Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jul. 02, 2022 | Sep. 23, 2022 | Dec. 31, 2021 | |
Cover [Abstract] | |||
Entity Registrant Name | TUESDAY MORNING CORP/DE | ||
Entity Central Index Key | 0000878726 | ||
Document Type | 10-K | ||
Document Period End Date | Jul. 02, 2022 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | TUEM | ||
Title of 12(b) Security | Common Stock, $0.01 par value per share | ||
Security Exchange Name | NASDAQ | ||
Entity Incorporation, State or Country Code | DE | ||
Current Fiscal Year End Date | --07-02 | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity File Number | 001-40432 | ||
Entity Tax Identification Number | 75-2398532 | ||
Entity Address, Address Line One | 6250 LBJ Freeway | ||
Entity Address, City or Town | Dallas | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 75240 | ||
City Area Code | 972 | ||
Local Phone Number | 387-3562 | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 176,163,768 | ||
Entity Public Float | $ 134,611,002 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Bankruptcy Proceedings, Reporting Current | true | ||
Documents Incorporated by Reference | Documents Incorporated By Reference: Portions of the registrant’s definitive proxy statement to be filed in connection with 2022 Annual Meeting of Stockholders are incor porated by reference into Part III of this Form 10-K. | ||
Auditor Name | GRANT THORNTON LLP | ||
Auditor Location | Dallas, Texas | ||
Auditor Firm Id | 248 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 02, 2022 | Jun. 30, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 7,816 | $ 6,534 |
Restricted cash | 0 | 22,321 |
Inventories | 148,462 | 145,075 |
Prepaid expenses | 5,811 | 5,486 |
Other current assets | 1,694 | 3,385 |
Total Current Assets | 163,783 | 182,801 |
Property and equipment, net | 28,442 | 37,784 |
Operating lease right of-use assets | 156,945 | 193,244 |
Deferred financing costs | 3,129 | 2,459 |
Other assets | 1,877 | 1,596 |
Total Assets | 354,176 | 417,884 |
Current liabilities: | ||
Current portion of long term debt | 250 | 0 |
Accounts payable | 40,797 | 45,930 |
Accrued liabilities | 33,491 | 46,454 |
Operating lease liabilities | 52,258 | 54,632 |
Total Current Liabilities | 126,796 | 147,016 |
Operating lease liabilities — non-current | 115,926 | 156,240 |
Borrowings under revolving credit facility | 62,191 | 12,000 |
Long term debt (see Note 3 for amounts due to related parties) | 28,730 | 26,374 |
Other liabilities — non-current | 1,546 | 4,453 |
Total Liabilities | 335,189 | 346,083 |
Commitments and contingencies | 0 | 0 |
Stockholders’ equity | ||
Preferred stock, par value $0.01 per share, authorized 10,000,000 shares; none issued or outstanding | 0 | 0 |
Common stock, par value $0.01 per share, authorized 200,000,000 at July 2, 2022 and June 30, 2021; 87,663,769 shares issued and 85,880,108 shares outstanding at July 2, 2022 and 87,988,233 shares issued and 86,204,572 shares outstanding at June 30, 2021 | 859 | 862 |
Additional paid-in capital | 311,690 | 305,498 |
Retained deficit | (286,750) | (227,747) |
Less: 1,783,661 common shares in treasury, at cost, at July 2, 2022 and at June 30, 2021, respectively | (6,812) | (6,812) |
Total Stockholders’ Equity | 18,987 | 71,801 |
Total Liabilities and Stockholders’ Equity | $ 354,176 | $ 417,884 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jul. 02, 2022 | Jun. 30, 2021 |
Stockholders’ equity | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 87,663,769 | 87,988,233 |
Common stock, shares outstanding | 85,880,108 | 86,204,572 |
Treasury stock, shares | 1,783,661 | 1,783,661 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jul. 02, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | |||
Net sales | $ 749,809 | $ 690,790 | $ 874,895 |
Cost of sales | 557,988 | 484,788 | 590,025 |
Gross margin | 191,821 | 206,002 | 284,870 |
Selling, general and administrative expenses | 240,870 | 244,155 | 330,572 |
Restructuring, impairment, and abandonment charges | 2,462 | 10,834 | 113,492 |
Operating loss before interest, reorganization and other income (expense) | (51,511) | (48,987) | (159,194) |
Other income (expense): | |||
Interest expense | (7,177) | (8,169) | (3,845) |
Reorganization items, net | (961) | 60,015 | (3,619) |
Other income, net | 719 | 414 | 551 |
Earnings (loss) before income taxes | (58,930) | 3,273 | (166,107) |
Income tax provision | 73 | 291 | 221 |
Net earnings (loss) | $ (59,003) | $ 2,982 | $ (166,328) |
Net earnings (loss) per common share: | |||
Basic | $ (0.70) | $ 0.05 | $ (3.68) |
Diluted | $ (0.70) | $ 0.05 | $ (3.68) |
Weighted average number of common shares: | |||
Basic | 84,885 | 60,584 | 45,208 |
Diluted | 84,885 | 61,689 | 45,208 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Cumulative Effect Period of Adoption Adjustment | Common Stock | Common Stock Rights Offering | Additional Paid-In Capital | Additional Paid-In Capital Rights Offering | Retained Earnings (Deficit) | Retained Earnings (Deficit) Cumulative Effect Period of Adoption Adjustment | Treasury Stock |
Balance at Jun. 30, 2019 | $ 171,309 | $ (601) | $ 465 | $ 241,456 | $ (63,800) | $ (601) | $ (6,812) | ||
Balance (in shares) at Jun. 30, 2019 | 46,683,000 | ||||||||
Net earnings /(loss) | (166,328) | (166,328) | |||||||
Shares issued in connection with exercises of employee stock options | $ (10) | 10 | |||||||
Shares issued in connection with exercises of employee stock options (in shares) | 658,000 | ||||||||
Share-based compensation expense | 2,555 | 2,555 | |||||||
Balance at Jun. 30, 2020 | 6,935 | $ 455 | 244,021 | (230,729) | (6,812) | ||||
Balance (in shares) at Jun. 30, 2020 | 47,341,000 | ||||||||
Net earnings /(loss) | 2,982 | 2,982 | |||||||
Shares issued in connection with a rights offering | 59,959 | $ 382 | $ 59,577 | ||||||
Shares issued in connection with a rights offering (shares) | 38,182,000 | ||||||||
Shares issued or canceled in connection with employee stock incentive plans and related tax effect | 74 | $ 25 | 49 | ||||||
Shares issued or canceled in connection with employee stock incentive plans and related tax effect (in shares) | 682,000 | ||||||||
Share-based compensation expense | 1,851 | 1,851 | |||||||
Balance at Jun. 30, 2021 | $ 71,801 | $ 862 | 305,498 | (227,747) | (6,812) | ||||
Balance (in shares) at Jun. 30, 2021 | 86,204,572 | 86,205,000 | |||||||
Net earnings /(loss) | $ (59,003) | (59,003) | |||||||
Shares issued or canceled in connection with employee stock incentive plans and related tax effect | 308 | $ (3) | 311 | ||||||
Shares issued or canceled in connection with employee stock incentive plans and related tax effect (in shares) | (325,000) | ||||||||
Share-based compensation expense | 5,881 | 5,881 | |||||||
Balance at Jul. 02, 2022 | $ 18,987 | $ 859 | $ 311,690 | $ (286,750) | $ (6,812) | ||||
Balance (in shares) at Jul. 02, 2022 | 85,880,108 | 85,880,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 02, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities: | |||
Net earnings (loss) | $ (59,003) | $ 2,982 | $ (166,328) |
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 13,388 | 15,412 | 27,019 |
Loss on impairment and abandonment of assets | 2,126 | 5,638 | 105,158 |
Intangible impairment charge | 1,639 | ||
Amortization of financing costs and interest expense | 4,719 | 7,177 | 1,606 |
Loss (Gain) on disposal of assets | 82 | (1,389) | 46 |
Gain on sale-leaseback | (49,639) | ||
Stock-based compensation | 5,881 | 2,054 | 2,720 |
Gain on repurchase of term loan | (939) | ||
Loss on refinancing of revolving credit facility | 588 | ||
Rights Offering and Backstop agreement | 19,990 | ||
Gain on lease terminations | (93,278) | ||
Deferred income taxes | (118) | 24 | 311 |
Construction allowances from landlords | 548 | 451 | 1,312 |
Change in operating assets and liabilities: | |||
Inventories | (3,387) | (30,114) | 122,825 |
Prepaid and other current assets | 982 | 323 | (2,547) |
Operating lease assets and liabilities | (6,815) | (7,941) | 2,941 |
Accounts payable | (4,841) | (43,051) | 2,726 |
Accrued liabilities | (13,228) | 10,082 | (3,105) |
Other liabilities—non-current | (1,596) | 1,585 | (814) |
Net cash provided by (used in) operating activities | (61,613) | (158,055) | 93,870 |
Cash flows from investing activities: | |||
Capital expenditures | (6,537) | (3,783) | (15,825) |
Purchase of intellectual property | (27) | ||
Proceeds from sale-leaseback | 68,566 | ||
Proceeds from sales of assets | 1,897 | 1,950 | |
Net cash provided by (used in) investing activities | (6,537) | 66,680 | (13,902) |
Cash flows from financing activities: | |||
Proceeds from borrowings under revolving credit facility | 921,533 | 811,031 | 308,506 |
Repayments of borrowings under revolving credit facility | (866,342) | (799,131) | (343,056) |
Change in cash overdraft | (4,996) | ||
Repurchase of term loan | (5,000) | ||
Proceeds from term loan | 25,000 | ||
Proceeds from Rights Offering | 40,000 | ||
Proceeds from the exercise of employee stock options | 459 | 45 | |
Tax payments related to vested deferred stock awards | (151) | ||
Payments on finance leases | (124) | (217) | (224) |
Payments of financing fees | (3,264) | (3,174) | (4,917) |
