NOTE 20 - SUBSEQUENT EVENTS

12 Months Ended

Feb. 02, 2014

NOTE 20 – SUBSEQUENT EVENTS

Cash Dividend

On March 4, 2014, our Board of Directors declared a quarterly cash dividend of $0.10 per share, payable on March 31, 2014 to shareholders of record at March 17, 2014.

Long-term Operating Lease Agreement and Sale of Existing Warehouse Facility

On April 1, 2014, we entered into a new, seven- year operating lease with 1350 State Road, LLC (as landlord) for a 628,000 square foot warehouse facility in Henry County, Virginia, referred to as our “Central Distribution Center II” facility (“CDC2”). We occupied, and previously leased, approximately 400,000 square feet in this facility, which is utilized for our casegoods segment and the imported upholstery division of our upholstery operating segment. We expect to pay rent, which will increase by 2% annually, of approximately $1.1 million in the first year of the lease to $1.3 million in the seventh year, for an aggregate of approximately $8.4 million over the initial seven-year term of the lease. Other material terms of the lease include:

§	An expanded footprint to encompass the entire 628,000 square foot CDC2 facility;

§	An initial base rent of $1.80 per square foot;

§	Two, three-year renewal options, with 180-day advance notice to the landlord;

§	A schedule of repairs and improvements to be made by the landlord;

§	Customary covenants, events of default and remedies; and

§	A right of first refusal for the landlord to provide any additional warehouse space we require within a 25-mile radius of CDC2.

Concurrent with entering the lease, Yale Realty Associates, LLC, an affiliate of the landlord, purchased our 189,000 square foot “Cloverleaf” warehouse facility located in Henry County, Virginia for $1.75 million.

We have agreed to finance the sale of the Cloverleaf facility with the following terms:

§	A 10% ($175,000) cash down payment, which was paid at closing;

§	A five-year promissory note, at 4.5% annual interest rate, with monthly payments computed on a 20-year amortization;

§	An initial 18-month interest-only period, unless during that period the landlord secures a tenant for all or a portion of the property for a lease term of more than one-year;

§	All unpaid interest and principal being due on April 1, 2019;

§	The note being secured by the property and a pledge of cash in the amount of one year’s payments under the note; and

§	The note becoming due and payable upon any sale of the property.

We expect to record a gain of approximately $300,000 pretax ($191,000 after tax, or $0.02 per share) on the sale of the property in our fiscal 2015 first quarter financial statements.