Business Segment Information

9 Months Ended

Mar. 26, 2017

Segment Reporting [Abstract]

Segment Reporting

21.  Business Segment Information

The Company defines operating segments as components of the organization for which discrete financial information is available and operating results are evaluated on a regular basis by the Company’s President, who is the chief operating decision maker (“CODM”), in order to assess performance and allocate resources. Characteristics of the organization which were relied upon in making the determination of reportable segments include the nature of the products sold, the organization’s internal structure, the trade policies in the geographic regions in which the Company operates, and the information that is regularly reviewed by the CODM for the purpose of assessing performance and allocating resources.

The Company’s operating segments are aggregated into three reportable segments based on similarities between the operating segments’ economic characteristics, nature of products sold, type of customer, methods of distribution, and regulatory environment.

• The operations within the Polyester Segment exhibit similar long-term economic characteristics and sell into an economic trading zone covered by the North American Free Trade Agreement (“NAFTA”) and the Dominican Republic—Central America Free Trade Agreement (“CAFTA-DR”) to similar customers utilizing similar methods of distribution. These operations derive revenues from polyester-based products with sales primarily to other yarn manufacturers and knitters and weavers that produce yarn and/or fabric for the apparel, hosiery, automotive upholstery, home furnishings, industrial and other end-use markets. The Polyester Segment consists of sales and manufacturing operations in the United States and El Salvador.

• The operations within the Nylon Segment exhibit similar long-term economic characteristics and sell into an economic trading zone covered by NAFTA and CAFTA-DR to similar customers utilizing similar methods of distribution. The Nylon Segment includes an immaterial operating segment in Colombia that sells similar nylon-based textile products to similar customers in Colombia and Mexico utilizing similar methods of distribution. The Nylon Segment manufactures nylon-based products, with sales to knitters and weavers that produce fabric primarily for the apparel and hosiery markets.  The Nylon Segment consists of sales and manufacturing operations in the United States and Colombia.

• The operations within the International Segment exhibit similar long-term economic characteristics and sell to similar customers utilizing similar methods of distribution in geographic regions that are outside of the NAFTA and CAFTA-DR economic trading zone. The International Segment primarily sells its polyester-based products to knitters and weavers that produce fabric for the apparel, automotive upholstery, home furnishings, industrial and other end-use markets primarily in the South American and Asian regions.  The International Segment includes a manufacturing location in Brazil and sales offices in Brazil, China and Sri Lanka.

In addition to the Company’s reportable segments, the selected financial information presented below includes an All Other category. All Other consists primarily of Renewables (up through the date of sale, December 23, 2016) and for-hire transportation services. For-hire transportation services revenue is derived from performing common carrier services utilizing the Company’s fleet of transportation equipment.

The operations within All Other (i) are not subject to review by the CODM at a level consistent with the Company’s other operations, (ii) are not regularly evaluated using the same metrics applied to the Company’s other operations and (iii) do not qualify for aggregation with an existing reportable segment. Therefore, such operations are excluded from reportable segments.

The Company evaluates the operating performance of its segments based upon Segment Profit (Loss), which represents segment gross profit (loss) plus segment depreciation expense.  This measurement of segment profit or loss best aligns segment reporting with the current assessments and evaluations performed by, and information provided to, the CODM.

The accounting policies for the segments are consistent with the Company’s accounting policies.  Intersegment sales are omitted from the below financial information, as they are (i) insignificant to the Company’s segments and eliminated from consolidated reporting and (ii) excluded from segment evaluations performed by the CODM.

Selected financial information is presented below. As described in Note 2, “Basis of Presentation; Condensed Notes,” certain amounts previously reported for the Polyester and Nylon Segments for the three months and nine months ended March 27, 2016 have been revised to match the current presentation.

	For the Three Months Ended March 26, 2017
	Polyester		Nylon		International		All Other		Total
Net sales	$	90,267	$	26,987	$	42,345	$	1,297	$	160,896
Cost of sales		81,730		24,656		32,159		1,221		139,766
Gross profit		8,537		2,331		10,186		76		21,130
Segment depreciation expense		3,636		542		317		74		4,569
Segment Profit	$	12,173	$	2,873	$	10,503	$	150	$	25,699

	For the Three Months Ended March 27, 2016
	Polyester		Nylon		International		All Other			Total
Net sales	$	98,997	$	29,533	$	31,092	$	1,656		$	161,278
Cost of sales		85,730		25,955		24,443		1,786			137,914
Gross profit (loss)		13,267		3,578		6,649		(130	)		23,364
Segment depreciation expense		2,733		466		236		242			3,677
Segment Profit	$	16,000	$	4,044	$	6,885	$	112		$	27,041

The reconciliations of segment gross profit to consolidated income before income taxes are as follows:

	For the Three Months Ended
	March 26, 2017			March 27, 2016
Polyester	$	8,537		$	13,267
Nylon		2,331			3,578
International		10,186			6,649
All Other		76			(130	)
Segment gross profit		21,130			23,364
Selling, general and administrative expenses		13,000			12,142
(Benefit) provision for bad debts		(92	)		411
Other operating (income) expense, net		(885	)		819
Operating income		9,107			9,992
Interest income		(126	)		(190	)
Interest expense		825			908
Equity in earnings of unconsolidated affiliates		(1,600	)		(4,167	)
Income before income taxes	$	10,008		$	13,441

	For the Nine Months Ended March 26, 2017
	Polyester		Nylon		International		All Other			Total
Net sales	$	261,623	$	83,784	$	126,557	$	4,056		$	476,020
Cost of sales		234,165		75,693		94,652		4,703			409,213
Gross profit (loss)		27,458		8,091		31,905		(647	)		66,807
Segment depreciation expense		10,128		1,582		791		570			13,071
Segment Profit (Loss)	$	37,586	$	9,673	$	32,696	$	(77	)	$	79,878

	For the Nine Months Ended March 27, 2016
	Polyester		Nylon		International		All Other			Total
Net sales	$	288,017	$	101,938	$	85,275	$	4,549		$	479,779
Cost of sales		252,840		87,272		68,654		4,852			413,618
Gross profit (loss)		35,177		14,666		16,621		(303	)		66,161
Segment depreciation expense		8,365		1,414		649		556			10,984
Segment Profit	$	43,542	$	16,080	$	17,270	$	253		$	77,145

The reconciliations of segment gross profit to consolidated income before income taxes are as follows:

	For the Nine Months Ended
	March 26, 2017			March 27, 2016
Polyester	$	27,458		$	35,177
Nylon		8,091			14,666
International		31,905			16,621
All Other		(647	)		(303	)
Segment gross profit		66,807			66,161
Selling, general and administrative expenses		37,278			35,391
(Benefit) provision for bad debts		(554	)		1,583
Other operating (income) expense, net		(636	)		879
Operating income		30,719			28,308
Interest income		(455	)		(519	)
Interest expense		2,431			2,708
Loss on sale of business		1,662			—
Equity in earnings of unconsolidated affiliates		(2,073	)		(7,330	)
Income before income taxes	$	29,154		$	33,449

The reconciliations of segment total assets to consolidated total assets are as follows:

	March 26, 2017		June 26, 2016
Polyester	$	267,832	$	243,105
Nylon		59,101		63,141
International		96,687		73,650
Segment total assets		423,620		379,896
Other current assets		14,912		6,674
Other PP&E		13,688		16,597
Other non-current assets		125		4,863
Investments in unconsolidated affiliates		117,910		117,412
Total assets	$	570,255	$	525,442

Product sales (excluding the All Other category) are as follows:

	For the Three Months Ended				For the Nine Months Ended
	March 26, 2017		March 27, 2016		March 26, 2017		March 27, 2016
Polyester	$	132,612	$	130,089	$	388,180	$	373,292
Nylon		26,987		29,533		83,784		101,938
Total product sales	$	159,599	$	159,622	$	471,964	$	475,230