Segment Information

3 Months Ended

Aug. 02, 2015

Segment Reporting [Abstract]

Segment Information

12.  Segment Information

Our operations are classified into two business segments: mattress fabrics and upholstery fabrics.  The mattress fabrics segment manufactures, sources, and sells fabrics and mattress covers to bedding manufacturers.  The upholstery fabrics segment sources, manufactures, and sells fabrics primarily to residential furniture manufacturers.

We evaluate the operating performance of our segments based upon income from operations before certain unallocated corporate expenses and other non-recurring items. Cost of sales in both segments include costs to 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 executive officers, all costs related to being a public company, and other miscellaneous expenses.  Segment assets include assets used in the operations of each segment and primarily consist of accounts receivable, inventories, and property, plant and equipment.  The mattress fabrics segment also includes in segment assets, goodwill, a non-compete agreement, and customer relationships associated with an acquisition.

Financial information for the company’s operating segments follows:
	Three months ended
(dollars in thousands)	August 2, 2015			August 3, 2014
Net sales:
Mattress Fabrics	$	47,808		$	42,822
Upholstery Fabrics		32,377			33,238
	$	80,185		$	76,060
Gross profit:
Mattress Fabrics	$	9,925		$	7,202
Upholstery Fabrics		6,277			5,513
	$	16,202		$	12,715
Selling, general, and administrative expenses:
Mattress Fabrics	$	2,923		$	2,574
Upholstery Fabrics		3,595			3,452
Total segment selling, general, and administrative expenses		6,518			6,026
Unallocated corporate expenses		2,223			1,393
	$	8,741		$	7,419
Income from operations:
Mattress Fabrics	$	7,003		$	4,629
Upholstery Fabrics		2,681			2,060
Total segment income from operations		9,684			6,689
Unallocated corporate expenses		(2,223	)		(1,393	)
Total income from operations		7,461			5,296
Interest expense		(24	)		(68	)
Interest income		66			142
Other (expense) income		(95	)		89
Income before income taxes	$	7,408		$	5,459

Balance sheet information for the company’s operating segments follow:
(dollars in thousands)	August 2, 2015		August 3, 2014		May 3, 2015
Segment assets:
Mattress Fabrics
Current assets (1)	$	42,530	$	37,970	$	41,328
Non-compete agreement		960		1,035		979
Customer relationships		753		804		766
Goodwill		11,462		11,462		11,462
Property, plant and equipment (2)		35,116		29,604		33,773
Total mattress fabrics assets		90,821		80,875		88,308
Upholstery Fabrics
Current assets (1)		29,721		27,957		29,905
Property, plant and equipment (3)		1,518		1,580		1,467
Total upholstery fabrics assets		31,239		29,537		31,372
Total segment assets		122,060		110,412		119,680
Non-segment assets:
Cash and cash equivalents		25,933		24,665		29,725
Short-term investments		6,336		6,311		10,004
Deferred income taxes		7,398		7,176		5,237
Income taxes receivable		142		136		229
Other current assets		3,502		2,308		2,440
Property, plant and equipment (4)		846		707		838
Long-term investments		2,893		1,749		2,415
Other assets		762		748		800
Total assets	$	169,872	$	154,212	$	171,368

	Three months ended
(dollars in thousands)	August 2, 2015		August 3, 2014
Capital expenditures (5):
Mattress Fabrics	$	2,704	$	2,129
Upholstery Fabrics		183		112
Unallocated Corporate		73		19
Total capital expenditures	$	2,960	$	2,260
Depreciation expense:
Mattress Fabrics	$	1,359	$	1,219
Upholstery Fabrics		196		180
Total depreciation expense	$	1,555	$	1,399

(1)   Current assets represent accounts receivable and inventory for the respective segment.

(2)   The $35.1 million at August 2, 2015, represents property, plant, and equipment of $23.6 million and $11.5 million located in the U.S. and Canada, respectively. The $29.6 million at August 3, 2014, represents property, plant, and equipment of $21.2 million and $8.4 million located in the U.S. and Canada, respectively. The $33.8 million at May 3, 2015, represents property, plant, and equipment of $23.8 million and $10.0 million located in the U.S. and Canada, respectively.

(3)   The $1.5 million at August 2, 2015, represents property, plant, and equipment of $818 and $700 located in the U.S. and China, respectively. The $1.6 million at August 3, 2014, represents property, plant, and equipment located in the U.S. of $911, located in China of $627, and located in Poland of $42. The $1.5 million at May 3, 2015, represents property, plant, and equipment located in the U.S. of $848 and located in China of $619.

(4)   The $846, $707, and $838 at August 2, 2015, August 3, 2014 and May 3, 2015, respectively, represent property, plant, and equipment associated with unallocated corporate departments and corporate departments shared by both the mattress and upholstery fabric segments. Property, plant, and equipment associated with corporate are located in the U.S.

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