Net cash provided by (used in) financing activities | 47,111 | 73,554 | (44,687) |
Net increase (decrease) in cash, cash equivalents and restricted cash | (21,039) | (17,821) | 35,281 |
Cash, cash equivalents and restricted cash, beginning of period | 28,855 | 46,676 | 11,395 |
Cash, cash equivalents and restricted cash, end of period | 7,816 | 28,855 | 46,676 |
Supplemental cash flow information: | |||
Interest paid | 5,857 | 2,623 | 2,141 |
Income taxes paid (refunded) | $ (352) | $ 478 | $ (104) |
Nature of Operations and Summar
Nature of Operations and Summary of Significant Accounting Policies | 12 Months Ended |
Jul. 02, 2022 | |
Accounting Policies [Abstract] | |
Nature of Operations and Summary of Significant Accounting Policies | 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations and Other General Principles Tuesday Morning Corporation, a Delaware corporation, and its wholly-owned subsidiaries, (collectively referred to as “Tuesday Morning”, the “Company”, “we”, “us”, and “our”), is a leading off-price retailer, specializing in name-brand, high-quality products for the home, including upscale textiles, furnishings, housewares, gourmet food, toys and seasonal décor at prices generally below those charged by boutique, specialty and department stores, catalogs and on‑line retailers in the United States. We operated 489 discount retail stores in 40 states as of July 2, 2022 (“fiscal 2022”). We operated in 490 discount retail stores in 40 states as of June 30, 2021 (“fiscal 2021”). We operated 685 discount retail stores in 39 states at June 30, 2020 (“fiscal 2020”). Our customer is a savvy shopper with discerning taste for quality at a value. Our strong value proposition has established a loyal customer base, who we engage regularly with social media, email, and digital media. Listing During the pendency of our bankruptcy proceedings, the Company’s common stock was delisted by the Nasdaq Stock Market, LLC (“Nasdaq”) and began trading on the OTC Pink marketplace under the symbol “TUESQ”. In January 2021, following our emergence from bankruptcy, the Company’s common stock began trading on the OTCQX market under the ticker symbol “TUEM.” On May 24, 2021, Nasdaq approved our application for the relisting of the Company's common stock on The Nasdaq Capital Market. The Company’s common stock was relisted and commenced trading on The Nasdaq Capital Market at the opening of the market on May 25, 2021, under the ticker symbol “TUEM.” On June 6, 2022, the Company received written notice from The Nasdaq Stock Market LLC (“Nasdaq”) that the Company was not in compliance with the Nasdaq’s Listing Rule 5550(a)(2), as the closing bid price of the Company’s common stock had been below $ 1.00 per share for 30 consecutive business days (the “Minimum Bid Price Requirement”). Under Nasdaq Rule 5810(c)(3)(A), the Company will have a compliance period of 180 calendar days, or until December 5, 2022, to regain compliance with the Minimum Bid Price Requirement. To regain compliance, during the 180-calendar day compliance period, the closing bid price of the Company’s common stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days. The notification of noncompliance had no immediate effect on the listing of the Company’s common stock, which continues to be listed and traded on The Nasdaq Capital Market under the symbol “TUEM.” The Company has committed to Nasdaq to seek stockholder approval of a reverse stock split at its next meeting of stockholders and to implement a reverse stock split promptly following such stockholder approval in order to regain compliance with the Minimum Bid Price Requirement. There can be no assurance that the Company will be able to regain compliance with the Minimum Bid Price Requirement or will otherwise be in compliance with other Nasdaq listing criteria. Updates on COVID-19 Pandemic The COVID-19 pandemic has had an adverse effect on our business operations, store traffic, employee availability, financial conditions, results of operations, liquidity and cash flow. On March 25, 2020, we temporarily closed all of our 687 stores nationwide, severely reducing revenues, resulting in significant operating losses and the elimination of substantially all operating cash flow. As allowed by state and local jurisdictions, 685 of our stores gradually reopened as of the end of June 2020, and two stores were permanently closed during the fourth quarter of fiscal year 2020. In accordance with our bankruptcy plan of reorganization, described below, we completed the permanent closure of 197 stores in the first quarter of fiscal 2021 and the closure of our Phoenix, Arizona distribution center (“Phoenix distribution center”) in second quarter of fiscal 2021. In addition, as part of our restructuring, we secured financing to pay creditors in accordance with the plan of reorganization and to fund planned operations and expenditures. The extent to which the COVID-19 pandemic impacts our business, results of operations, cash flows and financial condition will depend on future developments, including future surges in incidences of COVID-19 and the severity of any such resurgence, the rate and efficacy of vaccinations against COVID-19, the length of time that impacts of the COVID-19 pandemic continue, how fast economies will fully recover from the COVID-19 pandemic, the timing and extent of further impacts on traffic and consumer spending in our stores, the extent and duration of ongoing impacts to domestic and international supply chains and the related impacts on the flow, and availability and cost of products. Liquidity and Going Concern The consolidated balance sheets as of July 2, 2022, and June 30, 2021, and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for each of the three years in the period ended July 2, 2022, June 30, 2021, and June 30, 2020 and the related notes (collectively referred to as the “consolidated financial statements”) 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 Company’s results of operations for fiscal year ended July 2, 2022, have been negatively impacted by a variety of factors, including pandemic-related disruptions to supply chains, reduced store traffic and sales as a result of decades high inflation including increased fuel costs, higher freight costs, transportation and other supply chain conditions. As of July 2, 2022, the gross margin decreased from the previous year to 25.6 % compared to 29.8 % at June 30, 2021. The decrease in gross margin as a percentage of net sales was primarily a result of higher supply chain and transportation costs recognized in the current year, partially offset by lower markdowns. These conditions combined with limited remaining borrowing availability under the New ABL Credit Agreement raised substantial doubt as to the Company’s ability to continue as a going concern as of July 2, 2022. In connection therewith, and as discussed further in Note 12 to the consolidated financial statements, the Company made an early borrowing of $ 5 million under the FILO B term loan facility under the New ABL Credit Agreement. In addition, over the last three months, the Company also engaged in an extensive process to obtain additional financing to support the Company’s capital needs. As described further in Note 12 to the consolidated financial statements, on September 20, 2022, the Company completed the Private Placement, which result in an issuance of $ 35 million of convertible debt securities. The proceeds of the Private Placement were used (i) to repay $ 7.5 million of the FILO A term loans and FILO B term loans under the New ABL Credit Agreement; (ii) repayment of a portion of the Borrower’s revolving loans under the New ABL Credit Agreement; and (iii) payment of transaction costs not to exceed $ 5 million. In addition, remaining proceeds will be used for working capital and other general corporate purposes of the Company and its subsidiaries. In evaluating the criteria from ASC 205-40-50, the Company considered several key factors related to changing conditions that impacted the Company’s ability to continue as a going concern such as cash and cash equivalents, ABL availability, total liquidity and additional financing of $ 35 million, and a strategic partnership to bring in a new line of products. Accordingly, the Company re-evaluated its potential going concern disclosure requirements in accordance with ASC 205-40-50 as of the date of filing. Upon completion of this evaluation, the Company has concluded that as a result of the funds generated from the Private Placement, and the funds expected to be generated from operating activities, available cash and cash equivalents, and borrowings under the New ABL Facility will be sufficient to fund its planned operations and capital expenditure requirements for at least twelve months. Management’s expected plans to generate adequate funds from operating activities, include cost management of payroll, reductions in year over year distribution costs, the sale of new product categories, and better alignment of merchandise purchases and receipts with sales demand, among others. The Company believes these actions alleviate the substantial doubt about the Company’s ability to continue as a going concern. This evaluation is based on relevant conditions