Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Aug. 01, 2020 | Sep. 01, 2020 | |
Cover page. | ||
Entity Registrant Name | Kaspien Holdings Inc. | |
Entity Central Index Key | 0000795212 | |
Current Fiscal Year End Date | --02-01 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 1,825,198 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Aug. 1, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Address, State or Province | NY |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Aug. 01, 2020 | Feb. 01, 2020 | Aug. 03, 2019 |
CURRENT ASSETS | |||
Cash and cash equivalents | $ 3,337 | $ 2,977 | $ 3,635 |
Restricted cash | 950 | 950 | 950 |
Accounts receivable | 2,239 | 4,139 | 2,324 |
Merchandise inventory | 20,576 | 17,836 | 20,185 |
Prepaid expenses and other current assets | 1,085 | 2,974 | 983 |
Assets held for discontinued operations | 0 | 51,189 | 104,121 |
Total current assets | 28,187 | 80,065 | 132,198 |
Restricted cash | 4,362 | 4,925 | 5,345 |
Fixed assets, net | 2,285 | 2,190 | 1,898 |
Operating lease right-of-use assets | 3,030 | 3,311 | 3,586 |
Intangible assets, net | 1,246 | 1,760 | 3,096 |
Cash Surrender Value | 3,411 | 3,353 | 3,199 |
Other assets | 2,036 | 2,202 | 851 |
TOTAL ASSETS | 44,557 | 97,806 | 150,173 |
CURRENT LIABILITIES | |||
Accounts payable | 9,857 | 14,447 | 9,285 |
Short-term borrowings | 2,151 | 13,149 | 12,086 |
Accrued expenses and other current liabilities | 3,812 | 3,521 | 2,084 |
Current portion of operating lease liabilities | 571 | 534 | 511 |
Current portion of PPP loan | 1,017 | 0 | 0 |
Liabilities held for discontinued operations | 0 | 39,410 | 56,204 |
Total current liabilities | 17,408 | 71,061 | 80,170 |
Operating lease liabilities | 2,564 | 2,204 | 2,614 |
PPP loan | 1,001 | 0 | 0 |
Long-term debt | 4,401 | 0 | 0 |
Other long-term liabilities | 19,613 | 20,026 | 19,424 |
TOTAL LIABILITIES | 44,987 | 93,291 | 102,208 |
SHAREHOLDERS' EQUITY | |||
Preferred stock ($0.01 par value; 5,000,000 shares authorized; none issued) | 0 | 0 | 0 |
Common stock ($0.01 par value; 200,000,000 shares authorized; 3,235,576, 3,225,627 and 3,223,898 shares issued, respectively) | 32 | 32 | 32 |
Additional paid-in capital | 346,457 | 345,102 | 344,983 |
Treasury stock at cost (1,410,378, 1,409,316 and 1,408,043 shares, respectively) | (230,169) | (230,169) | (230,168) |
Accumulated other comprehensive loss | (1,473) | (1,479) | (725) |
Accumulated deficit | (115,277) | (108,971) | (66,157) |
TOTAL SHAREHOLDERS' EQUITY | (430) | 4,515 | 47,965 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 44,557 | $ 97,806 | $ 150,173 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parentheticals) - $ / shares | Aug. 01, 2020 | Feb. 01, 2020 | Aug. 03, 2019 |
SHAREHOLDERS' EQUITY | |||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 3,235,576 | 3,225,627 | 3,223,898 |
Treasury stock (in shares) | 1,410,378 | 1,409,316 | 1,408,043 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | ||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) [Abstract] | |||||
Net revenue | $ 42,296 | $ 34,260 | $ 73,885 | $ 69,392 | |
Cost of sales | 37,873 | 31,173 | 66,151 | 63,528 | |
Gross profit | 4,423 | 3,087 | 7,734 | 5,864 | |
Selling, general and administrative expenses | 4,916 | 6,666 | 13,406 | 13,644 | |
Loss from continuing operations | (493) | (3,579) | (5,672) | (7,780) | |
Interest expense | 406 | 172 | 634 | 308 | |
Loss from continuing operations before income tax benefit | (899) | (3,751) | (6,306) | (8,088) | |
Income tax expense | 0 | 7 | 0 | 16 | |
Loss from continued operations | (899) | (3,758) | (6,306) | (8,104) | |
Loss from fye business, net of tax | 0 | (4,370) | 0 | (7,826) | |
Net loss | $ (899) | $ (8,128) | $ (6,306) | $ (15,930) | [1] |
BASIC AND DILUTED LOSS PER SHARE: | |||||
Basic and diluted loss per common share (in dollars per share) | $ (0.49) | $ (4.48) | $ (3.46) | $ (8.78) | |
Weighted average number of common shares outstanding - basic and diluted (in shares) | 1,825 | 1,816 | 1,823 | 1,815 | |
[1] | The cash flows related to discontinued operations have not been segregated, and are included in the Consolidated Statements of Cash Flows. See footnote 3. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | ||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (unaudited) [Abstract] | |||||
Net loss | $ (899) | $ (8,128) | $ (6,306) | $ (15,930) | [1] |
Amortization of pension gain | 1 | 5 | 2 | 10 | |
Comprehensive loss | $ (898) | $ (8,123) | $ (6,304) | $ (15,920) | |
[1] | The cash flows related to discontinued operations have not been segregated, and are included in the Consolidated Statements of Cash Flows. See footnote 3. |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (unaudited) - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock At Cost [Member] | Accumulated Other Comprehensive Loss [Member] | Retained Earnings (Accumulated Deficit) [Member] | Total | |
Balance at Feb. 02, 2019 | $ 32 | $ 344,826 | $ (230,166) | $ (735) | $ (50,227) | $ 63,730 | |
Balance (in shares) at Feb. 02, 2019 | 3,222 | (1,409) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | $ 0 | 0 | $ 0 | 0 | (15,930) | (15,930) | [1] |
Other comprehensive income | 0 | 0 | 0 | 10 | 0 | 10 | |
Vested restricted shares | $ 0 | 3 | $ (2) | 0 | 0 | 1 | |
Vested restricted shares (in shares) | 2 | 0 | |||||
Common stock issued- Director/new grants | $ 0 | 0 | $ 0 | 0 | 0 | 0 | |
Common stock issued- Director/new grants (in shares) | 0 | 0 | |||||
Balance at Aug. 03, 2019 | $ 32 | 344,983 | $ (230,168) | (725) | (66,157) | 47,965 | |
Balance (in shares) at Aug. 03, 2019 | 3,224 | (1,409) | |||||
Balance at May. 04, 2019 | $ 32 | 344,905 | $ (230,166) | (730) | (58,029) | 56,012 | |
Balance (in shares) at May. 04, 2019 | 3,222 | (1,409) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | $ 0 | 0 | $ 0 | 0 | (8,128) | (8,128) | |
Other comprehensive income | 0 | 0 | 0 | 5 | 0 | 5 | |
Vested restricted shares | $ 0 | 3 | $ (2) | 0 | 0 | 1 | |
Vested restricted shares (in shares) | 2 | 0 | |||||
Amortization of unearned compensation/restricted stock amortization | $ 0 | 75 | $ 0 | 0 | 0 | 75 | |
Balance at Aug. 03, 2019 | $ 32 | 344,983 | $ (230,168) | (725) | (66,157) | 47,965 | |
Balance (in shares) at Aug. 03, 2019 | 3,224 | (1,409) | |||||
Balance at Feb. 01, 2020 | $ 32 | 345,102 | $ (230,169) | (1,479) | (108,971) | 4,515 | |
Balance (in shares) at Feb. 01, 2020 | 3,226 | (1,409) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | $ 0 | 0 | $ 0 | 0 | (6,306) | (6,306) | |
Other comprehensive income | 0 | 0 | 0 | 6 | 0 | 6 | |
Issuance of warrants | 0 | 836 | 0 | 0 | 0 | 836 | |
Vested restricted shares | $ 0 | (9) | $ 0 | 0 | 0 | (9) | |
Vested restricted shares (in shares) | 4 | (1) | |||||
Common stock issued- Director/new grants | $ 0 | 243 | $ 0 | 0 | 0 | 243 | |
Common stock issued- Director/new grants (in shares) | 6 | 0 | |||||
Amortization of unearned compensation/restricted stock amortization | $ 0 | 285 | $ 0 | 0 | 0 | 285 | |
Balance at Aug. 01, 2020 | $ 32 | 346,457 | $ (230,169) | (1,473) | (115,277) | (430) | |
Balance (in shares) at Aug. 01, 2020 | 3,236 | (1,410) | |||||
Balance at May. 02, 2020 | $ 32 | 346,442 | $ (230,169) | (1,476) | (114,378) | 451 | |
Balance (in shares) at May. 02, 2020 | 3,236 | (1,410) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | $ 0 | 0 | $ 0 | 0 | (899) | (899) | |
Other comprehensive income | 0 | 0 | 0 | 3 | 0 | 3 | |
Issuance of warrants | 0 | 0 | 0 | 0 | 0 | 0 | |
Vested restricted shares | $ 0 | 0 | $ 0 | 0 | 0 | 0 | |
Vested restricted shares (in shares) | 0 | 0 | |||||
Common stock issued- Director/new grants | $ 0 | 0 | $ 0 | 0 | 0 | 0 | |
Common stock issued- Director/new grants (in shares) | 0 | 0 | |||||
Amortization of unearned compensation/restricted stock amortization | $ 0 | 15 | $ 0 | 0 | 0 | 15 | |
Balance at Aug. 01, 2020 | $ 32 | $ 346,457 | $ (230,169) | $ (1,473) | $ (115,277) | $ (430) | |
Balance (in shares) at Aug. 01, 2020 | 3,236 | (1,410) | |||||
[1] | The cash flows related to discontinued operations have not been segregated, and are included in the Consolidated Statements of Cash Flows. See footnote 3. |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 6 Months Ended | ||
Aug. 01, 2020 | Aug. 03, 2019 | [1] | |
OPERATING ACTIVITIES: | |||
Net income loss | $ (6,306) | $ (15,930) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation of fixed assets | 493 | 1,460 | |
Amortization of intangible assets | 514 | 572 | |
Stock-based compensation | 285 | 154 | |
Loss on disposal of fixed assets | 0 | 5 | |
Write down investment | 0 | 500 | |
Amortization of ROU asset | 281 | ||
Change in cash surrender value | (58) | (175) | |
Changes in operating assets and liabilities that provide (use) cash: | |||
Accounts receivable | 1,901 | 102 | |
Merchandise inventory | (2,739) | 5,057 | |
Prepaid expenses and other current assets | 2,054 | 1,267 | |
Other long-term assets | 0 | 3,472 | |
Accounts payable | 1,978 | (5,285) | |
Accrued expenses and other current liabilities | (6,242) | (995) | |
Deferred revenue | 0 | (981) | |
Other long-term liabilities | (49) | (4,185) | |
Net cash used in operating activities | (7,888) | (14,962) | |
INVESTING ACTIVITIES: | |||
Purchases of fixed assets | (588) | (1,541) | |
Proceeds from sale of fye business | 11,779 | 0 | |
Capital distribution from joint venture | 0 | 121 | |
Net cash provided by (used in) investing activities | 11,191 | (1,420) | |
FINANCING ACTIVITIES: | |||
Proceeds from short term borrowings | 2,151 | 12,086 | |
Proceeds from long term borrowings | 4,401 | 0 | |
Proceeds from Issuance of Warrants | 836 | 0 | |
Proceeds from PPP loan | 2,018 | 0 | |
Issuance of director deferred shares and RSUs | 237 | 0 | |
Payment of short term borrowings | (13,149) | 0 | |
Net cash provided by (used in) financing activities | (3,506) | 12,086 | |
Net increase (decrease) in cash, cash equivalents, and restricted cash | (203) | (4,296) | |
Cash, cash equivalents, and restricted cash, beginning of period | 8,852 | 14,226 | |
Cash, cash equivalents, and restricted cash, end of period | $ 8,649 | $ 9,930 | |
[1] | The cash flows related to discontinued operations have not been segregated, and are included in the Consolidated Statements of Cash Flows. See footnote 3. |
Nature of Operations
Nature of Operations | 6 Months Ended |
Aug. 01, 2020 | |
Nature of Operations [Abstract] | |
Nature of Operations | Note 1. Nature of Operations Kaspien Holdings Inc., formerly Trans World Entertainment Corporation, which, together with its consolidated subsidiaries, is referred to herein as “the Company”, “we”, “us” and “our”, was incorporated in New York in 1972. We own 100% of the outstanding common stock of Kaspien Inc., formerly etailz, Inc (“Kaspien”), through which our principal operations are conducted. Kaspien provides a platform of software and services to empower brands to grow their online distribution channels on digital marketplaces such as Amazon, Walmart, eBay, among others. The Company helps brands achieve their online retail goals through its innovative and proprietary technology, tailored strategies, and mutually beneficial partnerships. Kaspien is positioning itself to be a brand’s ultimate online growth partner and is guided by seven core principles: • Partner Obsession • Results • Insights Driven • Ownership • Simplicity • Diversity and Teamwork • Innovation Previously, the Company also operated fye, a chain of retail entertainment stores and e-commerce sites, www.fye.com www.secondspin.com Liquidity and Cash Flows: The Company’s primary sources of liquidity are its borrowing capacity under its revolving credit facility, available cash and cash equivalents, and to a lesser extent, cash generated from operations. Our cash requirements relate primarily to working capital needed to operate and grow our business, including funding operating expenses and the purchase of inventory. Our ability to achieve profitability and meet future liquidity needs and capital requirements will depend upon numerous factors, including the timing and amount of our net revenue; the timing and amount of our operating expenses; the timing and costs of working capital needs; successful implementation of our strategy and planned activities; and our ability to overcome the impact of the COVID-19 pandemic. As disclosed in the Company's Annual Report on Form 10-K filed June 15, 2020, the Company experienced negative cash flows from operations during fiscal 2019 and 2018 and we expect to incur net losses in 2020. The ability of the Company to meet its liabilities and to continue as a going concern is dependent on improved profitability, the continued implementation of the strategic initiative to reposition Kaspien as a platform of software and services, the availability of future funding, implementation of one or more corporate initiatives to reduce costs at the parent company level (which could include a voluntary delisting from NASDAQ and deregistering of our Common Stock in order to substantially eliminate the costs associated with being a public company), satisfying all unassumed liabilities of the fye segment and other strategic alternatives, including selling all or part of the remaining business or assets of the Company, and overcoming the impact of the COVID-19 pandemic. There can be no assurance that we will be successful in further implementing our business strategy or that the strategy, including the completed initiatives, will be successful in sustaining acceptable levels of sales growth and profitability. In addition, the proceeds from the PPP Loan are subject to audit and there is a risk of repayment. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. On August 4, 2020, the Company received a letter from the Listing Qualifications staff of The Nasdaq Stock Market (“Nasdaq”) notifying the Company that it is no longer in compliance with the minimum stockholders’ equity requirement for continued listing on the Nasdaq Capital Market. Nasdaq Listing Rule 5550(b)(1) requires listed companies to maintain stockholders’ equity of at least $2,500,000 and as of August 4, 2020, the Company did not meet the alternative compliance standards relating to the market value of listed securities or net income from continuing operations. The notification letter has no immediate effect on the Company’s listing on the Nasdaq Capital Market. Nasdaq has provided the Company with 45 calendar days, or until September 18, 2020, to submit a plan to regain compliance with the minimum stockholders’ equity standard. If the Company submits a plan to regain compliance that is accepted, Nasdaq may grant an extension of up to 180 calendar days from the date of the notification letter to regain compliance. If the Company does not submit a plan to regain compliance or if such plan is not accepted, or if it is accepted and the Company does not regain compliance in the timeframe required by Nasdaq, the Nasdaq staff could provide notice that the Company’s Common Stock is subject to delisting. The unaudited condensed consolidated financial statements for the thirteen weeks ended August 1, 2020 were prepared on the basis of a going concern which contemplates that the Company will be able to realize assets and discharge liabilities in the normal course of business. The ability of the Company to meet its liabilities and to continue as a going concern is dependent on continued improved profitability and the other factors set forth in the preceding paragraph. For the next 12 months, management believes that the Company’s existing liquidity will be adequate to fund its working capital needs . At August 1, 2020, we had cash and cash equivalents of $3.3 million, net working capital of $10.8 million, and outstanding borrowings of $2.2 million on our revolving credit facility, as further discussed below. New Credit Facility On February 20, 2020, Kaspien Inc. entered into a Loan and Security Agreement (the “Loan Agreement”) with Encina Business Credit, LLC (“Encina”), as administrative agent, under which the lenders party thereto committed to provide up to $25 million in loans under a three-year, secured revolving credit facility (the “New Credit Facility”). Concurrent with the FYE Transaction, the Company borrowed $3.3 million under the New Credit Facility in order to satisfy the remaining obligations of the Company under the aforementioned Credit Facility. The commitments by the lenders under the New Credit Facility are subject to borrowing base and availability restrictions. Up to $5.0 million of the New Credit Facility may be used for the making of swing line loans. As of August 1, 2020, borrowings under the Credit Facility were $2.2 million. The Company had $6.5 million available for borrowing as of August 1, 2020. As of August 1, 2020, unamortized debt issuance costs of $1.0 million are included in “Other assets” on the unaudited condensed consolidated balance sheet. Subordinated Debt Agreement On March 30, 2020, the Company and Kaspien (the “Loan Parties”) entered into Amendment No. 1 to the Loan Agreement (the “Amendment”). Pursuant to the Amendment, among other things, (i) the Company was added as “Parent” under the Amended Loan Agreement, (ii) the Company granted a first priority security interest in substantially all of the assets of the Company, including inventory, accounts receivable, cash and cash equivalents and certain other collateral, and (iii) the Loan Agreement was amended to (a) permit the incurrence of certain subordinated indebtedness under the Subordinated Loan Agreement (as defined below) and (b) limit the Company’s ability to incur additional indebtedness, create liens, make investments, make restricted payments or specified payments and merge or acquire assets. On March 30, 2020, the Loan Parties entered into a Subordinated Loan and Security Agreement (the “Subordinated Loan Agreement”) with the lenders party thereto from time to time (the “Lenders”) and TWEC Loan Collateral Agent, LLC (“Collateral Agent”), as collateral agent for the Lenders, pursuant to which the Lenders made a $5.2 million secured term loan (the “Subordinated Loan”) to Kaspien with a scheduled maturity date of August 12, 2023. As of August 1, 2020, unamortized debt issuance costs of $0.2 million are included in “Long Term Debt” on the unaudited condensed consolidated balance sheet. Directors Jonathan Marcus, Thomas Simpson, and Michael Reickert are the chief executive officer of Alimco Re Ltd. (“Alimco”), the managing member of Kick-Start III, LLC and Kick-Start IV, LLC (“Kick-Start”), and a trustee of the Robert J. Higgins TWMC Trust (the “Trust”), an affiliate of RJHDC, LLC (“RJHDC” and together with Alimco and Kick-Start, “Related Party Entities”), respectively. The Related Party Entities are parties to the Subordinated Loan Agreement. Paycheck Protection Program On April 17, 2020, Kaspien received loan proceeds of $2.0 million (the “PPP Loan”) pursuant to the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The PPP Loan, which was in the form of a promissory note (the “Note”), dated April 10, 2020, between Kaspien and First Interstate Bank, as the lender, matures on April 17, 2022, bears interest at a fixed rate of 1% per annum, and is payable in monthly installments of $112,975.55 commencing on November 10, 2020. While under the terms of the PPP, some or all of the PPP Loan amount may be forgiven if the PPP Loan proceeds are used for qualifying expenses as described in the CARES Act and the Note, such as payroll costs, benefits, rent, and utilities, there is no assurance that the Company will be successful in qualifying for and receiving forgiveness on the PPP Loan amount. The Company submitted an application for forgiveness on August 14, 2020. In addition to the aforementioned current sources of existing working capital, the Company may explore certain other strategic alternatives that may become available to the Company, as well continuing our efforts to generate additional sales and increase margins. However, at this time the Company has no commitments to obtain any additional funds, and there can be no assurance such funds will be available on acceptable terms or at all, should we require such additional funds. If the Company is unable to improve its operations, it may be required to obtain additional funding, and the Company’s financial condition and results of operations may be materially adversely affected. Furthermore, broad market and industry factors may seriously harm the market price of our Common Stock, regardless of our operating performance, and may adversely impact our ability to raise additional funds, should we require such additional funds. Similarly, if our Common Stock is delisted from the NASDAQ Capital Market, it may also limit our ability to raise additional funds.The unaudited condensed consolidated financial statements for the thirteen weeks ended August 1, 2020 were prepared on the basis of a going concern which contemplates that the Company will be able to realize assets and discharge liabilities in the normal course of business. The ability of the Company to meet its liabilities and to continue as a going concern is dependent on improved profitability, the performance improvement plan implemented for the Kaspien segment and the availability of future funding. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. FYE Transaction On February 20, 2020, the Company consummated the sale of substantially all of the assets and certain of the liabilities relating to fye to a subsidiary of Sunrise Records pursuant to an Asset Purchase Agreement dated January 23, 2020, by and among the Company, Record Town, Inc., Record Town USA LLC, Record Town Utah LLC, Trans World FL LLC, Trans World New York, LLC, 2428392 Inc., and Sunrise Records. The fye business is reported as discontinued operations in our Consolidated Statements of Income, and the related assets and liabilities have been presented as held-for-sale in the Consolidated Balance Sheets, through their dates of disposal. These changes have been applied to all periods presented. Unless otherwise noted, discussion within these notes to the consolidated financial statements relates to continuing operations. Refer to Note 3 for additional information on discontinued operations. Impact of COVID-19 To date, as a direct result of COVID-19, most of our employees are working remotely. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition, including expenses, reserves and allowances, and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it, as well as the economic impact on local, regional, national and international customers and markets, which are highly uncertain and cannot be predicted at this time. Management is actively monitoring this situation and the possible effects on its financial condition, liquidity, operations, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the response to curb its spread, currently we are not able to estimate the effects of the COVID-19 outbreak to our results of operations, financial condition, or liquidity. In response to the rapidly evolving COVID-19 pandemic, we activated our business continuity program, led by our Executive Team in conjunction with Human Resources, to help us manage the situation. In mid-March, we transitioned our corporate office staff to work 100% remotely. This process was aided through the implementation of a flexible work from home policy rolled out to the organization in fiscal 2019, having a companywide communication platform for instant messaging and video conferencing, and cloud-based critical business applications. However, while our business is not dependent on physical office locations nor travel, having a 100% remote workforce does present increased operational risk. Our leadership team believes we have the necessary controls in place to mitigate these impacts and allow the team to continue to operate effectively remotely as long as required by State guidelines. While e-commerce has largely benefited from the closure of brick-and-mortar locations as consumer spending has been pushed online to marketplaces such as Amazon and Walmart, the industry nor our organization has been immune to the impact to our supply chains. For instance, in March, Amazon reduced replenishment in their fulfillment centers to essential items which limited a significant percentage of SKUs carried by Kaspien and a number of Kaspien’s partners shut their warehouses or suffered limited processing capacity due to COVID-19. While Amazon has since lifted restrictions and the leadership team executed contingency plans to mitigate the adverse impact from these restrictions, this highlights the fluid nature of COVID-19 across supply chains. Additionally, since the beginning of the pandemic, tens of millions of Americans have lost their jobs, significantly increasing the risk of near-term economic contraction in the United States that may affect e-commerce sales. The risk of a second wave or increased numbers of positive COVID-19 cases also presents further risk to supply chains. Leadership is actively monitoring the situation and potential impacts on its financial condition, liquidity, operations and workforce but the full extent of the impact is still highly uncertain. |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Aug. 01, 2020 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Note 2. Basis of Presentation The accompanying interim condensed consolidated financial statements consist of Kaspien Holdings Inc., Record Town, Inc. (“Record Town”), Record Town’s subsidiaries and Kaspien, Inc., all of which are wholly owned. All intercompany accounts and transactions have been eliminated. The interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished in these unaudited interim condensed consolidated financial statements reflects all normal, recurring adjustments which, in the opinion of management, are necessary for the fair presentation of such financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of net revenue and expenses during the reporting period. Actual results could differ from those estimates. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to rules and regulations applicable to interim financial statements. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations as of and for the year ended February 1, 2020 contained in the Company's Annual Report on Form 10-K filed June 15, 2020. The results of operations for the thirteen weeks ended August 1, 2020 are not necessarily indicative of the results to be expected for the entire fiscal year ending February 3, 2021. The Company’s significant accounting policies are the same as those described in Note 1 to the Company’s Consolidated Financial Statements on Form 10-K for the fiscal year ended February 1, 2020. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Aug. 01, 2020 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | Note 3. Discontinued Operations On February 20, 2020, the Company consummated the sale of substantially all of the assets and certain of the liabilities relating to fye to a subsidiary of Sunrise Records pursuant to an Asset Purchase Agreement dated January 23, 2020, by and among the Company, Record Town, Inc., Record Town USA LLC, Record Town Utah LLC, Trans World FL LLC, Trans World New York, LLC, 2428392 Inc., and Sunrise Records. The results for fye were previously reported in the fye segment. Certain corporate overhead costs and segment costs previously allocated to fye for segment reporting purposes did not qualify for classification within discontinued operations and have been reallocated to continuing operations. The following table summarizes the major line items for fye that are included in the income from discontinued operations, net of tax line item in the Consolidated Statements of Income: Thirteen Weeks Ended Twenty-Six Weeks Ended (In thousands) August 1, 2020 August 3, 2019 August 1, 2020 August 3, 2019 Net revenue $ — $ 41,744 $ — $ 86,762 Cost of goods sold — 24,731 — 52,247 Selling, general and administrative expenses — 20,835 — 41,777 Interest expense — 22 — 18 Other expense — 462 — 419 Loss from discontinued operations before income taxes — (4,306 ) — (7,699 ) Income tax expense — 64 — 127 Loss from discontinued operations, net of tax $ — $ (4,370 ) $ — $ (7,826 ) The following table summarizes the carrying amounts of major classes of assets and liabilities of discontinued operations for each of the periods presented: (In thousands) August 1, 2020 February 1, 2020 August 3, 2019 Cash $ — $ — $ — Accounts receivable, net — 62 2,957 Inventories — 50,122 69,600 Other current assets — 1,005 3,659 Property, plant and equipment, net — — 5,707 Operating lease right-to-use asset — — 21,118 Other assets — — 1,080 Total assets of discontinued operations $ — $ 51,189 $ 104,121 Accounts payable $ — $ 9,769 19,759 Accrued liabilities — 779 3,533 Deferred revenue — 6,764 5,974 Current portion of lease liabilities — 8,976 8,755 Operating lease liabilities — 11,059 16,070 Other liabilities — 2,063 2,113 Total liabilities of discontinued operations (a) $ — $ 39,410 $ 56,204 The cash flows related to discontinued operations have not been segregated and are included in the Consolidated Statements of Cash Flows. The following table summarizes the cash flows for discontinued operations that are included in the Consolidated Statements of Cash Flows: Twenty-six Weeks Ended (In thousands) August 1, 2020 August 3, 2019 Net cash used in operating activities $ — $ (11,555 ) Net cash provided by(used) in investing activities — (477 ) Depreciation and amortization — 1,188 Purchases of fixed assets — (1,068 ) |
Sale of Fye Business
Sale of Fye Business | 6 Months Ended |
Aug. 01, 2020 | |
Sale of Fye Business [Abstract] | |
Sale of Fye Business | Note 4. Sale of fye business On February 20, 2020, the Company consummated the sale of substantially all of the assets and certain of the liabilities relating to fye to a subsidiary of Sunrise Records pursuant to an Asset Purchase Agreement dated January 23, 2020, by and among the Company, Record Town, Inc., Record Town USA LLC, Record Town Utah LLC, Trans World FL LLC, Trans World New York, LLC, 2428392 Inc., and Sunrise Records. The following table reconciles the assets sold to and liabilities assumed by Sunrise to cash proceeds received: Assets sold Inventory $ 50,122 Accounts receivable 62 Prepaid expenses and other current assets 654 Other assets 351 fye business assets sold $ 51,189 Less liabilities assumed: Accounts payable (9,769 ) Deferred revenue (6,764 ) Accrued expenses and other current liabilities (779 ) Other long-term liabilities (2,063 ) Operating lease liabilities (20,035 ) fye business liabilities assumed $ 39,410 Net proceeds $ 11,779 The Company did not recognize |
Recently Adopted Accounting Pro
Recently Adopted Accounting Pronouncements | 6 Months Ended |
Aug. 01, 2020 | |
Recently Adopted Accounting Pronouncements [Abstract] | |
Recently Adopted Accounting Pronouncements | Note 5. Recently Adopted Accounting Pronouncements Compensation – Retirement Benefits In March 2017, the FASB issued ASU 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” which is intended to improve the presentation of net periodic pension cost and net periodic post-retirement benefit cost in an entity’s financial statements by requiring the service cost component be disaggregated from other components of net benefit costs and presented in the same line item or items as other compensation costs for the employees. Additionally, only the service cost component of net benefit cost is eligible for capitalization when applicable. ASU 2017-07 was effective for the Company’s fiscal year beginning February 3, 2019. This standard did not have a material effect on the Company’s consolidated financial statements. Compensation – Stock Compensation In August 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting,” which provided clarity as to what changes to the terms or conditions of share-based payment awards require an entity to apply modification accounting in Topic 718. ASU 2017-09 was effective for the Company for interim and annual periods in fiscal year beginning February 3, 2019. This standard did not have a material effect on the Company’s consolidated financial statements. Recently Adopted and Issued Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which introduced an expected credit loss model for the impairment of financial assets measured at amortized cost. The model replaces the probable, incurred loss model for those assets and instead, broadens the information an entity must consider in developing its expected credit loss estimate for assets measured at amortized cost. This standard will be effective for smaller reporting companies for fiscal years beginning after December 15, 2022, however early adoption is permitted. We are currently evaluating the impact of this new standard on the consolidated financial statements. In August 2018, the FASB issued ASU 2018-14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework— Changes to the Disclosure Requirements for Defined Benefit Plans”, which removes certain disclosures that are no longer cost beneficial and also includes additional disclosures to improve the overall usefulness of the disclosure requirements to financial statement users. This standard will be effective for public entities for fiscal years beginning after December 15, 2020, however early adoption is permitted. We are currently evaluating the impact of this new standard on the consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes” (Topic 740), which simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also simplifies aspects of the enacted changes in tax laws or rates. This standard will be effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, however early adoption is permitted. We are currently evaluating the impact of this new standard on the consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. ASU 2020-04 provides, among other things, guidance that modifications of contracts within the scope of Topic 470, Debt, should be accounted for by prospectively adjusting the effective interest rate; modifications of contracts within the scope of Topic 840, Leases, should be accounted for as a continuation of the existing contract; and, changes in the critical terms of hedging relationships, caused by reference rate reform, should not result in the de-designation of the instrument, provided certain criteria are met. The Company’s exposure to LIBOR rates includes its credit facility. The amendments are effective as of March 12, 2020 through December 31, 2022. Adoption is permitted at any time. The Company is currently evaluating the impact this update will have on its Condensed Consolidated Financial Statements. Recent accounting pronouncements pending adoption not discussed above are either not applicable or are not expected to have a material impact on our consolidated financial condition, results of operations, or cash flows. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Aug. 01, 2020 | |
Intangible Assets [Abstract] | |
Intangible Assets | Note 6. Intangible Assets The determination of the fair value of intangible assets acquired in a business acquisition, including the Company’s acquisition of Kaspien in 2016, is subject to many estimates and assumptions. Our identifiable intangible assets that resulted from our acquisition of Kaspien consist of vendor relationships, technology and tradenames. We review amortizable intangible asset groups for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. During fiscal 2019, the Company fully impaired its vendor relationships and the Company recognized an impairment loss of $0.8 million. During fiscal 2018, the Company concluded, based on continued operating losses for the Kaspien segment driven by lower than expected operating results culminating in the fourth quarter of fiscal 2018 that a triggering event had occurred, and an evaluation of intangible assets for impairment was required. Intangible assets related to technology and vendor relationships were written down to their estimated fair value at the end of fiscal 2018 resulting in the recognition of asset impairment charges of $16.4 million. Identifiable intangible assets as of August 1, 2020 consisted of the following (amounts in thousands): August 1, 2020 Weighted Average Amortization Period Original Gross Carrying Amount Accumulated Impairment Accumulated Amortization Net Carrying Amount Vendor relationships 120 $ 19,100 $ 14,587 $ 4,513 $ - Technology 60 6,700 2,587 3,660 453 Trade names and trademarks 60 3,200 - 2,407 793 $ 29,000 $ 17,174 $ 10,580 $ 1,246 The changes in net intangibles and goodwill from February 1, 2010 to August 1, 2020 were as follows: (amounts in thousands) February 1, Impairment Expense Amortization Expense August 1, Amortized intangible assets: Technology $ 647 $ - $ 194 $ 453 Trade names and trademarks 1,113 - 320 793 Net amortized intangible assets $ 1,760 $ - $ 514 $ 1,246 Amortization expense of intangible assets for the thirteen and twenty-six week periods ended August 1, 2020 and August 3, 2019 consisted of the following: Thirteen Weeks Ended Twenty-Six Weeks Ended (amounts in thousands) August 1, August 3, 2019 August 1, August 3, 2019 Amortized intangible assets: Vendor relationships $ - $ 29 $ - $ 58 Technology 97 97 194 194 Trade names and trademarks 160 160 320 320 Total amortization expense $ 257 $ 286 $ 514 $ 572 Estimated amortization expense for the remainder of fiscal 2020 and the five succeeding fiscal years and thereafter is as follows: Fiscal Year Amortization 2020 $ 514 2021 732 2022 - 2023 - 2024 - Thereafter - |
Depreciation and Amortization
Depreciation and Amortization | 6 Months Ended |
Aug. 01, 2020 | |
Depreciation and Amortization [Abstract] | |
Depreciation and Amortization | Note 7. Depreciation and Amortization Depreciation and amortization included in selling, general and administrative expenses of the interim condensed consolidated statements of operations for the thirteen weeks ended August 1, 2020 and August 3, 2019 was $0.5 million and $0.4 million, respectively. Depreciation and amortization included in selling, general and administrative expenses of the interim condensed consolidated statements of operations for the twenty-six weeks ended August 1, 2020 and August 3, 2019 was $1.0 million and $0.8 million, respectively. |
Restricted Cash
Restricted Cash | 6 Months Ended |
Aug. 01, 2020 | |
Restricted Cash [Abstract] | |
Restricted Cash | Note 8. Restricted Cash As a result of the death of its former Chairman, the Company holds $5.3 million in a rabbi trust, of which $1.0 million is classified as restricted cash in current assets and $4.3 million is classified as restricted cash in other assets on the accompanying interim condensed consolidated balance sheet as of August 1, 2020. A summary of cash, cash equivalents and restricted cash is as follows (amounts in thousands): August 1, 2020 February 1, 2020 August 3, 2019 Cash and cash equivalents $ 3,337 $ 2,977 $ 3,635 Restricted cash 5,312 5,875 6,295 Total cash, cash equivalents and restricted cash $ 8,649 $ 8,852 $ 9,930 |
Debt
Debt | 6 Months Ended |
Aug. 01, 2020 | |
Debt [Abstract] | |
Debt | Note 9. Debt Credit Facility In January 2017, the Company amended and restated its revolving credit facility (“Credit Facility”). The Credit Facility provided for commitments of $50 million subject to increase up to $75 million during the months of October to December of each year, as needed. On February 20, 2020, in conjunction with the FYE Transaction, the Company fully satisfied its obligations under the Credit Facility through proceeds received from the sale of the fye business and borrowings under the new Kaspien credit facility, as further discussed below, accordingly the Credit Facility is no longer available to the Company. As of August 3, 2019, borrowings under the Credit Facility were $12.1 million. New Credit Facility On February 20, 2020, Kaspien Inc. entered into a Loan and Security Agreement (the “Loan Agreement”) with Encina Business Credit, LLC (“Encina”), as administrative agent, under which the lenders party thereto committed to provide up to $25 million in loans under a three-year, secured revolving credit facility (the “ New Credit Facility”). Concurrent with the sale of the fye business, the Company borrowed $3.3 million under the New Credit Facility to satisfy the remaining obligations of the Company under the aforementioned Credit Facility. The commitments by the lenders under the New Credit Facility are subject to borrowing base and availability restrictions. Up to $5.0 million of the New Credit Facility may be used for the making of swing line loans. Interest under the New Credit Facility accrues, subject to certain terms and conditions under the Loan Agreement, at a LIBOR Rate or Base Rate, plus, in each case, an Applicable Margin, which is determined by reference to the level of Availability as defined in the Loan Agreement, with the Applicable Margin for LIBOR Rate loans ranging from 4.00% to 4.50% and the Applicable Margin for Base Rate loans ranging from 3.00% to 3.50%. The New Credit Facility is secured by a first priority security interest in substantially all of the assets of Kaspien, including inventory, accounts receivable, cash and cash equivalents and certain other collateral of the borrowers and guarantors under the New Credit Facility (collectively, the “Credit Facility Parties”) and by a first priority pledge by the Company of its equity interests in Kaspien. The Company will provide a limited guarantee of Kaspien’s obligations under the New Credit Facility. Among other things, the Loan Agreement limits Kaspien’s ability to incur additional indebtedness, create liens, make investments, make restricted payments or specified payments and merge or acquire assets. The Loan Agreement also requires Kaspien to comply with a financial maintenance covenant. The Loan Agreement contains customary events of default, including, but not limited to, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to other obligations, customary ERISA defaults, certain events of bankruptcy and insolvency, judgment defaults, the invalidity of liens on collateral, change in control, cessation of business or the liquidation of material assets of the Credit Facility Parties taken as a whole, the occurrence of an uninsured loss to a material portion of collateral and failure of the obligations under the New Credit Facility to constitute senior indebtedness under any applicable subordination or intercreditor agreements. On March 30, 2020, the Company and Kaspien (the “Loan Parties”) entered into Amendment No. 1 to the Loan Agreement (the “Amendment”). Pursuant to the Amendment, among other things, (i) the Company was added as “Parent” under the Amended Loan Agreement, (ii) the Company granted a first priority security interest in substantially all of the assets of the Company, including inventory, accounts receivable, cash and cash equivalents and certain other collateral, and (iii) the Loan Agreement was amended to (a) permit the incurrence of certain subordinated indebtedness under the Subordinated Loan Agreement (as defined below) and (b) limit the Company’s ability to incur additional indebtedness, create liens, make investments, make restricted payments or specified payments and merge or acquire assets. As of August 1, 2020, borrowings under the New Credit Facility were $2.2 million. The Company had $6.5 million available for borrowing as of August 1, 2020. As of August 1, 2020, unamortized debt issuance costs of $1.0 million related to the New Credit Facility are included in Other assets on the unaudited condensed consolidated balance sheet. The Company records short term borrowings at cost, in which the carrying value approximates fair value due to its short-term maturity. Subordinated Loan Agreement On March 30, 2020, the Loan Parties entered into a Subordinated Loan and Security Agreement (the “Subordinated Loan Agreement”) with the lenders party thereto from time to time (the “Lenders”) and TWEC Loan Collateral Agent, LLC (“Collateral Agent”), as collateral agent for the Lenders, pursuant to which the Lenders made a $5.2 million secured term loan (the “Subordinated Loan”) to Kaspien with a scheduled maturity date of May 22, 2023. Interest on the Subordinated Loan accrues, subject to certain terms and conditions under the Subordinated Loan Agreement, at the rate of twelve percent (12.0%) per annum, compounded on the last day of each calendar quarter by becoming a part of the principal amount of the Subordinated Loan. The Subordinated Loan is secured by a second priority security interest in substantially all of the assets of the Loan Parties, including inventory, accounts receivable, cash and cash equivalents and certain other collateral of the borrowers and guarantors under the Subordinated Loan Agreement (collectively, the “Second Lien Credit Facility Parties”). The Company will provide a limited guarantee of Kaspien’s obligations under the Subordinated Loan. Among other things, the Subordinated Loan Agreement limits the Loan Parties’ ability to incur additional indebtedness, create liens, make investments, make restricted payments or specified payments and merge or acquire assets. The Subordinated Loan Agreement contains customary events of default, including, but not limited to, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to other obligations, customary ERISA defaults, certain events of bankruptcy and insolvency, judgment defaults, the invalidity of liens on collateral, change in control, cessation of business or the liquidation of material assets of the Second Lien Credit Facility Parties taken as a whole and the occurrence of an uninsured loss to a material portion of collateral. In conjunction with the Subordinated Debt Agreement, the Company issued warrants to purchase up to 244,532 shares of Common Stock to the Related Party Entities (127,208 shares for Alimco, 23,401 shares for Kick-Start, and 93,923 shares for RJHDC), subject to adjustment in accordance with the terms of the Warrants, at an exercise price of $0.01 per share. The value of the warrants of $0.8 million was allocated against the principal proceeds of the Subordinated Debt Agreement. Paycheck Protection Program On April 17, 2020, Kaspien received loan proceeds of $2.0 million (the “PPP Loan”) pursuant to the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The PPP Loan, which was in the form of a promissory note (the “Note”), dated April 10, 2020, between Kaspien and First Interstate Bank, as the lender, matures on April 17, 2022, bears interest at a fixed rate of 1% per annum, and is payable in monthly installments of $112,976 commencing on November 10, 2020. While under the terms of the PPP, some or all of the PPP Loan amount may be forgiven if the PPP Loan proceeds are used for qualifying expenses as described in the CARES Act and the Note, such as payroll costs, benefits, rent, and utilities, there is no assurance that the Company will be successful in qualifying for and receiving forgiveness on the PPP Loan amount. |
Stock Based Compensation
Stock Based Compensation | 6 Months Ended |
Aug. 01, 2020 | |
Stock Based Compensation [Abstract] | |
Stock Based Compensation | Note 10. Stock Based Compensation The Company has outstanding awards under three employee stock award plans, the 2005 Long Term Incentive and Share Award Plan, the Amended and Restated 2005 Long Term Incentive and Share Award Plan (the “Old Plans”); and the 2005 Long Term Incentive and Share Award Plan (as amended and restated April 5, 2017 (the “New Plan”). Collectively, these plans are referred to herein as the Stock Award Plans. Additionally, the Company had a stock award plan for non-employee directors (the “1990 Plan”). The Company no longer issues stock options under the Old Plans or the 1990 Plan. The FYE Transaction in February 2020 constituted a change of control and vesting on all unvested options was accelerated. As a result, unrecognized compensation expense of $0.2 million was recognized in the first quarter of fiscal 2020. Total compensation expense recognized in the twenty-six weeks ended August 1, 2020 was $0.3 million. Equity awards authorized for issuance under the New Plan total 250,000. As of August 1, 2020, of the awards authorized for issuance under the Stock Award Plans, 133,462 options were granted and are outstanding, 46,900 of which were vested and exercisable. Shares available for future grants of options and other share-based awards under the New Plan at August 1, 2020 were 152,188. The following table summarizes stock award activity during the thirteen weeks ended August 1, 2020: Employee and Director Stock Award Plans Number of Shares Subject To Option Weighted Average Exercise Price Weighted Average Remaining Contractual Term Other Share Awards (1) Weighted Average Grant Fair Value Balance February 1, 2020 129,196 $ 52.11 5.8 9,945 $ 36.75 Granted 86,562 6.27 9.9 - - Canceled (82,297 ) 54.92 - - - Exercised - - - (9,945 ) 36.75 Balance August 1, 2020 133,461 $ 20.64 7.6 - $ - Exercisable August 1, 2020 55,900 $ 47.18 3.3 - $ - (1) Other Share Awards include deferred shares granted to Directors and restricted share units granted to executive officers. As of August 1, 2020, the intrinsic value of stock awards outstanding was $22,400 and the intrinsic value of stock awards exercisable was $171,669. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Aug. 01, 2020 | |
Accumulated Other Comprehensive Loss [Abstract] | |
Accumulated Other Comprehensive Loss | Note 11. Accumulated Other Comprehensive Loss Accumulated other comprehensive loss that the Company reports in the interim condensed consolidated balance sheets represents net loss, adjusted for the difference between the accrued pension liability and accrued benefit cost, net of taxes, associated with the Company’s defined benefit plan. Comprehensive loss consists of net loss and the amortization of pension gains associated with Company’s defined benefit plan for the thirteen and twenty-six weeks ended August 1, 2020 and August 3, 2019. |
Defined Benefit Plan
Defined Benefit Plan | 6 Months Ended |
Aug. 01, 2020 | |
Defined Benefit Plan [Abstract] | |
Defined Benefit Plan | Note 12. Defined Benefit Plan The Company maintains a non-qualified Supplemental Executive Retirement Plan (“SERP”) for certain executive officers of the Company. The SERP provides eligible executives defined pension benefits that supplement benefits under other retirement arrangements. During the thirteen weeks ended August 1, 2020, the Company did not make any cash contributions to the SERP and presently expects to pay approximately $1.2 million in benefits relating to the SERP during fiscal 2020. The measurement date for the SERP is the fiscal year end, using actuarial techniques which reflect estimates for mortality, turnover and expected retirement. In addition, management makes assumptions concerning future salary increases. Discount rates are generally established as of the measurement date using theoretical bond models that select high-grade corporate bonds with maturities or coupons that correlate to the expected payouts of the applicable liabilities. The following represents the components of the net periodic pension cost related to the Company’s SERP for the respective periods: Thirteen Weeks Ended Twenty-Six Weeks Ended (amounts in thousands) August 1, 2020 August 3, 2019 August 1, 2020 August 3, 2019 Service cost $ - $ 14 $ - $ 28 Interest cost 89 142 178 284 Amortization of net gain (1) (3 ) (5 ) (6 ) (10 ) Net periodic pension cost $ 86 $ 151 $ 172 $ 302 (1) The amortization of net gain is related to a director retirement plan previously provided by the Company. |
Basic and Diluted Loss Per Shar
Basic and Diluted Loss Per Share | 6 Months Ended |
Aug. 01, 2020 | |
Basic and Diluted Loss Per Share [Abstract] | |
Basic and Diluted Loss Per Share | Note 13. Basic and Diluted Loss Per Share Basic loss per share is calculated by dividing net loss by the weighted average common shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into Common Stock or resulted in the issuance of Common Stock (net of any assumed repurchases) that then shared in the earnings of the Company, if any. It is computed by dividing net loss by the sum of the weighted average shares outstanding and additional Common Shares that would have been outstanding if the dilutive potential common shares had been issued for the Company’s Common Stock awards from the Company’s Stock Award Plans. For the thirteen-week and twenty-six week periods ended August 1, 2020 and August 3, 2019, the impact of all outstanding stock awards was not considered because the Company reported net losses and such impact would be anti-dilutive. Accordingly, basic and diluted loss per share was the same. Total anti-dilutive stock awards for the thirteen weeks ended August 1, 2020 and August 3, 2019 were approximately 128,462 and 129,946 shares, respectively. Total anti-dilutive stock awards for the twenty-six weeks ended August 1, 2020 and August 3, 2019 were approximately 127,079 and 134,433, respectively. The following represents basic and diluted loss per share for continuing operations, loss from discontinued operations and net loss for the respective periods: Thirteen Weeks Ended Twenty-Six Weeks Ended (in thousands, except per share amounts) August 1, 2020 August 3, 2019 August 1, 2020 August 3, 2019 Loss from continuing operations $ (899 ) $ (3,758 ) $ (6,306 ) $ (8,104 ) Basic and diluted loss per common share from continuing operations $ (0.49 ) $ (2.07 ) $ (3.46 ) $ (4.47 ) Loss from discontinued operations $ - $ (4,370 ) $ - $ (7,826 ) Basic and diluted loss per common share from discontinued operations $ - $ (2.41 ) $ - $ (4.31 ) Net loss $ (899 ) $ (8,128 ) $ (6,306 ) $ (15,930 ) Basic and diluted loss per common share $ (0.49 ) $ (4.48 ) $ (3.46 ) $ (8.78 ) Weighted average number of common shares outstanding – basic and diluted 1,825 1,816 1,823 1,815 |
Income Taxes
Income Taxes | 6 Months Ended |
Aug. 01, 2020 | |
Income Taxes [Abstract] | |
Income Taxes | Note 14. Income Taxes In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent on the generation of future taxable income. Management considers the scheduled reversal of taxable temporary differences, projected future taxable income and tax planning strategies in making this assessment. Based on available objective evidence, management concluded that a full valuation allowance should continue to be recorded against the Company's deferred tax assets. Management will continue to assess the need for and amount of the valuation allowance against the deferred tax assets by giving consideration to all available evidence to the Company’s ability to generate future taxable income in its conclusion of the need for a full valuation allowance. Any reversal of the Company’s valuation allowance will favorably impact its results of operations in the period of reversal. The Company is currently unable to determine whether or when that reversal might occur, but it will continue to assess the realizability of its deferred tax assets and will adjust the valuation allowance if it is more likely than not that all or a portion of the deferred tax assets will become realizable in the future. The Company has significant net operating loss carry forwards and other tax attributes that are available to offset projected taxable income and current taxes payable, if any, for the year ending February 1, 2020. The deferred tax impact resulting from the utilization of the net operating loss carry forwards and other tax attributes will be offset by a reduction in the valuation allowance. As of February 1, 2020, the Company had a net operating loss carry forward of $288.1 million for federal income tax purposes and approximately $280.2 million for state income tax purposes that expire at various times through 2039 and are subject to certain limitations and statutory expiration periods. The Company has not changed its overall conclusion with respect to the need for a valuation allowance against its net deferred tax assets, which remain fully reserved. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Aug. 01, 2020 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 15. Commitments and Contingencies Legal Proceedings The Company is subject to legal proceedings and claims that have arisen in the ordinary course of its business and have not been finally adjudicated. Although there can be no assurance as to the ultimate disposition of these matters, it is management’s opinion, based upon the information available at this time, that the expected outcome of these matters, individually and in the aggregate, will not have a material adverse effect on the results of operations and financial condition of the Company. As a result, the liability for the cases listed below is remote. Loyalty Memberships and Magazine Subscriptions Class Action On November 14, 2018, three consumers filed a punitive class action complaint against the Company and Synapse Group, Inc. in the United States District Court for the District of Massachusetts, Boston Division (Case No.1:18-cv-12377-DPW) concerning enrollment in the Company’s Backstage Pass VIP loyalty program and associated magazine subscriptions. The complaint alleged, among other things, that the Company’s “negative option marketing” misled consumers into enrolling for membership and subscriptions without obtaining the consumers’ consent. The complaint sought to represent a nationwide class of “all persons in the United States” who were enrolled in and/or charged for Backstage Pass VIP memberships and/or magazine subscriptions, and to obtain statutory and actual damages on their behalf. On April 11, 2019, the plaintiffs voluntarily dismissed their lawsuit. On May 8, 2019, two of the plaintiffs from the dismissed lawsuit filed a similar punitive class action in Massachusetts state court (Civ. Act. No. 197CV00331, Mass. Super. Ct. Hampden Cty.), based on the same allegations, but this time seeking to represent only a class of “FYE customers in Massachusetts” who were charged for VIP Backstage Pass Memberships and/or magazine subscriptions. The Company believes it has meritorious defenses to the plaintiffs’ claims and, if the new case is not dismissed in full, the Company intends to vigorously defend the action. Store Manager Class Actions There are two pending class actions. The first, Spack v. Trans World Entertainment Corp. was originally filed in the District of New Jersey, April 2017 (the “Spack Action”). The Spack Action alleges that the Company misclassified Store Managers (“SMs”) as exempt nationwide. It also alleges that Trans World improperly calculated overtime for Senior Assistant Managers (“SAMs”) nationwide, and that both SMs and SAMs worked “off-the-clock.” It also alleges violations of New Jersey and Pennsylvania State Law with respect to calculating overtime for SAMs. The second, Roper v. Trans World Entertainment Corp., was filed in the Northern District of New York, August 2017 (the “Roper Action”). The Roper Action also asserts a nationwide misclassification claim on behalf of SMs. Both actions were consolidated into the Northern District of New York, with the Spack Action being the lead case. The Company has reached a settlement with the plaintiffs for both store manager class actions. The Company reserved $425,000 for the settlement as of August 1, 2020. Contingent Value Rights On March 30, 2020, the Company entered into the Contingent Value Rights Agreement (the “CVR Agreement”), pursuant to which the Related Party Entities received contingent value rights (“CVRs”) representing the contractual right to receive cash payments from the Company in an amount equal, in the aggregate, to 19.9% of the proceeds (10.35% for Alimco, 1.90% for Kick-Start, and 7.64% for RJHDC) received by the Company in respect of certain intercompany indebtedness owing to it by Kaspien and/or its equity interest in Kaspien. The Company does not anticipate these contingencies being met in Fiscal 2020. |
Nature of Operations (Policies)
Nature of Operations (Policies) | 6 Months Ended |
Aug. 01, 2020 | |
Nature of Operations [Abstract] | |
Nature of Operations | Kaspien Holdings Inc., formerly Trans World Entertainment Corporation, which, together with its consolidated subsidiaries, is referred to herein as “the Company”, “we”, “us” and “our”, was incorporated in New York in 1972. We own 100% of the outstanding common stock of Kaspien Inc., formerly etailz, Inc (“Kaspien”), through which our principal operations are conducted. Kaspien provides a platform of software and services to empower brands to grow their online distribution channels on digital marketplaces such as Amazon, Walmart, eBay, among others. The Company helps brands achieve their online retail goals through its innovative and proprietary technology, tailored strategies, and mutually beneficial partnerships. Kaspien is positioning itself to be a brand’s ultimate online growth partner and is guided by seven core principles: • Partner Obsession • Results • Insights Driven • Ownership • Simplicity • Diversity and Teamwork • Innovation Previously, the Company also operated fye, a chain of retail entertainment stores and e-commerce sites, www.fye.com www.secondspin.com |
Liquidity and Cash Flows | Liquidity and Cash Flows: The Company’s primary sources of liquidity are its borrowing capacity under its revolving credit facility, available cash and cash equivalents, and to a lesser extent, cash generated from operations. Our cash requirements relate primarily to working capital needed to operate and grow our business, including funding operating expenses and the purchase of inventory. Our ability to achieve profitability and meet future liquidity needs and capital requirements will depend upon numerous factors, including the timing and amount of our net revenue; the timing and amount of our operating expenses; the timing and costs of working capital needs; successful implementation of our strategy and planned activities; and our ability to overcome the impact of the COVID-19 pandemic. As disclosed in the Company's Annual Report on Form 10-K filed June 15, 2020, the Company experienced negative cash flows from operations during fiscal 2019 and 2018 and we expect to incur net losses in 2020. The ability of the Company to meet its liabilities and to continue as a going concern is dependent on improved profitability, the continued implementation of the strategic initiative to reposition Kaspien as a platform of software and services, the availability of future funding, implementation of one or more corporate initiatives to reduce costs at the parent company level (which could include a voluntary delisting from NASDAQ and deregistering of our Common Stock in order to substantially eliminate the costs associated with being a public company), satisfying all unassumed liabilities of the fye segment and other strategic alternatives, including selling all or part of the remaining business or assets of the Company, and overcoming the impact of the COVID-19 pandemic. There can be no assurance that we will be successful in further implementing our business strategy or that the strategy, including the completed initiatives, will be successful in sustaining acceptable levels of sales growth and profitability. In addition, the proceeds from the PPP Loan are subject to audit and there is a risk of repayment. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. On August 4, 2020, the Company received a letter from the Listing Qualifications staff of The Nasdaq Stock Market (“Nasdaq”) notifying the Company that it is no longer in compliance with the minimum stockholders’ equity requirement for continued listing on the Nasdaq Capital Market. Nasdaq Listing Rule 5550(b)(1) requires listed companies to maintain stockholders’ equity of at least $2,500,000 and as of August 4, 2020, the Company did not meet the alternative compliance standards relating to the market value of listed securities or net income from continuing operations. The notification letter has no immediate effect on the Company’s listing on the Nasdaq Capital Market. Nasdaq has provided the Company with 45 calendar days, or until September 18, 2020, to submit a plan to regain compliance with the minimum stockholders’ equity standard. If the Company submits a plan to regain compliance that is accepted, Nasdaq may grant an extension of up to 180 calendar days from the date of the notification letter to regain compliance. If the Company does not submit a plan to regain compliance or if such plan is not accepted, or if it is accepted and the Company does not regain compliance in the timeframe required by Nasdaq, the Nasdaq staff could provide notice that the Company’s Common Stock is subject to delisting. The unaudited condensed consolidated financial statements for the thirteen weeks ended August 1, 2020 were prepared on the basis of a going concern which contemplates that the Company will be able to realize assets and discharge liabilities in the normal course of business. The ability of the Company to meet its liabilities and to continue as a going concern is dependent on continued improved profitability and the other factors set forth in the preceding paragraph. For the next 12 months, management believes that the Company’s existing liquidity will be adequate to fund its working capital needs . At August 1, 2020, we had cash and cash equivalents of $3.3 million, net working capital of $10.8 million, and outstanding borrowings of $2.2 million on our revolving credit facility, as further discussed below. |
New Credit Facility | New Credit Facility On February 20, 2020, Kaspien Inc. entered into a Loan and Security Agreement (the “Loan Agreement”) with Encina Business Credit, LLC (“Encina”), as administrative agent, under which the lenders party thereto committed to provide up to $25 million in loans under a three-year, secured revolving credit facility (the “New Credit Facility”). Concurrent with the FYE Transaction, the Company borrowed $3.3 million under the New Credit Facility in order to satisfy the remaining obligations of the Company under the aforementioned Credit Facility. The commitments by the lenders under the New Credit Facility are subject to borrowing base and availability restrictions. Up to $5.0 million of the New Credit Facility may be used for the making of swing line loans. As of August 1, 2020, borrowings under the Credit Facility were $2.2 million. The Company had $6.5 million available for borrowing as of August 1, 2020. As of August 1, 2020, unamortized debt issuance costs of $1.0 million are included in “Other assets” on the unaudited condensed consolidated balance sheet. Subordinated Debt Agreement On March 30, 2020, the Company and Kaspien (the “Loan Parties”) entered into Amendment No. 1 to the Loan Agreement (the “Amendment”). Pursuant to the Amendment, among other things, (i) the Company was added as “Parent” under the Amended Loan Agreement, (ii) the Company granted a first priority security interest in substantially all of the assets of the Company, including inventory, accounts receivable, cash and cash equivalents and certain other collateral, and (iii) the Loan Agreement was amended to (a) permit the incurrence of certain subordinated indebtedness under the Subordinated Loan Agreement (as defined below) and (b) limit the Company’s ability to incur additional indebtedness, create liens, make investments, make restricted payments or specified payments and merge or acquire assets. On March 30, 2020, the Loan Parties entered into a Subordinated Loan and Security Agreement (the “Subordinated Loan Agreement”) with the lenders party thereto from time to time (the “Lenders”) and TWEC Loan Collateral Agent, LLC (“Collateral Agent”), as collateral agent for the Lenders, pursuant to which the Lenders made a $5.2 million secured term loan (the “Subordinated Loan”) to Kaspien with a scheduled maturity date of August 12, 2023. As of August 1, 2020, unamortized debt issuance costs of $0.2 million are included in “Long Term Debt” on the unaudited condensed consolidated balance sheet. Directors Jonathan Marcus, Thomas Simpson, and Michael Reickert are the chief executive officer of Alimco Re Ltd. (“Alimco”), the managing member of Kick-Start III, LLC and Kick-Start IV, LLC (“Kick-Start”), and a trustee of the Robert J. Higgins TWMC Trust (the “Trust”), an affiliate of RJHDC, LLC (“RJHDC” and together with Alimco and Kick-Start, “Related Party Entities”), respectively. The Related Party Entities are parties to the Subordinated Loan Agreement. |
Paycheck Protection Program | Paycheck Protection Program On April 17, 2020, Kaspien received loan proceeds of $2.0 million (the “PPP Loan”) pursuant to the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The PPP Loan, which was in the form of a promissory note (the “Note”), dated April 10, 2020, between Kaspien and First Interstate Bank, as the lender, matures on April 17, 2022, bears interest at a fixed rate of 1% per annum, and is payable in monthly installments of $112,975.55 commencing on November 10, 2020. While under the terms of the PPP, some or all of the PPP Loan amount may be forgiven if the PPP Loan proceeds are used for qualifying expenses as described in the CARES Act and the Note, such as payroll costs, benefits, rent, and utilities, there is no assurance that the Company will be successful in qualifying for and receiving forgiveness on the PPP Loan amount. The Company submitted an application for forgiveness on August 14, 2020. In addition to the aforementioned current sources of existing working capital, the Company may explore certain other strategic alternatives that may become available to the Company, as well continuing our efforts to generate additional sales and increase margins. However, at this time the Company has no commitments to obtain any additional funds, and there can be no assurance such funds will be available on acceptable terms or at all, should we require such additional funds. If the Company is unable to improve its operations, it may be required to obtain additional funding, and the Company’s financial condition and results of operations may be materially adversely affected. Furthermore, broad market and industry factors may seriously harm the market price of our Common Stock, regardless of our operating performance, and may adversely impact our ability to raise additional funds, should we require such additional funds. Similarly, if our Common Stock is delisted from the NASDAQ Capital Market, it may also limit our ability to raise additional funds.The unaudited condensed consolidated financial statements for the thirteen weeks ended August 1, 2020 were prepared on the basis of a going concern which contemplates that the Company will be able to realize assets and discharge liabilities in the normal course of business. The ability of the Company to meet its liabilities and to continue as a going concern is dependent on improved profitability, the performance improvement plan implemented for the Kaspien segment and the availability of future funding. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. |
FYE Transaction | FYE Transaction On February 20, 2020, the Company consummated the sale of substantially all of the assets and certain of the liabilities relating to fye to a subsidiary of Sunrise Records pursuant to an Asset Purchase Agreement dated January 23, 2020, by and among the Company, Record Town, Inc., Record Town USA LLC, Record Town Utah LLC, Trans World FL LLC, Trans World New York, LLC, 2428392 Inc., and Sunrise Records. The fye business is reported as discontinued operations in our Consolidated Statements of Income, and the related assets and liabilities have been presented as held-for-sale in the Consolidated Balance Sheets, through their dates of disposal. These changes have been applied to all periods presented. Unless otherwise noted, discussion within these notes to the consolidated financial statements relates to continuing operations. Refer to Note 3 for additional information on discontinued operations. |
Impact of COVID-19 | Impact of COVID-19 To date, as a direct result of COVID-19, most of our employees are working remotely. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition, including expenses, reserves and allowances, and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it, as well as the economic impact on local, regional, national and international customers and markets, which are highly uncertain and cannot be predicted at this time. Management is actively monitoring this situation and the possible effects on its financial condition, liquidity, operations, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the response to curb its spread, currently we are not able to estimate the effects of the COVID-19 outbreak to our results of operations, financial condition, or liquidity. In response to the rapidly evolving COVID-19 pandemic, we activated our business continuity program, led by our Executive Team in conjunction with Human Resources, to help us manage the situation. In mid-March, we transitioned our corporate office staff to work 100% remotely. This process was aided through the implementation of a flexible work from home policy rolled out to the organization in fiscal 2019, having a companywide communication platform for instant messaging and video conferencing, and cloud-based critical business applications. However, while our business is not dependent on physical office locations nor travel, having a 100% remote workforce does present increased operational risk. Our leadership team believes we have the necessary controls in place to mitigate these impacts and allow the team to continue to operate effectively remotely as long as required by State guidelines. While e-commerce has largely benefited from the closure of brick-and-mortar locations as consumer spending has been pushed online to marketplaces such as Amazon and Walmart, the industry nor our organization has been immune to the impact to our supply chains. For instance, in March, Amazon reduced replenishment in their fulfillment centers to essential items which limited a significant percentage of SKUs carried by Kaspien and a number of Kaspien’s partners shut their warehouses or suffered limited processing capacity due to COVID-19. While Amazon has since lifted restrictions and the leadership team executed contingency plans to mitigate the adverse impact from these restrictions, this highlights the fluid nature of COVID-19 across supply chains. Additionally, since the beginning of the pandemic, tens of millions of Americans have lost their jobs, significantly increasing the risk of near-term economic contraction in the United States that may affect e-commerce sales. The risk of a second wave or increased numbers of positive COVID-19 cases also presents further risk to supply chains. Leadership is actively monitoring the situation and potential impacts on its financial condition, liquidity, operations and workforce but the full extent of the impact is still highly uncertain. |
Recently Adopted Accounting P_2
Recently Adopted Accounting Pronouncements (Policies) | 6 Months Ended |
Aug. 01, 2020 | |
Recently Adopted Accounting Pronouncements [Abstract] | |
Recently Adopted and Issued Accounting Pronouncements | Recently Adopted and Issued Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which introduced an expected credit loss model for the impairment of financial assets measured at amortized cost. The model replaces the probable, incurred loss model for those assets and instead, broadens the information an entity must consider in developing its expected credit loss estimate for assets measured at amortized cost. This standard will be effective for smaller reporting companies for fiscal years beginning after December 15, 2022, however early adoption is permitted. We are currently evaluating the impact of this new standard on the consolidated financial statements. In August 2018, the FASB issued ASU 2018-14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework— Changes to the Disclosure Requirements for Defined Benefit Plans”, which removes certain disclosures that are no longer cost beneficial and also includes additional disclosures to improve the overall usefulness of the disclosure requirements to financial statement users. This standard will be effective for public entities for fiscal years beginning after December 15, 2020, however early adoption is permitted. We are currently evaluating the impact of this new standard on the consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes” (Topic 740), which simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also simplifies aspects of the enacted changes in tax laws or rates. This standard will be effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, however early adoption is permitted. We are currently evaluating the impact of this new standard on the consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. ASU 2020-04 provides, among other things, guidance that modifications of contracts within the scope of Topic 470, Debt, should be accounted for by prospectively adjusting the effective interest rate; modifications of contracts within the scope of Topic 840, Leases, should be accounted for as a continuation of the existing contract; and, changes in the critical terms of hedging relationships, caused by reference rate reform, should not result in the de-designation of the instrument, provided certain criteria are met. The Company’s exposure to LIBOR rates includes its credit facility. The amendments are effective as of March 12, 2020 through December 31, 2022. Adoption is permitted at any time. The Company is currently evaluating the impact this update will have on its Condensed Consolidated Financial Statements. Recent accounting pronouncements pending adoption not discussed above are either not applicable or are not expected to have a material impact on our consolidated financial condition, results of operations, or cash flows. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Aug. 01, 2020 | |
Discontinued Operations [Abstract] | |
Summary of Discontinued Operations Financial Information | The following table summarizes the major line items for fye that are included in the income from discontinued operations, net of tax line item in the Consolidated Statements of Income: Thirteen Weeks Ended Twenty-Six Weeks Ended (In thousands) August 1, 2020 August 3, 2019 August 1, 2020 August 3, 2019 Net revenue $ — $ 41,744 $ — $ 86,762 Cost of goods sold — 24,731 — 52,247 Selling, general and administrative expenses — 20,835 — 41,777 Interest expense — 22 — 18 Other expense — 462 — 419 Loss from discontinued operations before income taxes — (4,306 ) — (7,699 ) Income tax expense — 64 — 127 Loss from discontinued operations, net of tax $ — $ (4,370 ) $ — $ (7,826 ) The following table summarizes the carrying amounts of major classes of assets and liabilities of discontinued operations for each of the periods presented: (In thousands) August 1, 2020 February 1, 2020 August 3, 2019 Cash $ — $ — $ — Accounts receivable, net — 62 2,957 Inventories — 50,122 69,600 Other current assets — 1,005 3,659 Property, plant and equipment, net — — 5,707 Operating lease right-to-use asset — — 21,118 Other assets — — 1,080 Total assets of discontinued operations $ — $ 51,189 $ 104,121 Accounts payable $ — $ 9,769 19,759 Accrued liabilities — 779 3,533 Deferred revenue — 6,764 5,974 Current portion of lease liabilities — 8,976 8,755 Operating lease liabilities — 11,059 16,070 Other liabilities — 2,063 2,113 Total liabilities of discontinued operations (a) $ — $ 39,410 $ 56,204 The cash flows related to discontinued operations have not been segregated and are included in the Consolidated Statements of Cash Flows. The following table summarizes the cash flows for discontinued operations that are included in the Consolidated Statements of Cash Flows: Twenty-six Weeks Ended (In thousands) August 1, 2020 August 3, 2019 Net cash used in operating activities $ — $ (11,555 ) Net cash provided by(used) in investing activities — (477 ) Depreciation and amortization — 1,188 Purchases of fixed assets — (1,068 ) |
