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Commitments And Contingencies | 12 Months Ended
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Aug. 31, 2015
Commitments And Contingencies [Abstract] |
Commitments And Contingencies | 8.COMMITMENTS AND CONTINGENCIES Information Systems and Warehouse Outsourcing Contract We have an outsourcing contract with HP Enterprise Services (HP) to provide information technology system support and product warehousing and distribution services. During fiscal 2013, our warehouse and distribution agreement was amended to remove remaining fixed charges on our Salt Lake City warehouse facility. We are now contractually obligated to pay a monthly fixed charge for warehousing services at an HP facility in Des Moines, Iowa plus a variable charge based on certain warehouse activities. Because of the variable component of the agreement, our payments to HP may fluctuate in future periods based upon sales and specified activities. The warehouse and distribution fixed charge increases by two percent each year plus an escalation clause based upon changes in the Employment Cost Index. The HP outsourcing contract expires in June 2016 and our remaining estimated minimum fixed charges under the terms of this agreement at August 31, 2015 total $1.4 million. During fiscal years 2015, 2014, and 2013, we expensed $4.9 million, $5.2 million, and $5.0 million for services provided under the terms of the HP outsourcing contract. The total amount expensed each year under the HP contract includes freight charges, which are billed to the Company based upon activity. Freight charges included in our HP outsourcing costs totaled $1.9 million, $2.2 million, and $2.2 million during the fiscal years ended August 31, 2015, 2014, and 2013. The outsourcing contracts contain early termination provisions that we may exercise under certain conditions. However, in order to exercise the early termination provisions, we would have to pay specified penalties to HP depending upon the circumstances of the contract termination. Purchase Commitments During the normal course of business, we issue purchase orders to various vendors for products and services. At August 31, 2015, we had open purchase commitments totaling $3.0 million for products and services to be delivered primarily in fiscal 2016. Other purchase commitments for materials, supplies, and other items incidental to the ordinary conduct of business were immaterial, both individually and in aggregate, to the Company’s operations at August 31, 2015. Letters of Credit At August 31, 2015 and 2014 we had standby letters of credit totaling $0.1 million. These letters of credit were primarily required to secure commitments for certain insurance policies and expire in January 2017. No amounts were outstanding on the letters of credit at either August 31, 2015 or August 31, 2014. Legal Matters and Loss Contingencies During fiscal 2012, a former software vendor performed a license review and claimed that in prior years we had used certain software modules that we were not licensed to use. After reviewing the claims from the vendor, we determined that the amounts claimed by the vendor were not consistent with our previously existing software licensing agreement. We settled this complaint during fiscal 2014 for an insignificant amount. We are also the subject of certain other legal actions, which we consider routine to our business activities. At August 31, 2015, we believe that, after consultation with legal counsel, any potential liability to us under these other actions will not materially affect our financial position, liquidity, or results of operations.

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