XML 26 R14.htm IDEA: XBRL DOCUMENT

Cloud Computing Hosting Arrangement

9 Months Ended

Oct. 27, 2024

Disclosure Text Block Supplement [Abstract]

6. Cloud Computing Hosting Arrangement

We implemented a common Enterprise Resource Planning (ERP) system across all legacy Hooker divisions in fiscal 2023 and 2024.

Based on the provisions of ASU 2018-15, Intangibles — Goodwill and Other — Internal-Use Software, we capitalize implementation costs associated with hosting arrangements that are service contracts. These costs are recorded in other noncurrent assets of our consolidated balance sheets. We amortize on a straight-line basis over a 10-year term as the system went live. The amortization expenses are recorded as a component of selling and administrative expenses in our consolidated statements of operations. Additionally, we recorded capitalized interest as we entered into the term loans in July 2022.

Due to our cost reduction initiatives, we have temporarily paused the ERP project in the Home Meridian segment beginning in the third quarter of fiscal 2025. Implementation costs and interest expense of $451,000 and $1.3 million were capitalized in the third quarters of fiscal 2025 and fiscal 2024, respectively. Implementation costs and interest expense of $3.0 million and $4.0 million were capitalized in the fiscal 2025 and fiscal 2024 nine-month periods, respectively. Amortization expenses of $291,000 and $153,000 were recorded in the third quarters of fiscal 2025 and fiscal 2024, respectively. Amortization expenses of $874,000 and $190,000 were recorded in the fiscal 2025 and fiscal 2024 nine-month periods, respectively.

The capitalized implementation costs at October 27, 2024 and January 28, 2024 were as follows:

	October 27, 2024					January 28, 2024
	Gross carrying amount		Accumulated amortization			Gross carrying amount		Accumulated amortization
Implementation Costs	$	16,565	$	(1,274	)	$	13,736	$	(414	)
Interest Expenses		534		(22	)		357		(8	)