Sale of Fye Business (Tables)
Sale of Fye Business (Tables) | 6 Months Ended |
Aug. 01, 2020 | |
Sale of Fye Business [Abstract] | |
Pro forma Condensed Consolidated Balance Sheet and Statement of Operations | The following table reconciles the assets sold to and liabilities assumed by Sunrise to cash proceeds received: Assets sold Inventory $ 50,122 Accounts receivable 62 Prepaid expenses and other current assets 654 Other assets 351 fye business assets sold $ 51,189 Less liabilities assumed: Accounts payable (9,769 ) Deferred revenue (6,764 ) Accrued expenses and other current liabilities (779 ) Other long-term liabilities (2,063 ) Operating lease liabilities (20,035 ) fye business liabilities assumed $ 39,410 Net proceeds $ 11,779 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Aug. 01, 2020 | |
Intangible Assets [Abstract] | |
Identifiable Intangible Assets | Identifiable intangible assets as of August 1, 2020 consisted of the following (amounts in thousands): August 1, 2020 Weighted Average Amortization Period Original Gross Carrying Amount Accumulated Impairment Accumulated Amortization Net Carrying Amount Vendor relationships 120 $ 19,100 $ 14,587 $ 4,513 $ - Technology 60 6,700 2,587 3,660 453 Trade names and trademarks 60 3,200 - 2,407 793 $ 29,000 $ 17,174 $ 10,580 $ 1,246 |
Changes in Net Intangible Assets and Goodwill | The changes in net intangibles and goodwill from February 1, 2010 to August 1, 2020 were as follows: (amounts in thousands) February 1, Impairment Expense Amortization Expense August 1, Amortized intangible assets: Technology $ 647 $ - $ 194 $ 453 Trade names and trademarks 1,113 - 320 793 Net amortized intangible assets $ 1,760 $ - $ 514 $ 1,246 |
Finite-lived Intangible Assets Amortization Expense | Amortization expense of intangible assets for the thirteen and twenty-six week periods ended August 1, 2020 and August 3, 2019 consisted of the following: Thirteen Weeks Ended Twenty-Six Weeks Ended (amounts in thousands) August 1, August 3, 2019 August 1, August 3, 2019 Amortized intangible assets: Vendor relationships $ - $ 29 $ - $ 58 Technology 97 97 194 194 Trade names and trademarks 160 160 320 320 Total amortization expense $ 257 $ 286 $ 514 $ 572 |
Estimated Amortization Expense of the Intangible Assets | Estimated amortization expense for the remainder of fiscal 2020 and the five succeeding fiscal years and thereafter is as follows: Fiscal Year Amortization 2020 $ 514 2021 732 2022 - 2023 - 2024 - Thereafter - |
Restricted Cash (Tables)
Restricted Cash (Tables) | 6 Months Ended |
Aug. 01, 2020 | |
Restricted Cash [Abstract] | |
Cash, Cash Equivalents and Restricted Cash | A summary of cash, cash equivalents and restricted cash is as follows (amounts in thousands): August 1, 2020 February 1, 2020 August 3, 2019 Cash and cash equivalents $ 3,337 $ 2,977 $ 3,635 Restricted cash 5,312 5,875 6,295 Total cash, cash equivalents and restricted cash $ 8,649 $ 8,852 $ 9,930 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 6 Months Ended |
Aug. 01, 2020 | |
Stock Based Compensation [Abstract] | |
Stock Option Activity Under Stock Award Plans | The following table summarizes stock award activity during the thirteen weeks ended August 1, 2020: Employee and Director Stock Award Plans Number of Shares Subject To Option Weighted Average Exercise Price Weighted Average Remaining Contractual Term Other Share Awards (1) Weighted Average Grant Fair Value Balance February 1, 2020 129,196 $ 52.11 5.8 9,945 $ 36.75 Granted 86,562 6.27 9.9 - - Canceled (82,297 ) 54.92 - - - Exercised - - - (9,945 ) 36.75 Balance August 1, 2020 133,461 $ 20.64 7.6 - $ - Exercisable August 1, 2020 55,900 $ 47.18 3.3 - $ - (1) Other Share Awards include deferred shares granted to Directors and restricted share units granted to executive officers. |
Defined Benefit Plan (Tables)
Defined Benefit Plan (Tables) | 6 Months Ended |
Aug. 01, 2020 | |
Defined Benefit Plan [Abstract] | |
Net Periodic Benefit Cost | The following represents the components of the net periodic pension cost related to the Company’s SERP for the respective periods: Thirteen Weeks Ended Twenty-Six Weeks Ended (amounts in thousands) August 1, 2020 August 3, 2019 August 1, 2020 August 3, 2019 Service cost $ - $ 14 $ - $ 28 Interest cost 89 142 178 284 Amortization of net gain (1) (3 ) (5 ) (6 ) (10 ) Net periodic pension cost $ 86 $ 151 $ 172 $ 302 (1) The amortization of net gain is related to a director retirement plan previously provided by the Company. |
Basic and Diluted Loss Per Sh_2
Basic and Diluted Loss Per Share (Tables) | 6 Months Ended |
Aug. 01, 2020 | |
Basic and Diluted Loss Per Share [Abstract] | |
Basic and Diluted Loss Per Share for Continuing and Discontinued Operations | The following represents basic and diluted loss per share for continuing operations, loss from discontinued operations and net loss for the respective periods: Thirteen Weeks Ended Twenty-Six Weeks Ended (in thousands, except per share amounts) August 1, 2020 August 3, 2019 August 1, 2020 August 3, 2019 Loss from continuing operations $ (899 ) $ (3,758 ) $ (6,306 ) $ (8,104 ) Basic and diluted loss per common share from continuing operations $ (0.49 ) $ (2.07 ) $ (3.46 ) $ (4.47 ) Loss from discontinued operations $ - $ (4,370 ) $ - $ (7,826 ) Basic and diluted loss per common share from discontinued operations $ - $ (2.41 ) $ - $ (4.31 ) Net loss $ (899 ) $ (8,128 ) $ (6,306 ) $ (15,930 ) Basic and diluted loss per common share $ (0.49 ) $ (4.48 ) $ (3.46 ) $ (8.78 ) Weighted average number of common shares outstanding – basic and diluted 1,825 1,816 1,823 1,815 |
Nature of Operations (Details)
Nature of Operations (Details) | 6 Months Ended |
Aug. 01, 2020 | |
Kaspien Inc. [Member] | |
Subsidiary Information [Abstract] | |
Ownership interest | 100.00% |
Nature of Operations, Liquidity
Nature of Operations, Liquidity and Cash Flows (Details) - USD ($) $ in Thousands | Aug. 01, 2020 | Feb. 01, 2020 | Aug. 03, 2019 |
Liquidity and Cash Flows [Abstract] | |||
Cash and cash equivalents | $ 3,337 | $ 2,977 | $ 3,635 |
Net working capital | 10,800 | ||
Outstanding borrowings | 2,151 | $ 13,149 | 12,086 |
Credit Facility [Member] | |||
Liquidity and Cash Flows [Abstract] | |||
Outstanding borrowings | $ 2,151 | $ 12,100 |
Nature of Operations, New Credi
Nature of Operations, New Credit Facility and Subordinated Debt Agreement (Details) - USD ($) $ in Thousands | 6 Months Ended | ||||
Aug. 01, 2020 | Mar. 30, 2020 | Feb. 20, 2020 | Feb. 01, 2020 | Aug. 03, 2019 | |
New Credit Facility [Abstract] | |||||
Outstanding borrowings | $ 2,151 | $ 13,149 | $ 12,086 | ||
Kaspien Inc. [Member] | Subordinated Loan Agreement [Member] | |||||
New Credit Facility [Abstract] | |||||
Unamortized debt issuance costs | $ 200 | ||||
Secured term loan | $ 5,200 | ||||
Maturity date | Aug. 12, 2023 | ||||
New Credit Facility [Member] | Kaspien Inc. [Member] | |||||
New Credit Facility [Abstract] | |||||
Term of loan | 3 years | ||||
Borrowings | $ 3,300 | ||||
New Credit Facility [Member] | Maximum [Member] | Kaspien Inc. [Member] | |||||
New Credit Facility [Abstract] | |||||
Loan amount | 25,000 | ||||
Swing line loans | 5,000 | ||||
Credit Facility [Member] | |||||
New Credit Facility [Abstract] | |||||
Term of loan | 3 years | ||||
Borrowings | 3,300 | ||||
Outstanding borrowings | $ 2,151 | $ 12,100 | |||
Available borrowings | 6,500 | ||||
Unamortized debt issuance costs | $ 1,000 | ||||
Credit Facility [Member] | Maximum [Member] | Kaspien Inc. [Member] | |||||
New Credit Facility [Abstract] | |||||
Loan amount | 25,000 | ||||
Swing line loans | $ 5,000 |
Nature of Operations, Paycheck
Nature of Operations, Paycheck Protection Program (Details) - COVID-19 [Member] - Paycheck Protection Program [Member] - USD ($) | Nov. 10, 2020 | Aug. 01, 2020 | Apr. 17, 2020 | Apr. 10, 2020 |
Forecast [Member] | ||||
CARES Act [Abstract] | ||||
Monthly installments payable | $ 112,975.55 | |||
Kaspien Inc. [Member] | ||||
CARES Act [Abstract] | ||||
Loan amount | $ 2,000,000 | |||
Maturity date | Apr. 17, 2022 | |||
Fixed interest rate | 1.00% |
Nature of Operations, Impact of
Nature of Operations, Impact of COVID-19 (Details) | 6 Months Ended |
Aug. 01, 2020 | |
COVID-19 [Member] | |
Impact of COVID-19 [Abstract] | |
Percentage of corporate office staff working remotely | 100.00% |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | Feb. 01, 2020 | |
Discontinued Operation, Statements of Income [Abstract] | |||||
Loss from discontinued operations, net of tax | $ 0 | $ (4,370) | $ 0 | $ (7,826) | |
Fye [Member] | Discontinued Operations [Member] | |||||
Discontinued Operation, Statements of Income [Abstract] | |||||
Net revenue | 0 | 41,744 | 0 | 86,762 | |
Cost of goods sold | 0 | 24,731 | 0 | 52,247 | |
Selling, general and administrative expenses | 0 | 20,835 | 0 | 41,777 | |
Interest expense | 0 | 22 | 0 | 18 | |
Other expense | 0 | 462 | 0 | 419 | |
Loss from discontinued operations before income taxes | 0 | (4,306) | 0 | (7,699) | |
Income tax expense | 0 | 64 | 0 | 127 | |
Loss from discontinued operations, net of tax | 0 | (4,370) | 0 | (7,826) | |
Discontinued Operation, Balance Sheet [Abstract] | |||||
Cash | 0 | 0 | 0 | 0 | $ 0 |
Accounts receivable, net | 0 | 2,957 | 0 | 2,957 | 62 |
Inventories | 0 | 69,600 | 0 | 69,600 | 50,122 |
Other current assets | 0 | 3,659 | 0 | 3,659 | 1,005 |
Property, plant and equipment, net | 0 | 5,707 | 0 | 5,707 | 0 |
Operating lease right-to-use asset | 0 | 21,118 | 0 | 21,118 | 0 |
Other assets | 0 | 1,080 | 0 | 1,080 | 0 |
Total assets of discontinued operations | 0 | 104,121 | 0 | 104,121 | 51,189 |
Accounts payable | 0 | 19,759 | 0 | 19,759 | 9,769 |
Accrued liabilities | 0 | 3,533 | 0 | 3,533 | 779 |
Deferred revenue | 0 | 5,974 | 0 | 5,974 | 6,764 |
Current portion of lease liabilities | 0 | 8,755 | 0 | 8,755 | 8,976 |
Operating lease liabilities | 0 | 16,070 | 0 | 16,070 | 11,059 |
Other liabilities | 0 | 2,113 | 0 | 2,113 | 2,063 |
Total liabilities of discontinued operations | $ 0 | $ 56,204 | 0 | 56,204 | $ 39,410 |
Discontinued Operations, Cash Flow Statement [Abstract] | |||||
Net cash used in operating activities | 0 | (11,555) | |||
Net cash provided by (used) in investing activities | 0 | (477) | |||
Depreciation and amortization | 0 | 1,188 | |||
Purchases of fixed assets | $ 0 | $ (1,068) |
Sale of Fye Business (Details)
Sale of Fye Business (Details) - USD ($) $ in Thousands | Aug. 01, 2020 | Feb. 01, 2020 | Aug. 03, 2019 |
Assets Sold [Abstract] | |||
Accounts receivable | $ 2,239 | $ 4,139 | $ 2,324 |
Prepaid expenses and other current assets | 1,085 | 2,974 | 983 |
Other assets | 2,036 | 2,202 | 851 |
Assets sold | 44,557 | 97,806 | 150,173 |
Liabilities Assumed [Abstract] | |||
Accounts payable | (9,857) | (14,447) | (9,285) |
Accrued expenses and other current liabilities | (3,812) | (3,521) | (2,084) |
Other long-term liabilities | (19,613) | (20,026) | (19,424) |
Liabilities | 44,987 | $ 93,291 | $ 102,208 |
Fye Segment [Member] | |||
Assets Sold [Abstract] | |||
Assets sold | 51,189 | ||
Liabilities Assumed [Abstract] | |||
Liabilities | 39,410 | ||
Net proceeds | 11,779 | ||
Assets Sold [Member] | |||
Assets Sold [Abstract] | |||
Inventory | 50,122 | ||
Accounts receivable | 62 | ||
Prepaid expenses and other current assets | 654 | ||
Other assets | 351 | ||
Liabilities Assumed [Member] | |||
Liabilities Assumed [Abstract] | |||
Accounts payable | (9,769) | ||
Deferred revenue | (6,764) | ||
Accrued expenses and other current liabilities | (779) | ||
Other long-term liabilities | (2,063) | ||
Operating lease liabilities | $ (20,035) |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Feb. 01, 2020 | Feb. 02, 2019 | |
Goodwill, Impaired [Abstract] | ||
Goodwill impairment loss | $ 0.8 | |
Kaspien Inc. [Member] | ||
Goodwill, Impaired [Abstract] | ||
Asset impairment charges | $ 16.4 |
Intangible Assets, Identifiable
Intangible Assets, Identifiable Intangible Assets (Details) $ in Thousands | 6 Months Ended |
Aug. 01, 2020USD ($) | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Gross Carrying Amount | $ 29,000 |
Impairment | 17,174 |
Accumulated Amortization | 10,580 |
Net Carrying Amount | $ 1,246 |
Vendor Relationships [Member] | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Weighted Average Amortization Period | 120 months |
Gross Carrying Amount | $ 19,100 |
Impairment | 14,587 |
Accumulated Amortization | 4,513 |
Net Carrying Amount | $ 0 |
Technology [Member] | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Weighted Average Amortization Period | 60 months |
Gross Carrying Amount | $ 6,700 |
Impairment | 2,587 |
Accumulated Amortization | 3,660 |
Net Carrying Amount | $ 453 |
Trade Names and Trademarks [Member] | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Weighted Average Amortization Period | 60 months |
Gross Carrying Amount | $ 3,200 |
Impairment | 0 |
Accumulated Amortization | 2,407 |
Net Carrying Amount | $ 793 |
Intangible Assets, Changes in N
Intangible Assets, Changes in Net Intangibles and Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | ||
