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Acquisitions | 9 Months Ended
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Jan. 25, 2020
Business Combinations [Abstract] |
Acquisitions | Acquisitions We did not complete any acquisitions during the nine months ended January 25, 2020. Joybird acquisition On July 30, 2018, we completed our acquisition of Stitch Industries, Inc. ("Joybird"), an e-commerce retailer and manufacturer of upholstered furniture, for guaranteed cash payments of $75 million, which was subject to a working capital adjustment of $2.5 million. We received the working capital adjustment during the third quarter of fiscal 2019 from amounts placed in escrow at the time of the closing of the transaction. We acquired Joybird to better position ourselves for growth in the online selling environment and increase our visibility with millennial and Gen X consumers, while simultaneously leveraging our supply chain assets. The guaranteed payments include a closing date cash payment of $37.5 million in purchase price consideration (net of the working capital adjustment), $7.5 million in prepaid compensation, and the assumption of $5.0 million of liabilities that will be paid within two years following the acquisition. The remaining $25 million will be paid in five annual installments of $5 million on the anniversary date of the acquisition, the first of which was paid in the first quarter of fiscal 2020. The merger agreement also includes two future earn-out opportunities based on Joybird’s financial performance in fiscal 2021 and fiscal 2023. The $7.5 million of prepaid compensation relates to the retention of the four Joybird founders, now our employees, each of whom will forfeit proportional amounts if one or more of them resigns in the two years following the acquisition. We are amortizing the $7.5 million to SG&A expense over the two-year retention period on a straight-line basis. In addition to the guaranteed cash payments of $75 million, we recorded a contingent consideration liability on the date of acquisition of $7.5 million, which reflects the fair value of the earn-out opportunities as of the date of acquisition. We also recorded a finite-lived intangible asset of $6.4 million reflecting the fair value of the acquired Joybird® trade name, which we are amortizing to SG&A expense on a straight-line basis over its useful life of eight years. The undiscounted range of the contingent consideration is zero to $65 million and is based on sales and profitability of Joybird in fiscal 2021 and fiscal 2023. Subsequent adjustments to the fair value of the contingent consideration will impact SG&A expense in our consolidated statement of income. We recorded $78.8 million of goodwill related to the Joybird acquisition, related primarily to synergies we expect from the integration of the acquisition and the anticipated future benefits of these synergies. The finite-lived intangible asset and goodwill asset for Joybird are not deductible for federal income tax purposes. We included the Joybird operating segment in our other business activities which we report within our Corporate and Other reportable segment. Refer to Note 6. Goodwill and Other Intangible Assets and Note 16. Fair Value Measurements for further information regarding the valuation of the contingent consideration, goodwill and intangible assets related to Joybird. The following table summarizes the purchase price allocation for Joybird at the date of acquisition:
(Unaudited, amounts in thousands) |  | Joybird Acquisition
Fair value of consideration: |  |
Cash (paid at closing) |  | $ | 37,482 |
Guaranteed payment |  | 22,489 |
Acquisition earn-out |  | 7,500 |
Assumption of liability |  | 5,000 |
Working capital adjustment |  | (2,486 | )
Total fair value of consideration |  | 69,985 |
Amounts recognized for assets acquired and liabilities assumed: |  |
Inventory |  | 5,258 |
Other current assets |  | 3,733 |
Property, plant and equipment |  | 2,057 |
Finite-lived tradename |  | 6,400 |
Other long-term assets |  | 3,647 |
Accounts payable |  | (8,222 | )
Customer deposits |  | (13,904 | )
Other current liabilities |  | (7,681 | )
Other long-term liabilities |  | (150 | )
Total identifiable net liabilities acquired |  | (8,862 | )
Goodwill |  | $ | 78,847 |
The Joybird acquisition was not material to our financial position or our results of operations, and therefore, pro-forma financial information is not present

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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