and events that are currently known or reasonably knowable, as of September 28, 2022. Emergence from Chapter 11 Bankruptcy Proceedings In response to the impacts of the COVID-19 pandemic, on May 27, 2020 (the “Petition Date”), we filed voluntary petitions (the “Chapter 11 Cases”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Northern District of Texas, Dallas Division (the “Bankruptcy Court”). The Chapter 11 Cases were jointly administered for procedural purposes. During the pendency of the Chapter 11 Cases, we continued to operate our businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. In accordance with orders of the Bankruptcy Court, we entered into certain debtor-in-possession financing arrangements to provide financing during the pendency of the Chapter 11 Cases. See Note 3 “Debt” to the consolidated financial statements for additional information regarding these debtor-in-possession financing arrangements. In early June 2020, in accordance with orders of the Bankruptcy Court, we commenced the process to close 132 store locations. By the end of July 2020, all of these stores were permanently closed. In mid-July 2020, we began the process to close an additional 65 stores following negotiations with our landlords, and those store closures were completed in August 2020. In total, we permanently closed 197 stores during the first quarter of fiscal 2021. In addition, we closed our Phoenix, Arizona distribution center ("Phoenix distribution center") in the second quarter of fiscal 2021. On November 16, 2020, the Company and its subsidiaries filed with the Bankruptcy Court a proposed Revised Second Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code (the “Amended Plan”) and a proposed Amended Disclosure Statement (the “Amended Disclosure Statement”) in support of the Amended Plan describing the Amended Plan and the solicitation of votes to approve the same from certain of the Debtors’ creditors with respect to the Chapter 11 Cases. The Amended Plan and the Amended Disclosure Statement contemplated the debt financing transactions described in Note 3 below under the caption “Post-Emergence Debt Financing Arrangements,” the exchange and Rights Offering (defined in Note 7 below) and the sale-leaseback transactions described in Note 8. On December 23, 2020, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Amended Plan, with certain modifications described in the Confirmation Order (as modified and confirmed, the “Plan of Reorganization”). On December 31, 2020, all of the conditions precedent to the Plan of Reorganization were satisfied and the Company completed the debt financing and sale-leaseback contemplated in the Plan of Reorganization. However, the closing of the Rights Offering was considered a critical component to the execution of our confirmed Plan of Reorganization, therefore, we continued to apply the requirements of Accounting Standards Codification ("ASC") 852 – Reorganizations until that transaction closed on February 9, 2021. In accordance with the Plan of Reorganization, effective December 31, 2020 (the “Effective Date”), the Company’s board of directors was comprised of nine members, including five continuing directors of the Company, three new directors appointed by the Backstop Party (as defined in Note 7 below) and one director appointed by the equity committee in the Chapter 11 Cases. Pursuant to the Plan of Reorganization, each outstanding share of the Company’s common stock as of the close of business on January 4, 2021, was exchanged for (1) one new share of the Company’s stock and (2) a share purchase right entitling the holder to purchase its pro rata portion of shares available to eligible holders in the Rights Offering described under the caption "Equity Financing under the Plan of Organization" in Note 7. On February 9, 2021, the Company completed the equity financing contemplated by the Plan of Reorganization. On September 29, 2021, the U.S. Bankruptcy Court issued a final decree (the “Final Decree”) closing the Chapter 11 Cases of the Company and its subsidiaries. While the Company emerged from bankruptcy proceedings on December 31, 2020, the Chapter 11 Cases remained opened pending final resolution of all claims of general unsecured creditors. The Company was able to resolve all of the claims for approximately $ 14 million less than the amounts reserved and retained in the Unsecured Creditor Claim Fund. Upon entry of the Final Decree, the approximately $ 14 million remaining in the escrow account was returned to the Company to make a repayment on its ABL credit facility and the Chapter 11 Cases are now final. See Note 2 regarding Bankruptcy Accounting for further discussion. Summary of Significant Accounting Policies (a) Principles of Consolidation and Basis of Presentation —The accompanying consolidated financial statements include the accounts of Tuesday Morning Corporation, and its wholly‑owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. We have one operating segment and one reportable segment as our chief operating decision maker, the Executive Committee composed of the Chief Executive Officer, Chief Finance Officer, and other senior executives, reviews financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance. Certain reclassifications were made to prior period amounts to conform to the current period presentation. None of the reclassifications affected our net earnings/(loss) in any period. We do not present a separate statement of comprehensive income, as we have no other comprehensive income items. On February 23, 2022, the board of directors of the Company approved a change in the fiscal year end from a calendar year ending on June 30 to a 52-53-week year ending on the Saturday closest to June 30, effective beginning with fiscal year 2022. In a 52-week fiscal year, each of the Company’s quarterly periods will comprise 13 weeks. The additional week in a 53- week fiscal year is added to the fourth quarter, making such quarter consist of 14 weeks. The Company made the fiscal year change on a prospective basis and will not adjust operating results for prior periods. (b) Use of Estimates —The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles ("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 consolidated financial statements, and the reported amounts of net sales and expenses during the reporting period. Actual results could differ from those estimates. (c) Cash and Cash Equivalents —Cash and cash equivalents include credit card receivables and all highly liquid instruments with original maturities of three months or less. Cash equivalents are carried at cost, which approximates fair value. At July 2, 2022, and June 30, 2021, credit card receivables from third party consumer credit card providers were $ 6.3 million and $ 3.2 million , respectively. Such receivables generally are collected within one week of the balance sheet date. (d) Restricted Cash —There was no restricted cash as of July 2, 2022 . Restricted cash was $ 22.3 million, as of June 30, 2021 , which was held in the Unsecured Creditor Claims Fund (defined below in Note 2). (e) Inventories —Inventories, consisting of finished goods, are stated at the lower of cost or net realizable value using the retail inventory method for store inventory and the specific identification method for warehouse inventory. We have a perpetual inventory system that tracks on-hand inventory and inventory sold at a stock-keeping unit (“SKU”) level. Inventory is relieved and cost of sales is recorded based on the current calculated cost of the item sold. Buying, distribution, freight and certain other costs are capitalized as part of inventory and are charged to cost of sales as the related inventory is sold. We charged $ 112.2 million , $ 95.1 million , and $ 97.8 million of such capitalized inventory costs to cost of sales for the fiscal years ended July 2, 2022, June 30, 2021, and June 30, 2020, respectively. We have capitalized $ 29.0 million and $ 24.2 million of such costs in inventory at July 2, 2022, and June 30, 2021, respectively. Stores conduct annual physical inventories, staggered during the second half of the fiscal year. During periods in which physical inventory observations do not occur, we utilize an estimate for recording inventory shrink based on the historical results of our previous physical inventories. The estimated shrink rate may require a favorable or unfavorable adjustment to costs of sales based on actual results to the extent that our subsequent actual physical inventory yields a different result. Although inventory shrink rates have not fluctuated significantly in recent years, if the actual rate were to differ from our estimates, then an adjustment to inventory shrink would be required. We review our inventory during and at the end of each quarter to ensure that all necessary pricing actions are taken to adequately value our inventory at the lower of cost or net realizable by recording permanent markdowns to our on-hand inventory. Management believes these markdowns result in the appropriate prices necessary to stimulate demand for the merchandise. Actual recorded permanent markdowns could differ materially from management’s initial estimates based on future customer demand