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SUBSEQUENT EVENTS
 12 Months Ended
Jan. 30, 2022
Subsequent Events [Abstract]  
Subsequent Events [Text Block]

NOTE 20- SUBSEQUENT EVENTS

 

Cash Dividend

 

On March 1, 2022, our Board of Directors declared a quarterly cash dividend of $0.20 per share, payable on March 31, 2022 to shareholders of record at March 17, 2022.

 

Sunset West Acquisition

 

On January 31, 2022, the first day of our 2023 fiscal year, we entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Sunset HWM, LLC (“Sunset West”) and its three members (the “Sunset West Members”) to acquire substantially all of the assets of Sunset West (the “Sunset Acquisition”). Simultaneously, we closed on the transaction by paying $23.5 million in cash and $2 million subject to an escrow arrangement and possible earn-out payments to the Sunset West Members up to an aggregate of $4 million with the closing cash consideration subject to adjustment for customary working capital estimates. Under the Asset Purchase Agreement, the Company also assumed specified liabilities of Sunset West.

 

Sunset West is a leading West Coast-based manufacturer of outdoor furniture with its headquarters in Vista, California. The transaction enables us to immediately gain market share in the growing outdoor furniture segment of the industry with one of the most respected brands in the category.

 

Fair Value Estimates of Assets Acquired and Liabilities Assumed

 

The consideration and components of our initial fair value allocation of the purchase price paid at closing and in the subsequent Net Working Capital Adjustment consisted of the following:

 

Purchase price consideration

 

Cash paid for assets acquired

   $ 23,500  

Net working capital excess to working capital target

     411  

Escrow Fee

     (1

)

Earnout

     4,000  

Total purchase price

   $ 27,910  
         

Fair value estimates of assets acquired and liabilities assumed:

        

Net working capital

   $ 578  

Fixed assets

     101  

Intangible assets

     8,170  

Goodwill

     19,061  

Total purchase price

   $ 27,910  

 

Substantially all of these amounts are subject to subsequent adjustment as we continue to gather information during the measurement period. Certain intangible assets were acquired as part of this transaction. Trademarks, trade names and customer relationships have been assigned preliminary fair values subject to additional analysis during the measurement period. While we are still analyzing Sunset West’s operations and the requirements of ASC 280: Segment Reporting, we anticipate Sunset West will be included in the Domestic Upholstery segment.