XML 20 R11.htm IDEA: XBRL DOCUMENT
v3.22.2.2

Acquisition | 9 Months Ended
--- | ---
Oct. 30, 2022
Business Combinations [Abstract] |
Business Combination Disclosure [Text Block] | 3. Acquisition In accordance with FASB Accounting Standards Codification Topic 805, “Business Combinations” (“ASC 805”), the Acquisition has been accounted for using the acquisition method of accounting. We recorded assets acquired, including identifiable intangible assets, and liabilities assumed, from Sunset West at their respective fair values at the date of completion of the Acquisition. The excess of the purchase price over the net fair value of such assets and liabilities was recorded as goodwill. The following table summarizes the preliminary estimates of the fair values of the identifiable assets acquired and liabilities assumed in the Acquisition as of October 30, 2022. The preliminary estimates of fair value of identifiable assets acquired and liabilities assumed are subject to revision, which may result in adjustments to the preliminary values presented below, when management’s appraisals and estimates are finalized. In the fourth quarter of fiscal 2023, we received $639,000 from the seller for the final working capital adjustments. 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
Fair value estimates of assets acquired and liabilities assumed |  |  |  |
Purchase price consideration |  |  |  |
Cash paid for assets acquired |  | $ | 23,909 |
Cash receivable from the seller for final working capital adjustment |  |  | (639 | )
Escrow |  |  | 2,003 |
Fair value of earnout |  |  | 766 |
Total purchase price |  | $ | 26,039 |
Accounts receivable |  | $ | 1,560 |
Inventory |  |  | 2,577 |
Prepaid expenses and other current assets |  |  | 90 |
Property |  |  | 7 |
Intangible assets |  |  | 11,451 |
Goodwill |  |  | 14,462 |
Customer deposits |  |  | (3,276 | )
Accounts payable |  |  | (816 | )
Accrued expenses |  |  | (16 | )
Total purchase price |  | $ | 26,039 |
Property was recorded at fair value and primarily consists of machinery and equipment. Property and equipment will be amortized over their estimated useful lives. Goodwill is calculated as the excess of the purchase price over the net assets acquired. The goodwill recognized is attributable to growth opportunities and expected synergies. All goodwill is expected to be deductible for income tax purposes. Intangible assets, consist of two separately identified assets:
| ■ | Sunset West customer relationships, which are definite-lived intangible assets with an aggregate fair value of $10.4 million. The customer relationships are amortizable and will be amortized over a period of 10 years; and
| ■ | The Sunset West trade name, which is definite-lived intangible asset with fair value of $1.1 million. The trade name is amortizable and will be amortized over a period of 12 years.
| ■ | The total weighted average amortization period for these assets is 10.2 years.
We incurred Acquisition-related costs of $414,000 in fiscal 2022 and $69,000 in the first nine months of fiscal 2023. These expenses were included in the “Selling and administrative expenses” line of our fiscal 2022 and fiscal 2023 condensed consolidated statements of operations. Sunset West’s results are included in the Domestic Upholstery segment’s results beginning with the fiscal 2023 first quarter, which include $8.8 million in net sales and $1.4 million of operating income, including $282,000 in intangible amortization expense for the fiscal 2023 third quarter and $23.6 million in net sales and $2.4 million of operating income, including $846,000 in intangible amortization expense for the fiscal 2023 nine-month period.

X
- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration