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Commitments, Contingencies and Concentrations | 12 Months Ended
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Mar. 30, 2019
Commitments And Contingencies Disclosure [Abstract] |
Commitments, Contingencies and Concentrations |
1 8. | Commitments, Contingencies and Concentrations
Repurchase Contingencies and Guarantees A significant portion of the Company’s sales to independent retailers are made pursuant to repurchase agreements with lending institutions that provide wholesale floor plan financing to retailers. The Company enters into two types of repurchase agreements, (i) those that allow repurchase up to 24 months after the sale of a home to the retailer, and (ii) those that allow for repurchase until the home is sold by the retailer. For those homes sold to retailers with an unlimited repurchase period, the Company’s risk of loss upon repurchase declines due to required monthly principal payments by the retailer. After 24 or 30 months from the date of the Company’s sale of the home, the risk of loss on these homes is low, and by the 46th month, most programs require that the home be paid in full, at which time the Company no longer has risk of loss. During the repurchase period, generally upon default by the retailer and repossession by the financial institution, the Company is obligated to repurchase the homes from the lender. Before including the reduction from the resale value of the homes, the contingent repurchase obligation as of March 30, 2019 was estimated to be approximately $173.4 million. Losses under repurchase obligations represent the difference between the repurchase price and net proceeds from the resale of the homes, less accrued rebates, which will not be paid. Losses incurred on homes repurchased were immaterial during each of the fiscal years ended March 30, 2019, March 31, 2018 and April 1, 2017. The reserve for estimated losses under repurchase agreements was $1.0 million at March 30, 2019 and $0.7 million at March 31, 2018. The Company guarantees a portion of its customers’ floor plan obligations beyond the customary repurchase arrangements discussed above. The Company has agreed to guarantee from 3% to 50% of certain retailers’ outstanding loans to a floor plan lender. At March 30, 2019, those guarantees totaled $0.8 million of which $0.8 million was outstanding. At March 30, 2019, the Company was contingently obligated for approximately $21.0 million under letters of credit, primarily consisting of $12.6 million to support long-term debt, $7.9 million to support the casualty insurance program, $0.2 million to support repurchase obligations, and $0.3 million to support bonding agreements. The letters of credit are issued from a sub-facility under the Credit Agreement. The Company was also contingently obligated for $23.6 million under surety bonds, generally to support performance on long-term construction contracts, as well as license and service bonding requirements. In the normal course of business, the Company’s former subsidiaries that operated in the United Kingdom historically provided certain guarantees to two customers. Those guarantees provide contractual liability for proven construction defects up to 12 years from the date of delivery of certain products. The guarantees remain a contingent liability of the Company which declines over time through October 2027. As of the date of this report, the Company expects few, if any, claims to be reported under the terms of the guarantees. Operating Leases The Company’s trucking and retail sales locations, certain active manufacturing facilities, a corporate office, and certain equipment and vehicles are leased under operating leases with terms that generally range from 3 to 10 years. Net rent expense was $6.6 million, $5.8 million and $5.0 million during fiscal 2019, 2018 and 2017, respectively. As of March 30. 2019, the Company had the following minimum rental commitments under non-cancellable operating leases by fiscal year:
Fiscal 2020 |  | $ | 5,302 |
Fiscal 2021 |  |  | 3,805 |
Fiscal 2022 |  |  | 3,037 |
Fiscal 2023 |  |  | 2,273 |
Fiscal 2024 |  |  | 1,040 |
Thereafter |  |  | 2,998 |
|  | $ | 18,455 |
Legal Proceedings The Company has agreed to indemnify counterparties in the ordinary course of its business in agreements to acquire and sell business assets and in financing arrangements. The Company is subject to various legal proceedings and claims that arise in the ordinary course of its business. As of the date of this filing, the Company believes the ultimate liability with respect to these contingent obligations will not have, either individually or in the aggregate, a material adverse effect on the Company’s financial condition, results of operations, or cash flows. Concentrations The components and products used in the factory-built housing operations are presently available from a variety of vendors, and the Company is not dependent upon any single supplier. Prices of certain materials, such as lumber, insulation, steel and drywall, can fluctuate significantly due to changes in demand and supply. Additionally, availability of certain materials, such as drywall and insulation, has sometimes been limited, resulting in higher prices and/or the need to find alternative suppliers. The Company generally has been able to pass higher material costs on to its retailers and customers in the form of surcharges and price increases. For fiscal 2019, 2018 and 2017, sales from the Company’s Canadian operations were approximately 7%, 9% and 11%, respectively, of consolidated sales. As of March 30, 2019 and March 31, 2018, the Company’s net assets in Canada totaled approximately $41.6 million and $35.9 million, respectively. As of March 30, 2019, the Company had approximately 7,000 employees. Approximately 850 were employed at the Company’s manufacturing facilities in Canada, of which approximately 700 are subject to five separate collective bargaining agreements. At March 30, 2019, two agreements, covering 400 employees, expire in November 2019 and June 2020.

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