Amortized Intangible Assets [Roll Forward] | |||||
Amortized intangible assets, Beginning balance | $ 1,760 | ||||
Impairment of intangible assets | 0 | ||||
Amortization of intangible assets | $ 257 | $ 286 | 514 | $ 572 | [1] |
Amortized intangible assets, Ending balance | 1,246 | 3,096 | 1,246 | 3,096 | |
Vendor Relationships [Member] | |||||
Amortized Intangible Assets [Roll Forward] | |||||
Amortization of intangible assets | 0 | 29 | 0 | 58 | |
Technology [Member] | |||||
Amortized Intangible Assets [Roll Forward] | |||||
Amortized intangible assets, Beginning balance | 647 | ||||
Impairment of intangible assets | 0 | ||||
Amortization of intangible assets | 97 | 97 | 194 | 194 | |
Amortized intangible assets, Ending balance | 453 | 453 | |||
Trade Names and Trademarks [Member] | |||||
Amortized Intangible Assets [Roll Forward] | |||||
Amortized intangible assets, Beginning balance | 1,113 | ||||
Impairment of intangible assets | 0 | ||||
Amortization of intangible assets | 160 | $ 160 | 320 | $ 320 | |
Amortized intangible assets, Ending balance | $ 793 | $ 793 | |||
[1] | The cash flows related to discontinued operations have not been segregated, and are included in the Consolidated Statements of Cash Flows. See footnote 3. |
Intangible Assets, Future Amort
Intangible Assets, Future Amortization Expense (Details) $ in Thousands | Aug. 01, 2020USD ($) |
Intangible Assets [Abstract] | |
2020 | $ 514 |
2021 | 732 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Thereafter | $ 0 |
Depreciation and Amortization (
Depreciation and Amortization (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | |
Depreciation and Amortization [Abstract] | ||||
Depreciation and amortization | $ 0.5 | $ 0.4 | $ 1 | $ 0.8 |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) $ in Thousands | Aug. 01, 2020 | Feb. 01, 2020 | Aug. 03, 2019 | Feb. 02, 2019 | [1] | |
Restricted Cash and Cash Equivalents [Abstract] | ||||||
Restricted cash, current asset | $ 950 | $ 950 | $ 950 | |||
Cash Equivalents and Restricted Cash [Abstract] | ||||||
Cash and cash equivalents | 3,337 | 2,977 | 3,635 | |||
Restricted cash | 5,312 | 5,875 | 6,295 | |||
Total cash, cash equivalents and restricted cash | 8,649 | $ 8,852 | $ 9,930 | [1] | $ 14,226 | |
Rabbi Trust [Member] | ||||||
Restricted Cash and Cash Equivalents [Abstract] | ||||||
Restricted cash, current asset | 1,000 | |||||
Restricted cash, long-term asset | 4,300 | |||||
Cash Equivalents and Restricted Cash [Abstract] | ||||||
Restricted cash | $ 5,300 | |||||
[1] | The cash flows related to discontinued operations have not been segregated, and are included in the Consolidated Statements of Cash Flows. See footnote 3. |
Debt, Credit Facility (Details)
Debt, Credit Facility (Details) - USD ($) $ in Thousands | Aug. 01, 2020 | Feb. 01, 2020 | Aug. 03, 2019 | Jan. 31, 2017 |
Credit Facility [Abstract] | ||||
Outstanding borrowings | $ 2,151 | $ 13,149 | $ 12,086 | |
Credit Facility [Member] | ||||
Credit Facility [Abstract] | ||||
Commitments | $ 50,000 | |||
Outstanding borrowings | $ 2,151 | $ 12,100 | ||
Credit Facility [Member] | Maximum [Member] | ||||
Credit Facility [Abstract] | ||||
Commitments | $ 75,000 |
Debt, New Credit Facility (Deta
Debt, New Credit Facility (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Aug. 01, 2020 | Feb. 20, 2020 | Feb. 01, 2020 | Aug. 03, 2019 | |
New Credit Facility [Abstract] | ||||
Outstanding borrowings | $ 2,151 | $ 13,149 | $ 12,086 | |
New Credit Facility [Member] | ||||
New Credit Facility [Abstract] | ||||
Term of loan | 3 years | |||
Borrowings | $ 3,300 | |||
Outstanding borrowings | $ 2,151 | $ 12,100 | ||
Available borrowings | 6,500 | |||
Unamortized debt issuance costs | $ 1,000 | |||
New Credit Facility [Member] | Minimum [Member] | Kaspien Inc. [Member] | LIBOR [Member] | ||||
New Credit Facility [Abstract] | ||||
Debt instrument, basis spread on variable rate | 4.00% | |||
New Credit Facility [Member] | Minimum [Member] | Kaspien Inc. [Member] | Base Rate [Member] | ||||
New Credit Facility [Abstract] | ||||
Debt instrument, basis spread on variable rate | 3.00% | |||
New Credit Facility [Member] | Maximum [Member] | Kaspien Inc. [Member] | ||||
New Credit Facility [Abstract] | ||||
Loan amount | 25,000 | |||
Swing line loans | $ 5,000 | |||
New Credit Facility [Member] | Maximum [Member] | Kaspien Inc. [Member] | LIBOR [Member] | ||||
New Credit Facility [Abstract] | ||||
Debt instrument, basis spread on variable rate | 4.50% | |||
New Credit Facility [Member] | Maximum [Member] | Kaspien Inc. [Member] | Base Rate [Member] | ||||
New Credit Facility [Abstract] | ||||
Debt instrument, basis spread on variable rate | 3.50% |
Debt, Subordinated Loan Agreeme
Debt, Subordinated Loan Agreement (Details) - Subordinated Loan Agreement [Member] - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | |
Aug. 01, 2020 | Mar. 30, 2020 | |
Subordinated Loan Agreement [Abstract] | ||
Number of warrants issued to purchase (in shares) | 244,532 | |
Warrants exercise price (in dollars per share) | $ 0.01 | |
Value of warrants | $ 0.8 | |
Kaspien Inc. [Member] | ||
Subordinated Loan Agreement [Abstract] | ||
Secured term loan | $ 5.2 | |
Maturity date | May 22, 2023 | |
Interest rate | 12.00% | |
Alimco [Member] | ||
Subordinated Loan Agreement [Abstract] | ||
Number of warrants issued to purchase (in shares) | 127,208 | |
Kick-Start [Member] | ||
Subordinated Loan Agreement [Abstract] | ||
Number of warrants issued to purchase (in shares) | 23,401 | |
RJHDC [Member] | ||
Subordinated Loan Agreement [Abstract] | ||
Number of warrants issued to purchase (in shares) | 93,923 |
Debt, Paycheck Protection Progr
Debt, Paycheck Protection Program (Details) - COVID-19 [Member] - Paycheck Protection Program [Member] - USD ($) | Nov. 10, 2020 | Aug. 01, 2020 | Apr. 17, 2020 | Apr. 10, 2020 |
Forecast [Member] | ||||
CARES Act [Abstract] | ||||
Monthly installments payable | $ 112,975.55 | |||
Kaspien [Member] | ||||
CARES Act [Abstract] | ||||
Loan amount | $ 2,000,000 | |||
Maturity date | Apr. 17, 2022 | |||
Fixed interest rate | 1.00% |
Stock Based Compensation (Detai
Stock Based Compensation (Details) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | |||
Aug. 01, 2020USD ($)Plan$ / sharesshares | Feb. 01, 2020$ / sharesshares | Aug. 01, 2020USD ($)$ / sharesshares | May 02, 2020USD ($) | ||
Stock Awards [Abstract] | |||||
Number of employee stock award plans | Plan | 3 | ||||
Unrecognized compensation expense | $ | $ 200 | ||||
Total compensation expense recognized | $ | $ 300 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||||
Intrinsic value of stock awards outstanding | $ | $ 22,400 | ||||
Intrinsic value of stock awards exercisable | $ | $ 171,669 | ||||
New Plan [Member] | |||||
Stock Awards [Abstract] | |||||
Equity awards authorized for issuance (in shares) | 250,000 | ||||
Options granted (in shares) | 133,462 | 133,462 | |||
Options vested and exercisable (in shares) | 46,900 | ||||
Shares available for future grants (in shares) | 152,188 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||||
Number of Shares Subject To Option, Balance (in shares) | 133,462 | ||||
Number of Shares Subject To Option, Exercisable (in shares) | 46,900 | ||||
Employee and Director Stock Award Plans [Member] | |||||
Stock Awards [Abstract] | |||||
Options granted (in shares) | 133,461 | 129,196 | 133,461 | ||
Options vested and exercisable (in shares) | 55,900 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||||
Number of Shares Subject To Option, Balance (in shares) | 129,196 | ||||
Number of Shares Subject To Option, Granted (in shares) | 86,562 | ||||
Number of Shares Subject To Option, Cancelled (in shares) | (82,297) | ||||
Number of Shares Subject To Option, Exercised (in shares) | 0 | ||||
Number of Shares Subject To Option, Balance (in shares) | 133,461 | 129,196 | |||
Number of Shares Subject To Option, Exercisable (in shares) | 55,900 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||||
Weighted Average Exercise Price, Balance (in dollars per share) | $ / shares | $ 52.11 | ||||
Weighted Average Exercise Price, Granted (in dollars per share) | $ / shares | 6.27 | ||||
Weighted Average Exercise Price, Cancelled (in dollars per share) | $ / shares | 54.92 | ||||
Weighted Average Exercise Price, Exercised (in dollars per share) | $ / shares | 0 | ||||
Weighted Average Exercise Price, Ending Balance (in dollars per share) | $ / shares | $ 20.64 | $ 52.11 | |||
Weighted Average Exercise Price, Exercisable (in dollars per share) | $ / shares | $ 47.18 | ||||
Share Based Payment, Share Based Compensation Arrangement by Weighted Average Remaining Contractual Term [Abstract] | |||||
Weighted Average Remaining Contractual Term | 7 years 7 months 6 days | 5 years 9 months 18 days | |||
Weighted Average Remaining Contractual Term, Granted | 9 years 10 months 24 days | ||||
Weighted Average Remaining Contractual Term, Exercisable | 3 years 3 months 18 days | ||||
Share Based Compensation Arrangement by Share Based Payment Other Share Awards [Abstract] | |||||
Other Share Awards, Balance (in shares) | [1] | 9,945 | |||
Other Share Awards, Granted (in shares) | [1] | 0 | |||
Other Share Awards, Cancelled (in shares) | [1] | 0 | |||
Other Share Awards, Exercised (in shares) | [1] | (9,945) | |||
Other Share Awards, Balance (in shares) | [1] | 0 | 9,945 | ||
Other Share Awards, Exercisable (in shares) | [1] | 0 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||||
Weighted Average Grant Fair Value, Balance (in dollars per share) | $ / shares | $ 36.75 | ||||
Weighted Average Grant Fair Value, Granted (in dollars per share) | $ / shares | 0 | ||||
Weighted Average Grant Fair Value, Cancelled (in dollars per share) | $ / shares | 0 | ||||
Weighted Average Grant Fair Value, Exercised (in dollars per share) | $ / shares | 36.75 | ||||
Weighted Average Grant Fair Value, Balance (in dollars per share) | $ / shares | 0 | $ 36.75 | |||
Weighted Average Grant Fair Value, Exercisable (in dollars per share) | $ / shares | $ 0 | ||||
[1] | Other Share Awards include deferred shares granted to Directors and restricted share units granted to executive officers. |
Defined Benefit Plan (Details)
Defined Benefit Plan (Details) - Supplemental Employee Retirement Plan [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | ||
Contributions by Employer [Abstract] | |||||
Cash contributions by employer | $ 0 | ||||
Expected cash contributions by employer | 1,200 | $ 1,200 | |||
Net Periodic Pension Cost [Abstract] | |||||
Service cost | 0 | $ 14 | 0 | $ 28 | |
Interest cost | 89 | 142 | 178 | 284 | |
Amortization of net gain | [1] | (3) | (5) | (6) | (10) |
Net periodic benefit cost | $ 86 | $ 151 | $ 172 | $ 302 | |
[1] | The amortization of net gain is related to a director retirement plan previously provided by the company. |
Basic and Diluted Loss Per Sh_3
Basic and Diluted Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | ||
Basic and Diluted Loss Per Share [Abstract] | |||||
Total anti-dilutive stock awards (in shares) | 128,462 | 129,946 | 127,079 | 134,433 | |
Basic and Diluted Loss Per Share for Continuing and Discontinued Operations [Abstract] | |||||
Loss from continued operations | $ (899) | $ (3,758) | $ (6,306) | $ (8,104) | |
Basic and diluted loss per common share from continuing operations (in dollars per share) | $ (0.49) | $ (2.07) | $ (3.46) | $ (4.47) | |
Loss from discontinued operations | $ 0 | $ (4,370) | $ 0 | $ (7,826) | |
Basic and diluted loss per common share from discontinued operations (in dollars per share) | $ 0 | $ (2.41) | $ 0 | $ (4.31) | |
Net loss | $ (899) | $ (8,128) | $ (6,306) | $ (15,930) | [1] |
Basic and diluted loss per common share (in dollars per share) | $ (0.49) | $ (4.48) | $ (3.46) | $ (8.78) | |
Weighted average number of common shares outstanding - basic and diluted (in shares) | 1,825,000 | 1,816,000 | 1,823,000 | 1,815,000 | |
[1] | The cash flows related to discontinued operations have not been segregated, and are included in the Consolidated Statements of Cash Flows. See footnote 3. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 6 Months Ended | |
Aug. 01, 2020 | Feb. 01, 2020 | |
Domestic Tax Authority [Member] | ||
Operating Loss Carryforwards Components [Abstract] | ||
Net operating loss carryforwards | $ 288.1 | |
Operating loss carryforward expiration year | 2039 | |
State and Local Jurisdiction [Member] | ||
Operating Loss Carryforwards Components [Abstract] | ||
Net operating loss carryforwards | $ 280.2 | |
Operating loss carryforward expiration year | 2039 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Apr. 30, 2017Action | Aug. 01, 2020USD ($) | Mar. 30, 2020 | May 08, 2019plaintiff | Nov. 14, 2018Consumer |
Legal Proceedings [Abstract] | |||||
Number of consumers filed punitive class action complaint | 2 | 3 | |||
Number of pending class actions | Action | 2 | ||||
Settlement reserved amount | $ | $ 425 | ||||
Percentage of CVR to receive cash payment | 19.90% | ||||
Alimco [Member] | |||||
Legal Proceedings [Abstract] | |||||
Percentage of CVR to receive cash payment | 10.35% | ||||
Kick-Start [Member] | |||||
Legal Proceedings [Abstract] | |||||
Percentage of CVR to receive cash payment | 1.90% | ||||
RJHDC [Member] | |||||
Legal Proceedings [Abstract] | |||||
Percentage of CVR to receive cash payment | 7.64% |