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Accounts payable and other noncurrent liabilities

9 Months Ended

Jun. 30, 2021

Accounts payable and other noncurrent liabilities

Accounts payable and other noncurrent liabilities

9. Accounts payable and other noncurrent liabilities

In February 2021, the Company’s US. division of the TS segment entered into an agreement with a vendor to pay approximately $1.5 million including interest for goods and services through fiscal year 2025 in 5 payments related to a multi-year agreement with a customer.

In February 2021, the Company’s US. division of the TS segment entered into another agreement with a vendor to pay approximately $7.2 million including interest for goods and services through fiscal year 2025 in 6 payments through fiscal year 2025 related to a multi-year agreement with a customer.

See Note 6, “Accounts and Long-Term Receivable” for further information related to the multi-year agreements above.

There was not an interest rate stated and therefore interest was imputed under ASC 835 Interest as the payments in the exchange represented two elements: principal and interest. The imputed interest rate for both agreements was determined to be 5.0%. The rate was determined primarily based on the rate the Company could obtain by financing from other sources at the date of the transaction.

Interest expense related to these agreements for the three months ended June 30, 2021 was $92 thousand. Interest expense related to the notes for the nine months ended June 30, 2021 was $121 thousand. There was not interest expense in prior year due to these agreements being effective in the second quarter of fiscal year 2021.

The amounts owed for these agreements are in within accounts payable and other noncurrent liabilities because they are owed to a vendor rather than banks or financial institutions for borrowings. See Note 10, “Notes Payable and Line of Credit” for amounts due to banks and other financial institutions for borrowings.

Below are details of the agreements with the vendor that contain imputed interest:


	June 30, 2021
	(Amounts in thousands)
Current	$	1,468
Less: discount		246
Accounts payable and accrued expenses	$	1,222

Noncurrent	$	4,403
Less: discount		353
Other noncurrent liabilities	$	4,050

The Company had a total of approximately $6.8 million due to this vendor including the two aforementioned agreements and other payables as of June 30, 2021. This is approximately 40% of Accounts payable and other noncurrent liabilities. The TS segment has many vendors it transacts with and does not have any specific agreement with this vendor

that it must purchase certain products from the vendor. Management believes other suppliers could provide similar products on comparable terms.