Segment Information

3 Months Ended

Jul. 31, 2016

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)	July 31, 2016			August 2, 2015
Net sales:
Mattress Fabrics	$	50,530		$	47,808
Upholstery Fabrics		30,152			32,377
	$	80,682		$	80,185
Gross profit:
Mattress Fabrics	$	11,901		$	9,925
Upholstery Fabrics		6,518			6,277
	$	18,419		$	16,202
Selling, general, and administrative expenses:
Mattress Fabrics	$	3,499		$	2,923
Upholstery Fabrics		3,534			3,595
Total segment selling, general, and
administrative expenses		7,033			6,518
Unallocated corporate expenses		2,713			2,223
	$	9,746		$	8,741
Income from operations:
Mattress Fabrics	$	8,402		$	7,003
Upholstery Fabrics		2,984			2,681
Total segment income from operations		11,386			9,684
Unallocated corporate expenses		(2,713	)		(2,223	)
Total income from operations		8,673			7,461
Interest expense		-			(24	)
Interest income		25			66
Other expense		(152	)		(95	)
Income before income taxes	$	8,546		$	7,408

Balance sheet information for the company’s operating segments follows:

(dollars in thousands)	July 31, 2016		August 2, 2015		May 1, 2016
Segment assets:
Mattress Fabrics
Current assets (1)	$	39,800	$	42,530	$	43,472
Non-compete agreement		885		960		903
Customer relationships		702		753		715
Goodwill		11,462		11,462		11,462
Property, plant and equipment (2)		39,435		35,116		37,480
Total mattress fabrics assets		92,284		90,821		94,032
Upholstery Fabrics
Current assets (1)		31,021		29,721		26,540
Property, plant and equipment (3)		1,459		1,518		1,564
Total upholstery fabrics assets		32,480		31,239		28,104
Total segment assets		124,764		122,060		122,136
Non-segment assets:
Cash and cash equivalents		45,549		25,933		37,787
Short-term investments		2,434		6,336		4,359
Deferred income taxes		1,942		4,406		2,319
Income taxes receivable		-		142		155
Other current assets		2,294		3,502		2,477
Property, plant and equipment (4)		851		846		929
Long-term investments		4,611		2,893		4,025
Other assets		915		762		955
Total assets	$	183,360	$	166,880	$	175,142

	Three months ended
(dollars in thousands)	July 31, 2016		August 2, 2015
Capital expenditures (5):
Mattress Fabrics	$	3,521	$	2,704
Upholstery Fabrics		14		183
Unallocated Corporate		8		73
Total capital expenditures	$	3,543	$	2,960
Depreciation expense:
Mattress Fabrics	$	1,556	$	1,359
Upholstery Fabrics		205		196
Total depreciation expense	$	1,761	$	1,555

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

(2) The $39.4 million at July 31, 2016, represents property, plant, and equipment of $25.5 million and $13.9 million located in the U.S. and Canada, respectively. 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 $37.5 million at May 1, 2016, represents property, plant, and equipment of $24.8 million and $12.7 million located in the U.S. and Canada, respectively.

(3) The $1.5 million at July 31, 2016, represents property, plant, and equipment of $847 and $612 located in the U.S. and China, respectively. 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 May 1, 2016, represents property, plant, and equipment of $893 and $671 located in the U.S. and China, respectively.

(4) The $851, $846, and $929 at July 31, 2016, August 2, 2015 and May 1, 2016, 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.