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Other Commitments and Contingencies | 12 Months Ended
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Feb. 29, 2020
Commitments and Contingencies Disclosure [Abstract] |
Other Commitments and Contingencies | Note 15 - Other Commitments and Contingencies Indemnity Agreements – Under agreements with customers, licensors and parties from whom we have acquired assets or entered into business combinations, we indemnify these parties against liability associated with our products. Additionally, we are party to a number of agreements under leases where we indemnify the lessor for liabilities attributable to our actions or conduct. The indemnity agreements to which we are a party do not, in general, increase our liability for claims related to our products or actions and have not materially affected our consolidated financial statements. Employment Contract – We have an employment contract with Mr. Julien Mininberg, our CEO, that was amended and restated on November 7, 2018. The amended and restated agreement, among other things, extended the term of Mr. Mininberg’s employment agreement from March 1, 2019 through February 28, 2023. The agreement provides a base salary, potential incentive bonus and long-term incentive compensation. The agreement also specifies varying levels of salary continuation and/or severance compensation dependent on certain circumstances such as involuntary termination for other than cause or involuntary termination due to a change of control. International Trade – We purchase most of our appliances and a significant portion of other products that we sell from unaffiliated manufacturers located in the Far East, mainly in China. With most of our products being manufactured in the Far East, we are subject to risks associated with global public health crises (such as pandemics and epidemics), trade barriers, the imposition of additional tariffs, currency exchange fluctuations and social, economic and political unrest. In recent years, increasing labor costs, regional labor dislocations driven by new government policies, local inflation, changes in ocean cargo carrier capacity and costs, the impact of energy prices on transportation, and fluctuations in the Chinese Renminbi against the U.S. Dollar have resulted in variability in our cost of goods sold. In the past, certain Chinese suppliers have closed operations due to economic conditions that pressured their profitability. Although we have multiple sourcing partners for certain products, occasionally we may be unable to source certain items on a timely basis due to changes occurring with our suppliers. We believe that we could source similar products outside China, if necessary, and we continuously explore expanding sourcing alternatives in other countries. However, the relocation of any production capacity could require substantial time and increased costs. Customer Incentives – We regularly enter into arrangements with customers whereby we offer various incentives, including incentives in the form of volume rebates. Our estimates of the liabilities for such incentives is included in the accompanying consolidated balance sheets on the line entitled “Accrued expenses and other current liabilities,” and in Note 8 to these consolidated financial statements included in the lines entitled “Accrued sales discounts and allowances” and “Accrued advertising” and are based on incentives applicable to sales occurring up to the respective balance sheet dates. Legal Matters – In May 2018, we settled a patent infringement dispute related to two forehead thermometer models sold by our subsidiary, Kaz USA, Inc., in the United States and made a settlement payment of $15.0 million, which was accrued in prior periods along with related legal fees and other costs. We are involved in various other legal claims and proceedings in the normal course of operations. We believe the outcome of these matters will not have a material adverse effect on our consolidated financial position, results of operations or liquidity. Contractual Obligations and Commercial Commitments – Our contractual obligations and commercial commitments at the end of fiscal 2020 were:
| Fiscal Years Ended the Last Day of February,
|  | 2021 | 2022 | 2023 | 2024 | 2025 | After
(in thousands) | Total | 1 year | 2 years | 3 years | 4 years | 5 years | 5 years
Floating rate debt | $ | 340,507 |  | $ | 1,900 |  | $ | 321,900 |  | $ | 1,900 |  | $ | 14,807 |  | $ | — |  | $ | — |
Interest on floating rate debt (1) | 16,653 |  | 9,142 |  | 7,124 |  | 386 |  | 1 |  | — |  | — |
Long-term incentive plan payouts | 9,018 |  | 5,614 |  | 3,404 |  | — |  | — |  | — |  | — |
Open purchase orders | 239,841 |  | 239,841 |  | — |  | — |  | — |  | — |  | — |
Operating Leases | 62,876 |  | 6,082 |  | 5,959 |  | 5,601 |  | 5,102 |  | 5,762 |  | 34,370 |
Minimum royalty payments | 55,154 |  | 12,823 |  | 12,674 |  | 13,090 |  | 12,381 |  | 4,186 |  | — |
Advertising and promotional | 34,228 |  | 18,359 |  | 9,131 |  | 6,738 |  | — |  | — |  | — |
Capital spending commitments | 2,716 |  | 1,986 |  | 596 |  | 134 |  | — |  | — |  | — |
Total contractual obligations | $ | 760,993 |  | $ | 295,747 |  | $ | 360,788 |  | $ | 27,849 |  | $ | 32,291 |  | $ | 9,948 |  | $ | 34,370 |
(1) We estimate our future obligations for interest on our floating rate debt by assuming the weighted average interest rates in effect on each floating rate debt obligation at February 29, 2020 remain constant into the future. This is an estimate, as actual rates will vary over time. In addition, we assume the revolving credit debt balance outstanding as of February 29, 2020 remains the same for the remaining term of our revolving credit agreement. The actual balance outstanding may fluctuate significantly in future periods, depending on the availability of cash flow from operations and future investing and financing considerations.

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