or economic conditions. (f) Property and Equipment —Property and equipment are recorded at cost less accumulated depreciation. Furniture, fixtures, leasehold improvements, finance leases and equipment are depreciated on a straight‑line basis over the estimated useful lives of the assets as follows: Estimated Useful Lives Furniture and fixtures 3 to 7 years Leasehold improvements Shorter of useful life or lease term Equipment 5 to 10 years Assets under finance lease Shorter of useful life or lease term Software 3 to 10 years Upon sale or retirement of an asset, the related cost and accumulated depreciation are removed from our balance sheet and any gain or loss is recognized in the statement of operations. Expenditures for maintenance, minor renewals and repairs are expensed as incurred, while major replacements and improvements are capitalized. (g) Deferred Financing Costs — Deferred financing costs represent costs paid in connection with obtaining bank and other long‑term financing. These costs for the term loan are reported in the balance sheet as a direct deduction from the face amount of the term loan and the ABL credit agreements (defined in Note 3 below) are presented as deferred financing costs in the balance sheet. (h) Income Taxes —Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using statutory tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period that includes the date of enactment. Valuation allowances are established against deferred tax assets when it is more likely than not that the realization of those deferred tax assets will not occur. Valuation allowances are released when positive evidence becomes available that future taxable income is sufficient to utilize the underlying deferred tax assets. We file our annual federal income tax return on a consolidated basis. Furthermore, we recognize uncertain tax positions when we have determined it is more likely than not that a tax position will be sustained upon examination. However, new information may become available, or applicable laws or regulations may change, thereby resulting in a favorable or unfavorable adjustment to amounts recorded. On March 27, 2020, in an effort to mitigate the economic impact of the COVID-19 pandemic, the U.S. Congress enacted the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). The CARES Act included certain corporate income tax provisions, which among other things, included a five-year carryback of net operating losses and acceleration of the corporate AMT credit. The Company has evaluated the CARES Act and it did not have a material impact on the income tax provision. The CARES Act also contains provisions for deferral of the employer portion of social security taxes incurred through the end of calendar 2020 and an employee retention credit, a refundable payroll credit for 50% of wages and health benefits paid to employees not providing services due to the pandemic. As a result of the CARES Act, we continued to defer qualified payroll taxes through December 31, 2020. As of July 2, 2022, we have $ 2.6 million in current qualified deferred payroll taxes in “Accrued Liabilities" in the Consolidated Balance Sheets, which are due December 31, 2022. (i) Self-Insurance Reserves —We use a combination of insurance and self‑insurance plans to provide for the potential liabilities associated with workers’ compensation, general liability, property insurance, director and officers’ liability insurance, vehicle liability and employee health care benefits. Our stop loss limits per claim ar e $ 500,000 for workers ’ compensation, $ 250,000 for general liability, and $ 150,000 for medical. Liabilities associated with the risks that are retained by us are estimated, in part, by historical claims experience, severity factors and the use of loss development factors by third-party actuaries. The insurance liabilities we record are primarily influenced by the frequency and severity of claims and include a reserve for claims incurred but not yet reported. Our estimated reserves may be materially different from our future actual claim costs, and, when required adjustments to our estimate reserves are identified, the liability will be adjusted accordingly in that period. Our self‑insurance reserves for workers’ compensation, general liability and medical were $ 6.9 million , $ 0.6 million , and $ 1.0 million , respectively, at July 2, 2022, and $ 7.3 million , $ 1.2 million , and $ 1.0 million , respectively, at June 30, 2021. We recognize insurance expenses based on the date of an occurrence of a loss including the actual and estimated ultimate costs of our claims. Claims are paid from our reserves and our current period insurance expense is adjusted for the difference in prior period recorded reserves and actual payments as well as changes in estimated reserves. Current period insurance expenses also include the amortization of our premiums paid to our insurance carriers. Expenses for workers’ compensation, general liability and medical insurance were $ 2.3 million , $ 3.4 million and $ 7.0 million , respectively, for the fiscal year ended July 2, 2022, $ 1.4 million , $ 3.7 million , and $ 7.8 million , respectively, for the fiscal year ended June 30, 2021, and $ 2.7 million , $ 3.3 million and $ 8.7 million , respectively, for the fiscal year ended June 30, 2020 . (j) Revenue Recognition —Our revenue is earned from sales of merchandise within our stores and is recorded at the point of sale and conveyance of merchandise to customers. Revenue is measured based on the amount of consideration that we expect to receive, reduced by point of sale discounts and estimates for sales returns, and excludes sales tax. Payment for our sales is due at the time of sale. We maintain a reserve for estimated sales returns, and we use historical customer return behavior to estimate our reserve requirements. No impairment of the returns asset was indicated or recorded for the fiscal year ended July 2, 2022. Gift cards are sold to customers in our stores, and we issue gift cards for merchandise returns in our stores. Revenue from sales of gift cards and issuances of merchandise credits is recognized when the gift card is redeemed by the customer, or if the likelihood of the gift card being redeemed by the customer is remote (“gift card breakage”). The gift card breakage rate is determined based upon historical redemption patterns. An estimate of the rate of gift card breakage is applied over the period of estimated performance and the breakage amounts are included in net sales in the Consolidated Statements of Operations. Breakage income recognized was $ 0.7 million , $ 0.4 million , and $ 0.8 million for the fiscal years ended July 2, 2022, June 30, 2021, and 2020, respectively. The gift card liability totals $ 1.1 million and $ 1.0 million included in “Accrued Liabilities” in the Consolidated Balance Sheets at July 2, 2022 and June 30, 2021 , respectively (See Note 5). (k) Advertising —Costs for direct mail, television, radio, newspaper, digital and other media are expensed as the advertised events take place. Advertising expenses for the fiscal years ended July 2, 2022, June 30, 2021, and 2020 were $ 6.6 million , $ 8.3 million , and $ 18.6 million , respectively. We do not and did not receive consideration from vendors to support our advertising expenditures during fiscal 2022, 2021 and 2020 . (l) Share‑Based Compensation — The Company accounts for share-based compensation in accordance ASC 718, Compensation-Stock Compensation , which requires the fair value of share-based payments to be recognized in the consolidated financial statements as share-based compensation expense over the requisite service period. For time-based awards, share-based compensation expense is recognized on a straight-line basis, net of forfeitures, over the requisite service period for awards that actually vest. For performance-based awards, share-based compensation expense is estimated based on achievement of the performance condition and is recognized using the accelerated attribution method over the requisite service period for awards that actually vest. Share-based compensation expense is recorded in the selling, general and administrative expenses line in the consolidated statements of operations. ASC 718 also provides guidance for determining whether certain financial instruments awarded in share-based payment transactions are liabilities. The guidance requires that instruments that include conditions other than service, performance or market conditions that affect their fair value, exercisability or vesting be classified as a liability and be remeasured at fair value at each fiscal period (See Note 7 for further discussion on share-based compensation). During fiscal years ended July 2, 2022, and June 30, 2021, no stock options were granted. The fair value of each stock option granted during the fiscal year ended June 30, 2020, was estimated at the date of grant using a Black‑Scholes option pricing model, using the following assumptions: Fiscal Years Ended July 2, June 30, June 30, 2022 2021 2020 Risk-free interest rate — — 2.4 % Expected term (years) — — 4.6 Expected stock volatility — — 64.8 % Expected dividend yield — — 0.0 % • Risk‑free interest rate - the