Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Jul. 26, 2014 | Sep. 04, 2014 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 26-Jul-14 | ' |
Document Fiscal Year Focus | '2015 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Trading Symbol | 'SCOO | ' |
Entity Registrant Name | 'SCHOOL SPECIALTY INC | ' |
Entity Central Index Key | '0001055454 | ' |
Current Fiscal Year End Date | '--04-26 | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 1,000,004 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Jul. 26, 2014 | Apr. 26, 2014 | Jul. 27, 2013 |
In Thousands, unless otherwise specified | |||
Current assets: | ' | ' | ' |
Cash and cash equivalents | $9,281 | $9,008 | $9,787 |
Restricted cash | ' | ' | 25,820 |
Accounts receivable, less allowance for doubtful accounts of $1,701, $984 and $2,176, respectively | 135,842 | 62,631 | 138,879 |
Inventories | 109,722 | 93,387 | 104,868 |
Deferred catalog costs | 4,497 | 8,057 | 5,793 |
Prepaid expenses and other current assets | 19,242 | 18,043 | 26,667 |
Refundable income taxes | 7 | ' | 5,334 |
Assets held for sale | 2,200 | 2,200 | ' |
Total current assets | 280,791 | 193,326 | 317,148 |
Property, plant and equipment, net | 38,557 | 39,045 | 46,309 |
Goodwill | 21,588 | 21,588 | 23,661 |
Intangible assets, net | 47,130 | 48,251 | 47,427 |
Development costs and other | 34,132 | 36,646 | 38,042 |
Deferred taxes long-term | 13 | 48 | 51 |
Investment in unconsolidated affiliate | 715 | 715 | 715 |
Total assets | 422,926 | 339,619 | 473,353 |
Current liabilities: | ' | ' | ' |
Current maturities-long-term debt | 72,475 | 12,388 | 62,229 |
Accounts payable | 53,443 | 42,977 | 49,124 |
Accrued compensation | 7,376 | 8,966 | 7,597 |
Deferred revenue | 2,926 | 2,613 | 2,605 |
Accrued fee for early termination of long-term debt | ' | ' | 25,582 |
Other accrued liabilities | 16,672 | 14,460 | 34,467 |
Total current liabilities | 152,892 | 81,404 | 181,604 |
Long-term debt-less current maturities | 156,331 | 153,987 | 152,932 |
Other liabilities | 998 | 1,171 | 925 |
Total liabilities | 310,221 | 236,562 | 335,461 |
Commitments and contingencies-Note 18 | ' | ' | ' |
Stockholders' equity: | ' | ' | ' |
Preferred stock, $0.001 par value per share, 500,000 shares authorized; none outstanding | ' | ' | ' |
Common stock, $0.001 par value per share, 2,000,000 shares authorized; 1,000,004 shares outstanding | 1 | 1 | 1 |
Capital in excess of par value | 119,391 | 120,955 | 120,955 |
Accumulated other comprehensive loss | -216 | -414 | -7 |
Retained earnings (accumulated deficit) | -6,471 | -17,485 | 16,943 |
Total stockholders' equity | 112,705 | 103,057 | 137,892 |
Total liabilities and stockholders' equity | $422,926 | $339,619 | $473,353 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) | Jul. 26, 2014 | Apr. 26, 2014 | Jul. 27, 2013 |
In Thousands, except Share data, unless otherwise specified | |||
Allowance for doubtful accounts | $1,701 | $984 | $2,176 |
Preferred stock, par value | $0.00 | $0.00 | $0.00 |
Preferred stock, shares authorized | 500,000 | 500,000 | 500,000 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Common stock, par value | $0.00 | $0.00 | $0.00 |
Common stock, shares authorized | 2,000,000 | 2,000,000 | 2,000,000 |
Common stock, shares outstanding | 1,000,004 | 1,000,004 | 1,000,004 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 1 Months Ended | 3 Months Ended | 1 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Jul. 27, 2013 | Jul. 26, 2014 | Jun. 11, 2013 |
Predecessor | |||
Revenues | $143,499 | $199,469 | $58,697 |
Cost of revenues | 83,741 | 120,903 | 35,079 |
Gross profit | 59,758 | 78,566 | 23,618 |
Selling, general and administrative expenses | 35,867 | 61,942 | 27,473 |
Facility exit costs and restructuring | 2,595 | 133 | ' |
Operating income (loss) | 21,296 | 16,491 | -3,855 |
Other expense (income): | ' | ' | ' |
Interest expense | 2,821 | 5,275 | 3,235 |
Change in fair value of interest rate swap | ' | -13 | ' |
Reorganization items, net | 1,280 | 271 | -84,799 |
Income before provision for (benefit from) income taxes | 17,195 | 10,958 | 77,709 |
Provision for (benefit from) income taxes | 252 | -56 | 1,641 |
Net income | $16,943 | $11,014 | $76,068 |
Weighted average shares outstanding: | ' | ' | ' |
Basic | 1,000 | 1,000 | 18,922 |
Diluted | 1,000 | 1,000 | 18,922 |
Net Income per Share: | ' | ' | ' |
Basic | $16.94 | $11.01 | $4.02 |
Diluted | $16.94 | $11.01 | $4.02 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (USD $) | 1 Months Ended | 3 Months Ended | 1 Months Ended |
In Thousands, unless otherwise specified | Jul. 27, 2013 | Jul. 26, 2014 | Jun. 11, 2013 |
Predecessor | |||
Net income | $16,943 | $11,014 | $76,068 |
Other comprehensive income (loss), net of tax: | ' | ' | ' |
Foreign currency translation adjustments | -7 | 198 | -101 |
Total comprehensive income | $16,936 | $11,212 | $75,967 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 1 Months Ended | 3 Months Ended | 1 Months Ended |
In Thousands, unless otherwise specified | Jul. 27, 2013 | Jul. 26, 2014 | Jun. 11, 2013 |
Predecessor | |||
Cash flows from operating activities: | ' | ' | ' |
Net income | $16,943 | $11,014 | $76,068 |
Adjustments to reconcile net income to net cash used in operating activities: | ' | ' | ' |
Depreciation and intangible asset amortization expense | 2,866 | 4,370 | 2,983 |
Amortization of development costs | 1,478 | 3,671 | 918 |
Non-cash reorganization items | ' | ' | -99,668 |
Amortization of debt fees and other | 392 | 582 | 9 |
Change in fair value of interest rate swap | ' | -13 | ' |
Deferred taxes | ' | 28 | ' |
Non-cash interest expense | ' | 799 | ' |
Changes in current assets and liabilities: | ' | ' | ' |
Accounts receivable | -72,188 | -73,161 | -8,011 |
Inventories | -2,182 | -16,328 | -18,255 |
Deferred catalog costs | 1,377 | 3,560 | 1,754 |
Prepaid expenses and other current assets | 5,010 | -1,397 | 722 |
Accounts payable | 10,879 | 10,397 | 11,012 |
Accrued liabilities | -6,067 | 980 | 12,488 |
Net cash used in operating activities | -41,492 | -55,498 | -19,980 |
Cash flows from investing activities: | ' | ' | ' |
Additions to property, plant and equipment | -514 | -2,770 | -243 |
Change in restricted cash | 482 | ' | ' |
Investment in product development costs | -880 | -1,538 | -463 |
Proceeds from disposal of property, plant and equipment | ' | 11 | ' |
Net cash used in investing activities | -912 | -4,297 | -706 |
Cash flows from financing activities: | ' | ' | ' |
Proceeds from bank borrowings | 37,042 | 106,766 | 7,561 |
Repayment of bank borrowings | ' | -46,698 | -148,619 |
Issuance of debt | ' | ' | 165,924 |
Payment of debt fees and other | -385 | ' | -9,415 |
Net cash provided by financing activities | 36,657 | 60,068 | 15,451 |
Net increase/(decrease) in cash and cash equivalents | -5,747 | 273 | -5,235 |
Cash and cash equivalents, beginning of period | 15,534 | 9,008 | 20,769 |
Cash and cash equivalents, end of period | 9,787 | 9,281 | 15,534 |
Supplemental disclosures of cash flow information: | ' | ' | ' |
Interest paid | 2,152 | 3,848 | 5,578 |
Income taxes paid, net | ' | 164 | ' |
Bankruptcy related reorganization costs paid (included in operating activities, above) | 4,011 | 266 | 3,802 |
Non-cash financing activity-deferred cash payment obligations | ' | $1,564 | ' |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended |
Jul. 26, 2014 | |
Basis of Presentation | ' |
NOTE 1 – BASIS OF PRESENTATION | |
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (which are normal and recurring in nature unless otherwise noted) considered necessary for a fair presentation have been included. The balance sheet at April 26, 2014 has been derived from School Specialty, Inc.’s (“School Specialty” or the “Company”) audited financial statements for the fiscal year ended April 26, 2014. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 26, 2014. | |
During the period January 28, 2013 through June 11, 2013, School Specialty, Inc. and certain of its subsidiaries operated as debtors-in-possession under bankruptcy court jurisdiction (see Note 3). In accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 852, Reorganizations, for periods including and subsequent to the filing of the Chapter 11 petition, all expenses, gains and losses that resulted from the reorganization were reported separately as reorganization items in the Consolidated Statements of Operations. Net cash used for reorganization items was disclosed separately in the Consolidated Statements of Cash Flows, and liabilities subject to compromise were reported separately in the Consolidated Balance Sheets. | |
As discussed in Note 4 – Fresh Start Accounting, as of June 11, 2013 (the “Effective Date”), the Company adopted fresh start accounting in accordance with ASC 852. The adoption of fresh start accounting resulted in the Company becoming a new entity for financial reporting purposes. Accordingly, the financial statements on or prior to June 11, 2013 are not comparable with the financial statements for periods after June 11, 2013. The consolidated financial statements as of July 26, 2014, April 26, 2014 and July 27, 2013 and for the three months ended July 26, 2014 and the seven weeks ended July 27, 2013 and any references to “Successor” or “Successor Company” relate to the financial position and results of operations of the reorganized Company subsequent to bankruptcy emergence on June 11, 2013. References to “Predecessor” or “Predecessor Company” refer to the financial position and results of operations of the Company prior to the bankruptcy emergence. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 3 Months Ended |
Jul. 26, 2014 | |
Recent Accounting Pronouncements | ' |
NOTE 2 – RECENT ACCOUNTING PRONOUNCEMENTS | |
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, “Presentation of Financial Statements and Property, Plant and Equipment; Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” ASU 2014-08 modifies the requirements for reporting discontinued operations. Under the amendments in ASU 2014-08, the definition of discontinued operation has been modified to only include those disposals of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. ASU 2014-08 also expands the disclosure requirements for disposals that meet the definition of a discontinued operation and requires entities to disclose information about disposals of individually significant components that do not meet the definition of discontinued operations. ASU 2014-08 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2014. The adoption of this update is not expected to have a material impact on the Company’s consolidated financial statements. | |
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” ASU 2014-09 is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for annual reporting periods, and interim periods within that period, beginning after December 15, 2016 and early adoption is not permitted. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. The Company has not yet determined the potential effects of the adoption of ASU 2014-09 on its consolidated financial statements. |
Bankruptcy_Proceedings
Bankruptcy Proceedings | 3 Months Ended | |||
Jul. 26, 2014 | ||||
Bankruptcy Proceedings | ' | |||
NOTE 3 – BANKRUPTCY PROCEEDINGS | ||||
On January 28, 2013 (the “Petition Date”), School Specialty, Inc. and certain of its subsidiaries (collectively, the “Debtors”) filed voluntary petitions for relief under Chapter 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). The cases (the “Chapter 11 Cases”) were jointly administered as Case No. 13-10125 (KJC) under the caption “In re School Specialty, Inc., et al.” The Debtors continued to operate their business as “debtors-in-possession” (“DIP”) under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of Chapter 11 and orders of the Bankruptcy Court. The Company’s foreign subsidiaries (collectively, the “Non-Filing Entities”) were not part of the Chapter 11 Cases. | ||||
The Chapter 11 Cases were filed in response to an environment of ongoing declines in school spending and a lack of sufficient liquidity, including trade credit provided by the Debtors’ vendors, to permit the Debtors to pursue their business strategy to position the School Specialty brands successfully for the long term. As a result of the Chapter 11 filing, the Company’s common stock was delisted from the NASDAQ Stock Market, effective March 1, 2013. | ||||
On May 23, 2013, the Bankruptcy Court entered an order confirming the Debtors’ Second Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (the “Reorganization Plan”), and a corrected copy of such order was entered by the Bankruptcy Court on June 3, 2013. The Reorganization Plan, which is described in additional detail below, became effective on the Effective Date. Pursuant to the Reorganization Plan, on the Effective Date, the Company’s existing credit agreements, outstanding convertible subordinated debentures, equity plans and certain other agreements were cancelled. In addition, all outstanding equity interests of the Company that were issued and outstanding prior to the Effective Date were cancelled on the Effective Date. Also on the Effective Date, in accordance with and as authorized by the Reorganization Plan, the Company reincorporated in Delaware and issued a total of 1,000,004 shares of Common Stock of the reorganized Company to holders of certain allowed claims against the Debtors in exchange for such claims. As of June 12, 2013, there were 60 record holders of the new common stock of the reorganized Company issued pursuant to the Reorganization Plan. | ||||
Operation and Implication of the Bankruptcy Filing | ||||
Under Section 362 of the Bankruptcy Code, the filing of voluntary bankruptcy petitions by the Debtors automatically stayed most actions against the Debtors, including most actions to collect indebtedness incurred prior to the Petition Date or to exercise control over the Company’s property. Accordingly, although the Company defaulted on certain of the Debtors’ debt obligations, creditors were stayed from taking any actions as a result of such defaults. Absent an order of the Bankruptcy Court, substantially all of the Company’s pre-petition liabilities were subject to settlement under a reorganization plan or in connection with a Section 363 sale. | ||||
Subsequent to the Petition Date, the Company received approval from the Bankruptcy Court to pay or otherwise honor certain pre-petition obligations generally designed to stabilize the Company’s operations. These obligations related to certain employee wages, salaries and benefits, and the payment of vendors and other providers in the ordinary course for goods and services received after the Petition Date. The Company retained, pursuant to Bankruptcy Court approval, legal and financial professionals to advise the Company in connection with the bankruptcy filing and certain other professionals to provide services and advice in the ordinary course of business. | ||||
Reorganization Plan | ||||
In order for the Company to emerge successfully from Chapter 11, the Company determined that it was in the best interests of the Debtors’ estates to seek Bankruptcy Court confirmation of a reorganization plan. A reorganization plan determines the rights and satisfaction of claims of various creditors and security holders, subject to the ultimate outcome of negotiations and Bankruptcy Court decisions ongoing through the date on which the reorganization plan is confirmed. | ||||
On May 23, 2013, the Bankruptcy Court entered an order confirming the Reorganization Plan, and a corrected copy of such order was entered by the Bankruptcy Court on June 3, 2013. The Reorganization Plan became effective on the Effective Date. | ||||
General | ||||
The Reorganization Plan generally provided for the payment in full in cash on or as soon as practical after the Effective Date of specified claims, including: | ||||
• | All claims (the “DIP Financing Claims”) under the Debtor-in-Possession Credit Agreement (the “ABL DIP Agreement”) by and among Wells Fargo Capital Finance, LLC (as Administrative Agent, Co-Collateral Agent, Co-Lead Arranger and Joint Book Runner) and GE Capital Markets, Inc. (as Co-Collateral Agent, Co-Lead Arranger and Joint Book Runner and Syndication Agent), General Electric Capital Corporation (as syndication agent), the lenders party to the ABL DIP Facility (as defined below), and the Company and certain of its subsidiaries; | |||
• | Certain pre-petition secured claims; | |||
• | All claims relating to the costs and expenses of administering the Chapter 11 Cases; and | |||
• | All priority claims. | |||
In addition, the Reorganization Plan generally provides for the treatment of allowed claims against, and equity interests in, the Debtors as follows: | ||||
• | The lenders under the Senior Secured Super Priority Debtor-in-Possession Credit Agreement (the “Ad Hoc DIP Agreement”) by and among the Company, certain of its subsidiaries, U.S. Bank National Association, as Administrative Agent and Collateral Agent and the lenders party thereto were entitled to receive (i) cash in an approximate amount of $98,000, and (ii) 65% of the common stock of the reorganized Company. The fair value of the 65% ownership interest was approximately $78,600 as of the Effective Date. Approximately $57,200 of this value was in satisfaction of the portion of the Ad Hoc DIP not settled in cash with approximately $21,375 representing excess value received by the Ad Hoc DIP lenders. The $21,375 of excess value received by the Ad Hoc DIP lenders was recognized as a reorganization loss; | |||
• | Each holder of an allowed general unsecured claim is entitled to receive a deferred cash payment equal to 20% of such allowed claim, plus interest, on the terms described in the Reorganization Plan; | |||
• | Each holder of an unsecured claim arising from the provision of goods and/or services to the Debtors in the ordinary course of its pre-petition trade relationship with the Debtors, with whom the reorganized Debtors continue to do business after the Effective Date, is entitled to receive a deferred cash payment equal to 20% of such claim, plus interest, on the terms described in the Reorganization Plan. Such holders may increase their percentage recoveries to 45%, plus interest, by electing to provide the reorganized Debtors with customary trade terms for a specified period, as described in the Reorganization Plan; | |||
• | Each holder of the Company’s 3.75% Convertible Subordinated Debentures due 2026, as further described elsewhere in this report, received its pro rata share of 35% of the common stock of the reorganized Company; | |||
• | Each holder of an allowed general unsecured claim or allowed trade unsecured claim of $3 or less, or any holder of a general unsecured claim or trade unsecured claim in excess of $3 that agreed to voluntarily reduce the amount of its claim to $3 under the terms described in the Reorganization Plan, was entitled to receive a cash payment equal to 20% of such allowed claim on or as soon as practicable after the Effective Date; and | |||
• | Holders of equity interests in the Company prior to the Effective Date, including claims arising out of or with respect to such equity interests, were not entitled to receive any distribution under the Reorganization Plan. | |||
Exit Facilities | ||||
As of the Effective Date, the Debtors closed on the exit credit facilities, the proceeds of which were or will be, among other things, used to (i) pay in cash the DIP Financing Claims, to the extent provided for in the Reorganization Plan, (ii) make required distributions under the Reorganization Plan, (iii) satisfy certain Reorganization Plan-related expenses, and (iv) fund the reorganized Company’s working capital needs. The terms of the exit credit facilities are described under Note 14 of the Notes to Condensed Consolidated Financial Statements – Debt. | ||||
Equity Interests | ||||
As mentioned above, all shares of the Company’s common stock outstanding prior to the Effective Date were cancelled and extinguished as of the Effective Date. The Company issued 1,000,004 shares of new common stock on the Effective Date pursuant to the Reorganization Plan, which constitutes the total number of shares of new common stock outstanding immediately following the Effective Date. | ||||
On the Effective Date, equity interests in the Company’s U.S. subsidiaries were deemed cancelled and extinguished and of no further force and effect, and each reorganized subsidiary was deemed to issue and distribute the new subsidiary equity interests. The ownership and terms of such new subsidiary equity interests in the reorganized subsidiaries are the same as the ownership and terms of the equity interests in these subsidiaries immediately prior to the Effective Date, except as otherwise provided in the Reorganization Plan. | ||||
Reincorporation in Delaware; Amendments to Certificate of Incorporation | ||||
On the Effective Date, the Company was reincorporated as a Delaware corporation. Prior to the Effective Date, the Company caused a new wholly owned subsidiary to be formed in Delaware. On the Effective Date, the Company entered into a plan of merger with the Delaware subsidiary, providing for the Company to merge with and into the Delaware subsidiary, so that the Company’s separate corporate existence as a Wisconsin corporation ceased and the Delaware subsidiary was the surviving corporation. The certificates of incorporation of the reorganized Company and its reorganized subsidiaries were amended to be consistent with the provisions of the Reorganization Plan and the Bankruptcy Code, including the prohibition of issuance of nonvoting equity securities only for so long as, and to the extent that, the issuance of nonvoting equity securities is prohibited by the Bankruptcy Code. The reorganized Company was authorized to issue the new common stock for distribution in accordance with the terms of this Reorganization Plan and the amended certificate of incorporation without the need for any further corporate or stockholder action. | ||||
Appointment of Senior Executive Officers and Directors | ||||
Pursuant to the Reorganization Plan, on the Effective Date, the terms of the directors and managers of the board of directors or board of managers of the Debtors expired and such directors and managers were deemed removed from such boards. The initial board of directors of the reorganized Company was comprised of four members, including: | ||||
• | Michael P. Lavelle, the Company’s former Chief Executive Officer; and | |||
• | Three directors, including Madhu Satyanarayana, Justin Lu and James R. Henderson, as designated by the three largest lenders under the Ad Hoc DIP Agreement. | |||
All of the other lenders under the Ad Hoc DIP Agreement had the right to designate an additional director under the Reorganization Plan. These lenders determined not to exercise their right, and requested that the board of directors designate the additional director at its discretion. | ||||
Mr. Lavelle resigned from the board of directors upon his resignation as Chief Executive Officer in August, 2013. Following this resignation, the board of directors consisted of the three remaining board members mentioned above until April, 2014 when Joseph M. Yorio became the Company’s President and Chief Executive Officer and was appointed to the board of directors. | ||||
On the Effective Date, the officers of each of the reorganized Company and subsidiaries were appointed in accordance with the provisions of the new organizational documents. | ||||
On July 22, 2013 the Company entered into a Transition and Separation Agreement and Mutual General Release (the “Transition Agreement”) with Mr. Lavelle, pursuant to which Mr. Lavelle resigned as President and Chief Executive Officer of the Company, and as a member of the board of directors of the Company. Mr. Lavelle’s resignation became effective on August 9, 2013. | ||||
Restructuring | ||||
The Reorganization Plan provided as soon as reasonably practicable after the Effective Date, that the reorganized Company and subsidiaries may simplify and rationalize their corporate structures by eliminating certain entities deemed no longer essential. As of the date hereof, the Company has not eliminated any such entities. | ||||
2014 Incentive Plan | ||||
The Reorganization Plan provides that, following the Effective Date, the board of directors of the reorganized Company will determine the terms of an incentive plan permitting the reorganized Company to grant participating employees, officers and directors of the reorganized Company, shares of common stock of the reorganized Company and/or options to acquire shares of common stock, and/or to provide such participating employees, officers and directors with such other consideration, including cash bonuses, as the new board of directors may determine. On April 24, 2014, the board of directors adopted the 2014 Incentive Plan (the “2014 Plan”), subject to stockholder approval at the 2014 annual meeting of stockholders. The 2014 Plan permits the grant of stock options, stock appreciation rights, restricted stock and restricted stock units as well as incentive awards. Directors, employees and consultants of the Company and any subsidiary of the Company are eligible to participate in the 2014 Plan. See also Note 9 – Share-Based Compensation Expense. | ||||
Financial Statement Presentation | ||||
We have prepared the accompanying consolidated financial statements in accordance with FASB ASC Topic 852 “Reorganizations” (“FASB ASC 852”). FASB ASC 852 requires that the financial statements distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain expenses including professional fees, realized gains and losses and provisions for losses that are realized from the reorganization and restructuring process are classified as reorganization items on the condensed consolidated statement of operations. | ||||
In connection with the Company’s emergence from Chapter 11, the Company was required to adopt fresh start accounting as of June 11, 2013 in accordance with ASC 852 “Reorganizations”. The Company elected to use June 8, 2013 (the “Convenience Date”), which was the week ended date nearest to the Effective Date, to avoid disruption to the Company’s weekly accounting processes. The Company performed a qualitative and quantitative assessment in order to determine the appropriateness of using the Convenience Date for fresh start accounting instead of the Effective Date. The Company’s assessment determined that the use of the Convenience Date did not have a material impact on either the predecessor or successor periods in the current fiscal year and there were no qualitative factors that would preclude the use of the Convenience Date for accounting and reporting purposes. The adoption of fresh start accounting resulted in the Company becoming a new entity for financial reporting purposes. Accordingly, the financial statements on or prior to June 11, 2013 are not comparable with the financial statements for periods after June 11, 2013. The consolidated financial statements as of July 26, 2014, April 26, 2014 and July 27, 2013 and for the three months ended July 26, 2014 and the seven weeks ended July 27, 2013 and any references to “Successor” or “Successor Company” show the financial position and results of operations of the reorganized Company subsequent to bankruptcy emergence on June 11, 2013. References to “Predecessor” or “Predecessor Company” refer to the financial position and results of operations of the Company prior to the bankruptcy emergence. Prior to the Effective Date, the Predecessor Company’s financial statements included in this Quarterly Report on Form 10-Q do not reflect or provide for the consequences of the Chapter 11 bankruptcy proceeding. |
Fresh_Start_Accounting
Fresh Start Accounting | 3 Months Ended | ||||||||||||||||
Jul. 26, 2014 | |||||||||||||||||
Fresh Start Accounting | ' | ||||||||||||||||
NOTE 4 – FRESH START ACCOUNTING | |||||||||||||||||
On the Effective Date, the Company adopted fresh start accounting and reporting in accordance with FASB ASC 852. The Company was required to apply the provisions of fresh start reporting to its financial statements, as the holders of existing voting shares of the Predecessor Company received less than 50% of the voting shares of the emerging entity and the reorganization value of the Predecessor Company’s assets immediately before the date of confirmation was less than the post-petition liabilities and allowed claims. | |||||||||||||||||
Fresh start reporting generally requires resetting the historical net book value of assets and liabilities to fair value as of the Effective Date by allocating the entity’s enterprise value as set forth in the Reorganization Plan to its assets and liabilities pursuant to accounting guidance related to business combinations. The financial statements as of the Effective Date report the results of the Successor Company with no beginning retained earnings or accumulated deficit. Any presentation of the Successor Company represents the financial position and results of operations of a new reporting entity and is not comparable to prior periods. The consolidated financial statements for periods ended prior to the Effective Date do not include the effect of any changes in capital structure or changes in the fair value of assets and liabilities as a result of fresh start accounting. | |||||||||||||||||
In accordance with FASB ASC 852, the Predecessor Company’s results of operations prior to the Effective Date include (i) a pre-emergence gain of $161,943 resulting from the discharge of liabilities under the Reorganization Plan; (ii) pre-emergence charges to earnings of $46,878 recorded as reorganization items resulting from certain costs and expenses relating to the Reorganization Plan becoming effective, including the cancellation of certain debt upon issuance of new equity and the cancellation of equity-based awards of the Predecessor; and (iii) a pre-emergence decrease in earnings of $30,266 resulting from the aggregate changes to the net carrying value of the Predecessor Company’s pre-emergence assets and liabilities to reflect their fair values under fresh start accounting, as well as the recognition of goodwill. See Note 5, “Reorganization Items, Net” for additional information. | |||||||||||||||||
Enterprise Value / Reorganization Value Determination | |||||||||||||||||
Enterprise value represents the fair value of an entity’s interest-bearing debt and stockholders’ equity. In the disclosure statement associated with the Reorganization Plan, which was confirmed by the Bankruptcy Court, we estimated a range of enterprise values between $275,000 and $325,000, with a midpoint of $300,000. Based on current and anticipated economic conditions and the direct impact these conditions have on our business, we deemed it appropriate to use the midpoint between the low end and high end of the range to determine the final enterprise value of $300,000, comprised of debt valued at approximately $179,000 and equity valued at approximately $121,000. | |||||||||||||||||
FASB ASC 852 provides for, among other things, a determination of the value to be assigned to the assets of the reorganized Company as of a date selected for financial reporting purposes. The Company adjusted its enterprise value of $300,000 for certain items such as post-petition liabilities to determine a reorganization value attributable to assets of $415,410. Under fresh start accounting, the reorganization value was allocated to the Company’s assets based on their respective fair values in conformity with the purchase method of accounting for business combinations included in FASB ASC 805, Business Combinations. The excess reorganization value over the fair value of identified tangible and intangible assets of $21,588 was recorded as goodwill. | |||||||||||||||||
The reorganization value represents the amount of resources available, or that become available, for the satisfaction of post-petition liabilities and allowed claims, as negotiated between the Company and its creditors (the “Interested Parties”). This value, along with other terms of the Reorganization Plan, was determined only after extensive arms-length negotiations between the Interested Parties. Each Interested Party developed its view of what the value should be based upon expected future cash flows of the business after emergence from Chapter 11, discounted at rates reflecting perceived business and financial risks. This value is viewed as the fair value of the entity before considering liabilities and is intended to approximate the amount a willing buyer would pay for the assets of the Successor Company immediately after restructuring. The reorganization value was determined using numerous projections and assumptions that are inherently subject to significant uncertainties and the resolution of contingencies beyond the control of the Company. Accordingly, there can be no assurance that the estimates, assumptions and amounts reflected in the valuation will be realized. | |||||||||||||||||
Methodology, Analysis and Assumptions | |||||||||||||||||
The Company’s valuation was based upon a discounted cash flow methodology, which included a calculation of the present value of expected un-levered after-tax free cash flows reflected in our long-term financial projections, including the calculation of the present value of the terminal value of cash flows, and supporting analysis that included a comparison of selected financial data of the Company with similar data of other publicly held companies comparable to ours in terms of end markets, operational characteristics, growth prospects and geographical footprint. The Company also considered precedent transaction analysis but ultimately determined there was insufficient data for a meaningful analysis. A detailed discussion of this methodology and supporting analysis is presented below. | |||||||||||||||||
The Company’s multi-year business plan was the foundation for developing long-term financial projections used in the valuation of our business. The business planning and forecasting process included a review of Company, industry and macroeconomic factors including, but not limited to, achievement of future financial results, projected changes associated with our reorganization initiatives, anticipated changes in general market conditions including variations in market regions, and known new business initiatives and challenges. | |||||||||||||||||
The following represents a detailed discussion of the methodology and supporting analysis used to value our business using the business plan and long-term financial projections developed by the Company: | |||||||||||||||||
Discounted Cash Flow Methodology | |||||||||||||||||
The Discounted Cash Flow (“DCF”) analysis is a forward-looking enterprise valuation methodology that relates the value of an asset or business to the present value of expected future cash flows to be generated by that asset or business. Under this methodology, projected future cash flows are discounted by the business’ weighted average cost of capital (“WACC”). The WACC reflects the estimated blended rate of return that debt and equity investors would require to invest in the business based on its capital structure. Our DCF analysis has two components: (1) the present value of the expected un-levered after-tax free cash flows for a determined period, and (2) the present value of the terminal value of cash flows, which represents a firm value beyond the time horizon of the long-term financial projections. | |||||||||||||||||
The DCF calculation was based on management’s financial projections of un-levered after-tax free cash flows for the period 2014 to 2017. The Company used a WACC of 13.3% to discount future cash flows and terminal values. This WACC was determined based upon an estimated cost of debt for similar sized companies, rather than the anticipated cost of debt of the reorganized Company upon emergence from bankruptcy, and a market cost of equity using a capital asset pricing model. Assumptions used in the DCF analysis, including the appropriate components of the WACC, were deemed to be those of “market participants” upon analysis of peer groups’ capital structures. | |||||||||||||||||
In conjunction with our analysis of publicly traded companies described below, the Company used a range of exit multiples of 2013 earnings before interest, taxes, depreciation and amortization (“EBITDA”) between 4.4 and 8.1, with a lower than midpoint exit multiple of 5.5 selected, to determine the present value of the terminal value of cash flows. The selected exit multiple is weighted towards those comparable companies which are more similar to the Company’s Distribution (formerly referred to as “Educational Resources”) segment which represents a higher percentage of consolidated revenues as compared to the Curriculum (formerly referred to as “Accelerated Learning”) segment. | |||||||||||||||||
The sum of the present value of the projected un-levered after-tax free cash flows was added to the present value of the terminal value of cash flows to determine the Company’s enterprise value. | |||||||||||||||||
Publicly Traded Company Analysis | |||||||||||||||||
As part of our valuation analysis, the Company identified publicly traded companies whose businesses are relatively similar to each of our reporting segments and have comparable operational characteristics to derive comparable revenue and EBITDA multiples for our DCF analysis. Criteria for selecting comparable companies for the analysis included, among other relevant characteristics, similar lines of businesses, business risks, growth prospects, maturity of businesses, market presence, size, and scale of operations. The analysis included a detailed multi-year financial comparison of each company’s income statement, balance sheet and statement of cash flows. In addition, each company’s performance, profitability, margins, leverage and business trends were also examined. Based on these analyses, a number of financial multiples and ratios were calculated to gauge each company’s relative performance and valuation. The ranges of ratios derived were then applied to the Company’s projected financial results to develop a range of implied values. | |||||||||||||||||
Enterprise Value, Accounting Policies and Reorganized Consolidated Balance Sheet | |||||||||||||||||
In determining the final enterprise value attributed to the Company of $300,000, the Company blended its DCF methodology and publicly traded company analysis, with more emphasis on the DCF methodology. | |||||||||||||||||
Fresh start accounting and reporting permits the selection of appropriate accounting policies for Successor Company. The Predecessor Company’s significant accounting policies that were disclosed in the Annual Report on Form 10-K for the year ended April 27, 2013 were generally adopted by the Successor Company as of the Effective Date, though many of the account balances were affected by the reorganization and fresh start adjustments presented below. | |||||||||||||||||
The adjustments presented below were made to the June 11, 2013 condensed consolidated balance sheet and contain estimates of fair value. Estimates of fair value represent the Company’s best estimates, which are based on industry and data trends, and by reference to relevant market rates and discounted cash flow valuation methods, among other factors. The determination of the fair value of assets and liabilities was subject to significant estimation and assumptions. In accordance with ASC No. 805, the allocation of the reorganization value was subject to additional adjustment until the Company completed its analysis. This analysis was finalized in the first quarter of fiscal 2015. The table below represents the final determination of the fair value of individual assets and liabilities. | |||||||||||||||||
The condensed consolidated balance sheet, reorganization adjustments and fresh start adjustments presented below summarize the impact of the Reorganization Plan and the adoption of fresh start accounting as of the Effective Date. | |||||||||||||||||
Certain of the fresh start adjustments were updated between the Effective Date and finalization of fresh start accounting during the three months ended July 26, 2014. During the three months ended July 26, 2014, the Successor Company updated the estimated value of holders of unsecured claims that elect to provide the Company with customary trade terms and thereby recover 45% of their claims, per the Reorganization Plan (see Notes 3 and 7). | |||||||||||||||||
REORGANIZED CONDENSED CONSOLIDATED BALANCE SHEET | |||||||||||||||||
AS OF JUNE 11, 2013 | |||||||||||||||||
June 11, 2013 | |||||||||||||||||
Predecessor | Reorganization | Fresh Start | Successor | ||||||||||||||
Company | Adjustments | Adjustments | Company | ||||||||||||||
ASSETS | |||||||||||||||||
Current assets: | |||||||||||||||||
Cash and cash equivalents | $ | 11,052 | $ | 4,363 | (1) | $ | — | $ | 15,415 | ||||||||
Restricted cash | 26,421 | — | — | 26,421 | |||||||||||||
Accounts receivable | 66,894 | — | (250 | )(8) | 66,644 | ||||||||||||
Inventories | 110,830 | — | (8,147 | )(8) | 102,683 | ||||||||||||
Other current assets | 45,819 | 321 | (2) | (788 | )(8) | 45,352 | |||||||||||
Total current assets | 261,016 | 4,684 | (9,185 | ) | 256,515 | ||||||||||||
Property, plant and equipment, net | 37,604 | (6,202 | )(2) | 14,148 | (8) | 45,550 | |||||||||||
Goodwill | — | — | 21,588 | (8)(9) | 21,588 | ||||||||||||
Intangible assets, net | 109,155 | — | (56,795 | )(8) | 52,360 | ||||||||||||
Development costs and other | 31,142 | 8,255 | (3) | — | 39,397 | ||||||||||||
Total assets | $ | 438,917 | $ | 6,737 | $ | (30,244 | ) | $ | 415,410 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||
Current liabilities: | |||||||||||||||||
Accounts payable | $ | 38,226 | $ | — | $ | — | $ | 38,226 | |||||||||
Accrued compensation | 7,229 | (315 | )(2) | — | 6,914 | ||||||||||||
Other accrued liabilities | 60,301 | 9,947 | (2)(4)(6) | 22 | (8) | 70,270 | |||||||||||
Total current liabilities | 105,756 | 9,632 | 22 | 115,410 | |||||||||||||
Long-term debt | 205,863 | (39,939 | )(5) | — | 165,924 | ||||||||||||
Other liabilities | 925 | 12,195 | (2)(6) | — | 13,120 | ||||||||||||
Liabilities subject to compromise | 223,988 | (223,988 | )(6) | — | — | ||||||||||||
Total liabilities | $ | 536,532 | $ | (242,100 | ) | $ | 22 | $ | 294,454 | ||||||||
Commitments and contingencies | |||||||||||||||||
Stockholders’ equity: | |||||||||||||||||
Common stock—Predecessor | $ | 24 | $ | (24 | )(7) | $ | — | $ | — | ||||||||
Capital in excess of par value—Predecessor | 446,232 | (446,232 | )(7) | — | — | ||||||||||||
Treasury Stock—Predecessor | (186,637 | ) | 186,637 | (7) | — | — | |||||||||||
Accumulated (deficit) and other comprehensive income—Predecessor | (357,234 | ) | 387,500 | (7) | (30,266 | )(7)(8) | — | ||||||||||
Common stock—Successor | — | 1 | (7) | — | 1 | ||||||||||||
Capital in excess of par value—Successor | — | 120,955 | (7) | — | 120,955 | ||||||||||||
Total stockholders’ equity | (97,615 | ) | 248,837 | (30,266 | ) | 120,956 | |||||||||||
Total liabilities and stockholders’ equity | $ | 438,917 | $ | 6,737 | $ | (30,244 | ) | $ | 415,410 | ||||||||
-1 | The Company deposited $7,647 of proceeds from its exit financing into a segregated cash account which is used to pay administrative claims and certain advisors in the bankruptcy proceedings. The Company utilized $3,284 of its cash balance immediately prior to emergence to fund a portion of the cash requirements from exit financing. | ||||||||||||||||
-2 | The Company recorded adjustments related to various contract rejections or amendments completed as part of the Reorganization Plan. This included a $6,202 write down of property, plant and equipment related to the amendment of capital lease obligations for the Mansfield, OH distribution center and the rejection of capital lease obligations for the Company’s Agawam, MA property. In addition, the Company recorded $920 related to various contract damages relating to lease rejections and severance obligations, classified between long-term and short-term liabilities. | ||||||||||||||||
-3 | In connection with entering into the exit credit facilities, the Company capitalized $8,255 of deferred financing costs. | ||||||||||||||||
-4 | Pursuant to the Chapter 11 Cases, additional professional fees of $2,057 were recorded. In addition, certain administrative and convenience claims of $8,435 were recorded as current liabilities, offset by accrued interest expense converted to new Successor Company equity. | ||||||||||||||||
-5 | The table below presents refinancing of the Predecessor long-term debt. The Company issued $78,620 of new Successor Company equity (including $21,375 in excess of debt carrying amount), partially offset by $17,306 of debt discount and other financing costs. The current portion of the reorganized debt was $25,251, which includes of $23,823 of new Successor Company ABL loan. | ||||||||||||||||
June 11, 2013 | |||||||||||||||||
Predecessor Company long-term debt | $ | 205,863 | |||||||||||||||
Reorganization adjustments: | |||||||||||||||||
Issuance of Successor Company equity | (78,620 | ) | |||||||||||||||
Equity issuance in excess of debt carrying amount | 21,375 | ||||||||||||||||
Financing costs and professional fees paid with exit financing | 17,306 | ||||||||||||||||
Reorganized Successor Company long-term debt | $ | 165,924 | |||||||||||||||
-6 | Liabilities subject to compromise generally refer to pre-petition obligations, secured or unsecured, that may be impaired by a plan of reorganization. FASB ASC 852 requires such liabilities, including those that became known after filing the Chapter 11 petitions, be reported at the amounts expected to be allowed, even if they may be settled for lesser amounts. These liabilities represented the estimated amount expected to be resolved on known or potential claims through the Chapter 11 process. Liabilities subject to compromise also includes items that may be assumed under the Reorganization Plan, and may be subsequently reclassified to liabilities not subject to compromise. Liabilities subject to compromise also include certain pre-petition liabilities including accrued interest and accounts payable. At April 27, 2013, liabilities subject to compromise were $228,302, of which administrative claim payments of $4,314 were made in the Predecessor period of fiscal 2014. The table below identifies the principal categories of liabilities subject to compromise at June 11, 2013: | ||||||||||||||||
June 11, 2013 | |||||||||||||||||
Accounts payable | $ | 47,683 | |||||||||||||||
2011 Debentures | 163,688 | ||||||||||||||||
Pre-petition accrued interest on 2011 Debentures | 979 | ||||||||||||||||
Sale-leaseback obligations | 11,638 | ||||||||||||||||
Liabilities subject to compromise | $ | 223,988 | |||||||||||||||
-7 | The Company recorded elimination of (1) the Predecessor Company’s common stock, (2) the Predecessor Company’s capital in excess of par value, net of stock options cancellation of $3,624, (3) the Predecessor Company’s treasury stock, and (4) the Predecessor Company’s accumulated deficit and accumulated other comprehensive loss. The following table represents reorganization value to be allocated to assets reconciled to the Successor Company Equity. The Company recorded Successor Company common stock of $1 and capital in excess of par value of $120,955. | ||||||||||||||||
June 11, 2013 | |||||||||||||||||
Total reorganization value to be allocated to assets | $ | 415,410 | |||||||||||||||
Less: Debt | (179,044 | ) | |||||||||||||||
Less: Other liabilities | (115,410 | ) | |||||||||||||||
Successor Company Equity | $ | 120,956 | |||||||||||||||
The above estimated amounts were updated during the three months ended July 26, 2014 (see Note 7). | |||||||||||||||||
-8 | The following table represents the adjustments for fresh start accounting primarily related to recording goodwill, recording our intangible assets, fixed assets, and other assets and liabilities at fair value and related deferred income taxes in accordance with ASC 805. Additionally, such fresh start accounting adjustments reflect the increase in inventory reserve of $6,600, and elimination of certain capitalized costs of $1,426. The Company also recorded other fresh start accounting adjustments relating to (1) deferred rent included in current liabilities, (2) vendor rebates receivables in current assets, and (3) other current assets and liabilities as a result of fresh start accounting. In addition, the impact of fresh start accounting adjustments on the accumulated retained earnings was eliminated. | ||||||||||||||||
June 11, 2013 | |||||||||||||||||
Fresh start accounting adjustments: | |||||||||||||||||
Goodwill | $ | 21,588 | |||||||||||||||
Fair value adjustment to intangible assets | (56,795 | ) | |||||||||||||||
Fair value adjustment to fixed assets | 15,522 | ||||||||||||||||
Fresh start accounting adjustments relating to inventory | (8,147 | ) | |||||||||||||||
Other fresh start accounting adjustments | (2,434 | ) | |||||||||||||||
Total fresh start accounting adjustments | $ | (30,266 | ) | ||||||||||||||
-9 | The following table represents a reconciliation of the enterprise value attributed to assets, determination of the total reorganization value to be allocated to these assets and the determination of goodwill: | ||||||||||||||||
June 11, 2013 | |||||||||||||||||
Enterprise value attributed to School Specialty. | $ | 300,000 | |||||||||||||||
Plus: other liabilities (excluding debt) | 115,410 | ||||||||||||||||
Total reorganization value to be allocated to assets | 415,410 | ||||||||||||||||
Less: fair value assigned to tangible and intangible assets | (393,822 | ) | |||||||||||||||
Value of School Specialty assets in excess of fair value (Goodwill) | $ | 21,588 | |||||||||||||||
Reorganization_Items_Net
Reorganization Items, Net | 3 Months Ended | ||||||||||||
Jul. 26, 2014 | |||||||||||||
Reorganization Items, Net | ' | ||||||||||||
NOTE 5 – REORGANIZATION ITEMS, NET | |||||||||||||
Reorganization items directly associated with the process of reorganizing the business under Chapter 11 of the Bankruptcy Code have been recorded on a separate line item on the condensed consolidated statements of operations. The following table displays the details of reorganization items for the three months ended July 26, 2014, the seven weeks ended July 27, 2013 and the six weeks ended June 11, 2013: | |||||||||||||
Successor | Successor | Predecessor | |||||||||||
Company | Company | Company | |||||||||||
Three Months Ended | Seven Weeks Ended | Six Weeks Ended | |||||||||||
26-Jul-14 | 27-Jul-13 | 11-Jun-13 | |||||||||||
Liabilities subject to compromise.. | $ | — | $ | — | $ | 223,988 | |||||||
Issuance of capital in excess of par value | — | — | (42,335 | ) | |||||||||
Reclassified into other balance sheet liability accounts. | — | — | (19,710 | ) | |||||||||
Settlement of liabilities subject to compromise. | $ | — | $ | — | $ | 161,943 | |||||||
Fresh start accounting adjustments: | |||||||||||||
Goodwill | $ | — | $ | — | $ | 21,588 | |||||||
Fair value adjustment to intangible assets | — | — | (56,795 | ) | |||||||||
Fair value adjustment to fixed assets | — | — | 15,522 | ||||||||||
Fresh start accounting adjustments relating to inventory | — | — | (8,147 | ) | |||||||||
Other fresh start accounting adjustments | — | — | (2,434 | ) | |||||||||
Total fresh start accounting adjustments | $ | — | $ | — | $ | (30,266 | ) | ||||||
Other reorganization adjustments: | |||||||||||||
Asset write-downs due to contract rejections | $ | — | $ | — | $ | (7,011 | ) | ||||||
Professional fees | 271 | 1,280 | (10,512 | ) | |||||||||
Cancellation of equity-based awards | — | — | (3,624 | ) | |||||||||
Financing fees | — | — | (2,853 | ) | |||||||||
Issuance of equity in excess of debt carrying amount | — | — | (21,375 | ) | |||||||||
Other | — | — | (1,503 | ) | |||||||||
Total other reorganization adjustments | $ | 271 | $ | 1,280 | $ | (46,878 | ) | ||||||
Total Reorganization items, net | $ | 271 | $ | 1,280 | $ | 84,799 | |||||||
The 2011 Debentures and related accrued interest within the liabilities subject to compromise at June 11, 2013 were settled by the issuance of new common stock representing 35% ownership in the Successor Company, with an estimated fair value of $42,335. The portion of accounts payable within the liabilities subject to compromise that will be paid in accordance with the Reorganization Plan were classified between long-term and short-term liabilities. Administrative claims totaling $8,335 were classified as short-term with any remaining recoveries under the Reorganization Plan classified as Deferred Cash Payments in long-term debt (see Note 14 of the Notes to Condensed Consolidated Financial Statements – Debt). Since the value of Common Stock issued and the amounts to be paid in cash at a later date were less than the liabilities subject to compromise, the Predecessor Company recorded a gain on reorganization of $161,943 for the six weeks ended June 11, 2013. | |||||||||||||
Fresh start accounting adjustments resulted in a net asset write down of $30,266 which has partially offset the gain related to the settlement of liabilities subject to compromise. The fresh start accounting adjustments are related to the preliminary valuation done in accordance with the adoption of the fresh start accounting. See Note 4 – Fresh Start Accounting for information on these fresh start valuation adjustments. | |||||||||||||
A portion of the gain related to the settlement of liabilities subject to compromise is further offset by $46,878 of other reorganizational adjustments. Equity issued to the Ad Hoc DIP lenders in excess of the debt carrying amount was $21,375. Professional fees and financing fees associated with the Predecessor Company’s debtor-in-possession financings were $13,365. The cancellation of equity awards outstanding as of the Effective Date triggered $3,624 of unrecognized share-based compensation expense. In addition, the rejection of certain leases pursuant to the Reorganization Plan resulted in an additional $7,011 of expense. |
Income_Taxes
Income Taxes | 3 Months Ended |
Jul. 26, 2014 | |
Income Taxes | ' |
NOTE 6 – INCOME TAXES | |
The Company files income tax returns with the U.S., various U.S. states, and foreign jurisdictions. The most significant tax return the Company files is with the U.S. The Company’s tax returns are no longer subject to examination by the U.S. for fiscal years before 2010. The Company has various state tax audits and appeals in process at any given time. It is not anticipated that any adjustments resulting from tax examinations or appeals would result in a material change to the Company’s financial position or results of operations. | |
Pursuant to the Reorganization Plan, on the Effective Date, the Company realized cancellation of indebtedness income. During the six weeks ended June 11, 2013, the Company excluded from taxable income $129,084 of cancellation of indebtedness income as defined under Internal Revenue Code (“IRC”) Section 108. IRC Section 108 excludes from taxable income the amount of indebtedness discharged under a Chapter 11 case. IRC Section 108 also requires a reduction of tax attributes equal to the amount of excluded taxable income. As a result, the Company reduced the available federal and state net operating loss carryforward and adjusted the tax reporting basis of tangible and intangible assets for the discharge of indebtedness income. In addition to the adjustment to the tax reporting basis as described above, the fresh start accounting adjustments also created additional basis differences between income tax and financial reporting. | |
The Company has determined that an ownership change occurred in fiscal 2013 that is subject to IRC Section 382. Due to the limitations imposed under Section 382, certain federal and state deferred tax attributes may be significantly reduced over the next five years. | |
In fiscal 2012, the Company concluded that the realization of a majority of the deferred tax assets did not meet the more likely than not threshold, and recorded a tax valuation allowance of $32,638. In fiscal 2013, the Company increased its tax valuation allowance to $71,272. As of April 26, 2014, the Company reduced its valuation allowance to $30,573 related to the reduction of tax attributes associated with the cancellation of indebtedness and other fresh start adjustments. At the end of fiscal 2014 and at the end of the first quarter of fiscal 2015 there was a full valuation allowance against all the Company’s deferred tax assets. As of July 26, 2014, the Company had an immaterial amount of unremitted earnings from foreign investments. | |
The balance of the Company’s liability for unrecognized income tax benefits, net of federal tax benefits, at July 26, 2014, April 26, 2014 and July 27, 2013, was $398, $398 and $925, respectively, all of which would have an impact on the effective tax rate if recognized. The Company does not expect any material changes in the amount of unrecognized tax benefits within the next twelve months. The Company classifies accrued interest and penalties related to unrecognized tax benefits as income tax expense in its consolidated statements of operations. The amounts of accrued interest and penalties included in the liability for uncertain tax positions are not material. |
Stockholders_Equity
Stockholders' Equity | 3 Months Ended | ||||||||||||||||||||||||
Jul. 26, 2014 | |||||||||||||||||||||||||
Stockholders' Equity | ' | ||||||||||||||||||||||||
NOTE 7 – STOCKHOLDERS’ EQUITY | |||||||||||||||||||||||||
Changes in condensed consolidated stockholders’ equity during the three months ended July 26, 2014 (Successor Company), six weeks ended June 11, 2013 (Predecessor Company) and seven weeks ended July 27, 2013 (Successor Company), were as follows: | |||||||||||||||||||||||||
(in thousands) | Common | Additional | Retained | Treasury | Accumulated | Total | |||||||||||||||||||
Stock | Paid-in | Earnings | Stock | Other | Stockholders’ | ||||||||||||||||||||
Capital | (Accumulated | Comprehensive | Equity | ||||||||||||||||||||||
Deficit) | Income (Loss) | ||||||||||||||||||||||||
Balance, April 26, 2014 (Successor Company) | $ | 1 | $ | 120,955 | $ | (17,485 | ) | $ | — | $ | (414 | ) | $ | 103,057 | |||||||||||
Net income | — | — | 11,014 | — | — | 11,014 | |||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | 198 | 198 | |||||||||||||||||||
Change in Fresh Start estimate | — | (1,564 | ) | — | — | — | (1,564 | ) | |||||||||||||||||
Balance, July 26, 2014 (Successor Company) | $ | 1 | $ | 119,391 | $ | (6,471 | ) | $ | — | $ | (216 | ) | $ | 112,705 | |||||||||||
(in thousands) | Common | Additional | Retained | Treasury | Accumulated | Total | |||||||||||||||||||
Stock | Paid-in | Earnings | Stock | Other | Stockholders’ | ||||||||||||||||||||
Capital | (Accumulated | Comprehensive | Equity (Deficit) | ||||||||||||||||||||||
Deficit) | Income (Loss) | ||||||||||||||||||||||||
Balance, April 27, 2013 (Predecessor Company) | $ | 24 | $ | 446,232 | $ | (361,192 | ) | $ | (186,637 | ) | $ | 22,381 | $ | (79,192 | ) | ||||||||||
Net income | — | — | 76,068 | — | — | 76,068 | |||||||||||||||||||
Foreign currency translation adjustment | (101 | ) | (101 | ) | |||||||||||||||||||||
Cancellation of Predecessor Company common stock | (24 | ) | — | — | — | — | (24 | ) | |||||||||||||||||
Elimination of Predecessor Company capital in excess of par | — | (446,232 | ) | — | — | — | (446,232 | ) | |||||||||||||||||
Elimination of Predecessor Company accumulated deficit | — | — | 285,124 | — | — | 285,124 | |||||||||||||||||||
Elimination of Predecessor Company treasury stock | — | — | — | 186,637 | — | 186,637 | |||||||||||||||||||
Elimination of Predecessor Company accumulated other comprehensive loss | — | — | — | — | (22,280 | ) | (22,280 | ) | |||||||||||||||||
Balance, June 11, 2013 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
(Predecessor Company) | |||||||||||||||||||||||||
Issuance of Successor Company Common Stock | $ | 1 | $ | — | $ | — | $ | — | $ | — | $ | 1 | |||||||||||||
Establishment of Successor Company capital in excess of par | — | 120,955 | — | — | — | 120,955 | |||||||||||||||||||
Balance, June 12, 2013 | 1 | 120,955 | — | — | — | 120,956 | |||||||||||||||||||
(Successor Company) | |||||||||||||||||||||||||
Net income | — | — | 16,943 | — | — | 16,943 | |||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | (7 | ) | (7 | ) | |||||||||||||||||
Balance, July 27, 2013 | $ | 1 | $ | 120,955 | $ | 16,943 | $ | — | $ | (7 | ) | $ | 137,892 | ||||||||||||
(Successor Company) | |||||||||||||||||||||||||
In the first quarter of fiscal 2015, the Company revised its fresh-start estimate for the amount of deferred cash payment obligations (see Note 14 – Debt). The change in estimate is related to an increased number of unsecured trade creditors which elected to provide the Company customary trade terms which entitled those creditors to a 45% recovery of their unsecured claim rather than a 20% recovery. This change in estimate resulted in a decrease of $1,564 to the Successor Company’s equity and a corresponding increase in long-term debt. |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | ||||||||||||
Jul. 26, 2014 | |||||||||||||
Earnings Per Share | ' | ||||||||||||
NOTE 8 – EARNINGS PER SHARE | |||||||||||||
Earnings Per Share | |||||||||||||
The following information presents the Company’s computations of basic earnings per share (“basic EPS”) and diluted earnings per share (“diluted EPS”) for the periods presented in the condensed consolidated statements of operations: | |||||||||||||
Income (loss) | Weighted | Per Share | |||||||||||
(Numerator) | Average | Amount | |||||||||||
Shares | |||||||||||||
(Denominator) | |||||||||||||
Three months ended July 26, 2014: | |||||||||||||
Basic and diluted EPS (Successor Company) | $ | 11,014 | 1,000 | $ | 11.01 | ||||||||
Seven weeks ended July 27, 2013: | |||||||||||||
Basic and diluted EPS (Successor Company) | $ | 16,943 | 1,000 | $ | 16.94 | ||||||||
Six weeks ended June 11, 2013: | |||||||||||||
Basic and diluted EPS (Predecessor Company) | $ | 76,068 | 18,922 | $ | 4.02 | ||||||||
All outstanding stock options and restricted shares of the Predecessor Company were cancelled as of the Effective Date. |
ShareBased_Compensation_Expens
Share-Based Compensation Expense | 3 Months Ended | ||||||||||||||||
Jul. 26, 2014 | |||||||||||||||||
Share-Based Compensation Expense | ' | ||||||||||||||||
NOTE 9 – SHARE-BASED COMPENSATION EXPENSE | |||||||||||||||||
Employee Stock Plans | |||||||||||||||||
As of July 26, 2014, the Company had one share-based employee compensation plan; the 2014 Plan, as described in Note 2 – Bankruptcy Proceedings. The 2014 Plan is subject to approval by the Company’s stockholders at the 2014 annual meeting of stockholders. On April 24, 2014, School Specialty, Inc.’s CEO was awarded 32 stock options under the 2014 Plan, and on May 22, 2014, other members of management were awarded 36 stock options. These stock option awards are contingent upon stockholder approval of the plan at the Annual Meeting of Stockholders to be held on September 4, 2014. Due to the pending stockholder approval, these awards are not considered outstanding, nor granted as of July 26, 2014 and therefore no expense recognized. | |||||||||||||||||
Prior to the Effective Date, the Company had three share-based employee compensation plans under which awards were outstanding as of April 27, 2013: the School Specialty, Inc. 1998 Stock Incentive Plan (the “1998 Plan”), the School Specialty, Inc. 2002 Stock Incentive Plan (the “2002 Plan”), and the School Specialty, Inc. 2008 Equity Incentive Plan (the “2008 Plan”). All plans were approved by the Company’s stockholders. | |||||||||||||||||
In conjunction with the Reorganization Plan which became effective on June 11, 2013 (see Note 3 – Bankruptcy Proceedings), all shares, options, Non-Vested Stock Units (NSUs) and restricted shares that were outstanding on the Effective Date were canceled. As a result, the Predecessor Company recognized a $3,624 reorganization item related to the unrecognized share-based compensation expense which was triggered upon the cancellation of the awards. | |||||||||||||||||
A summary of option activity for the Predecessor Company during the six weeks ended June 11, 2013 follows: | |||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||
Predecessor Company | Options | Weighted- | Options | Weighted- | |||||||||||||
Average | Average | ||||||||||||||||
Exercise | Exercise | ||||||||||||||||
Price | Price | ||||||||||||||||
Balance at April 27, 2013 | 2,550 | $ | 15.27 | 1,207 | $ | 24.76 | |||||||||||
Granted | — | — | |||||||||||||||
Exercised | — | — | |||||||||||||||
Canceled | (2,550 | ) | 15.27 | ||||||||||||||
Balance at June 11, 2013 | — | $ | — | — | $ | — | |||||||||||
There were no time-based NSU awards granted nor restricted stock awarded in the six weeks ended June 11, 2013. | |||||||||||||||||
On May 28, 2014, the Board of Directors (the “Board”) of the Company granted 6 stock appreciation rights (“SARs”) to each of the non-employee members of the Board under the 2014 Plan, contingent upon stockholder approval of the plan at the Annual Meeting of Stockholders to be held on September 4, 2014. Each SAR has a grant date value of $130 and will be settled in cash upon exercise. The SARs will vest as to one-half of the SARs on the second anniversary of the date of grant and as to one-fourth of the SARs on each of the third and fourth anniversaries of the date of grant. Due to the pending stockholder approval, these awards are not considered outstanding, nor granted as of July 26, 2014. |
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 3 Months Ended | ||||||||||||
Jul. 26, 2014 | |||||||||||||
Goodwill and Other Intangible Assets | ' | ||||||||||||
NOTE 10 – GOODWILL AND OTHER INTANGIBLE ASSETS | |||||||||||||
The following tables present details of the Successor Company’s intangible assets, including the estimated useful lives, excluding goodwill (preliminary values): | |||||||||||||
July 26, 2014 | Gross Value | Accumulated | Net Book | ||||||||||
Amortization | Value | ||||||||||||
Amortizable intangible assets: | |||||||||||||
Customer relationships (13 years) | $ | 11,300 | $ | (1,014 | ) | $ | 10,286 | ||||||
Publishing rights (20 years) | 4,000 | (233 | ) | 3,767 | |||||||||
Trademarks (20 years) | 22,700 | (1,324 | ) | 21,376 | |||||||||
Developed technology (7 years) | 6,600 | (1,100 | ) | 5,500 | |||||||||
Content (5 years) | 4,400 | (1,027 | ) | 3,373 | |||||||||
Perpetual license agreements (5 years) | 1,200 | (280 | ) | 920 | |||||||||
Favorable leasehold interests (10 years) | 2,160 | (252 | ) | 1,908 | |||||||||
Total intangible assets | $ | 52,360 | $ | (5,230 | ) | $ | 47,130 | ||||||
26-Apr-14 | Gross Value | Accumulated | Net Book | ||||||||||
Amortization | Value | ||||||||||||
Amortizable intangible assets: | |||||||||||||
Customer relationships (13 years) | $ | 11,300 | $ | (797 | ) | $ | 10,503 | ||||||
Publishing rights (20 years) | 4,000 | (183 | ) | 3,817 | |||||||||
Trademarks (20 years) | 22,700 | (1,040 | ) | 21,660 | |||||||||
Developed technology (7 years) | 6,600 | (864 | ) | 5,736 | |||||||||
Content (5 years) | 4,400 | (807 | ) | 3,593 | |||||||||
Perpetual license agreements (5 years) | 1,200 | (220 | ) | 980 | |||||||||
Favorable leasehold interests (10 years) | 2,160 | (198 | ) | 1,962 | |||||||||
Total intangible assets | $ | 52,360 | $ | (4,109 | ) | $ | 48,251 | ||||||
July 27, 2013 | Gross | Accumulated | Net Book | ||||||||||
Value | Amortization | Value | |||||||||||
Amortizable intangible assets: | |||||||||||||
Customer relationships (13 years) | $ | 9,400 | $ | (96 | ) | $ | 9,304 | ||||||
Publishing rights (20 years) | 2,500 | (17 | ) | 2,483 | |||||||||
Trademarks (20 years) | 22,100 | (147 | ) | 21,953 | |||||||||
Developed technology (7 years) | 6,600 | (126 | ) | 6,474 | |||||||||
Content (5 years) | 4,400 | (117 | ) | 4,283 | |||||||||
Perpetual license agreements (5 years) | 1,500 | (40 | ) | 1,460 | |||||||||
Favorable leasehold interests (10 years) | 1,490 | (20 | ) | 1,470 | |||||||||
Total intangible assets | $ | 47,990 | $ | (563 | ) | $ | 47,427 | ||||||
The gross values were determined by the valuation which was performed as part of the fresh start accounting. In addition to the intangible assets above, the Successor Company recorded $21,588 of goodwill. | |||||||||||||
Intangible asset amortization expenses were included in selling, general and administrative expense. Intangible asset amortization expense for the three months ended July 26, 2014, seven weeks ended July 27, 2013 and the six weeks ended June 11, 2013 was $1,121, $563, and $1,138, respectively. | |||||||||||||
Intangible asset amortization expense for each of the five succeeding fiscal years and the remainder of fiscal 2015 is estimated to be: | |||||||||||||
Fiscal 2015 (nine months remaining) | $ | 3,362 | |||||||||||
Fiscal 2016 | 4,483 | ||||||||||||
Fiscal 2017 | 4,483 | ||||||||||||
Fiscal 2018 | 4,483 | ||||||||||||
Fiscal 2019 | 3,456 | ||||||||||||
Fiscal 2020 | 3,363 | ||||||||||||
The table below shows the allocation to the segments of the recorded goodwill as of July 26, 2014. There were no changes during the twelve month period ending July 26, 2014, other than fresh start accounting adjustments. | |||||||||||||
Distribution | Curriculum | Total | |||||||||||
Segment | Segment | ||||||||||||
Fresh Start Valuation: | |||||||||||||
Goodwill | $ | 14,666 | $ | 6,922 | $ | 21,588 | |||||||
Balance at July 26, 2014 | $ | 14,666 | $ | 6,922 | $ | 21,588 | |||||||
Investment_in_Unconsolidated_A
Investment in Unconsolidated Affiliate | 3 Months Ended | ||||||||||||||||
Jul. 26, 2014 | |||||||||||||||||
Investment in Unconsolidated Affiliate | ' | ||||||||||||||||
NOTE 11 – INVESTMENT IN UNCONSOLIDATED AFFILIATE | |||||||||||||||||
The Company holds a 35% interest, accounted for under the cost method, in Carson-Dellosa Publishing, which is accounted for under the cost method as the Company does not have significant influence over the investee. | |||||||||||||||||
The investment in unconsolidated affiliate consisted of the following: | |||||||||||||||||
Percent | Successor | Predecessor | |||||||||||||||
Owned | July 26, 2014 | April 26, 2014 | July 27, 2013 | ||||||||||||||
Carson- Dellosa Publishing, LLC | 35 | % | $ | 715 | $ | 715 | $ | 715 | |||||||||
The investment amount represents the Company’s maximum exposure to loss as a result of the Company’s ownership interest. |
Property_Plant_and_Equipment
Property, Plant and Equipment | 3 Months Ended | ||||||||||||
Jul. 26, 2014 | |||||||||||||
Property, Plant and Equipment | ' | ||||||||||||
NOTE 12 – PROPERTY, PLANT AND EQUIPMENT | |||||||||||||
Property, plant and equipment consist of the following: | |||||||||||||
July 26, | April 26, | July 27, | |||||||||||
2014 | 2014 | 2013 | |||||||||||
Land | $ | — | $ | — | $ | 210 | |||||||
Projects in progress | 5,146 | 10,854 | 2,927 | ||||||||||
Buildings and leasehold improvements | 3,699 | 3,595 | 7,288 | ||||||||||
Furniture, fixtures and other | 34,818 | 30,525 | 29,277 | ||||||||||
Machinery and warehouse equipment | 9,149 | 6,770 | 8,910 | ||||||||||
Total property, plant and equipment | 52,812 | 51,744 | 48,612 | ||||||||||
Less: Accumulated depreciation | (14,255 | ) | (12,699 | ) | (2,303 | ) | |||||||
Net property, plant and equipment | $ | 38,557 | $ | 39,045 | $ | 46,309 | |||||||
Depreciation expense for the three months ended July 26, 2014, seven weeks ended July 27 and six weeks ended June 11, 2013 was $3,249, $2,303 and $1,845, respectively. |
Assets_Held_For_Sale
Assets Held For Sale | 3 Months Ended |
Jul. 26, 2014 | |
Assets Held For Sale | ' |
NOTE 13 – ASSETS HELD FOR SALE | |
In fiscal 2014, the company-wide Process Improvement Program was launched to better align the Company’s operating groups, enhance systems and processes and drive efficiency throughout the organization to improve the customer experience. As part of this program, the Salina, Kansas facility was closed in the third quarter of fiscal 2014. The Salina distribution center ceased processing customer shipments in the second quarter of fiscal 2014. The facility is classified as held for sale on the July 26, 2014 and April 26, 2014 consolidated balance sheets. | |
In fiscal 2014, the Company decided to sell certain print assets of its subsidiary, Premier Agendas, Inc. (“Premier”). Historically, Premier printed approximately 30% of all agendas sold, with the remainder being printed by vendors. The decision was made to have all agendas printed by outside sources and sell the printing assets. These assets were sold early in the third quarter of fiscal 2014. |
Debt
Debt | 3 Months Ended | ||||||||||||
Jul. 26, 2014 | |||||||||||||
Debt | ' | ||||||||||||
NOTE 14 – DEBT | |||||||||||||
Long-term debt consisted of the following: | |||||||||||||
July 26, | April 26, | July 27, | |||||||||||
2014 | 2014 | 2013 | |||||||||||
New ABL Facility, maturing in 2018 | $ | 71,900 | $ | 10,600 | $ | 60,801 | |||||||
New Term Loan, maturing in 2019 | 142,681 | 143,913 | 145,000 | ||||||||||
New Term Loan Original Issue Discount | (2,352 | ) | (2,473 | ) | (2,835 | ) | |||||||
Deferred Cash Payment Obligations, maturing in 2019 | 16,577 | 14,335 | 12,195 | ||||||||||
Total debt | 228,806 | 166,375 | 215,161 | ||||||||||
Less: Current maturities | (72,475 | ) | (12,388 | ) | (62,229 | ) | |||||||
Total long-term debt | $ | 156,331 | $ | 153,987 | $ | 152,932 | |||||||
Successor Company Debt | |||||||||||||
Credit Agreement | |||||||||||||
On June 11, 2013, the Company entered into a Loan Agreement (the “Asset-Based Credit Agreement”) by and among the Company, Bank of America, N.A, as Agent, SunTrust Bank, as Syndication Agent, Merrill Lynch, Pierce, Fenner & Smith Incorporated and SunTrust Robinson Humphrey, Inc., as Joint Lead Arrangers and Bookrunners, and the Lenders that are party to the Asset-Based Credit Agreement (the “Asset-Based Lenders”). | |||||||||||||
Under the Asset-Based Credit Agreement, the Asset-Based Lenders agreed to provide a revolving senior secured asset-based credit facility (the “New ABL Facility”) in an aggregate principal amount of $175,000. Outstanding amounts under the New ABL Facility will bear interest at a rate per annum equal to, at the Company’s election: (1) a base rate (equal to the greatest of (a) the prime lending rate, (b) the federal funds rate plus 0.50%, and (c) the 30-day LIBOR rate plus 1.00% per annum) (the “Base Rate”) plus an applicable margin (equal to a specified margin based on the interest rate elected by the Company, the fixed charge coverage ratio under the New ABL Facility and the applicable point in the life of the New ABL Facility) (the “Applicable Margin”), or (2) a LIBOR rate plus the Applicable Margin (the “LIBOR Rate”). Interest on loans under the New ABL Facility bearing interest based upon the Base Rate will be due monthly in arrears, and interest on loans bearing interest based upon the LIBOR Rate will be due on the last day of each relevant interest period or, if sooner, on the respective dates that fall every three months after the beginning of such interest period. | |||||||||||||
The effective interest rate under the New ABL Facility for the three months ended July 26, 2014 was 7.48%, which includes amortization of loan origination fees of $289 and commitment fees on unborrowed funds of $170. As of July 26, 2014, the outstanding balance on the New ABL Facility was $71,900, which was reflected as currently maturing, long-term debt in the accompanying condensed consolidated balance sheets. | |||||||||||||
The New ABL Facility will mature on June 11, 2018. The Company may prepay advances under the New ABL Facility in whole or in part at any time without penalty or premium. The Company will be required to make specified prepayments upon the occurrence of certain events, including: (1) the amount outstanding on the New ABL Facility exceeding the Borrowing Base (as determined in accordance with the terms of the New ABL Facility), and (2) the Company’s receipt of net cash proceeds of any sale or disposition of assets that are first priority collateral for the New ABL Facility. | |||||||||||||
Pursuant to a Guaranty and Collateral Agreement dated as of June 11, 2013 (the “New ABL Security Agreement”), the New ABL Facility is secured by a first priority security interest in substantially all assets of the Company and the guarantor subsidiaries. Under an intercreditor agreement between the Asset-Based Lenders and the Term Loan Lenders, as defined and described below, the Asset-Based Lenders have a first priority security interest in substantially all working capital assets of the Company and the guarantor subsidiaries, and a second priority security interest in all other assets, subordinate only to the first priority security interest of the New Term Loan Lenders in such other assets. | |||||||||||||
The Asset-Based Credit Agreement contains customary events of default and financial, affirmative and negative covenants, including but not limited to a springing financial covenant relating to the Company’s fixed charge coverage ratio and restrictions on indebtedness, liens, investments, asset dispositions and dividends and other restricted payments. | |||||||||||||
Term Loan | |||||||||||||
Also on June 11, 2013, the Company entered into a Credit Agreement (the “New Term Loan Credit Agreement”) among the Company, Credit Suisse AG, as Administrative Agent and Collateral Agent, and the Lenders defined in the New Term Loan Credit Agreement (the “Term Loan Lenders”). | |||||||||||||
Under the New Term Loan Credit Agreement, the Term Loan Lenders agreed to make a term loan (the “New Term Loan”) to the Company in aggregate principal amount of $145,000, including an original issue discount of $2,900. The outstanding principal amount of the New Term Loan will bear interest at a rate per annum equal to the applicable LIBOR rate (with a 1% floor) plus 8.50%, or the base rate plus a margin of 7.50%. Interest on loans under the New Term Loan Credit Agreement bearing interest based upon the base rate will be due quarterly in arrears, and interest on loans bearing interest based upon the LIBOR Rate will be due on the last day of each relevant interest period or, if sooner, on the respective dates that fall every three months after the beginning of such interest period. | |||||||||||||
The effective interest rate under the term loan credit facility for the three months ended July 26, 2014 was 10.64%, which includes amortization of loan origination fees of $293 and original issue discount amortization of $121. As of July 26, 2014, the outstanding balance on the New Term Loan Credit Agreement was $140,329, net of the unamortized original issue discount. Of this amount, $575 was reflected as currently maturing, long-term debt in the accompanying condensed consolidated balance sheets. The original issue discount is being amortized as additional interest expense on a straight-line basis over the life of the New Term Loan. | |||||||||||||
The New Term Loan matures on June 11, 2019. The New Term Loan Credit Agreement requires prepayments at specified levels upon the Company’s receipt of net proceeds from certain events, including: (1) certain dispositions of property, divisions, business units or business lines; and (2) other issuances of debt other than Permitted Debt (as defined in the New Term Loan Credit Agreement). The New Term Loan Credit Agreement also requires prepayments at specified levels from the Company’s excess cash flow. The Company is also permitted to voluntarily prepay the New Term Loan in whole or in part. Any prepayments are to be made at par, plus an early payment fee calculated in accordance with the terms of the New Term Loan Credit Agreement if prepaid prior to the second anniversary of the Term Loan Credit Agreement. | |||||||||||||
Pursuant to a Guarantee and Collateral Agreement dated as of June 11, 2013 (the “New Term Loan Security Agreement”), the Term Loan is secured by a first priority security interest in substantially all assets of the Company and the guarantor subsidiaries. Under an intercreditor agreement between the Asset-Based Lenders and the Term Loan Lenders, the Term Loan Lenders have a second priority security interest in substantially all working capital assets of the Company and the subsidiary guarantors, subordinate only to the first priority security interest of the Asset-Based Lenders in such assets, and a first priority security interest in all other assets. | |||||||||||||
The New Term Loan Credit Agreement contains customary events of default and financial, affirmative and negative covenants, including but not limited to quarterly financial covenants that commenced on the fiscal quarter ending October 26, 2013, relating to the Company’s (1) minimum interest coverage ratio and (2) maximum net total leverage ratio and restrictions on indebtedness, liens, investments, asset dispositions and dividends and other restricted payments. | |||||||||||||
The New Term Loan required the Company to enter into an interest rate hedge, within 90 days of the Effective Date, in an amount equal to at least 50% of the aggregate principal amount outstanding under the New Term Loan. The purpose of the interest rate hedge is to effectively subject a portion of the New Term Loan to a fixed or maximum interest rate. As such, the Company entered into an interest rate swap agreement on August 27, 2013 that effectively fixes the interest payments on a portion of the Company’s variable-rate debt. The swap, which has a termination date of September 11, 2016, effectively fixes the LIBOR-based interest rate on the debt in the amount of the notional amount of the swap at 9.985%. The notional amount of the swap at July 26, 2014 was $72,500. The fair value of the derivative increased as of the end of first quarter fiscal 2015 compared to the end of fiscal 2014 by $13 and a gain of $13 was recognized for the quarter. The gain for the first quarter of fiscal 2015 was recorded in “Change in fair value of interest rate swap” on the condensed consolidated statement of operations. | |||||||||||||
Under this swap agreement, the Company will pay the counterparty interest on the notional amount at a fixed rate per annum of 1.485% and the counterparty will pay the Company interest on the notional amount at a variable rate per annum equal to the greater of 1-month LIBOR or 1.0%. The 1-month LIBOR rate applicable to this agreement was 0.156% at July 26, 2014. The notional amounts do not represent amounts exchanged by the parties, and thus are not a measure of exposure of the Company. The amounts exchanged are normally based on the notional amounts and other terms of the swaps. The variable rates are subject to change over time as 1-month LIBOR fluctuates. | |||||||||||||
The company has estimated the fair value of its Term Loan (valued under Level 3) as of July 26, 2014 approximated the carrying value of $142,681. | |||||||||||||
Deferred Cash Payment Obligations | |||||||||||||
In connection with the Reorganization Plan, general unsecured creditors are entitled to receive a deferred cash payment obligation of 20% of the allowed claim in full settlement of the allowed unsecured claims. Such payment accrues quarterly paid-in-kind interest of 5% per annum beginning on the Effective Date. Trade unsecured creditors had the ability to make a trade election to provide agreed upon customary trade terms. If the election was made, those unsecured trade creditors received a deferred cash payment obligation of 45% of the allowed claim in full settlement of those claims. As of the Effective Date, the deferred payment obligations under the trade elections began to accrue quarterly paid-in-kind interest of 10% per annum. All deferred cash payment obligations, along with interest paid-in-kind, are payable in December 2019. | |||||||||||||
The Company’s reconciliation of general unsecured claims is still in process. The Company currently estimates the deferred payment obligations are $16,577, of which $3,030 represents a 20% recovery for the creditors and $12,014 represents a 45% recovery for the creditors with the remaining $1,533 related to accrued paid-in-kind interest. The Company expects to complete the reconciliation of general unsecured claims in the second quarter of fiscal 2015 and these estimated obligation amounts are subject to change. | |||||||||||||
Predecessor Company Debt | |||||||||||||
For a description of the Predecessor Company’s debt, please see the disclosure contained in the Company’s Form 10-K for the fiscal year ended April 26, 2014. |
Changes_in_Accumulated_Other_C
Changes in Accumulated Other Comprehensive Income | 3 Months Ended | ||||
Jul. 26, 2014 | |||||
Changes in Accumulated Other Comprehensive Income | ' | ||||
NOTE 15 – CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME | |||||
Changes in accumulated other comprehensive income (loss) during the three months ended July 26, 2014 (Successor), six weeks ended June 11, 2013 (Predecessor Company) and seven weeks ended July 27, 2013 (Successor Company) were as follows: | |||||
Foreign | |||||
Currency | |||||
Translation | |||||
Accumulated Other Comprehensive Income (Loss) at April 26, 2014 (Successor) | $ | (414 | ) | ||
Other comprehensive income before reclassifications | 198 | ||||
Amounts reclassified from other comprehensive income | — | ||||
Accumulated Other Comprehensive Income (Loss) at July 26, 2014 (Successor) | $ | (216 | ) | ||
Foreign | |||||
Currency | |||||
Translation | |||||
Accumulated Other Comprehensive Income at April 27, 2013 (Predecessor) | $ | 22,381 | |||
Other comprehensive income (loss) before reclassifications | (101 | ) | |||
Amounts reclassified from other comprehensive income (loss) | (22,280 | ) | |||
Accumulated Other Comprehensive Income at June 11, 2013 (Predecessor) | $ | — | |||
Other comprehensive income (loss) before reclassifications | (7 | ) | |||
Amounts reclassified from other comprehensive income | — | ||||
Accumulated Other Comprehensive Income (Loss) at July 27, 2013 (Successor) | $ | (7 | ) | ||
Amounts reclassified from other comprehensive income (loss) are reflected in “Reorganization items, net” on the condensed consolidated statement of operations for the six weeks ended July 11, 2013. |
Restructuring
Restructuring | 3 Months Ended | ||||||||||||||||
Jul. 26, 2014 | |||||||||||||||||
Restructuring | ' | ||||||||||||||||
NOTE 16 – RESTRUCTURING | |||||||||||||||||
In the first three months of fiscal 2015 and fiscal 2014, the Company recorded restructuring costs associated with closure or disposal of distribution centers and severance related to headcount reductions. The following is a reconciliation of accrued restructuring costs for the three months ended July 26, 2014 (Successor Company), the six weeks ended June 11, 2013 (Predecessor Company) and the seven weeks ended July 27, 2013 (Successor Company): | |||||||||||||||||
Distribution | Curriculum | Corporate | Total | ||||||||||||||
Accrued Restructuring Costs at April 26, 2014 (Successor) | $ | — | $ | 58 | $ | 135 | $ | 193 | |||||||||
Amounts charged to expense | 15 | — | 97 | 112 | |||||||||||||
Payments | (15 | ) | (58 | ) | (159 | ) | (232 | ) | |||||||||
Accrued Restructuring Costs at July 26, 2014 (Successor) | $ | — | $ | — | $ | 73 | $ | 73 | |||||||||
Distribution | Curriculum | Corporate | Total | ||||||||||||||
Accrued Restructuring Costs at April 27, 2013 (Predecessor) | $ | (21 | ) | $ | 149 | $ | 588 | $ | 716 | ||||||||
Amounts charged to expense | 21 | — | — | 21 | |||||||||||||
Payments | — | (15 | ) | (167 | ) | (182 | ) | ||||||||||
Accrued Restructuring Costs at June 11, 2013 (Predecessor) | $ | — | $ | 134 | $ | 421 | $ | 555 | |||||||||
Reclassification | 406 | — | (406 | ) | — | ||||||||||||
Amounts charged to expense | — | 31 | 1,325 | 1,356 | |||||||||||||
Payments | (158 | ) | (37 | ) | (1,328 | ) | (1,523 | ) | |||||||||
Accrued Restructuring Costs at July 27, 2013 (Successor) | $ | 248 | $ | 128 | $ | 12 | $ | 388 | |||||||||
The $21 charged to Predecessor for the six weeks ended June 11, 2013 was included in reorganization items, net and the $1,356 charged to Successor for seven weeks ended July 27, 2013 and the $112 charged to Successor for the three months ended July 26, 2014 was included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. |
Segment_Information
Segment Information | 3 Months Ended | ||||||||||||
Jul. 26, 2014 | |||||||||||||
Segment Information | ' | ||||||||||||
NOTE 17 – SEGMENT INFORMATION | |||||||||||||
During the fourth quarter of fiscal 2014, the Company changed its operating segments in order to align its segments with changes in the management and reporting structure of the Company. Information for prior years has been restated to reflect the new reporting structure. The Company determines its operating segments based on the information utilized by the chief operating decision maker, the Company’s Chief Executive Officer, to allocate resources and assess performance. Based on this information, the Company has determined that it operates in two operating segments, Distribution and Curriculum, which also constitute its reportable segments. The change in the Company’s operating segments is a result of changes within its organizational management of the business, efficiencies obtained within the organization, and how management reviews results of the business on a monthly and quarterly basis. The Company operates principally in the United States, with limited operations in Canada. The Distribution segment offers products that include basic classroom supplies and office products, supplemental learning materials, physical education equipment, classroom technology, planning and student development, coordinated school health and furniture. The Curriculum segment is a PreK-12 curriculum-based publisher of proprietary and non-proprietary products in the categories of science and reading and literacy. The accounting policies of the segments are the same as those described in Summary of Significant Accounting Policies as included in the Company’s Form 10-K for the fiscal year ended April 26, 2014. | |||||||||||||
Successor | Predecessor | ||||||||||||
Three Months | Seven Weeks | Six Weeks Ended | |||||||||||
Ended | Ended | ||||||||||||
July 26, 2014 | July 27, 2013 | June 11, 2013 | |||||||||||
Revenues: | |||||||||||||
Distribution | $ | 166,669 | $ | 124,321 | $ | 49,069 | |||||||
Curriculum | 32,800 | 19,177 | 9,628 | ||||||||||
Corporate and intercompany eliminations | — | — | — | ||||||||||
Total | $ | 199,469 | $ | 143,499 | $ | 58,697 | |||||||
Operating income (loss) and income (loss) before taxes: | |||||||||||||
Distribution | $ | 13,548 | $ | 19,459 | $ | (2,646 | ) | ||||||
Curriculum | 5,618 | 4,432 | (1,209 | ) | |||||||||
Corporate and intercompany eliminations (1) | (2,675 | ) | (2,595 | ) | — | ||||||||
Operating income | 16,491 | 21,296 | (3,855 | ) | |||||||||
Interest expense and reorganization items, net | 5,533 | 4,101 | (81,564 | ) | |||||||||
Income before provision for income taxes | $ | 10,958 | $ | 17,195 | $ | 77,709 | |||||||
Successor | Successor | Successor | |||||||||||
July 26, 2014 | April 26, 2014 | July 27, 2013 | |||||||||||
Identifiable assets: | |||||||||||||
Distribution | $ | 293,413 | $ | 214,723 | $ | 325,545 | |||||||
Curriculum | 110,558 | 103,622 | 88,827 | ||||||||||
Corporate assets | 18,955 | 21,274 | 58,981 | ||||||||||
Total | $ | 422,926 | $ | 339,619 | $ | 473,353 | |||||||
Successor | Predecessor | ||||||||||||
Three Months | Seven Weeks | Six Weeks Ended | |||||||||||
Ended | Ended | ||||||||||||
July 26, 2014 | July 27, 2013 | June 11, 2013 | |||||||||||
Depreciation and amortization of intangible assets and development costs: | |||||||||||||
Distribution | $ | 3,947 | $ | 3,906 | $ | 2,080 | |||||||
Curriculum | 4,094 | 438 | 1,821 | ||||||||||
Total | $ | 8,041 | $ | 4,344 | $ | 3,901 | |||||||
Expenditures for property, plant and equipment, intangible and other assets and development costs: | |||||||||||||
Distribution | $ | 2,675 | $ | 747 | $ | 317 | |||||||
Curriculum | 1,633 | 647 | 389 | ||||||||||
Total | $ | 4,308 | $ | 1,394 | $ | 706 | |||||||
-1 | Operating expenses in Corporate for the Successor’s three month period ended July 26, 2014 and for the Successor’s seven week period ended July 27, 2013 were $2,675 and $2,595, respectively. These amounts included restructuring and facility exit costs, costs incurred to implement process improvement actions and other corporate professional expenses. |
Restricted_Cash
Restricted Cash | 3 Months Ended |
Jul. 26, 2014 | |
Restricted Cash | ' |
NOTE 18 – RESTRICTED CASH | |
During the fourth quarter of fiscal 2013, the Company placed $25,000 of cash into a restricted account. The Ad Hoc DIP Agreement required the funds to be placed in an escrow account as a deposit for an early termination fee payable to Bayside Finance, LLC (“Bayside”) that was provided under the former term loan credit agreement of the Predecessor Company. The Bankruptcy Court ruled that the funds were owed, but the Official Committee of Unsecured Creditors contested the ruling and filed an appeal in the Federal District Court of Delaware. On the Effective Date, an additional $119, representing interest earned, was transferred into the restricted account. After the Effective Date, the Company deposited an additional $1,280 into the restricted account related to potential interest expense on the unpaid early termination fees for the pre-bankruptcy term loan with Bayside. In the second quarter of fiscal 2014, this escrow amount, including interest, was released to Bayside. On October 24, 2013, the Bankruptcy Court approved a stipulation which reflected the settlement of this matter. In connection with this settlement, the parties agreed that the amount of the early termination fee was $21,000. As a result, Bayside refunded to the Company $5,399 which represented the amount of restricted account funds that had been released to Bayside in excess of the $21,000 settlement. The $5,399 consisted of a reduction of the early termination fee of $4,054 and a recovery of interest expense previously paid in fiscal 2014 of $1,345. | |
During the first quarter of fiscal 2013, the Company transferred $2,708 of cash into an additional restricted account. The funds in the restricted account serve as collateral primarily for the Company’s workmen’s compensation insurance and other lease obligations, secured by letters of credit. During the third and fourth quarters of fiscal 2013 and the first and second quarters of fiscal 2014, $972, $434, $601 and $701, respectively, was transferred from the restricted cash account as the letters of credit secured by these amounts were canceled. The Company currently has no restrictions on its cash balance. The restricted cash balance of $25,820 on July 27, 2013 approximated fair value. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Jul. 26, 2014 | |
Commitments and Contingencies | ' |
NOTE 19 – COMMITMENTS AND CONTINGENCIES | |
Various claims and proceedings arising in the normal course of business are pending against the Company. The results of these matters are not expected to have a material effect on the Company’s consolidated financial position, results of operations or cash flows. |
Fresh_Start_Accounting_Tables
Fresh Start Accounting (Tables) | 3 Months Ended | ||||||||||||||||
Jul. 26, 2014 | |||||||||||||||||
Condensed Consolidated Balance Sheet, Reorganization Adjustments, and Fresh Start Adjustments | ' | ||||||||||||||||
The condensed consolidated balance sheet, reorganization adjustments and fresh start adjustments presented below summarize the impact of the Reorganization Plan and the adoption of fresh start accounting as of the Effective Date. | |||||||||||||||||
Certain of the fresh start adjustments were updated between the Effective Date and finalization of fresh start accounting during the three months ended July 26, 2014. During the three months ended July 26, 2014, the Successor Company updated the estimated value of holders of unsecured claims that elect to provide the Company with customary trade terms and thereby recover 45% of their claims, per the Reorganization Plan (see Notes 3 and 7). | |||||||||||||||||
REORGANIZED CONDENSED CONSOLIDATED BALANCE SHEET | |||||||||||||||||
AS OF JUNE 11, 2013 | |||||||||||||||||
June 11, 2013 | |||||||||||||||||
Predecessor | Reorganization | Fresh Start | Successor | ||||||||||||||
Company | Adjustments | Adjustments | Company | ||||||||||||||
ASSETS | |||||||||||||||||
Current assets: | |||||||||||||||||
Cash and cash equivalents | $ | 11,052 | $ | 4,363 | (1) | $ | — | $ | 15,415 | ||||||||
Restricted cash | 26,421 | — | — | 26,421 | |||||||||||||
Accounts receivable | 66,894 | — | (250 | )(8) | 66,644 | ||||||||||||
Inventories | 110,830 | — | (8,147 | )(8) | 102,683 | ||||||||||||
Other current assets | 45,819 | 321 | (2) | (788 | )(8) | 45,352 | |||||||||||
Total current assets | 261,016 | 4,684 | (9,185 | ) | 256,515 | ||||||||||||
Property, plant and equipment, net | 37,604 | (6,202 | )(2) | 14,148 | (8) | 45,550 | |||||||||||
Goodwill | — | — | 21,588 | (8)(9) | 21,588 | ||||||||||||
Intangible assets, net | 109,155 | — | (56,795 | )(8) | 52,360 | ||||||||||||
Development costs and other | 31,142 | 8,255 | (3) | — | 39,397 | ||||||||||||
Total assets | $ | 438,917 | $ | 6,737 | $ | (30,244 | ) | $ | 415,410 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||
Current liabilities: | |||||||||||||||||
Accounts payable | $ | 38,226 | $ | — | $ | — | $ | 38,226 | |||||||||
Accrued compensation | 7,229 | (315 | )(2) | — | 6,914 | ||||||||||||
Other accrued liabilities | 60,301 | 9,947 | (2)(4)(6) | 22 | (8) | 70,270 | |||||||||||
Total current liabilities | 105,756 | 9,632 | 22 | 115,410 | |||||||||||||
Long-term debt | 205,863 | (39,939 | )(5) | — | 165,924 | ||||||||||||
Other liabilities | 925 | 12,195 | (2)(6) | — | 13,120 | ||||||||||||
Liabilities subject to compromise | 223,988 | (223,988 | )(6) | — | — | ||||||||||||
Total liabilities | $ | 536,532 | $ | (242,100 | ) | $ | 22 | $ | 294,454 | ||||||||
Commitments and contingencies | |||||||||||||||||
Stockholders’ equity: | |||||||||||||||||
Common stock—Predecessor | $ | 24 | $ | (24 | )(7) | $ | — | $ | — | ||||||||
Capital in excess of par value—Predecessor | 446,232 | (446,232 | )(7) | — | — | ||||||||||||
Treasury Stock—Predecessor | (186,637 | ) | 186,637 | (7) | — | — | |||||||||||
Accumulated (deficit) and other comprehensive income—Predecessor | (357,234 | ) | 387,500 | (7) | (30,266 | )(7)(8) | — | ||||||||||
Common stock—Successor | — | 1 | (7) | — | 1 | ||||||||||||
Capital in excess of par value—Successor | — | 120,955 | (7) | — | 120,955 | ||||||||||||
Total stockholders’ equity | (97,615 | ) | 248,837 | (30,266 | ) | 120,956 | |||||||||||
Total liabilities and stockholders’ equity | $ | 438,917 | $ | 6,737 | $ | (30,244 | ) | $ | 415,410 | ||||||||
-1 | The Company deposited $7,647 of proceeds from its exit financing into a segregated cash account which is used to pay administrative claims and certain advisors in the bankruptcy proceedings. The Company utilized $3,284 of its cash balance immediately prior to emergence to fund a portion of the cash requirements from exit financing. | ||||||||||||||||
-2 | The Company recorded adjustments related to various contract rejections or amendments completed as part of the Reorganization Plan. This included a $6,202 write down of property, plant and equipment related to the amendment of capital lease obligations for the Mansfield, OH distribution center and the rejection of capital lease obligations for the Company’s Agawam, MA property. In addition, the Company recorded $920 related to various contract damages relating to lease rejections and severance obligations, classified between long-term and short-term liabilities. | ||||||||||||||||
-3 | In connection with entering into the exit credit facilities, the Company capitalized $8,255 of deferred financing costs. | ||||||||||||||||
-4 | Pursuant to the Chapter 11 Cases, additional professional fees of $2,057 were recorded. In addition, certain administrative and convenience claims of $8,435 were recorded as current liabilities, offset by accrued interest expense converted to new Successor Company equity. | ||||||||||||||||
-5 | The table below presents refinancing of the Predecessor long-term debt. The Company issued $78,620 of new Successor Company equity (including $21,375 in excess of debt carrying amount), partially offset by $17,306 of debt discount and other financing costs. The current portion of the reorganized debt was $25,251, which includes of $23,823 of new Successor Company ABL loan. | ||||||||||||||||
June 11, 2013 | |||||||||||||||||
Predecessor Company long-term debt | $ | 205,863 | |||||||||||||||
Reorganization adjustments: | |||||||||||||||||
Issuance of Successor Company equity | (78,620 | ) | |||||||||||||||
Equity issuance in excess of debt carrying amount | 21,375 | ||||||||||||||||
Financing costs and professional fees paid with exit financing | 17,306 | ||||||||||||||||
Reorganized Successor Company long-term debt | $ | 165,924 | |||||||||||||||
-6 | Liabilities subject to compromise generally refer to pre-petition obligations, secured or unsecured, that may be impaired by a plan of reorganization. FASB ASC 852 requires such liabilities, including those that became known after filing the Chapter 11 petitions, be reported at the amounts expected to be allowed, even if they may be settled for lesser amounts. These liabilities represented the estimated amount expected to be resolved on known or potential claims through the Chapter 11 process. Liabilities subject to compromise also includes items that may be assumed under the Reorganization Plan, and may be subsequently reclassified to liabilities not subject to compromise. Liabilities subject to compromise also include certain pre-petition liabilities including accrued interest and accounts payable. At April 27, 2013, liabilities subject to compromise were $228,302, of which administrative claim payments of $4,314 were made in the Predecessor period of fiscal 2014. The table below identifies the principal categories of liabilities subject to compromise at June 11, 2013: | ||||||||||||||||
June 11, 2013 | |||||||||||||||||
Accounts payable | $ | 47,683 | |||||||||||||||
2011 Debentures | 163,688 | ||||||||||||||||
Pre-petition accrued interest on 2011 Debentures | 979 | ||||||||||||||||
Sale-leaseback obligations | 11,638 | ||||||||||||||||
Liabilities subject to compromise | $ | 223,988 | |||||||||||||||
-7 | The Company recorded elimination of (1) the Predecessor Company’s common stock, (2) the Predecessor Company’s capital in excess of par value, net of stock options cancellation of $3,624, (3) the Predecessor Company’s treasury stock, and (4) the Predecessor Company’s accumulated deficit and accumulated other comprehensive loss. The following table represents reorganization value to be allocated to assets reconciled to the Successor Company Equity. The Company recorded Successor Company common stock of $1 and capital in excess of par value of $120,955. | ||||||||||||||||
June 11, 2013 | |||||||||||||||||
Total reorganization value to be allocated to assets | $ | 415,410 | |||||||||||||||
Less: Debt | (179,044 | ) | |||||||||||||||
Less: Other liabilities | (115,410 | ) | |||||||||||||||
Successor Company Equity | $ | 120,956 | |||||||||||||||
The above estimated amounts were updated during the three months ended July 26, 2014 (see Note 7). | |||||||||||||||||
-8 | The following table represents the adjustments for fresh start accounting primarily related to recording goodwill, recording our intangible assets, fixed assets, and other assets and liabilities at fair value and related deferred income taxes in accordance with ASC 805. Additionally, such fresh start accounting adjustments reflect the increase in inventory reserve of $6,600, and elimination of certain capitalized costs of $1,426. The Company also recorded other fresh start accounting adjustments relating to (1) deferred rent included in current liabilities, (2) vendor rebates receivables in current assets, and (3) other current assets and liabilities as a result of fresh start accounting. In addition, the impact of fresh start accounting adjustments on the accumulated retained earnings was eliminated. | ||||||||||||||||
June 11, 2013 | |||||||||||||||||
Fresh start accounting adjustments: | |||||||||||||||||
Goodwill | $ | 21,588 | |||||||||||||||
Fair value adjustment to intangible assets | (56,795 | ) | |||||||||||||||
Fair value adjustment to fixed assets | 15,522 | ||||||||||||||||
Fresh start accounting adjustments relating to inventory | (8,147 | ) | |||||||||||||||
Other fresh start accounting adjustments | (2,434 | ) | |||||||||||||||
Total fresh start accounting adjustments | $ | (30,266 | ) | ||||||||||||||
-9 | The following table represents a reconciliation of the enterprise value attributed to assets, determination of the total reorganization value to be allocated to these assets and the determination of goodwill: | ||||||||||||||||
June 11, 2013 | |||||||||||||||||
Enterprise value attributed to School Specialty. | $ | 300,000 | |||||||||||||||
Plus: other liabilities (excluding debt) | 115,410 | ||||||||||||||||
Total reorganization value to be allocated to assets | 415,410 | ||||||||||||||||
Less: fair value assigned to tangible and intangible assets | (393,822 | ) | |||||||||||||||
Value of School Specialty assets in excess of fair value (Goodwill) | $ | 21,588 | |||||||||||||||
Reorganization_Items_Net_Table
Reorganization Items, Net (Tables) | 3 Months Ended | ||||||||||||
Jul. 26, 2014 | |||||||||||||
Schedule of Reorganization Items | ' | ||||||||||||
The following table displays the details of reorganization items for the three months ended July 26, 2014, the seven weeks ended July 27, 2013 and the six weeks ended June 11, 2013: | |||||||||||||
Successor | Successor | Predecessor | |||||||||||
Company | Company | Company | |||||||||||
Three Months Ended | Seven Weeks Ended | Six Weeks Ended | |||||||||||
26-Jul-14 | 27-Jul-13 | 11-Jun-13 | |||||||||||
Liabilities subject to compromise.. | $ | — | $ | — | $ | 223,988 | |||||||
Issuance of capital in excess of par value | — | — | (42,335 | ) | |||||||||
Reclassified into other balance sheet liability accounts. | — | — | (19,710 | ) | |||||||||
Settlement of liabilities subject to compromise. | $ | — | $ | — | $ | 161,943 | |||||||
Fresh start accounting adjustments: | |||||||||||||
Goodwill | $ | — | $ | — | $ | 21,588 | |||||||
Fair value adjustment to intangible assets | — | — | (56,795 | ) | |||||||||
Fair value adjustment to fixed assets | — | — | 15,522 | ||||||||||
Fresh start accounting adjustments relating to inventory | — | — | (8,147 | ) | |||||||||
Other fresh start accounting adjustments | — | — | (2,434 | ) | |||||||||
Total fresh start accounting adjustments | $ | — | $ | — | $ | (30,266 | ) | ||||||
Other reorganization adjustments: | |||||||||||||
Asset write-downs due to contract rejections | $ | — | $ | — | $ | (7,011 | ) | ||||||
Professional fees | 271 | 1,280 | (10,512 | ) | |||||||||
Cancellation of equity-based awards | — | — | (3,624 | ) | |||||||||
Financing fees | — | — | (2,853 | ) | |||||||||
Issuance of equity in excess of debt carrying amount | — | — | (21,375 | ) | |||||||||
Other | — | — | (1,503 | ) | |||||||||
Total other reorganization adjustments | $ | 271 | $ | 1,280 | $ | (46,878 | ) | ||||||
Total Reorganization items, net | $ | 271 | $ | 1,280 | $ | 84,799 | |||||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Jul. 26, 2014 | |||||||||||||||||||||||||
Changes in Condensed Consolidated Stockholders' Equity | ' | ||||||||||||||||||||||||
Changes in condensed consolidated stockholders’ equity during the three months ended July 26, 2014 (Successor Company), six weeks ended June 11, 2013 (Predecessor Company) and seven weeks ended July 27, 2013 (Successor Company), were as follows: | |||||||||||||||||||||||||
(in thousands) | Common | Additional | Retained | Treasury | Accumulated | Total | |||||||||||||||||||
Stock | Paid-in | Earnings | Stock | Other | Stockholders’ | ||||||||||||||||||||
Capital | (Accumulated | Comprehensive | Equity | ||||||||||||||||||||||
Deficit) | Income (Loss) | ||||||||||||||||||||||||
Balance, April 26, 2014 (Successor Company) | $ | 1 | $ | 120,955 | $ | (17,485 | ) | $ | — | $ | (414 | ) | $ | 103,057 | |||||||||||
Net income | — | — | 11,014 | — | — | 11,014 | |||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | 198 | 198 | |||||||||||||||||||
Change in Fresh Start estimate | — | (1,564 | ) | — | — | — | (1,564 | ) | |||||||||||||||||
Balance, July 26, 2014 (Successor Company) | $ | 1 | $ | 119,391 | $ | (6,471 | ) | $ | — | $ | (216 | ) | $ | 112,705 | |||||||||||
(in thousands) | Common | Additional | Retained | Treasury | Accumulated | Total | |||||||||||||||||||
Stock | Paid-in | Earnings | Stock | Other | Stockholders’ | ||||||||||||||||||||
Capital | (Accumulated | Comprehensive | Equity (Deficit) | ||||||||||||||||||||||
Deficit) | Income (Loss) | ||||||||||||||||||||||||
Balance, April 27, 2013 (Predecessor Company) | $ | 24 | $ | 446,232 | $ | (361,192 | ) | $ | (186,637 | ) | $ | 22,381 | $ | (79,192 | ) | ||||||||||
Net income | — | — | 76,068 | — | — | 76,068 | |||||||||||||||||||
Foreign currency translation adjustment | (101 | ) | (101 | ) | |||||||||||||||||||||
Cancellation of Predecessor Company common stock | (24 | ) | — | — | — | — | (24 | ) | |||||||||||||||||
Elimination of Predecessor Company capital in excess of par | — | (446,232 | ) | — | — | — | (446,232 | ) | |||||||||||||||||
Elimination of Predecessor Company accumulated deficit | — | — | 285,124 | — | — | 285,124 | |||||||||||||||||||
Elimination of Predecessor Company treasury stock | — | — | — | 186,637 | — | 186,637 | |||||||||||||||||||
Elimination of Predecessor Company accumulated other comprehensive loss | — | — | — | — | (22,280 | ) | (22,280 | ) | |||||||||||||||||
Balance, June 11, 2013 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
(Predecessor Company) | |||||||||||||||||||||||||
Issuance of Successor Company Common Stock | $ | 1 | $ | — | $ | — | $ | — | $ | — | $ | 1 | |||||||||||||
Establishment of Successor Company capital in excess of par | — | 120,955 | — | — | — | 120,955 | |||||||||||||||||||
Balance, June 12, 2013 | 1 | 120,955 | — | — | — | 120,956 | |||||||||||||||||||
(Successor Company) | |||||||||||||||||||||||||
Net income | — | — | 16,943 | — | — | 16,943 | |||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | (7 | ) | (7 | ) | |||||||||||||||||
Balance, July 27, 2013 | $ | 1 | $ | 120,955 | $ | 16,943 | $ | — | $ | (7 | ) | $ | 137,892 | ||||||||||||
(Successor Company) | |||||||||||||||||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | ||||||||||||
Jul. 26, 2014 | |||||||||||||
Computations of Basic and Diluted Earnings Per Share | ' | ||||||||||||
The following information presents the Company’s computations of basic earnings per share (“basic EPS”) and diluted earnings per share (“diluted EPS”) for the periods presented in the condensed consolidated statements of operations: | |||||||||||||
Income (loss) | Weighted | Per Share | |||||||||||
(Numerator) | Average | Amount | |||||||||||
Shares | |||||||||||||
(Denominator) | |||||||||||||
Three months ended July 26, 2014: | |||||||||||||
Basic and diluted EPS (Successor Company) | $ | 11,014 | 1,000 | $ | 11.01 | ||||||||
Seven weeks ended July 27, 2013: | |||||||||||||
Basic and diluted EPS (Successor Company) | $ | 16,943 | 1,000 | $ | 16.94 | ||||||||
Six weeks ended June 11, 2013: | |||||||||||||
Basic and diluted EPS (Predecessor Company) | $ | 76,068 | 18,922 | $ | 4.02 | ||||||||
ShareBased_Compensation_Expens1
Share-Based Compensation Expense (Tables) | 3 Months Ended | ||||||||||||||||
Jul. 26, 2014 | |||||||||||||||||
Summary of Option Activity | ' | ||||||||||||||||
A summary of option activity for the Predecessor Company during the six weeks ended June 11, 2013 follows: | |||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||
Predecessor Company | Options | Weighted- | Options | Weighted- | |||||||||||||
Average | Average | ||||||||||||||||
Exercise | Exercise | ||||||||||||||||
Price | Price | ||||||||||||||||
Balance at April 27, 2013 | 2,550 | $ | 15.27 | 1,207 | $ | 24.76 | |||||||||||
Granted | — | — | |||||||||||||||
Exercised | — | — | |||||||||||||||
Canceled | (2,550 | ) | 15.27 | ||||||||||||||
Balance at June 11, 2013 | — | $ | — | — | $ | — | |||||||||||
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended | ||||||||||||
Jul. 26, 2014 | |||||||||||||
Intangible Assets, Excluding Goodwill | ' | ||||||||||||
The following tables present details of the Successor Company’s intangible assets, including the estimated useful lives, excluding goodwill (preliminary values): | |||||||||||||
July 26, 2014 | Gross Value | Accumulated | Net Book | ||||||||||
Amortization | Value | ||||||||||||
Amortizable intangible assets: | |||||||||||||
Customer relationships (13 years) | $ | 11,300 | $ | (1,014 | ) | $ | 10,286 | ||||||
Publishing rights (20 years) | 4,000 | (233 | ) | 3,767 | |||||||||
Trademarks (20 years) | 22,700 | (1,324 | ) | 21,376 | |||||||||
Developed technology (7 years) | 6,600 | (1,100 | ) | 5,500 | |||||||||
Content (5 years) | 4,400 | (1,027 | ) | 3,373 | |||||||||
Perpetual license agreements (5 years) | 1,200 | (280 | ) | 920 | |||||||||
Favorable leasehold interests (10 years) | 2,160 | (252 | ) | 1,908 | |||||||||
Total intangible assets | $ | 52,360 | $ | (5,230 | ) | $ | 47,130 | ||||||
26-Apr-14 | Gross Value | Accumulated | Net Book | ||||||||||
Amortization | Value | ||||||||||||
Amortizable intangible assets: | |||||||||||||
Customer relationships (13 years) | $ | 11,300 | $ | (797 | ) | $ | 10,503 | ||||||
Publishing rights (20 years) | 4,000 | (183 | ) | 3,817 | |||||||||
Trademarks (20 years) | 22,700 | (1,040 | ) | 21,660 | |||||||||
Developed technology (7 years) | 6,600 | (864 | ) | 5,736 | |||||||||
Content (5 years) | 4,400 | (807 | ) | 3,593 | |||||||||
Perpetual license agreements (5 years) | 1,200 | (220 | ) | 980 | |||||||||
Favorable leasehold interests (10 years) | 2,160 | (198 | ) | 1,962 | |||||||||
Total intangible assets | $ | 52,360 | $ | (4,109 | ) | $ | 48,251 | ||||||
July 27, 2013 | Gross | Accumulated | Net Book | ||||||||||
Value | Amortization | Value | |||||||||||
Amortizable intangible assets: | |||||||||||||
Customer relationships (13 years) | $ | 9,400 | $ | (96 | ) | $ | 9,304 | ||||||
Publishing rights (20 years) | 2,500 | (17 | ) | 2,483 | |||||||||
Trademarks (20 years) | 22,100 | (147 | ) | 21,953 | |||||||||
Developed technology (7 years) | 6,600 | (126 | ) | 6,474 | |||||||||
Content (5 years) | 4,400 | (117 | ) | 4,283 | |||||||||
Perpetual license agreements (5 years) | 1,500 | (40 | ) | 1,460 | |||||||||
Favorable leasehold interests (10 years) | 1,490 | (20 | ) | 1,470 | |||||||||
Total intangible assets | $ | 47,990 | $ | (563 | ) | $ | 47,427 | ||||||
Estimated Intangible Asset Amortization Expense | ' | ||||||||||||
Intangible asset amortization expense for each of the five succeeding fiscal years and the remainder of fiscal 2015 is estimated to be: | |||||||||||||
Fiscal 2015 (nine months remaining) | $ | 3,362 | |||||||||||
Fiscal 2016 | 4,483 | ||||||||||||
Fiscal 2017 | 4,483 | ||||||||||||
Fiscal 2018 | 4,483 | ||||||||||||
Fiscal 2019 | 3,456 | ||||||||||||
Fiscal 2020 | 3,363 | ||||||||||||
Changes to Goodwill | ' | ||||||||||||
The table below shows the allocation to the segments of the recorded goodwill as of July 26, 2014. There were no changes during the twelve month period ending July 26, 2014, other than fresh start accounting adjustments. | |||||||||||||
Distribution | Curriculum | Total | |||||||||||
Segment | Segment | ||||||||||||
Fresh Start Valuation: | |||||||||||||
Goodwill | $ | 14,666 | $ | 6,922 | $ | 21,588 | |||||||
Balance at July 26, 2014 | $ | 14,666 | $ | 6,922 | $ | 21,588 | |||||||
Investment_in_Unconsolidated_A1
Investment in Unconsolidated Affiliate (Tables) | 3 Months Ended | ||||||||||||||||
Jul. 26, 2014 | |||||||||||||||||
Investment in Unconsolidated Affiliate under Cost Method | ' | ||||||||||||||||
The investment in unconsolidated affiliate consisted of the following: | |||||||||||||||||
Percent | Successor | Predecessor | |||||||||||||||
Owned | July 26, 2014 | April 26, 2014 | July 27, 2013 | ||||||||||||||
Carson- Dellosa Publishing, LLC | 35 | % | $ | 715 | $ | 715 | $ | 715 |
Property_Plant_and_Equipment_T
Property, Plant and Equipment (Tables) | 3 Months Ended | ||||||||||||
Jul. 26, 2014 | |||||||||||||
Property, Plant and Equipment | ' | ||||||||||||
Property, plant and equipment consist of the following: | |||||||||||||
July 26, | April 26, | July 27, | |||||||||||
2014 | 2014 | 2013 | |||||||||||
Land | $ | — | $ | — | $ | 210 | |||||||
Projects in progress | 5,146 | 10,854 | 2,927 | ||||||||||
Buildings and leasehold improvements | 3,699 | 3,595 | 7,288 | ||||||||||
Furniture, fixtures and other | 34,818 | 30,525 | 29,277 | ||||||||||
Machinery and warehouse equipment | 9,149 | 6,770 | 8,910 | ||||||||||
Total property, plant and equipment | 52,812 | 51,744 | 48,612 | ||||||||||
Less: Accumulated depreciation | (14,255 | ) | (12,699 | ) | (2,303 | ) | |||||||
Net property, plant and equipment | $ | 38,557 | $ | 39,045 | $ | 46,309 | |||||||
Debt_Tables
Debt (Tables) | 3 Months Ended | ||||||||||||
Jul. 26, 2014 | |||||||||||||
Long-Term Debt | ' | ||||||||||||
Long-term debt consisted of the following: | |||||||||||||
July 26, | April 26, | July 27, | |||||||||||
2014 | 2014 | 2013 | |||||||||||
New ABL Facility, maturing in 2018 | $ | 71,900 | $ | 10,600 | $ | 60,801 | |||||||
New Term Loan, maturing in 2019 | 142,681 | 143,913 | 145,000 | ||||||||||
New Term Loan Original Issue Discount | (2,352 | ) | (2,473 | ) | (2,835 | ) | |||||||
Deferred Cash Payment Obligations, maturing in 2019 | 16,577 | 14,335 | 12,195 | ||||||||||
Total debt | 228,806 | 166,375 | 215,161 | ||||||||||
Less: Current maturities | (72,475 | ) | (12,388 | ) | (62,229 | ) | |||||||
Total long-term debt | $ | 156,331 | $ | 153,987 | $ | 152,932 | |||||||
Changes_in_Accumulated_Other_C1
Changes in Accumulated Other Comprehensive Income (Tables) | 3 Months Ended | ||||
Jul. 26, 2014 | |||||
Changes in Accumulated Other Comprehensive Income (Loss) | ' | ||||
Changes in accumulated other comprehensive income (loss) during the three months ended July 26, 2014 (Successor), six weeks ended June 11, 2013 (Predecessor Company) and seven weeks ended July 27, 2013 (Successor Company) were as follows: | |||||
Foreign | |||||
Currency | |||||
Translation | |||||
Accumulated Other Comprehensive Income (Loss) at April 26, 2014 (Successor) | $ | (414 | ) | ||
Other comprehensive income before reclassifications | 198 | ||||
Amounts reclassified from other comprehensive income | — | ||||
Accumulated Other Comprehensive Income (Loss) at July 26, 2014 (Successor) | $ | (216 | ) | ||
Foreign | |||||
Currency | |||||
Translation | |||||
Accumulated Other Comprehensive Income at April 27, 2013 (Predecessor) | $ | 22,381 | |||
Other comprehensive income (loss) before reclassifications | (101 | ) | |||
Amounts reclassified from other comprehensive income (loss) | (22,280 | ) | |||
Accumulated Other Comprehensive Income at June 11, 2013 (Predecessor) | $ | — | |||
Other comprehensive income (loss) before reclassifications | (7 | ) | |||
Amounts reclassified from other comprehensive income | — | ||||
Accumulated Other Comprehensive Income (Loss) at July 27, 2013 (Successor) | $ | (7 | ) | ||
Restructuring_Tables
Restructuring (Tables) | 3 Months Ended | ||||||||||||||||
Jul. 26, 2014 | |||||||||||||||||
Reconciliation of Accrued Restructuring Costs | ' | ||||||||||||||||
The following is a reconciliation of accrued restructuring costs for the three months ended July 26, 2014 (Successor Company), the six weeks ended June 11, 2013 (Predecessor Company) and the seven weeks ended July 27, 2013 (Successor Company): | |||||||||||||||||
Distribution | Curriculum | Corporate | Total | ||||||||||||||
Accrued Restructuring Costs at April 26, 2014 (Successor) | $ | — | $ | 58 | $ | 135 | $ | 193 | |||||||||
Amounts charged to expense | 15 | — | 97 | 112 | |||||||||||||
Payments | (15 | ) | (58 | ) | (159 | ) | (232 | ) | |||||||||
Accrued Restructuring Costs at July 26, 2014 (Successor) | $ | — | $ | — | $ | 73 | $ | 73 | |||||||||
Distribution | Curriculum | Corporate | Total | ||||||||||||||
Accrued Restructuring Costs at April 27, 2013 (Predecessor) | $ | (21 | ) | $ | 149 | $ | 588 | $ | 716 | ||||||||
Amounts charged to expense | 21 | — | — | 21 | |||||||||||||
Payments | — | (15 | ) | (167 | ) | (182 | ) | ||||||||||
Accrued Restructuring Costs at June 11, 2013 (Predecessor) | $ | — | $ | 134 | $ | 421 | $ | 555 | |||||||||
Reclassification | 406 | — | (406 | ) | — | ||||||||||||
Amounts charged to expense | — | 31 | 1,325 | 1,356 | |||||||||||||
Payments | (158 | ) | (37 | ) | (1,328 | ) | (1,523 | ) | |||||||||
Accrued Restructuring Costs at July 27, 2013 (Successor) | $ | 248 | $ | 128 | $ | 12 | $ | 388 | |||||||||
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | ||||||||||||
Jul. 26, 2014 | |||||||||||||
Segment Information | ' | ||||||||||||
Successor | Predecessor | ||||||||||||
Three Months | Seven Weeks | Six Weeks Ended | |||||||||||
Ended | Ended | ||||||||||||
July 26, 2014 | July 27, 2013 | June 11, 2013 | |||||||||||
Revenues: | |||||||||||||
Distribution | $ | 166,669 | $ | 124,321 | $ | 49,069 | |||||||
Curriculum | 32,800 | 19,177 | 9,628 | ||||||||||
Corporate and intercompany eliminations | — | — | — | ||||||||||
Total | $ | 199,469 | $ | 143,499 | $ | 58,697 | |||||||
Operating income (loss) and income (loss) before taxes: | |||||||||||||
Distribution | $ | 13,548 | $ | 19,459 | $ | (2,646 | ) | ||||||
Curriculum | 5,618 | 4,432 | (1,209 | ) | |||||||||
Corporate and intercompany eliminations (1) | (2,675 | ) | (2,595 | ) | — | ||||||||
Operating income | 16,491 | 21,296 | (3,855 | ) | |||||||||
Interest expense and reorganization items, net | 5,533 | 4,101 | (81,564 | ) | |||||||||
Income before provision for income taxes | $ | 10,958 | $ | 17,195 | $ | 77,709 | |||||||
Successor | Successor | Successor | |||||||||||
July 26, 2014 | April 26, 2014 | July 27, 2013 | |||||||||||
Identifiable assets: | |||||||||||||
Distribution | $ | 293,413 | $ | 214,723 | $ | 325,545 | |||||||
Curriculum | 110,558 | 103,622 | 88,827 | ||||||||||
Corporate assets | 18,955 | 21,274 | 58,981 | ||||||||||
Total | $ | 422,926 | $ | 339,619 | $ | 473,353 | |||||||
Successor | Predecessor | ||||||||||||
Three Months | Seven Weeks | Six Weeks Ended | |||||||||||
Ended | Ended | ||||||||||||
July 26, 2014 | July 27, 2013 | June 11, 2013 | |||||||||||
Depreciation and amortization of intangible assets and development costs: | |||||||||||||
Distribution | $ | 3,947 | $ | 3,906 | $ | 2,080 | |||||||
Curriculum | 4,094 | 438 | 1,821 | ||||||||||
Total | $ | 8,041 | $ | 4,344 | $ | 3,901 | |||||||
Expenditures for property, plant and equipment, intangible and other assets and development costs: | |||||||||||||
Distribution | $ | 2,675 | $ | 747 | $ | 317 | |||||||
Curriculum | 1,633 | 647 | 389 | ||||||||||
Total | $ | 4,308 | $ | 1,394 | $ | 706 | |||||||
-1 | Operating expenses in Corporate for the Successor’s three month period ended July 26, 2014 and for the Successor’s seven week period ended July 27, 2013 were $2,675 and $2,595, respectively. These amounts included restructuring and facility exit costs, costs incurred to implement process improvement actions and other corporate professional expenses. |
Bankruptcy_Proceedings_Additio
Bankruptcy Proceedings - Additional Information (Detail) (Reorganization Adjustments, USD $) | 3 Months Ended |
In Thousands, except Share data, unless otherwise specified | Jul. 26, 2014 |
Director | |
Fresh-Start Adjustment [Line Items] | ' |
Common stock, shares issued | 1,000,004 |
Reorganized Company common stock Percentage | 35.00% |
Fair value ownership interest | $78,600 |
Interest rate | 3.75% |
Maturity year | '2026 |
Amount of claims to be settled in cash under Reorganization Plan | 3 |
Number of initial board of directors of the reorganized Company | 4 |
Ad Hoc DIP Facility | ' |
Fresh-Start Adjustment [Line Items] | ' |
Cash receivable under the Senior Secured Super Priority Debtor-in-Possession Credit Agreement | 98,000 |
Reorganized Company common stock Percentage | 65.00% |
Fair value ownership interest | 21,375 |
Reorganization loss | 21,375 |
Percentage of deferred cash payment | 20.00% |
Ad Hoc DIP Facility | Maximum | ' |
Fresh-Start Adjustment [Line Items] | ' |
Percentage of deferred cash payment | 45.00% |
Ad Hoc DIP Facility | Non Cash | ' |
Fresh-Start Adjustment [Line Items] | ' |
Fair value ownership interest | $57,200 |
Fresh_Start_Accounting_Additio
Fresh Start Accounting - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | ||||||
In Thousands, unless otherwise specified | Jul. 27, 2013 | Jul. 26, 2014 | Jun. 11, 2013 | Jul. 26, 2014 | Jul. 26, 2014 | Jun. 11, 2013 | Jul. 26, 2014 | Jul. 26, 2014 | Jul. 26, 2014 | Jul. 26, 2014 |
Average debt | Average equity | Predecessor | Predecessor | Minimum | Maximum | Midpoint | ||||
Fresh-Start Adjustment [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ownership percentage of voting shares by previous shareholders in emerging entity | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' |
Pre-emergence gain resulting from discharge of liabilities | ' | ' | ' | ' | ' | ' | $161,943 | ' | ' | ' |
Reorganization items | 1,280 | 271 | ' | ' | ' | -46,878 | -46,878 | ' | ' | ' |
Pre-emergence decrease in earnings | ' | ' | ' | ' | ' | ' | -30,266 | ' | ' | ' |
Estimated enterprise value | ' | 300,000 | 300,000 | 179,000 | 121,000 | ' | ' | 275,000 | 325,000 | 300,000 |
Reorganization value | ' | 415,410 | ' | ' | ' | ' | ' | ' | ' | ' |
Reorganization value in excess of fair value of assets | ' | $21,588 | ' | ' | ' | ' | ' | ' | ' | ' |
Discounted cash flow calculation, cash flow period | ' | ' | ' | ' | ' | ' | ' | '2014 | '2017 | ' |
WACC used | ' | 13.30% | ' | ' | ' | ' | ' | ' | ' | ' |
Exit multiples of EBITDA | ' | ' | ' | ' | ' | ' | ' | 4.4 | 8.1 | 5.5 |
Reorganized_Condensed_Consolid
Reorganized Condensed Consolidated Balance Sheet (Detail) (USD $) | Jul. 26, 2014 | Apr. 26, 2014 | Jul. 27, 2013 | Jun. 11, 2013 | |
In Thousands, unless otherwise specified | |||||
Current assets: | ' | ' | ' | ' | |
Cash and cash equivalents | ' | ' | ' | $15,415 | |
Restricted cash | ' | ' | 25,820 | 26,421 | |
Accounts receivable | 135,842 | 62,631 | 138,879 | 66,644 | |
Inventories | 109,722 | 93,387 | 104,868 | 102,683 | |
Other current assets | ' | ' | ' | 45,352 | |
Total current assets | 280,791 | 193,326 | 317,148 | 256,515 | |
Property, plant and equipment, net | 38,557 | 39,045 | 46,309 | 45,550 | |
Goodwill | 21,588 | 21,588 | 23,661 | 21,588 | |
Intangible assets, net | 47,130 | 48,251 | 47,427 | 52,360 | |
Development costs and other | 34,132 | 36,646 | 38,042 | 39,397 | |
Total assets | 422,926 | 339,619 | 473,353 | 415,410 | |
Current liabilities: | ' | ' | ' | ' | |
Accounts payable | 53,443 | 42,977 | 49,124 | 38,226 | |
Accrued compensation | 7,376 | 8,966 | 7,597 | 6,914 | |
Other accrued liabilities | 16,672 | 14,460 | 34,467 | 70,270 | |
Total current liabilities | 152,892 | 81,404 | 181,604 | 115,410 | |
Long-term debt | 156,331 | 153,987 | 152,932 | 165,924 | |
Other liabilities | 998 | 1,171 | 925 | 13,120 | |
Total liabilities | 310,221 | 236,562 | 335,461 | 294,454 | |
Commitments and contingencies | ' | ' | ' | ' | |
Stockholders' equity (deficit) | ' | ' | ' | ' | |
Common stock | 1 | 1 | 1 | ' | |
Capital in excess of par value | 119,391 | 120,955 | 120,955 | ' | |
Accumulated (deficit) and other comprehensive income | -216 | -414 | -7 | ' | |
Total stockholders' equity | 112,705 | 103,057 | 137,892 | 120,956 | |
Total liabilities and stockholders' equity | 422,926 | 339,619 | 473,353 | 415,410 | |
Successor | ' | ' | ' | ' | |
Stockholders' equity (deficit) | ' | ' | ' | ' | |
Common stock | ' | ' | ' | 1 | |
Capital in excess of par value | ' | ' | ' | 120,955 | |
Fresh Start Adjustment | ' | ' | ' | ' | |
Current assets: | ' | ' | ' | ' | |
Accounts receivable | ' | ' | ' | -250 | [1] |
Inventories | ' | ' | ' | -8,147 | [1] |
Other current assets | ' | ' | ' | -788 | [1] |
Total current assets | ' | ' | ' | -9,185 | |
Property, plant and equipment, net | ' | ' | ' | 14,148 | [1] |
Goodwill | ' | ' | ' | 21,588 | [1],[2] |
Intangible assets, net | ' | ' | ' | -56,795 | [1] |
Total assets | ' | ' | ' | -30,244 | |
Current liabilities: | ' | ' | ' | ' | |
Other accrued liabilities | ' | ' | ' | 22 | [1] |
Total current liabilities | ' | ' | ' | 22 | |
Total liabilities | ' | ' | ' | 22 | |
Commitments and contingencies | ' | ' | ' | ' | |
Stockholders' equity (deficit) | ' | ' | ' | ' | |
Accumulated (deficit) and other comprehensive income | ' | ' | ' | -30,266 | [1],[3] |
Total stockholders' equity | ' | ' | ' | -30,266 | |
Total liabilities and stockholders' equity | ' | ' | ' | -30,244 | |
Reorganization Adjustments | ' | ' | ' | ' | |
Current assets: | ' | ' | ' | ' | |
Cash and cash equivalents | ' | ' | ' | 4,363 | [4] |
Other current assets | ' | ' | ' | 321 | [5] |
Total current assets | ' | ' | ' | 4,684 | |
Property, plant and equipment, net | ' | ' | ' | -6,202 | [5] |
Development costs and other | ' | ' | ' | 8,255 | [6] |
Total assets | ' | ' | ' | 6,737 | |
Current liabilities: | ' | ' | ' | ' | |
Accrued compensation | ' | ' | ' | -315 | [5] |
Other accrued liabilities | ' | ' | ' | 9,947 | [5],[7],[8] |
Total current liabilities | ' | ' | ' | 9,632 | |
Long-term debt | ' | ' | ' | -39,939 | [9] |
Other liabilities | ' | ' | ' | 12,195 | [5],[8] |
Liabilities subject to compromise | ' | ' | ' | -223,988 | [8] |
Total liabilities | ' | ' | ' | -242,100 | |
Commitments and contingencies | ' | ' | ' | ' | |
Stockholders' equity (deficit) | ' | ' | ' | ' | |
Common stock | ' | ' | ' | -24 | [3] |
Capital in excess of par value | ' | ' | ' | -446,232 | [3] |
Treasury Stock | ' | ' | ' | 186,637 | [3] |
Accumulated (deficit) and other comprehensive income | ' | ' | ' | 387,500 | [3] |
Total stockholders' equity | ' | ' | ' | 248,837 | |
Total liabilities and stockholders' equity | ' | ' | ' | 6,737 | |
Reorganization Adjustments | Successor | ' | ' | ' | ' | |
Stockholders' equity (deficit) | ' | ' | ' | ' | |
Common stock | ' | ' | ' | 1 | [3] |
Capital in excess of par value | ' | ' | ' | 120,955 | [3] |
Predecessor | ' | ' | ' | ' | |
Current assets: | ' | ' | ' | ' | |
Cash and cash equivalents | ' | ' | ' | 11,052 | |
Restricted cash | ' | ' | ' | 26,421 | |
Accounts receivable | ' | ' | ' | 66,894 | |
Inventories | ' | ' | ' | 110,830 | |
Other current assets | ' | ' | ' | 45,819 | |
Total current assets | ' | ' | ' | 261,016 | |
Property, plant and equipment, net | ' | ' | ' | 37,604 | |
Intangible assets, net | ' | ' | ' | 109,155 | |
Development costs and other | ' | ' | ' | 31,142 | |
Total assets | ' | ' | ' | 438,917 | |
Current liabilities: | ' | ' | ' | ' | |
Accounts payable | ' | ' | ' | 38,226 | |
Accrued compensation | ' | ' | ' | 7,229 | |
Other accrued liabilities | ' | ' | ' | 60,301 | |
Total current liabilities | ' | ' | ' | 105,756 | |
Long-term debt | ' | ' | ' | 205,863 | |
Other liabilities | ' | ' | ' | 925 | |
Liabilities subject to compromise | ' | ' | ' | 223,988 | |
Total liabilities | ' | ' | ' | 536,532 | |
Commitments and contingencies | ' | ' | ' | ' | |
Stockholders' equity (deficit) | ' | ' | ' | ' | |
Common stock | ' | ' | ' | 24 | |
Capital in excess of par value | ' | ' | ' | 446,232 | |
Treasury Stock | ' | ' | ' | -186,637 | |
Accumulated (deficit) and other comprehensive income | ' | ' | ' | -357,234 | |
Total stockholders' equity | ' | ' | ' | -97,615 | |
