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Commitments and Contingencies
12 Months Ended
May 03, 2020
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

15.

COMMITMENTS AND CONTINGENCIES

Leases

Balance Sheet

The right of use asset and lease liabilities associated with our operating leases as of May 3, 2020, and April 29, 2019, are as follows:

 

(dollars in thousands)

 

May 3,

2020

 

 

(1) April 29,

2019

 

Right of use asset

 

$

3,903

 

 

$

7,191

 

Operating lease liability - current

 

 

1,805

 

 

 

2,629

 

Operating lease liability – noncurrent

 

 

2,016

 

 

 

4,473

 

 

(1)

Amounts represent right of use assets and lease liabilities recorded in our Consolidated Balance Sheet in connection with the adoption of Topic 842 on April 29, 2019. These amounts include a right of use asset and a corresponding lease liability totaling $1.1 million that were associated with our former home accessories segment. As disclosed in Note 3 located in the consolidated financial statements, we sold our entire ownership interest in eLuxury on March 31, 2020, and consequently our home accessories segment was eliminated at such time. As a result, there were no right of use assets and corresponding lease liabilities associated with our former home accessories segment as of May 3, 2020.

 

Supplemental Cash Flow Information

 

(dollars in thousands)

 

2020

 

Operating lease liability payments

 

$

2,524

 

Right of use assets exchanged for lease liabilities

 

 

344

 

 

During fiscal 2020, operating lease costs associated with continuing operations were $2.6 million, short-term lease costs were $148,000, and variable lease costs were immaterial. During fiscal 2020, operating lease costs totaling $204,000 were associated with our former home accessories segmented and were presented within loss from discontinued operations on the Fiscal 2020 Consolidated Statement of Net Loss.

 

As of May 3, 2020, the weighted average remaining lease term and discount rate for our operating leases follows:

 

Weighted average lease term

 

2.98 years

 

Weighted average discount rate

 

 

3.60

%

Other Information

Maturity of our operating lease liabilities for the next five fiscal years, and thereafter follows:

 

(dollars in thousands)

 

 

 

 

2021

 

$

1,831

 

2022

 

 

978

 

2023

 

 

541

 

2024

 

 

432

 

2025

 

 

253

 

Thereafter

 

 

 

 

 

 

4,035

 

Less: interest

 

 

(214

)

Present value of lease liabilities

 

$

3,821

 

 

 

Lease Modifications

 

After May 3, 2020, we entered into agreements that extend the lease term for two buildings associated with our China operations through December 2024 and require monthly payments ranging from $20,000 to $30,000 during the lease term. As a result, we will record an increase of $2.6 million was recorded to right of use assets and lease liabilities during the first quarter of fiscal 2021. These agreements pertain to our upholstery fabrics segment.

 

Also, we entered into a new agreement to lease a warehouse associated with our Canadian operation for a term of 3 years that is set to expire in June 2023 and requires monthly payments of approximately $21,000. As a result, an increase of $550,000 was recorded to right of use assets and lease liabilities during the first quarter of fiscal 2021. This agreement is associated with our mattress fabrics segment.

Related Party Lease

We lease a plant facility associated with our mattress fabrics segment from a partnership owned by an immediate family member of an officer. Currently, this facility is being leased on a month to month basis at an amount of $13,100 per month. Rents paid to this entity owned by an immediate family of an officer totaled $157,000, $158,000, $156,000 in fiscal 2020, 2019, and 2018, respectively.

Other Litigation

The company is involved in legal proceedings and claims which have arisen in the ordinary course of business. Management has determined that it is not reasonably possible that these actions, when ultimately concluded and settled, will have a material adverse effect upon the financial position, results of operations, or cash flows of the company.

Accounts Payable – Capital Expenditures

At May 3, 2020, we had total amounts due regarding capital expenditures totaling $107,000, which pertained to outstanding vendor invoices, none of which were financed. At April 28, 2019, we had total amounts due regarding capital expenditures associated with continuing operations totaling $68,000, which pertained to outstanding vendor invoices, none of which were financed.

Purchase Commitments - Capital Expenditures

At May 3, 2020, we had open purchase commitments to acquire equipment for our U.S. and Canadian mattress fabrics operations totaling $2.2 million.