risk‑free interest rate is the constant maturity risk-free interest rate for U.S. Treasury instruments with terms consistent with the expected lives of the awards. • Expected term - the expected term of an option is based on our historical review of employee exercise behavior based on the employee class (executive or non‑executive) and based on our consideration of the remaining contractual term if limited exercise activity existed for a certain employee class. • Expected stock volatility - the expected stock volatility is based on both the historical volatility of our stock based on our historical stock prices and implied volatility of our traded stock options. • Expected dividend yield - the expected dividend yield is based on our expectation of not paying dividends on our common stock for the foreseeable future. (m) Net Earnings/(Loss) Per Common Share —Basic net earnings/(loss) per common share for the fiscal years ended July 2, 2022, June 30, 2021, and 2020, was calculated by dividing net earnings/(loss) by the weighted average number of common shares outstanding for each period. Diluted net earnings/(loss) per common share for the fiscal years ended July 2, 2022, June 30, 2021, and 2020 was calculated by dividing net earnings/(loss) by the weighted average number of common shares including the impact of dilutive common stock equivalents and warrants (unless anti-dilutive) as shown in Note 10. (n) Impairment of Long‑Lived Assets and Long‑Lived Assets to Be Disposed Of — Long‑lived assets, principally property and equipment, including leasehold improvements, and lease right-of-use ("ROU") assets are reviewed for impairment when, in management’s judgment, events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable. If the carrying value of the asset or asset group exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the asset group, the Company will write the carrying value down to the fair value in the period identified. Since there is typically no active market for our long-lived tangible assets, we estimate fair values based on the expected future cash flows. We estimate future cash flows based on store-level historical results, current trends, and operating and cash flow projections. We also perform an entity-wide assessment for impairment of shared assets such as our distribution center and corporate right of use assets using the residual cash flow method. While we believe our estimates and judgments about future cash flows are reasonable, future impairment charges may be required if the expected cash flow estimates, as projected, do not occur or if events change requiring us to revise our estimates. Assets subject to fair value measurement under ASC 820, “Fair Value Measurement”, are categorized into one of three different levels of the fair value hierarchy depending on the observability of the inputs employed in the measurement, as follows: • Level 1 – observable inputs that reflect quoted prices (unadjusted) for identical assets in active markets. • Level 2 – inputs that reflect quoted prices for identical assets in markets which are not active; quoted prices for similar assets in active markets; inputs other than quoted prices that are observable for the asset; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. • Level 3 – unobservable inputs reflecting the Company’s own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. See Note 4 and Note 8 for additional information. (o) Intellectual Property —Our intellectual property primarily consists of indefinite-lived trademarks. We evaluate annually whether the trademarks continue to have an indefinite life. Trademarks and other intellectual property are reviewed for impairment annually in the fourth quarter and may be reviewed more frequently if indicators of impairment are present. Due to change in the Company’s management in the fourth quarter of fiscal 2021 and their |
Bankruptcy Accounting
Bankruptcy Accounting | 12 Months Ended |
Jul. 02, 2022 | |
Reorganizations [Abstract] | |
Bankruptcy Accounting | 2. BANKRUPTCY ACCOUNTING FASB ASC 852, Reorganizations (“ASC 852”) require that the consolidated financial statements, for periods subsequent to the filing of the Chapter 11 Cases, distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. During the pendency of the Chapter 11 Cases until we qualified for emergence under ASC 852, the consolidated financial statements were prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities and commitments in the normal course of business and reflect the application of ASC 852. Accordingly, certain expenses, gains and losses that were realized or incurred in the bankruptcy proceedings were recorded in Reorganization items, net in our consolidated statements of operations. Pursuant to the Plan of Reorganization, an escrow account (the “Unsecured Creditor Claim Fund”) was established for the benefit of holders of allowed general unsecured claims. Upon the closing of the sale and leaseback of the Corporate Office and the Dallas Distribution Center properties (see Note 8) and the issuance of the Term Loan (as defined in Note 3), net proceeds of $ 67.5 million, after payment of property taxes, and $ 18.8 million, respectively, were deposited directly into the Unsecured Creditor Claim Fund that was administered by an independent unsecured claims disbursing agent. The remaining proceeds from the Term Loan that were not deposited into the Unsecured Creditor Claim Fund were deposited into our operating account. In addition, $ 14.2 million of additional cash was deposited into a segregated bank account at Wells Fargo Bank and was restricted for use in paying compensation for services rendered by professionals on or after the Petition date and prior to the approval of the Effective Date. The closing of the Rights Offering described in Note 7 provided approximately $ 40.0 million of cash that was deposited to the Unsecured Creditor Claim Fund and recorded as restricted cash. During the fiscal 2021, all services rendered by professionals were paid and the Wells Fargo Restricted Fund account was closed with all of the applicable funds disbursed. Net cash remaining of $ 1.9 million was deposited directly into our unrestricted cash account during the fourth quarter of fiscal 2021. As of July 2, 2022 , we had zero cash held in the Unsecured Creditor Claim Fund held on the balance sheet for the payment of claims. As of June 30, 2021 , we had $ 22.3 million of cash held in the Unsecured Creditor Claim Fund, recorded as restricted cash on the balance sheet for the payment of claims. Our Plan of Reorganization was confirmed on December 23, 2020, and all listed material conditions precedent were resolved by the December 31, 2020, legal effective date of emergence as governed by the Bankruptcy Court. However, the closing of our Rights Offering was considered a critical component to the execution of our confirmed Plan of Reorganization, therefore, we continued to apply the requirements of ASC 852 until that transaction closed on February 9, 2021. We were not required to apply fresh start accounting based on the provisions of ASC 852 as there was no change in control and the entity’s reorganization value immediately before the date of confirmation was more than the total of all its post-petition liabilities and allowed claims. Restructuring, Impairment and Abandonment Charges Restructuring, impairment and abandonment charges are as follows (in thousands): Fiscal Years Ended July 2, June 30, June 30, 2022 2021 2020 Restructuring costs: Severance and compensation related costs (adjustments) $ 499 $ 3,557 $ 3,122 Professional fees — — 5,212 Total restructuring costs $ 499 $ 3,557 $ 8,334 Impairment costs: Corporate long-lived assets $ 1,963 $ — $ — Intangible asset — 1,639 — Operating lease right-of-use assets — — 51,626 Distribution center long-lived assets — — 16,794 Store long-lived assets — — 11,656 Total impairment costs $ 1,963 $ 1,639 $ 80,076 Abandonment costs: Accelerated recognition of operating lease right-of-use assets $ — $ 5,638 $ 25,082 Total abandonment costs $ — $ 5,638 $ 25,082 Total restructuring, impairment and abandonment costs $ 2,462 $ 10,834 $ 113,492 For the year ended July 2, 2022, restructuring, impairment and abandonment charges of $ 2.5 million primarily relate to software abandonment charges of $ 2.0 million and $ 0.5 million in employee retention cost. For the year ended June 30, 2021 , restructuring and abandonment costs of $ 10.8 million primarily related to $ 3.6 million of executive severance and employee retention costs, intangible impairment charge of $ 1.6 million, as well as abandonment cost of $ 5.6 million related to the permanent closure of our stores and the Phoenix distribution center. For the year ended June 30, 2020 , restructuring, impairment and abandonment charges of $ 113.5 million primarily related to (i) $ 80.1 million in impairment cost and $ 25.1 million in abandonment cost relating to our permanent store closing plan along with our decision to close the Phoenix distribution center; (ii) $ 5.2 million in pre-filing incremental professional fees; and (iii) $ 3.1 million in compensation costs related to a reorganization reduction in force completed prior to the filing of the Chapter 11 