Segment Information

9 Months Ended

Jan. 30, 2022

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 and other items that are not expected to occur on a regular basis. 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, amortization of intangible assets, 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 January 31, 2021 (see note 3 to the consolidated financial statements for further details). 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
	January 30, 2022			January 31, 2021
net sales by segment:
mattress fabrics	$	38,439		$	38,600
upholstery fabrics		41,852			40,741
net sales	$	80,291		$	79,341
gross profit:
mattress fabrics	$	3,164		$	6,458
upholstery fabrics		5,946			7,414
gross profit	$	9,110		$	13,872
selling, general, and administrative expenses by segment:
mattress fabrics	$	2,800		$	3,161
upholstery fabrics		3,500			3,551
unallocated corporate expenses		1,707			3,123
selling, general, and administrative expenses	$	8,007		$	9,835
income (loss) from operations by segment:
mattress fabrics	$	364		$	3,297
upholstery fabrics		2,446			3,863
unallocated corporate expenses		(1,707	)		(3,123	)
income from operations		1,103			4,037
interest income		214			90
other expense		(322	)		(1,010	)
income before income taxes	$	995		$	3,117

	Nine months ended
	January 30, 2022			January 31, 2021
net sales by segment:
mattress fabrics	$	122,380		$	114,733
upholstery fabrics		115,519			105,923
net sales	$	237,899		$	220,656
gross profit by segment:
mattress fabrics	$	16,106		$	18,650
upholstery fabrics		16,230			19,385
gross profit	$	32,336		$	38,035
selling, general, and administrative expenses by segment:
mattress fabrics	$	8,991		$	9,125
upholstery fabrics		10,491			10,122
unallocated corporate expenses		6,793			8,350
selling, general, and administrative expenses	$	26,275		$	27,597
income (loss) from operations by segment:
mattress fabrics	$	7,115		$	9,525
upholstery fabrics		5,739			9,263
unallocated corporate expenses		(6,793	)		(8,350	)
income from operations		6,061			10,438
interest expense		—			(51	)
interest income		347			208
other expense		(963	)		(2,057	)
income before income taxes	$	5,445		$	8,538

Balance sheet information for our operating segments follows:

(dollars in thousands)	January 30, 2022		January 31, 2021		May 2, 2021
Segment assets:
Mattress Fabrics:
Accounts receivable, net	$	17,617	$	17,722	$	20,427
Inventory		39,544		30,326		30,047
Property, plant and equipment (1)		39,483		39,550		41,264
Right of use assets (2)		3,706		1,077		4,278
Investment in unconsolidated joint venture		—		1,723		—
Total mattress fabrics assets		100,350		90,398		96,016
Upholstery Fabrics:
Accounts receivable, net		21,381		18,675		17,299
Inventory		33,589		27,468		25,870
Property, plant and equipment (3)		2,448		1,953		1,925
Right of use assets (4)		8,727		3,519		5,945
Total upholstery fabrics assets		66,145		51,615		51,039
Total segment assets		166,495		142,013		147,055
Non-segment assets:
Cash and cash equivalents		11,780		35,987		37,009
Short-term investments - available for sale		438		5,548		5,542
Short-term investments - held-to-maturity		1,315		9,785		3,161
Current income taxes receivable		367		—		—
Other current assets		4,419		3,116		3,852
Deferred income taxes		500		640		545
Property, plant and equipment (5)		847		882		814
Right of use assets (6)		4,162		1,610		1,507
Intangible assets		2,722		3,098		3,004
Long-term investments - rabbi trust		9,223		8,232		8,415
Long-term investments - held-to-maturity		8,677		512		1,141
Other assets		622		555		2,035
Total assets	$	211,567	$	211,978	$	214,080

	Nine months ended
(dollars in thousands)	January 30, 2022		January 31, 2021
Capital expenditures (7):
Mattress Fabrics	$	2,828	$	3,886
Upholstery Fabrics		815		259
Unallocated Corporate		1,330		308
Total capital expenditures	$	4,973	$	4,453
Depreciation expense:
Mattress Fabrics	$	4,613	$	4,579
Upholstery Fabrics		590		624
Total depreciation expense	$	5,203	$	5,203

(1) The $39.5 million as of January 30, 2022, represents property, plant, and equipment of $26.2 million, $12.5 million, and $796,000 located in the U.S., Canada, and Haiti, respectively. The $39.6 million as of January 31, 2021, represents property, plant, and equipment of $27.3 million and $12.3 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 $3.7 million as of January 30, 2022, represents right of use assets of $2.1 million, $1.3 million, and $352,000 located in Haiti, the U.S., and Canada, respectively.  The $1.1 million as of January 31, 2021, represents right of use assets of $632,000 and $445,000 located in the U.S. and Canada, 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 $2.4 million as of January 30, 2022, represents property, plant, and equipment of $1.1 million, $774,000 and $585,000 located in the U.S., China, and Haiti, respectively. The $2.0 million as of January 31, 2021, represents property, plant, and equipment of $1.1 million and $881,000 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 $8.7 million as of January 30, 2022, represents right of use assets of $4.1 million, $2.7 million, and $1.9 million located in China, Haiti, and the U.S., respectively.  The $3.5 million as of January 31, 2021, represents right of use assets of $2.4 million and $1.1 million 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 $847,000, $882,000, and $814,000 as of January 30, 2022, January 31, 2021, 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 $4.2 million, $1.6 million, and $1.5 million as of January 30, 2022, January 31, 2021, 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.