Total liabilities and stockholders' equity | ' | ' | ' | $438,917 | |
[1] | The following table represents the adjustments for fresh start accounting primarily related to recording goodwill, recording our intangible assets, fixed assets, and other assets and liabilities at fair value and related deferred income taxes in accordance with ASC 805. Additionally, such fresh start accounting adjustments reflect the increase in inventory reserve of $6,600, and elimination of certain capitalized costs of $1,426. The Company also recorded other fresh start accounting adjustments relating to (1) deferred rent included in current liabilities, (2) vendor rebates receivables in current assets, and (3) other current assets and liabilities as a result of fresh start accounting. In addition, the impact of fresh start accounting adjustments on the accumulated retained earnings was eliminated. June 11, 2013 Fresh start accounting adjustments: Goodwill $ 25,535 Fair value adjustment to intangible assets (60,695 ) Fair value adjustment to fixed assets 15,475 Fresh start accounting adjustments relating to inventory (8,147 ) Other fresh start accounting adjustments (2,434 ) Total fresh start accounting adjustments $ (30,266 ) | ||||
[2] | The following table represents a reconciliation of the enterprise value attributed to assets, determination of the total reorganization value to be allocated to these assets and the determination of goodwill: | ||||
[3] | The Company recorded elimination of (1) the Predecessor Company's common stock, (2) the Predecessor Company's capital in excess of par value, net of stock options cancellation of $3,624, (3) the Predecessor Company's treasury stock, and (4) the Predecessor Company's accumulated deficit and accumulated other comprehensive loss. The following table represents reorganization value to be allocated to assets reconciled to the Successor Company Equity. The Company recorded Successor Company common stock of $1 and capital in excess of par value of $120,955. | ||||
[4] | The Company deposited $7,647 of proceeds from its exit financing into a segregated cash account which is used to pay administrative claims and certain advisors in the bankruptcy proceedings. The Company utilized $3,284 of its cash balance immediately prior to emergence to fund a portion of the cash requirements from exit financing. | ||||
[5] | The Company recorded adjustments related to various contract rejections or amendments completed as part of the Reorganization Plan. This included a $6,202 write down of property, plant and equipment related to the amendment of capital lease obligations for the Mansfield, OH distribution center and the rejection of capital lease obligations for the Company's Agawam, MA property. In addition, the Company recorded $920 related to various contract damages relating to lease rejections and severance obligations, classified between long-term and short-term liabilities. | ||||
[6] | In connection with entering into the exit credit facilities, the Company capitalized $8,255 of deferred financing costs. | ||||
[7] | Pursuant to the Chapter 11 Cases, additional professional fees of $2,057 were recorded. In addition, certain administrative and convenience claims of $8,435 were recorded as current liabilities, offset by accrued interest expense converted to new Successor Company equity. | ||||
[8] | Liabilities subject to compromise generally refer to pre-petition obligations, secured or unsecured, that may be impaired by a plan of reorganization. FASB ASC 852 requires such liabilities, including those that became known after filing the Chapter 11 petitions, be reported at the amounts expected to be allowed, even if they may be settled for lesser amounts. These liabilities represented the estimated amount expected to be resolved on known or potential claims through the Chapter 11 process. Liabilities subject to compromise also includes items that may be assumed under the Reorganization Plan, and may be subsequently reclassified to liabilities not subject to compromise. Liabilities subject to compromise also include certain pre-petition liabilities including accrued interest and accounts payable. At April 27, 2013, liabilities subject to compromise were $228,302, of which administrative claim payments of $4,314 were made in the Predecessor period of fiscal 2014. The table below identifies the principal categories of liabilities subject to compromise at June 11, 2013: | ||||
[9] | The table below presents refinancing of the Predecessor long-term debt. The Company issued $78,620 of new Successor Company equity (including $21,375 in excess of debt carrying amount), partially offset by $17,306 of debt discount and other financing costs. The current portion of the reorganized debt was $25,251, which includes of $23,823 of new Successor Company ABL loan. |
Reorganized_Condensed_Consolid1
Reorganized Condensed Consolidated Balance Sheet (Parenthetical) (Detail) (USD $) | 1 Months Ended | 1 Months Ended | |||||||||
In Thousands, unless otherwise specified | Jun. 11, 2013 | Jul. 26, 2014 | Apr. 26, 2014 | Jul. 27, 2013 | Jun. 11, 2013 | Jun. 11, 2013 | Jun. 11, 2013 | Apr. 27, 2013 | Jun. 11, 2013 | Jun. 11, 2013 | |
Inventory Valuation Reserve | ABL DIP Facility | Predecessor | Predecessor | Fresh Start Adjustment | Reorganization Adjustments | ||||||
Condensed Balance Sheet Statements, Captions [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Amount used to pay administrative claims and advisors | $7,647 | ' | ' | ' | ' | ' | ' | $4,314 | ' | ' | |
Utilization of cash balance to fund a portion of the cash requirements from exit financing | 3,284 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Write down of property, plant and equipment | ' | ' | ' | ' | ' | ' | ' | ' | 6,202 | ' | |
Contract damages related to severance and lease rejections | ' | ' | ' | ' | ' | ' | ' | ' | 920 | ' | |
Deferred financing costs relate to exit financing facilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,255 | |
Accrued Professional Fees, Current | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,057 | |
Administrative and convenience claims | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,435 | |
New equity issued for Successor Company | -78,620 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Issuance of additional stock to Ad Hoc lenders in excess of debt | 21,375 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Financing costs and professional fees paid with exit financing | 17,306 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Reorganized debt | 25,251 | ' | ' | ' | ' | 23,823 | ' | ' | ' | ' | |
Long-term debt | 165,924 | 156,331 | 153,987 | 152,932 | ' | ' | 205,863 | ' | ' | -39,939 | [1] |
Reorganization adjustments: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Issuance of Successor Company equity | -78,620 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Equity issuance in excess of debt carrying amount | 21,375 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Financing costs and professional fees paid with exit financing | 17,306 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Reorganized Successor Company long-term debt | 165,924 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Liabilities subject to compromise | ' | ' | ' | ' | ' | ' | 223,988 | 228,302 | ' | -223,988 | [2] |
Accounts payable | ' | ' | ' | ' | ' | ' | 47,683 | ' | ' | ' | |
2011 Debentures | ' | ' | ' | ' | ' | ' | 163,688 | ' | ' | ' | |
Pre-petition accrued interest on 2011 Debentures | ' | ' | ' | ' | ' | ' | 979 | ' | ' | ' | |
Sale-leaseback obligations | ' | ' | ' | ' | ' | ' | 11,638 | ' | ' | ' | |
Establishment of successor company common stock | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Establishment of successor additional paid in capital | 120,955 | -1,564 | ' | ' | ' | ' | ' | ' | ' | ' | |
Cancellation of equity based awards | ' | ' | ' | ' | ' | ' | 3,624 | ' | ' | ' | |
Total reorganization value to be allocated to assets | 415,410 | ' | ' | ' | ' | ' | ' | ' | ' | 415,410 | |
Less: Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | -179,044 | |
Less: Other liabilities | 115,410 | ' | ' | ' | ' | ' | ' | ' | ' | -115,410 | |
Total reorganization items, net | ' | 415,410 | ' | ' | ' | ' | ' | ' | ' | 120,956 | |
Fresh start accounting adjustments relating to inventory | -8,147 | ' | ' | ' | 6,600 | ' | ' | ' | ' | ' | |
Fresh start adjustment eliminated capitalize idle cost | 1,426 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Goodwill | 21,588 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Fair value adjustment to intangible assets | -56,795 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Fair value adjustment to fixed assets | 15,522 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Other fresh start accounting adjustments | -2,434 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Total fresh start accounting adjustments | -30,266 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Enterprise value attributed to School Specialty | 300,000 | 300,000 | ' | ' | ' | ' | ' | ' | ' | ' | |
Less: fair value assigned to tangible and intangible assets | ($393,822) | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
[1] | The table below presents refinancing of the Predecessor long-term debt. The Company issued $78,620 of new Successor Company equity (including $21,375 in excess of debt carrying amount), partially offset by $17,306 of debt discount and other financing costs. The current portion of the reorganized debt was $25,251, which includes of $23,823 of new Successor Company ABL loan. | ||||||||||
[2] | Liabilities subject to compromise generally refer to pre-petition obligations, secured or unsecured, that may be impaired by a plan of reorganization. FASB ASC 852 requires such liabilities, including those that became known after filing the Chapter 11 petitions, be reported at the amounts expected to be allowed, even if they may be settled for lesser amounts. These liabilities represented the estimated amount expected to be resolved on known or potential claims through the Chapter 11 process. Liabilities subject to compromise also includes items that may be assumed under the Reorganization Plan, and may be subsequently reclassified to liabilities not subject to compromise. Liabilities subject to compromise also include certain pre-petition liabilities including accrued interest and accounts payable. At April 27, 2013, liabilities subject to compromise were $228,302, of which administrative claim payments of $4,314 were made in the Predecessor period of fiscal 2014. The table below identifies the principal categories of liabilities subject to compromise at June 11, 2013: |
Schedule_of_Reorganization_Ite
Schedule of Reorganization Items (Detail) (USD $) | 1 Months Ended | 3 Months Ended | |
In Thousands, unless otherwise specified | Jul. 27, 2013 | Jun. 11, 2013 | Jul. 26, 2014 |
Fresh start accounting adjustments: | ' | ' | ' |
Goodwill | ' | $21,588 | ' |
Fair value adjustment to intangible assets | ' | -56,795 | ' |
Fair value adjustment to fixed assets | ' | 15,522 | ' |
Fresh start accounting adjustments relating to inventory | ' | -8,147 | ' |
Other fresh start accounting adjustments | ' | -2,434 | ' |
Total fresh start accounting adjustments | ' | -30,266 | ' |
Other reorganization adjustments: | ' | ' | ' |
Professional fees | 1,280 | ' | 271 |
Issuance of equity in excess of debt carrying amount | ' | -21,375 | ' |
Total other reorganization adjustments | 1,280 | ' | 271 |
Total Reorganization items, net | 1,280 | ' | 271 |
Predecessor | ' | ' | ' |
Reorganization [Line Items] | ' | ' | ' |
Liabilities subject to compromise | ' | 223,988 | ' |
Issuance of capital in excess of par value | ' | -42,335 | ' |
Reclassified into other balance sheet liability accounts | ' | -19,710 | ' |
Settlement of liabilities subject to compromise | ' | 161,943 | ' |
Fresh start accounting adjustments: | ' | ' | ' |
Goodwill | ' | 21,588 | ' |
Fair value adjustment to intangible assets | ' | -56,795 | ' |
Fair value adjustment to fixed assets | ' | 15,522 | ' |
Fresh start accounting adjustments relating to inventory | ' | -8,147 | ' |
Other fresh start accounting adjustments | ' | -2,434 | ' |
Total fresh start accounting adjustments | ' | -30,266 | ' |
Other reorganization adjustments: | ' | ' | ' |
Asset write-downs due to contract rejections | ' | -7,011 | ' |
Professional fees | ' | -10,512 | ' |
Cancellation of equity-based awards | ' | -3,624 | ' |
Financing fees | ' | -2,853 | ' |
Issuance of equity in excess of debt carrying amount | ' | -21,375 | ' |
Other | ' | -1,503 | ' |
Total other reorganization adjustments | ' | -46,878 | -46,878 |
Total Reorganization items, net | ' | $84,799 | ' |
Reorganization_Items_Net_Addit
Reorganization Items, Net - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | |
In Thousands, unless otherwise specified | Jul. 27, 2013 | Jun. 11, 2013 | Jul. 26, 2014 |
Reorganization [Line Items] | ' | ' | ' |
Total fresh start accounting adjustments | ' | ($30,266) | ' |
Other reorganization adjustments | 1,280 | ' | 271 |
Issuance of additional stock to Ad Hoc lenders in excess of debt | ' | 21,375 | ' |
Predecessor | ' | ' | ' |
Reorganization [Line Items] | ' | ' | ' |
Reorganized Company common stock Percentage | ' | 35.00% | ' |
Issuance of capital in excess of par value | ' | -42,335 | ' |
Administrative claims classified as short-term liabilities | ' | 8,335 | ' |
Settlement of liabilities subject to compromise | ' | 161,943 | ' |
Total fresh start accounting adjustments | ' | -30,266 | ' |
Other reorganization adjustments | ' | -46,878 | -46,878 |
Issuance of additional stock to Ad Hoc lenders in excess of debt | ' | 21,375 | ' |
Professional fees and financing fees | ' | 13,365 | ' |
Cancellation of equity based awards | ' | 3,624 | ' |
Reorganizational expense | ' | $7,011 | ' |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | Jul. 26, 2014 | Apr. 26, 2014 | Jul. 27, 2013 | Apr. 27, 2013 | Apr. 28, 2012 | Jun. 11, 2013 |
In Thousands, unless otherwise specified | Predecessor | |||||
Income Taxes [Line Items] | ' | ' | ' | ' | ' | ' |
Cancellation of indebtedness income excluded from taxable income | ' | ' | ' | ' | ' | $129,084 |
Tax valuation allowance | ' | 30,573 | ' | 71,272 | 32,638 | ' |
Unrecognized income tax benefits, net of federal tax benefits | $398 | $398 | $925 | ' | ' | ' |
Changes_in_Condensed_Consolida
Changes in Condensed Consolidated Stockholders' Equity (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | ||||||||||||||||
In Thousands, unless otherwise specified | Jul. 27, 2013 | Jul. 26, 2014 | Jun. 11, 2013 | Jun. 11, 2013 | Jun. 11, 2013 | Jul. 26, 2014 | Apr. 26, 2014 | Jul. 27, 2013 | Jun. 11, 2013 | Jun. 11, 2013 | Jun. 11, 2013 | Jul. 26, 2014 | Apr. 26, 2014 | Jul. 27, 2013 | Jun. 11, 2013 | Jun. 11, 2013 | Jun. 11, 2013 | Jul. 27, 2013 | Jul. 26, 2014 | Jun. 11, 2013 | Jun. 11, 2013 | Apr. 27, 2013 | Jun. 11, 2013 | Jul. 27, 2013 | Jul. 26, 2014 | Jun. 11, 2013 | Jun. 11, 2013 |
Predecessor | Predecessor | Common Stock | Common Stock | Common Stock | Common Stock | Common Stock | Common Stock | Additional Paid-in Capital | Additional Paid-in Capital | Additional Paid-in Capital | Additional Paid-in Capital | Additional Paid-in Capital | Additional Paid-in Capital | Retained Earnings | Retained Earnings | Retained Earnings | Retained Earnings | Treasury Stock | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) | ||||
Elimination | Predecessor | Predecessor | Predecessor | Predecessor | Predecessor | Predecessor | Predecessor | Predecessor | Predecessor | Predecessor | |||||||||||||||||
Elimination | Elimination | Elimination | Elimination | Elimination | |||||||||||||||||||||||
Shareholders Equity [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning Balance | $120,956 | $103,057 | ' | ($79,192) | ' | $1 | $1 | $1 | $1 | $24 | ' | $119,391 | $120,955 | $120,955 | $120,955 | $446,232 | ' | ' | ($17,485) | ($361,192) | ' | ($186,637) | ' | ' | ($414) | $22,381 | ' |
Cancellation of Predecessor Company common stock | ' | ' | ' | ' | -24 | ' | ' | ' | ' | ' | -24 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | 16,943 | 11,014 | ' | 76,068 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16,943 | 11,014 | 76,068 | ' | ' | ' | ' | ' | ' | ' |
Foreign currency translation adjustment | -7 | 198 | ' | -101 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -7 | 198 | -101 | ' |
Change in Fresh Start estimate | ' | -1,564 | 120,955 | ' | -446,232 | ' | ' | ' | ' | ' | ' | -1,564 | ' | ' | ' | ' | -446,232 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ending Balance | 137,892 | 112,705 | ' | ' | ' | 1 | 1 | 1 | 1 | ' | ' | 119,391 | 120,955 | 120,955 | 120,955 | ' | ' | 16,943 | -6,471 | ' | ' | -186,637 | ' | -7 | -216 | ' | ' |
Elimination of Predecessor Company accumulated deficit | ' | ' | ' | ' | 285,124 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 285,124 | ' | ' | ' | ' | ' | ' |
Issuance of Successor Company Common Stock | ' | ' | ' | 1 | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Elimination of Predecessor Company treasury stock | ' | ' | ' | ' | 186,637 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 186,637 | ' | ' | ' | ' |
Establishment of Successor Company capital in excess of par | ' | ' | ' | 120,955 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 120,955 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Elimination of Predecessor Company accumulated other comprehensive loss | ' | ' | ' | ' | ($22,280) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ($22,280) |
Shareholders_Equity_Additional
Shareholders' Equity - Additional Information (Detail) (USD $) | Jul. 26, 2014 | Jun. 11, 2013 |
In Thousands, unless otherwise specified | ||
Shareholders Equity [Line Items] | ' | ' |
Decrease in Company's opening equity | ($1,564) | $120,955 |
Increase in long-term debt | $1,564 | ' |
Unsecured Trade Creditors | Deferred Cash Payment Obligations | ' | ' |
Shareholders Equity [Line Items] | ' | ' |
Reorganization Plan percentage of deferred cash payment | 45.00% | ' |
General Unsecured Creditors | Deferred Cash Payment Obligations | ' | ' |
Shareholders Equity [Line Items] | ' | ' |
Reorganization Plan percentage of deferred cash payment | 20.00% | ' |
Companys_Computations_of_Basic
Company's Computations of Basic and Diluted EPS for the Periods Presented in the Consolidated Statements of Operations (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 1 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Jul. 27, 2013 | Jul. 26, 2014 | Jun. 11, 2013 |
Predecessor | |||
Components Of Basic And Diluted Earning Per Share [Line Items] | ' | ' | ' |
Net income (loss) | $16,943 | $11,014 | $76,068 |
Weighted Average Shares (Denominator), Basic and Diluted EPS | 1,000 | 1,000 | 18,922 |
Per share amount, Basic and Diluted EPS | $16.94 | $11.01 | $4.02 |
ShareBased_Compensation_Expens2
Share-Based Compensation Expense - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Jul. 26, 2014 | Apr. 27, 2013 | Jun. 11, 2013 | 22-May-14 | Apr. 24, 2014 | Jun. 11, 2013 | Jun. 11, 2013 | 28-May-14 |
OptionPlan | CompensationPlan | Predecessor | 2014 Incentive Plan | 2014 Incentive Plan | Nonvested Stock Awards | Restricted Stock | Stock appreciation rights (SARs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Number of share based employee compensation plans | 1 | 3 | ' | ' | ' | ' | ' | ' |
Number of stock options granted | ' | ' | ' | 36 | 32 | ' | ' | ' |
Share based compensation, recognized | ' | ' | $3,624 | ' | ' | ' | ' | ' |
Time-based awards granted | ' | ' | ' | ' | ' | 0 | ' | ' |
Awards granted | ' | ' | ' | ' | ' | ' | 0 | 6 |
Awards granted, fair value | ' | ' | ' | ' | ' | ' | ' | $130 |
Summary_of_Option_Transactions
Summary of Option Transactions (Detail) (Predecessor, USD $) | 1 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Jun. 11, 2013 |
Predecessor | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Options outstanding, Options, Beginning Balance | 2,550 |
Options Outstanding, Options, Granted | ' |
Options Outstanding, Options, Exercised | ' |
Options Outstanding, Options, Canceled | -2,550 |
Options Outstanding, Weighted-Average Exercise Price, Beginning Balance | $15.27 |
Options Outstanding, Weighted-Average Exercise Price, Granted | ' |
Options Outstanding, Weighted-Average Exercise Price, Exercised | ' |
Options Outstanding, Weighted-Average Exercise Price, Canceled | $15.27 |
Options Exercisable, Options, Beginning Balance | 1,207 |
Options Exercisable, Weighted-Average Exercise Price, Beginning Balance | $24.76 |
Intangible_Assets_Excluding_Go
Intangible Assets, Excluding Goodwill (Detail) (USD $) | Jul. 26, 2014 | Apr. 26, 2014 | Jul. 27, 2013 |
In Thousands, unless otherwise specified | |||
Finite And Indefinite Lived Intangible Assets [Line Items] | ' | ' | ' |
Amortizable intangible assets, Gross Value | $52,360 | $52,360 | $47,990 |
Amortizable intangible assets, Accumulated Amortization | -5,230 | -4,109 | -563 |
Total amortizable intangible assets, Net Book Value | 47,130 | 48,251 | 47,427 |
Customer relationships | ' | ' | ' |
Finite And Indefinite Lived Intangible Assets [Line Items] | ' | ' | ' |
Amortizable intangible assets, Gross Value | 11,300 | 11,300 | 9,400 |
Amortizable intangible assets, Accumulated Amortization | -1,014 | -797 | -96 |
Total amortizable intangible assets, Net Book Value | 10,286 | 10,503 | 9,304 |
Publishing rights | ' | ' | ' |
Finite And Indefinite Lived Intangible Assets [Line Items] | ' | ' | ' |
Amortizable intangible assets, Gross Value | 4,000 | 4,000 | 2,500 |
Amortizable intangible assets, Accumulated Amortization | -233 | -183 | -17 |
Total amortizable intangible assets, Net Book Value | 3,767 | 3,817 | 2,483 |
Trademarks | ' | ' | ' |
Finite And Indefinite Lived Intangible Assets [Line Items] | ' | ' | ' |
Amortizable intangible assets, Gross Value | 22,700 | 22,700 | 22,100 |
Amortizable intangible assets, Accumulated Amortization | -1,324 | -1,040 | -147 |
Total amortizable intangible assets, Net Book Value | 21,376 | 21,660 | 21,953 |