Cases. Decisions regarding store closures and the Phoenix distribution center were made in the fourth quarter of fiscal 2020, prior to filing the Chapter 11 Cases; however, the closure of the Phoenix distribution center was not completed until the second quarter of fiscal 2021. Reorganization Items Reorganization items included in our consolidated statement of operations represent amounts resulting from the Chapter 11 Cases are as follows (in thousands): Fiscal Years Ended July 2, June 30, June 30, 2022 2021 2020 Reorganization items, net: Professional and legal fees $ 367 $ 34,579 $ 3,619 Claims related costs 594 1,302 — Gains on lease termination, net of estimated claims — ( 66,247 ) — Gain on sale-leaseback — ( 49,639 ) — Rights Offering and Backstop Agreement — 19,990 — Total reorganization items, net $ 961 $ ( 60,015 ) $ 3,619 For the year ended July 2, 2022 , reorganization items, net charges related to $ 0.6 million in net claims related costs and $ 0.4 million in professional and legal fees. For the year ended June 30, 2021 , Reorganization items, net was a net gain of $ 60.0 million due to a net gain of $ 66.2 million resulting from the store lease terminations and the termination of our Phoenix distribution center lease under our permanent closure plan, and a $ 49.6 million gain on the sale-leaseback transactions under our Plan of Reorganization (see Note 1 and Note 8). These gains were partially offset by $ 34.6 million in professional and legal fees related to our reorganization costs as well as $ 20.0 million of charges related to the execution of our Rights Offering (see Note 1 and 7). The proceeds of the sales-leaseback transaction, along with other sources of financing, continue to be used to satisfy allowed claims and are categorized as Reorganization items, net. For the year ended June 30, 2020 , reorganization costs represent amounts incurred from the Petition Date onward directly resulting from the Chapter 11 Cases and consist of professional fees of $ 3.6 million. |
Debt
Debt | 12 Months Ended |
Jul. 02, 2022 | |
Debt Disclosure [Abstract] | |
Debt | 3. DEBT Pre-Petition Financing Agreements Through December 31, 2020, we were party to a credit agreement that provided for an asset-based, five-year senior secured revolving credit facility in the original amount of up to $ 180.0 million which was scheduled to mature on January 29, 2024 (the “Pre-Petition ABL Credit Agreement”). The availability of funds under the Pre-Petition ABL Credit Agreement was limited to the lesser of a calculated borrowing base and the lenders’ aggregate commitments under the Pre-Petition ABL Credit Agreement. Our indebtedness under the Pre-Petition ABL Credit Agreement was secured by a lien on substantially all of our assets. As of December 31, 2020, we had no amounts outstanding under the Pre-Petition ABL Credit Agreement, and that agreement was terminated in connection with our legal emergence from bankruptcy. Debtor-In-Possession Financing Agreements On May 29, 2020, we entered into a Senior Secured Super Priority Debtor-in-Possession Credit Agreement (the “DIP ABL Credit Agreement”) among the Company, JPMorgan Chase Bank, N.A., as administrative agent, for itself and the other lenders, which provided for a super priority secured debtor-in-possession revolving credit facility in an aggregate amount of up to $ 100.0 million. On July 10, 2020, we entered into a Senior Secured Super Priority Debtor-In-Possession Delayed Draw Term Loan Agreement (the “DIP DDTL Agreement”) with the Franchise Group, Inc., which provided for delayed draw term loans in an amount not to exceed $ 25.0 million. We made no borrowings under the DIP ABL Credit Agreement or the DIP DDTL Agreement. On December 31, 2020, the DIP ABL Credit Agreement and the DIP DDTL Agreement were terminated in connection with our legal emergence from bankruptcy. Post-Emergence Financing Arrangements On December 31, 2020, the Company and its subsidiaries entered into a Credit Agreement (the “Post-Emergence ABL Credit Agreement”) with JPMorgan Chase Bank, N.A., Wells Fargo Bank, N.A. and Bank of America, N.A. (collectively, the “Lenders”) that provided for a revolving credit facility in an aggregate amount of $ 110.0 million (the “Post-Emergence ABL Facility”). The Post-Emergence ABL Credit Agreement includes conditions to borrowings, representations and warranties, affirmative and negative covenants, and events of default customary for financings of this type and size. The Post-Emergence ABL Credit Agreement required the Company to maintain a minimum fixed charge coverage ratio if borrowing availability fell below certain minimum levels, after the first anniversary of the agreement. We were not required to be compliant per the lender agreement until after the first anniversary of the agreement. Under the terms of the Post-Emergence ABL Credit Agreement, amounts available for advances would be subject to a borrowing base as described in the Post-Emergence ABL Credit Agreement. Under the Post-Emergence ABL Credit Agreement, borrowings initially bore interest at a rate equal to the adjusted LIBOR rate plus a spread of 2.75 % or the Commercial Bank Floating Bank rate plus a spread of 1.75 %. The Post-Emergence ABL Facility was secured by a first priority lien on all present and after-acquired tangible and intangible assets of the Company and its subsidiaries other than certain collateral that secures the Term Loan (as defined below). The commitments of the Lenders under the Post-Emergence ABL Facility were due to terminate and outstanding borrowings under the Post-Emergence ABL Facility was due to mature on December 31, 2023 . On December 31, 2020, the Company, Alter Domus (US), LLC, as administrative agent, and the lenders named therein including Tensile Capital Partners Master Fund LP ("Tensile") and affiliates of Osmium Partners, LLC, ("Osmium") entered into a Credit Agreement (as amended from time to time, the “Term Loan Credit Agreement”) to provide a term loan of $ 25.0 million to the Company (the “Term Loan”). In accordance with the Plan of Reorganization, on December 31, 2020, three new directors were selected for membership on the Board of Directors by Osmium Partners (Larkspur SPV), LP, ("Larkspur SPV") an affiliate of Tensile and Osmium. Pursuant to the Term Loan Credit Agreement, Tensile and affiliates of Osmium held $ 19.0 million and $ 1.0 million, respectively, of the $ 25.0 million outstanding Term Loan. Representatives of Osmium and Tensile both hold seats on the board and therefore Osmium and Tensile are related parties to the Company (see Note 11). New ABL Credit Agreement On May 9, 2022, the Company, Tuesday Morning, Inc. (the “Borrower”) and each other subsidiary of the Company entered into a Credit Agreement (the “New ABL Credit Agreement”) with the lenders named therein, Wells Fargo Bank, National Association, as administrative agent, and 1903P Loan Agent, LLC, as FILO B documentation agent. The New ABL Credit Agreement replaced the Post-Emergence ABL Facility. The New ABL Credit Agreement provides for (i) a revolving credit facility in an aggregate amount of $ 110.0 million (the “New ABL Facility”), which includes a $ 10.0 million sublimit for swingline loans and a $ 25.0 million sublimit for letters of credit, (ii) a first-in last-out term loan facility in an aggregate amount of $ 5.0 million (the “FILO A Facility”) and (iii) an additional first-in last-out term loan facility in an aggregate amount of $ 5.0 million (the “FILO B Facility” and, collectively with the New ABL Facility and the FILO A Facility, the “New Facilities”). In addition, under the original terms of the New ABL Credit Agreement, the Borrower had the right, on and following November 9, 2022, to request (x) an additional incremental loan under the FILO B Facility in an aggregate amount not to exceed $ 5.0 million (“FILO B Delayed Incremental Loan”), and (y) additional incremental commitments from the FILO B lenders to make additional loans in an aggregate amount not to exceed $ 5.0 million, subject to the satisfaction of certain conditions. The New ABL Credit Agreement includes conditions to borrowings, representations and warranties, affirmative and negative covenants, and events of default customary for financings of this type and size. Pursuant to the New ABL Credit Agreement, the Borrower and its subsidiaries must maintain borrowing availability under the New ABL Facility at least equal to the greater of (i) $ 7.5 million and (ii) 7.5 % of the Modified Revolving Loan Cap (as defined in the New ABL Credit Agreement). Amounts available for advances under the New Facilities are subject to borrowing bases as described in the New ABL Credit Agreement. Borrowings under the New ABL Facility will bear interest at a rate equal to, at the option of the Borrower, (i) the Adjusted Term SOFR (as defined below) plus a margin ranging from 1.25 % to 1.75 %, or (ii) the Base Rate (as defined below) plus a margin ranging from 0.25 % to 0.75 %, in each case with such margins depending on the Borrower’s average quarterly borrowing availability under the New ABL Facility. Borrowings under the FILO A Facility will bear interest at a rate equal to, at the option of the Borrower, (i) the Adjusted Term SOFR