	$	108,912	$	513,220
Cost of sales		265,069		105,794		94,965		465,828
Gross profit		21,678		11,767		13,947		47,392
Selling, general and administrative expenses		20,721		7,099		6,121		33,941
Segment operating profit	$	957	$	4,668	$	7,826	$	13,451

	For the Nine Months Ended March 25, 2012
	Polyester			Nylon		International		Total
Net sales	$	289,694		$	118,958	$	108,508	$	517,160
Cost of sales		277,884			106,679		96,295		480,858
Gross profit		11,810			12,279		12,213		36,302
Selling, general and administrative expenses		19,197			6,588		6,720		32,505
Segment operating (loss) profit	$	(7,387	)	$	5,691	$	5,493	$	3,797

The reconciliations of Segment operating profit to consolidated Income before income taxes are as follows:

	For the Nine Months Ended
	March 24, 2013			March 25, 2012
Polyester	$	957		$	(7,387	)
Nylon		4,668			5,691
International		7,826			5,493
Segment operating profit		13,451			3,797
Provision for bad debts		257			418
Other operating expense, net		1,777			1,118
Operating income		11,417			2,261
Interest income		(508	)		(1,713	)
Interest expense		4,041			12,791
Loss on extinguishment of debt		1,102			462
Loss on previously held equity interest		—			3,656
Other non-operating expense (income)		96			(1,488	)
Equity in earnings of unconsolidated affiliates		(6,712	)		(14,166	)
Income before income taxes	$	13,398		$	2,719

The reconciliations of Segment depreciation and amortization expense to consolidated Depreciation and amortization expense are as follows:

	For the Three Months Ended				For the Nine Months Ended
	March 24, 2013		March 25, 2012		March 24, 2013		March 25, 2012
Polyester	$	4,449	$	4,693	$	13,827	$	14,227
Nylon		745		788		2,258		2,341
International		860		1,176		2,546		3,075
Segment depreciation and amortization expense		6,054		6,657		18,631		19,643
Depreciation and amortization included in other operating expense, net		55		32		146		69
Amortization included in interest expense		157		227		486		672
Depreciation and amortization expense	$	6,266	$	6,916	$	19,263	$	20,384

Segment other adjustments for each of the reportable segments consists of the following:

	For the Three Months Ended				For the Nine Months Ended
	March 24, 2013		March 25, 2012		March 24, 2013		March 25, 2012
Polyester	$	263	$	50	$	357	$	50
Nylon		87		—		87		—
International		—		278		56		382
Segment other adjustments	$	350	$	328	$	500	$	432

Other adjustments include amounts recorded for employee severance expenses and certain domestic retiree and post-employment medical liabilities.

Segment Adjusted Profit for each of the reportable segments consists of the following:

	For the Three Months Ended				For the Nine Months Ended
	March 24, 2013		March 25, 2012		March 24, 2013		March 25, 2012
Polyester	$	2,953	$	4,046	$	15,141	$	6,890
Nylon		2,216		1,925		7,013		8,032
International		2,654		3,456		10,428		8,950
Segment Adjusted Profit	$	7,823	$	9,427	$	32,582	$	23,872

Intersegment sales for each of the reportable segments consist of the following:

	For the Three Months Ended					For the Nine Months Ended
	March 24, 2013		March 25, 2012			March 24, 2013		March 25, 2012
Polyester	$	62	$	303		$	1,031	$	1,193
Nylon		249		(3	)		423		224
International		373		459			772		1,020
Intersegment sales	$	684	$	759		$	2,226	$	2,437

The reconciliations of Segment capital expenditures to consolidated Capital expenditures are as follows:

	For the Three Months Ended				For the Nine Months Ended
	March 24, 2013		March 25, 2012		March 24, 2013		March 25, 2012
Polyester	$	641	$	1,122	$	2,559	$	2,799
Nylon		82		185		252		375
International		345		423		634		1,430
Segment capital expenditures		1,068		1,730		3,445		4,604
Unallocated corporate capital expenditures		582		340		1,077		725
Capital expenditures	$	1,650	$	2,070	$	4,522	$	5,329

The reconciliations of Segment total assets to consolidated Total assets are as follows:

	March 24, 2013		June 24, 2012
Polyester	$	183,501	$	198,321
Nylon		74,379		74,569
International		88,594		88,040
Segment total assets		346,474		360,930
All other current assets		4,790		9,424
Unallocated corporate PP&E		12,139		10,404
All other non-current assets		4,908		5,712
Investments in unconsolidated affiliates		92,971		95,763
Total assets	$	461,282	$	482,233

Geographic Data:

Geographic information for Net sales is as follows:

	For the Three Months Ended				For the Nine Months Ended
	March 24, 2013		March 25, 2012		March 24, 2013		March 25, 2012
U.S.	$	123,895	$	130,735	$	372,684	$	377,704
Brazil		28,357		32,635		89,284		93,100
All other foreign		15,997		15,667		51,252		46,356
Total	$	168,249	$	179,037	$	513,220	$	517,160

The information for Net sales is based on the operating locations from where the items were produced or distributed. Export sales from the Company’s U.S. operations to external customers were $20,895 and $20,493 for the three months ended March 24, 2013 and March 25, 2012, respectively. Export sales from the Company’s U.S. operations to external customers were $66,459 and $60,055 for the nine months ended March 24, 2013 and March 25, 2012, respectively.

Geographic information for long-lived assets is as follows:

	March 24, 2013		June 24, 2012
U.S.	$	200,415	$	215,890
Brazil		17,311		19,121
All other foreign		9,735		7,935
Total	$	227,461	$	242,946

Long-lived assets are comprised of Property, plant and equipment, net, Intangible assets, net, Investments in unconsolidated affiliates and Other non-current assets.