Developed Technology | ' | ' | ' |
Finite And Indefinite Lived Intangible Assets [Line Items] | ' | ' | ' |
Amortizable intangible assets, Gross Value | 6,600 | 6,600 | 6,600 |
Amortizable intangible assets, Accumulated Amortization | -1,100 | -864 | -126 |
Total amortizable intangible assets, Net Book Value | 5,500 | 5,736 | 6,474 |
Content | ' | ' | ' |
Finite And Indefinite Lived Intangible Assets [Line Items] | ' | ' | ' |
Amortizable intangible assets, Gross Value | 4,400 | 4,400 | 4,400 |
Amortizable intangible assets, Accumulated Amortization | -1,027 | -807 | -117 |
Total amortizable intangible assets, Net Book Value | 3,373 | 3,593 | 4,283 |
Perpetual licensing agreements | ' | ' | ' |
Finite And Indefinite Lived Intangible Assets [Line Items] | ' | ' | ' |
Amortizable intangible assets, Gross Value | 1,200 | 1,200 | 1,500 |
Amortizable intangible assets, Accumulated Amortization | -280 | -220 | -40 |
Total amortizable intangible assets, Net Book Value | 920 | 980 | 1,460 |
Favorable leasehold interests | ' | ' | ' |
Finite And Indefinite Lived Intangible Assets [Line Items] | ' | ' | ' |
Amortizable intangible assets, Gross Value | 2,160 | 2,160 | 1,490 |
Amortizable intangible assets, Accumulated Amortization | -252 | -198 | -20 |
Total amortizable intangible assets, Net Book Value | $1,908 | $1,962 | $1,470 |
Intangible_Assets_Excluding_Go1
Intangible Assets, Excluding Goodwill (Parenthetical) (Detail) | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Jul. 27, 2013 | Jul. 26, 2014 | Apr. 26, 2014 | |
Customer relationships | ' | ' | ' |
Finite And Indefinite Lived Intangible Assets [Line Items] | ' | ' | ' |
Useful life of intangible assets, excluding goodwill | '13 years | '13 years | '13 years |
Publishing rights | ' | ' | ' |
Finite And Indefinite Lived Intangible Assets [Line Items] | ' | ' | ' |
Useful life of intangible assets, excluding goodwill | '20 years | '20 years | '20 years |
Trademarks | ' | ' | ' |
Finite And Indefinite Lived Intangible Assets [Line Items] | ' | ' | ' |
Useful life of intangible assets, excluding goodwill | '20 years | '20 years | '20 years |
Developed Technology | ' | ' | ' |
Finite And Indefinite Lived Intangible Assets [Line Items] | ' | ' | ' |
Useful life of intangible assets, excluding goodwill | '7 years | '7 years | '7 years |
Content | ' | ' | ' |
Finite And Indefinite Lived Intangible Assets [Line Items] | ' | ' | ' |
Useful life of intangible assets, excluding goodwill | '5 years | '5 years | '5 years |
Perpetual licensing agreements | ' | ' | ' |
Finite And Indefinite Lived Intangible Assets [Line Items] | ' | ' | ' |
Useful life of intangible assets, excluding goodwill | '5 years | '5 years | '5 years |
Favorable leasehold interests | ' | ' | ' |
Finite And Indefinite Lived Intangible Assets [Line Items] | ' | ' | ' |
Useful life of intangible assets, excluding goodwill | '10 years | '10 years | '10 years |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets - Additional Information (Detail) (USD $) | Jul. 26, 2014 | Apr. 26, 2014 | Jul. 27, 2013 | Jun. 11, 2013 | Jul. 27, 2013 | Jun. 11, 2013 | Jul. 26, 2014 |
In Thousands, unless otherwise specified | Selling, General and Administrative Expenses | Selling, General and Administrative Expenses | Selling, General and Administrative Expenses | ||||
Goodwill And Other Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Goodwill | $21,588 | $21,588 | $23,661 | $21,588 | ' | ' | ' |
Intangible assets amortization expense reflected in selling, general and administrative expense | ' | ' | ' | ' | $563 | $1,138 | $1,121 |
Intangible_Asset_Amortization_
Intangible Asset Amortization Expense (Detail) (USD $) | Jul. 26, 2014 |
In Thousands, unless otherwise specified | |
Goodwill And Other Intangible Assets [Line Items] | ' |
Fiscal 2015 (nine months remaining) | $3,362 |
Fiscal 2016 | 4,483 |
Fiscal 2017 | 4,483 |
Fiscal 2018 | 4,483 |
Fiscal 2019 | 3,456 |
Fiscal 2020 | $3,363 |
Changes_to_Goodwill_Detail
Changes to Goodwill (Detail) (USD $) | Jul. 26, 2014 | Apr. 26, 2014 | Jul. 27, 2013 | Jun. 11, 2013 |
In Thousands, unless otherwise specified | ||||
Goodwill And Other Intangible Assets [Line Items] | ' | ' | ' | ' |
Goodwill | $21,588 | ' | ' | ' |
Goodwill, Total | 21,588 | 21,588 | 23,661 | 21,588 |
Distribution | ' | ' | ' | ' |
Goodwill And Other Intangible Assets [Line Items] | ' | ' | ' | ' |
Goodwill | 14,666 | ' | ' | ' |
Goodwill, Total | 14,666 | ' | ' | ' |
Curriculum | ' | ' | ' | ' |
Goodwill And Other Intangible Assets [Line Items] | ' | ' | ' | ' |
Goodwill | 6,922 | ' | ' | ' |
Goodwill, Total | $6,922 | ' | ' | ' |
Investment_in_Unconsolidated_A2
Investment in Unconsolidated Affiliate - Additional Information (Detail) (Carson-Dellosa Publishing LLC) | Jul. 26, 2014 |
Carson-Dellosa Publishing LLC | ' |
Schedule of Equity Method Investments [Line Items] | ' |
Equity Method Investment, percent owned | 35.00% |
Investment_in_Unconsolidated_A3
Investment in Unconsolidated Affiliate under Equity Method (Detail) (USD $) | Jul. 26, 2014 | Apr. 26, 2014 | Jul. 27, 2013 |
In Thousands, unless otherwise specified | |||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' |
Investment in unconsolidated affiliate | $715 | $715 | $715 |
Carson-Dellosa Publishing LLC | ' | ' | ' |
Schedule of Equity Method Investments [Line Items] | ' | ' | ' |
Equity Method Investment, percent owned | 35.00% | ' | ' |
Investment in unconsolidated affiliate | 715 | ' | ' |
Predecessor | Carson-Dellosa Publishing LLC | ' | ' | ' |
Schedule of Equity Method Investments [Line Items] | ' | ' | ' |
Investment in unconsolidated affiliate | ' | $715 | $715 |
Property_Plant_and_Equipment_D
Property, Plant and Equipment (Detail) (USD $) | Jul. 26, 2014 | Apr. 26, 2014 | Jul. 27, 2013 | Jun. 11, 2013 |
In Thousands, unless otherwise specified | ||||
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Total property, plant and equipment | $52,812 | $51,744 | $48,612 | ' |
Less: Accumulated depreciation | -14,255 | -12,699 | -2,303 | ' |
Net property, plant and equipment | 38,557 | 39,045 | 46,309 | 45,550 |
Land | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Total property, plant and equipment | ' | ' | 210 | ' |
Projects in progress | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Total property, plant and equipment | 5,146 | 10,854 | 2,927 | ' |
Building and leasehold improvements | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Total property, plant and equipment | 3,699 | 3,595 | 7,288 | ' |
Furniture, fixtures and other | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Total property, plant and equipment | 34,818 | 30,525 | 29,277 | ' |
Machinery and warehouse equipment | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Total property, plant and equipment | $9,149 | $6,770 | $8,910 | ' |
Property_Plant_and_Equipment_A
Property, Plant and Equipment - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | |
In Thousands, unless otherwise specified | Jul. 27, 2013 | Jun. 11, 2013 | Jul. 26, 2014 |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Depreciation expense | $2,303 | $1,845 | $3,249 |
Assets_Held_for_Sale_Additiona
Assets Held for Sale - Additional Information (Detail) | Jul. 26, 2014 |
Businesses Held For Sale Divestitures And Impairments [Line Items] | ' |
Percentage of printing done by Premier | 30.00% |
LongTerm_Debt_Detail
Long-Term Debt (Detail) (USD $) | Jul. 26, 2014 | Apr. 26, 2014 | Jul. 27, 2013 | Jun. 11, 2013 |
In Thousands, unless otherwise specified | ||||
Debt Instrument [Line Items] | ' | ' | ' | ' |
Total debt | $228,806 | $166,375 | $215,161 | ' |
Less: Current maturities | -72,475 | -12,388 | -62,229 | ' |
Total long-term debt | 156,331 | 153,987 | 152,932 | 165,924 |
New ABL Facility | ' | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' | ' |
Total debt | 71,900 | 10,600 | 60,801 | ' |
New Term Loan | ' | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' | ' |
Total debt | 142,681 | 143,913 | 145,000 | ' |
New Term Loan Original Issue Discount | -2,352 | -2,473 | -2,835 | ' |
Deferred Cash Payment Obligations | ' | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' | ' |
Total debt | $16,577 | $14,335 | $12,195 | ' |
LongTerm_Debt_Parenthetical_De
Long-Term Debt (Parenthetical) (Detail) | 3 Months Ended |
Jul. 26, 2014 | |
New ABL Facility | ' |
Debt Instrument [Line Items] | ' |
Maturity year | '2018 |
New Term Loan | ' |
Debt Instrument [Line Items] | ' |
Maturity year | '2019 |
Deferred Cash Payment Obligations | ' |
Debt Instrument [Line Items] | ' |
Maturity year | '2019 |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (USD $) | 3 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | ||||||||||||||||
In Thousands, unless otherwise specified | Jul. 26, 2014 | Apr. 26, 2014 | Jul. 27, 2013 | Jul. 26, 2014 | Apr. 26, 2014 | Jul. 27, 2013 | Jul. 26, 2014 | Apr. 26, 2014 | Jul. 27, 2013 | Jul. 26, 2014 | Jul. 26, 2014 | Jul. 26, 2014 | Jun. 11, 2013 | Jul. 26, 2014 | Jun. 11, 2013 | Jun. 11, 2013 | Jun. 11, 2013 | Jul. 26, 2014 | Jul. 26, 2014 | Jun. 11, 2013 | Jul. 26, 2014 | Jun. 11, 2013 | Jun. 11, 2013 | Jun. 11, 2013 | Jul. 26, 2014 | Jul. 26, 2014 |
Deferred Cash Payment Obligations | Deferred Cash Payment Obligations | Deferred Cash Payment Obligations | New Term Loan | New Term Loan | New Term Loan | New Term Loan | Interest Rate Swap | Interest Rate Swap | New Term Loan | New Term Loan | New Term Loan | New Term Loan | New Term Loan | New Term Loan | New Term Loan | New ABL Facility | New ABL Facility | New ABL Facility | New ABL Facility | New ABL Facility | General Unsecured Creditors | Unsecured Trade Creditors | ||||
Fair Value, Inputs, Level 3 | London Interbank Offered Rate (LIBOR) | Federal Funds Rate | London Interbank Offered Rate (LIBOR) | Floor Rate | Interest Rate Swap | Interest Rate Swap | Asset Based Credit Agreement, maturing in 2014 | Federal Funds Rate | London Interbank Offered Rate (LIBOR) | Deferred Cash Payment Obligations | Deferred Cash Payment Obligations | |||||||||||||||
Cash Flow Hedging | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Credit Agreement, borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $175,000 | ' | ' | ' | ' |
Applicable margin | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7.50% | 8.50% | ' | ' | ' | ' | ' | ' | 0.50% | 1.00% | ' | ' |
ABL Facility, interest rate covenants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Outstanding amounts under the New ABL Facility will bear interest at a rate per annum equal to, at the Companybs election: (1) a base rate (equal to the greatest of (a) the prime lending rate, (b) the federal funds rate plus 0.50%, and (c) the 30-day LIBOR rate plus 1.00% per annum) (the bBase Rateb) plus an applicable margin (equal to a specified margin based on the interest rate elected by the Company, the fixed charge coverage ratio under the New ABL Facility and the applicable point in the life of the New ABL Facility) (the bApplicable Marginb), or (2) a LIBOR rate plus the Applicable Margin (the bLIBOR Rateb). Interest on loans under the New ABL Facility bearing interest based upon the Base Rate will be due monthly in arrears, and interest on loans bearing interest based upon the LIBOR Rate will be due on the last day of each relevant interest period or, if sooner, on the respective dates that fall every three months after the beginning of such interest period. | ' | ' | ' | ' | ' | ' |
Effective interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.64% | ' | ' | ' | ' | ' | ' | 7.48% | ' | ' | ' | ' | ' |
Amortization of loan origination Fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 293 | ' | ' | ' | ' | ' | ' | 289 | ' | ' | ' | ' | ' |
Commitment fees on unborrowed funds | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 170 | ' | ' | ' | ' | ' |
ABL Facility outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 71,900 | ' | ' | ' | ' | ' |
Debt instrument maturity date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11-Jun-19 | ' | ' | ' | ' | ' | ' | 11-Jun-18 | ' | ' | ' | ' | ' |
Term Loan, aggregate principal amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 145,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debentures interest rate stated percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Original issue discount | ' | ' | ' | ' | ' | ' | 2,352 | 2,473 | 2,835 | ' | ' | ' | 2,900 | 121 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate terms | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'The outstanding principal amount of the New Term Loan will bear interest at a rate per annum equal to the applicable LIBOR rate (with a 1% floor) plus 8.50%, or the base rate plus a margin of 7.50%. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term loan outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 140,329 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Currently maturing long term debt | 72,475 | 12,388 | 62,229 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 575 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of days to enter into interest rate hedge after the effective date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '90 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of term loan under interest rate hedge | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Inception date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 27-Aug-13 | ' | ' | ' | ' | ' | ' | ' | ' |
Termination date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11-Sep-16 | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.49% | ' | ' | ' | ' | ' | ' | 9.99% | ' | ' | ' | ' | ' | ' | ' | ' |
Notional amount of swaps | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 72,500 | ' | ' | ' | ' | ' | ' | ' | ' |
Increase in fair value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13 | ' | ' | ' | ' | ' | ' | ' |
Change in fair value of interest rate swap | 13 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13 | ' | ' | ' | ' | ' | ' | ' |
Variable interest rate on notional amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.16% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term loan, fair value | ' | ' | ' | ' | ' | ' | ' | ' | ' | 142,681 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reorganization Plan percentage of deferred cash payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% | 45.00% |
Paid-in-kind interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | 10.00% |
Maturity month and year | ' | ' | ' | '2019-12 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total debt | 228,806 | 166,375 | 215,161 | 16,577 | 14,335 | 12,195 | 142,681 | 143,913 | 145,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,030 | 12,014 |
Accrued interest expense | ' | ' | ' | $1,533 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Changes_in_Accumulated_Other_C2
Changes in Accumulated Other Comprehensive Income (Loss) (Detail) (USD $) | Jul. 26, 2014 | Apr. 26, 2014 | Jul. 27, 2013 | Jul. 27, 2013 | Jul. 26, 2014 | Jun. 11, 2013 |
In Thousands, unless otherwise specified | Foreign Currency Translation | Foreign Currency Translation | Foreign Currency Translation | |||
Predecessor | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' | ' | ' | ' |
Accumulated other comprehensive income (loss), beginning balance | ($216) | ($414) | ($7) | ' | ($414) | $22,381 |
Other comprehensive income (loss) before reclassifications | ' | ' | ' | -7 | 198 | -101 |
Amounts reclassified from other comprehensive income (loss) | ' | ' | ' | ' | ' | -22,280 |
Accumulated other comprehensive income (loss), ending balance | ($216) | ($414) | ($7) | ($7) | ($216) | ' |
Reconciliation_of_Accrued_Rest
Reconciliation of Accrued Restructuring Costs (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | |||
In Thousands, unless otherwise specified | Jul. 27, 2013 | Jul. 26, 2014 | Jul. 27, 2013 | Jul. 26, 2014 | Jul. 27, 2013 | Jul. 26, 2014 | Jul. 27, 2013 | Jul. 26, 2014 | Jun. 11, 2013 | Jun. 11, 2013 | Jun. 11, 2013 | Jun. 11, 2013 |
Operating Segments | Operating Segments | Operating Segments | Operating Segments | Non operating | Non operating | Predecessor | Predecessor | Predecessor | Predecessor | |||
Distribution | Distribution | Curriculum | Curriculum | Operating Segments | Operating Segments | Non operating | ||||||
Distribution | Curriculum | |||||||||||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued Restructuring costs, beginning balance | ' | $193 | ' | ' | ' | $58 | ' | $135 | $716 | ($21) | $149 | $588 |
Reclassification | ' | ' | 406 | ' | ' | ' | -406 | ' | ' | ' | ' | ' |
Amounts charged to expense | 1,356 | 112 | ' | 15 | 31 | ' | 1,325 | 97 | 21 | 21 | ' | ' |
Payments | -1,523 | -232 | -158 | -15 | -37 | -58 | -1,328 | -159 | -182 | ' | -15 | -167 |
Accrued Restructuring costs, ending balance | $388 | $73 | $248 | ' | $128 | ' | $12 | $73 | $555 | ' | $134 | $421 |
Restructuring_Additional_Infor
Restructuring - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | |
In Thousands, unless otherwise specified | Jul. 27, 2013 | Jul. 26, 2014 | Jun. 11, 2013 | Jul. 27, 2013 | Jul. 26, 2014 |
Reorganization Item, Net | Selling, General and Administrative Expenses | Selling, General and Administrative Expenses | |||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' |
Restructuring costs | $2,595 | $133 | $21 | $1,356 | $112 |
Segment_Information_Additional
Segment Information - Additional Information (Detail) | 3 Months Ended |
Jul. 26, 2014 | |
Segment | |
Segment Reporting Information [Line Items] | ' |
Number of operating segments | 2 |
Segment_Information_Detail
Segment Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Jul. 27, 2013 | Jul. 26, 2014 | Apr. 26, 2014 | Jun. 11, 2013 | Jul. 27, 2013 | Jul. 26, 2014 | Jul. 27, 2013 | Jul. 26, 2014 | Jul. 27, 2013 | Jul. 26, 2014 | Apr. 26, 2014 | Jul. 27, 2013 | Jul. 26, 2014 | Apr. 26, 2014 | Jul. 27, 2013 | Jul. 26, 2014 | Jul. 26, 2014 | Apr. 26, 2014 | Jul. 27, 2013 | Jun. 11, 2013 | Jun. 11, 2013 | Jun. 11, 2013 | Jun. 11, 2013 | Jun. 11, 2013 | ||
Distribution | Distribution | Curriculum | Curriculum | Operating Segments | Operating Segments | Operating Segments | Operating Segments | Operating Segments | Operating Segments | Corporate and intercompany eliminations | Corporate and intercompany eliminations | Non operating | Non operating | Non operating | Predecessor | Predecessor | Predecessor | Predecessor | Predecessor | |||||||
Distribution | Distribution | Distribution | Curriculum | Curriculum | Curriculum | Distribution | Curriculum | Operating Segments | Operating Segments | |||||||||||||||||
Distribution | Curriculum | |||||||||||||||||||||||||
Revenues: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Total Revenue | $143,499 | $199,469 | ' | ' | ' | ' | ' | ' | $124,321 | $166,669 | ' | $19,177 | $32,800 | ' | ' | ' | ' | ' | ' | $58,697 | ' | ' | $49,069 | $9,628 | ||
Operating income (loss) and income (loss) before taxes: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Operating income (loss) | 21,296 | 16,491 | ' | ' | ' | ' | ' | ' | 19,459 | 13,548 | ' | 4,432 | 5,618 | ' | -2,595 | [1] | -2,675 | [1] | ' | ' | ' | -3,855 | ' | ' | -2,646 | -1,209 |
Interest expense and reorganization items, net | 4,101 | 5,533 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -81,564 | ' | ' | ' | ' | ||
Income before provision for (benefit from) income taxes | 17,195 | 10,958 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 77,709 | ' | ' | ' | ' | ||
Identifiable assets: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Identifiable assets | 473,353 | 422,926 | 339,619 | 415,410 | ' | ' | ' | ' | 325,545 | 293,413 | 214,723 | 88,827 | 110,558 | 103,622 | ' | ' | 18,955 | 21,274 | 58,981 | ' | ' | ' | ' | ' | ||
Depreciation and amortization of intangible assets and development costs: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Total Depreciation and amortization of intangible assets and development costs | 4,344 | 8,041 | ' | ' | 3,906 | 3,947 | 438 | 4,094 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,901 | 2,080 | 1,821 | ' | ' | ||
Expenditures for property, plant and equipment, intangible and other assets and development costs: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Total Expenditures for property, plant and equipment, intangible and other assets and development costs | $1,394 | $4,308 | ' | ' | $747 | $2,675 | $647 | $1,633 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $706 | $317 | $389 | ' | ' | ||
[1] | Operating expenses in Corporate for the Successor's three month period ended July 26, 2014 and for the Successor's seven week period ended July 27, 2013 were $2,675 and $2,595, respectively. These amounts included restructuring and facility exit costs, costs incurred to implement process improvement actions and other corporate professional expenses. |
Segment_Information_Parentheti
Segment Information (Parenthetical) (Detail) (Non operating, USD $) | 1 Months Ended | 3 Months Ended |
In Thousands, unless otherwise specified | Jul. 27, 2013 | Jul. 26, 2014 |
Non operating | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Operating expenses | $2,595 | $2,675 |
Restricted_Cash_Additional_Inf
Restricted Cash - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 7 Months Ended | ||||||
In Thousands, unless otherwise specified | Jun. 11, 2013 | Oct. 26, 2013 | Jul. 27, 2013 | Apr. 27, 2013 | Jan. 26, 2013 | Jul. 28, 2012 | Jan. 25, 2014 | Jan. 25, 2014 | Jan. 25, 2014 |
Term Loan | Term Loan | Term Loan | |||||||
Interest Expense | Early Termination Fees | ||||||||
Restricted Cash and Cash Equivalents Items [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash placed into restricted account | $119 | ' | ' | $25,000 | ' | $2,708 | $1,280 | ' | ' |
Early termination fee | ' | ' | ' | ' | ' | ' | ' | ' | 21,000 |
Refund of termination fee | ' | ' | ' | ' | ' | ' | 5,399 | 1,345 | 4,054 |
Decrease in restricted cash due to cancellation of letter of credit | ' | 701 | 601 | 434 | 972 | ' | ' | ' | ' |
Restricted cash and cash equivalents | $26,421 | ' | $25,820 | ' | ' | ' | ' | ' | ' |