plus 3.00 %, or (ii) the Base Rate plus 2.00 %. Borrowings under the FILO B Facility will bear interest at a rate equal to, at the option of the Borrower, (i) the Adjusted Term SOFR plus a margin ranging from 8.50 % to 9.00 %, or (ii) the Base Rate plus a margin ranging from 7.50 % to 8.00 %, in each case with such margins depending on seasonal periods. The “Adjusted Term SOFR” is the term SOFR plus a term SOFR adjustment of 0.10 % for loans under the New ABL Facility or a term SOFR adjustment of 0.00 % for loans under the FILO A Facility and the FILO B Facility. The “Base Rate” is the greatest of (i) the federal funds effective rate plus 0.50 %, (ii) the term SOFR plus 1.00 %, and (iii) the prime rate of Wells Fargo Bank, National Association. Each of the Adjusted Term SOFR and the Base Rate is subject to a 0.00 % floor with respect to the New ABL Facility and a 1.00 % floor for each of the FILO A Facility and the FILO B Facility. The New Facilities are secured by a first priority lien on all present and after-acquired tangible and intangible assets of the Company and its subsidiaries other than certain collateral that secures the Term Loan (as defined below). Each of the New Facilities will terminate, and outstanding borrowings thereunder will mature, on the earlier of (i) May 9, 2027, and (ii) the date that is 91 days prior to maturity of the Term Loan. On May 9, 2022, the Borrower borrowed approximately $ 75.2 million under the New ABL Facility, $ 5.0 million under the FILO A Facility and $ 5.0 million under the FILO B Facility (collectively, the “Closing Date Loans”). A portion of the aggregate proceeds from the Closing Date Loans was used to (i) repay all outstanding indebtedness (the “Existing ABL Loans”) under the Post-Emergence ABL Facility, along with accrued interest, expenses and fees, (ii) purchase of a portion of the principal amount of the outstanding indebtedness (the “Term Loan”) under that certain Credit Agreement, dated as of December 31, 2020, by and among the Company, the Borrower, each of the subsidiary guarantors party thereto, the lenders party thereto (including Tensile Capital Partners Master Fund LP and affiliates of Osmium Partners, LLC) (collectively, the “Term Loan Lenders”), and Alter Domus (US) LLC, as administrative agent (the “Term Loan Credit Agreement”) for the aggregate purchase price of $ 5.0 million (the “Loan Repurchase”), and (iii) pay transaction costs related to the transactions described in the foregoing clauses (i) and (ii) and the execution and delivery of the New ABL Credit Agreement and related loan documents. The remainder of the proceeds from the Closing Date Loans, as well as the proceeds from future borrowings, will be used for working capital needs and other general corporate purposes. As of July 2, 2022, we had $ 3.1 million in deferred financing costs net of amortization for the New ABL Facility. As of July 2, 2022, we had $ 57.2 million of borrowings outstanding under the New ABL Facility and, $ 14.6 million of letters of credit outstanding. We had borrowing availability of $ 10.3 million under the New ABL Facility, as of July 2, 2022. As further described in Note 12 below, on July 11, 2022, we entered into an amendment to the New ABL Credit Agreement pursuant to which the FILO B lenders agreed to provide FILO B Delayed Incremental Loan on July 11, 2022, and we entered into an additional amendment to the New ABL Credit Agreement on September 20, 2022, in connection with the Private Placement (defined in Note 12 below). Amendment to Term Loan Credit Agreement On May 9, 2022, the Company, the Borrower, certain subsidiaries of the Company, certain of the Term Loan Lenders (the “Consenting Lenders”), and Alter Domus (US) LLC, as administrative agent, entered into an amendment to the Term Loan Credit Agreement (the “Term Loan Credit Agreement Amendment”), pursuant to which, among other things, (i) each Consenting Lender agreed to the Loan Repurchase, (ii) concurrently with the consummation of the Loan Repurchase, each Consenting Lender agreed to waive and forgive an amount of the accrued and unpaid interest owed to such Consenting Lender , (iii) it was agreed that immediately, automatically and permanently upon the consummation of the Loan Repurchase, the Term Loans assigned pursuant to the Loan Repurchase would be deemed cancelled and of no further force and effect and (iv) the Term Loan Credit Agreement was amended to, among other things, (x) provide that the Borrower and its subsidiaries shall not permit the borrowing availability under the New ABL Facility to be less than the greater of (A) $ 7.5 million and (B) 7.5 % of the Modified Revolving Loan Cap, (y) permit the Borrower to borrow on the $ 5.0 million committed FILO B accordion, subject to certain conditions, on and following November 9, 2022, and (z) provide that, commencing with the 12-month period (each, a “Test Period”) ending September 30, 2023, and for each subsequent Test Period ending on the last day of each fiscal month of the Company and TMI Holdings, Inc. (“Intermediate Holdings” and, together with the Company, “Holdings”) thereafter, Holdings shall not permit the Total Secured Net Leverage Ratio (as defined below) as of the last day for any such Test Period to be greater than (A) for any Test Period ending on or prior to the last day of Holdings’ December 2023 fiscal month, 8.00 :1.00, or (B) for any Test Period ending on or after the last day of Holdings’ January 2024 fiscal month, 6.00 :1.00. For purposes of the Term Loan Credit Agreement, “Total Secured Net Leverage Ratio” means, for any Test Period, Holdings and its subsidiaries’ Consolidated Secured Indebtedness (as defined in the Term Loan Credit Agreement) as of the last day of such Test Period divided by EBITDA (as defined in the Term Loan Credit Agreement) for such Test Period. Pursuant to the terms of the Term Loan Credit Agreement, the Term Loan has a maturity date of December 31, 2024 , and bears interest at a rate of 14 % per annum, with interest payable in-kind (“PIK”). Under the terms of the Term Loan Credit Agreement, the Term Loan is secured by a second lien on the collateral securing the Post-Emergence ABL Facility and a first lien on certain other assets of the Company as described in the Term Loan Credit Agreement. The Term Loan is subject to optional prepayment after the first anniversary of the date of issuance at prepayment price equal to the greater of (i) the original principal amount of the Term Loan plus accrued interest thereon, and (ii) 125 % of the original principal amount of the Term Loan. The Term Loan is subject to mandatory prepayment in connection with a change of control of the Company as described in the Term Loan Credit Agreement. The Term Loan Credit Agreement also includes customary covenants and events of default. The following table provides details on our long-term debt (in thousands): July 2, June 30, 2022 2021 Term loan balance $ 24,400 $ 25,000 Debt issuance costs, net ( 420 ) ( 432 ) Accrued paid-in-kind interest — 1,806 FILO A, non-current 4,750 — Loan balance, ending $ 28,730 $ 26,374 At July 2, 2022, we were in compliance with covenants in the New ABL Facility and Term Loan respectively. As further described in Note 12 below, on July 11, 2022, we entered into an amendment to the Term Loan in connection with an amendment to New ABL Credit Agreement pursuant to which the FILO B lenders agreed to provide FILO B Delayed Incremental Loan on July 11, 2022, and we entered into an additional amendment to the Term Loan on September 20, 2022, in connection with the Private Placement. Interest Expense Interest expense for fiscal year 2022 for the New ABL Facility, the Post-Emergence ABL Facility, and the Term Loan of $ 7.2 million , was comprised of commitment fees of $ 2.2 million , amortization of financing fees of $ 1.6 million , and interest paid and PIK for the New ABL Facility and Post-Emergence ABL Facility of $ 3.4 million . Interest expense for fiscal year 2021 from the Post-Emergence ABL Facility, the DIP ABL Credit Agreement and the Term Loan of $ 8.2 million was comprised of the amortization of financing fees of $ 5.5 million , commitment fees of $ 0.8 million , and interest paid on the Post-Emergence ABL Facility and accrued PIK interest on the Term Loan of $ 1.9 million . Interest expense for fiscal year 2020 from the Pre-Petition ABL Credit Agreement of $ 1.9 million was comprised of interest of $ 1.5 million , commitment fees of $ 0.2 million , and the amortization of financing fees of $ 0.2 million . Fair Value Measurements The fair value of our Term Loan was determined based on observable market data provided by a third party for similar types of debt which are considered Level 2 inputs within the fair value hierarchy. The carrying value of our long-term debt as of July 2, 2022, and June 30, 2021 was $ 28.7 million and $ 26.4 million , respectively. The fair value of our long-term debt as of July 2, 2022, and June 30, 2021, was $ 28.9 million and $ 29.6 million respectively. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Jul. 02, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 4. PROPERTY AND EQUIPMENT, net Property and equipment, net of accumulated depreciation, consisted of the following (in thousands): July 2, June 30, 2022 2021 Furniture and fixtures $ 47,501 $ 47,587 Equipment 50,191 50,231 Software 41,880 41,575 Leasehold improvements 51,386 49,651 Assets under finance lease 680 681 191,638 189,725 Less accumulated depreciation ( 163,196 ) ( 151,941 ) Net property and equipment $ 28,442 $ 37,784 In the second quarter fiscal 2021, we sold our corporate office and Dallas distribution center properties and land with a total net book value of $ 18.9 million in a sale-leaseback transaction (see further discussion in Note 8 below). Gains related to the sale or other disposal of such assets are presented in Reorganization items, net on our Consolidated Statement of Operations (See Note 2). |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Jul. 02, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | 5. ACCRUED LIABILITIES Accrued liabilities consisted of the following (in thousands): July 2, June 30, 2022 2021 Sales and use tax $ 3,854 $ 2,698 Self-insurance reserves 8,451 9,405 Wages, benefits and payroll taxes 5,892 9,639 Property taxes 1,476 1,510 Freight and distribution 6,484 8,658 Capital expenditures 122 348 Utilities 1,261 1,466 Gift card liability 1,095 1,045 Reorganization expenses 20 6,337 Other expenses 4,836 5,348 Total accrued liabilities $ 33,491 $ 46,454 |
