Segment Information

3 Months Ended

Aug. 01, 2021

Segment Reporting [Abstract]

Segment Information

12. Segment Information

Overall

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 primarily to bedding manufacturers. The upholstery fabrics segment develops, manufactures, sources, and sells fabrics primarily to residential and commercial furniture manufacturers. 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 income (loss) from operations before certain unallocated corporate expenses, asset impairments, restructuring credit (expense) and related charges, and other non-recurring items. 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 executive officers and their support staff, all costs associated with 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, property, plant, and equipment, and right of use assets. The mattress fabrics segment also included in segment assets its investment in an unconsolidated joint venture as of August 2, 2020. 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
	August 1, 2021			August 2, 2020
net sales by segment:
mattress fabrics	$	43,058		$	36,103
upholstery fabrics		39,989			28,361
net sales	$	83,047		$	64,464
gross profit:
mattress fabrics	$	6,795		$	4,608
upholstery fabrics		5,704			5,293
gross profit	$	12,499		$	9,901
selling, general, and administrative expenses by segment:
mattress fabrics	$	3,184		$	2,763
upholstery fabrics		3,437			3,180
unallocated corporate expenses		2,560			2,075
selling, general, and administrative expenses	$	9,181		$	8,018
income (loss) from operations by segment:
mattress fabrics	$	3,611		$	1,845
upholstery fabrics		2,267			2,113
unallocated corporate expenses		(2,560	)		(2,075	)
income from operations		3,318			1,883
interest expense		—			(51	)
interest income		74			58
other expense		(237	)		(366	)
income before income taxes	$	3,155		$	1,524

Balance sheet information for our operating segments follows:

(dollars in thousands)	August 1, 2021		August 2, 2020		May 2, 2021
Segment assets:
Mattress Fabrics:
Accounts receivable	$	18,016	$	15,585	$	20,427
Inventory		31,778		20,070		30,047
Property, plant and equipment (1)		40,881		39,597		41,264
Right of use assets (2)		4,058		832		4,278
Investment in unconsolidated joint venture		—		1,759		—
Total mattress fabrics assets		94,733		77,843		96,016
Upholstery Fabrics:
Accounts receivable		16,992		14,308		17,299
Inventory		26,835		20,332		25,870
Property, plant and equipment (3)		2,080		1,634		1,925
Right of use assets (4)		5,984		3,802		5,945
Total upholstery fabrics assets		51,891		40,076		51,039
Total segment assets		146,624		117,919		147,055
Non-segment assets:
Cash and cash equivalents		26,061		39,986		37,009
Short-term investments - available for sale		9,698		983		5,542
Short-term investments - held-to-maturity		1,661		5,092		3,161
Current income taxes receivable		524		782		—
Other current assets		3,889		3,547		3,852
Deferred income taxes		455		593		545
Property, plant and equipment (5)		969		820		814
Right of use assets (6)		1,405		1,809		1,507
Intangible assets		2,910		3,286		3,004
Long-term investments - rabbi trust		8,841		7,916		8,415
Long-term investments - held-to-maturity		6,629		1,314		1,141
Other assets		2,582		540		2,035
Total assets	$	212,248	$	184,587	$	214,080

	Three months ended
(dollars in thousands)	August 1, 2021		August 2, 2020
Capital expenditures (7):
Mattress Fabrics	$	1,117	$	545
Upholstery Fabrics		262		113
Unallocated Corporate		274		68
Total capital expenditures	$	1,653	$	726
Depreciation expense:
Mattress Fabrics	$	1,521	$	1,631
Upholstery Fabrics		205		191
Total depreciation expense	$	1,726	$	1,822

(1) The $40.9 million as of August 1, 2021, represents property, plant, and equipment of $27.6 million, $12.4 million, and $875,000 located in the U.S., Canada, and Haiti, respectively. The $39.6 million as of August 2, 2020, represents property, plant, and equipment of $27.0 million and $12.6 million located in the U.S. and Canada, respectively.   The $41.3 million as of May 2, 2021, represents property, plant, and equipment of $28.4 million, $12.0 million, and $855,000 located in the U.S., Canada, and Haiti, respectively.

(2) The $4.1 million as of August 1, 2021, represents right of use assets of $2.3 million, $1.4 million, and $355,000 located in Haiti, the U.S., and Canada, respectively.  The $832,000 as of August 2, 2020, represents right of use assets of $535,000 and $297,000 located in Canada and the U.S., respectively.  The $4.3 million as of May 2, 2021, represents right of use assets of $2.4 million, $1.4 million, and $400,000 located in Haiti, the U.S., and Canada, respectively.  

(3) The $2.1 million as of August 1, 2021, represents property, plant, and equipment of $1.1 million, $830,000, and $130,000 located in the U.S., China, and Haiti, respectively. The $1.6 million as of August 2, 2020, represents property, plant, and equipment of $1.2 million and $456,000 located in the U.S. and China, respectively.   The $1.9 million as of May 2, 2021, represents property, plant, and equipment of $1.1 million and $850,000 located in the U.S. and China, respectively.

(4) The $6.0 million as of August 1, 2021, represents right of use assets of $4.6 million and $1.4 million located in China and the U.S., respectively.  The $3.8 million as of August 2, 2020, represents right of use assets of $3.1 million and $710,000 located in China and the U.S., respectively.  The $5.9 million as of May 2, 2021, represents right of use assets of $5.0 million and $952,000 located in China and the U.S., respectively.

(5) The $969,000, $820,000, and $814,000 as of August 1, 2021, August 2, 2020, and May 2, 2021, respectively, represent 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 reside in the U.S.

(6) The $1.4 million, $1.8 million, and $1.5 million as of August 1, 2021, August 2, 2020, and May 2, 2021, respectively, represent right of use assets located in the U.S.

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