Income Taxes
Income Taxes | 12 Months Ended |
Jul. 02, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6. INCOME TAXES Income tax provision/(benefit) consisted of the following (in thousands): Current Deferred Total Fiscal Year Ended July 2, 2022 Federal $ — $ ( 96 ) $ ( 96 ) State and local 191 ( 22 ) 169 Total $ 191 $ ( 118 ) $ 73 Fiscal Year Ended June 30, 2021 Federal $ — $ 20 $ 20 State and local 267 4 271 Total $ 267 $ 24 $ 291 Fiscal Year Ended June 30, 2020 Federal $ ( 286 ) $ 306 $ 20 State and local 196 5 201 Total $ ( 90 ) $ 311 $ 221 A reconciliation between income taxes computed at the statutory federal income tax rate of 21 % and taxes recognized in the Consolidated Statements of Operations was as follows (in thousands): Fiscal Years Ended July 2, June 30, June 30, 2022 2021 2020 Federal income tax (benefit) expense computed at statutory rate $ ( 12,375 ) $ 687 $ ( 34,883 ) State income taxes, net of related federal tax benefit (excluding state valuation allowance) ( 3,051 ) 3,133 ( 6,874 ) Increase (decrease) in state valuation allowance 3,202 ( 2,919 ) 7,033 Increase (decrease) in federal valuation allowance 11,816 ( 11,637 ) 34,586 Federal tax credits ( 244 ) ( 113 ) ( 91 ) Stock option expiration or deficiencies 556 250 620 Warrant issue expenses — 4,324 — Reorganization expenses 19 6,202 — Other, net 150 364 ( 170 ) Provision for income taxes $ 73 $ 291 $ 221 Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities as of July 2, 2022, and June 30, 2021, all of which are classified as non-current in our Consolidated Balance Sheets, were comprised of the following (in thousands): July 2, June 30, 2022 2021 Deferred tax assets: Other payroll and benefits $ 384 $ 1,182 Inventory reserves 604 931 Self-insurance reserves 2,083 2,318 Share-based compensation 1,981 1,800 Other current assets 1,007 1,160 Operating lease liabilities 41,503 52,008 Property and equipment 2,992 727 Disallowed interest expense 6,671 2,954 Net operating loss and tax credits 54,327 41,833 Other noncurrent assets 435 556 Total gross deferred tax assets $ 111,987 $ 105,469 Deferred tax liabilities: Inventory costs $ 3,855 $ 2,924 Prepaid supplies 1,436 1,353 Operating lease - right of use 38,681 47,627 Total gross deferred tax liabilities 43,972 51,904 Valuation allowance ( 68,015 ) ( 53,683 ) Net deferred tax liability $ — $ ( 118 ) During fiscal 2013, we established a valuation allowance related to deferred tax assets. In assessing whether a deferred tax asset would be realized, we considered whether it is more likely than not that some portion or all of the deferred tax assets would not be realized. We considered the reversal of existing taxable temporary differences, projected future taxable income, tax planning strategies and loss carry back potential in making this assessment. In evaluating the likelihood that sufficient future earnings would be available in the near future to realize the deferred tax assets, we considered our cumulative losses over three years including the then-current year. Based on the foregoing, we concluded that a valuation allowance was necessary, and based on our results since fiscal 2013, we have continued to conclude that a full tax valuation allowance is necessary. In fiscal 2022, the deferred tax asset valuation allowance, increased $ 14.3 million, due to our operating income for fiscal 2022 and non-deductible reorganization costs. We have federal net operating loss carryforwards of $ 200.5 million. These losses can only be carried forward and utilized to offset future taxable income. Of this carryforward amount, $ 73.7 million will expire in fiscal years 2033 through 2037 if not utilized before then. The remaining $ 126.8 million can be carried forward indefinitely, due to provisions of the TCJA. The Company also has federal tax credit carryforwards of $ 3.8 million. These carryforwards will expire in fiscal years 2032 through 2042 if not utilized before then. Additionally, we have tax effected state net operating loss carryforwards of $ 8.4 million, which will expire throughout fiscal years 2022 through 2042 filings, if not utilized before then. Following the completion of the private placement, a change of control of the Company occurred, which is a triggering event for Section 382 of the Internal Revenue Code, its impact on the realization of positive tax attributes will be evaluated. The change in control is expected likely to result in restrictions on the Company's use of its net operating losses and certain other tax attributes in future periods. Accounting for Uncertainty in Income Taxes The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years before fiscal 2015. The Internal Revenue Service has concluded an examination of the Company for years ending on or before June 30, 2010. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Balance at June 30, 2019 $ 147 Additions for tax positions of prior years — Reductions for lapse of statute of limitations — Balance at June 30, 2020 $ 147 Additions for tax positions of prior years — Reductions for lapse of statute of limitations — Balance at June 30, 2021 $ 147 Additions for tax positions of prior years — Reductions for lapse of statute of limitations — Balance at July 2, 2022 $ 147 The balance of taxes, interest, and penalties at July 2, 2022 , that if recognized, would affect the effective tax rate is $ 0.4 million. We classify and recognize interest and penalties accrued related to unrecognized tax benefits in income tax expense. No interest or penalties were paid in the tax years ended July 2, 2022, June 30, 2021, and 2020. We do not anticipate that the total amount of unrecognized tax benefits will significantly increase or decrease the effective tax rate within 12 months as of July 2, 2022 . |
Common Stock & Share-Based Ince
Common Stock & Share-Based Incentive Plans | 12 Months Ended |
Jul. 02, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Common Stock & Share-Based Incentive Plans | 7. COMMON STOCK & SHARE‑BASED INCENTIVE PLANS Increase in Authorized Capital Stock As provided in the Plan of Reorganization, the Company’s Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”) increased the number of authorized shares of the Company’s common stock, par value $ 0.01 per share, to 200,000,000 shares. The Company had 85,880,108 shares of common stock outstanding as of July 2, 2022. See Note 12 for information regarding the issuance of additional common stock in connection with the Private Placement Equity Financing under Plan of Reorganization Pursuant to the Plan of Reorganization, each outstanding share of the Company’s common stock as of the close of business on January 4, 2021 was exchanged (the “Exchange”) for (1) one new share of the Company’s stock and (2) a share purchase right entitling the holder to purchase its pro rata portion of shares available to eligible holders in a rights offering. In accordance with the Plan of Reorganization, the Company commenced a $ 40.0 million rights offering in January 2021, under which eligible holders of the Company’s common stock could purchase up to $ 24.0 million of shares of the Company’s common stock at a purchase price of $ 1.10 per share, and Osmium Partners (Larkspur SPV), LP (the “Backstop Party”), a special purpose entity affiliate of Osmium Partners, LLC jointly owned with Tensile Capital Management, could purchase up to $ 16 million of the Company’s common stock at a purchase price of $ 1.10 per share (the “Rights Offering”). Pursuant to a backstop commitment agreement, the Backstop Party agreed to purchase all unsubscribed shares in the Rights Offering. The subscription period for the Rights Offering expired on February 1, 2021 , with eligible holders subscribing to purchase approximately $ 19.8 million of the company’s common stock, with the Backstop Party purchasing the remaining $ 20.2 million of the company’s common stock. On February 9, 2021 , the Company closed on the Rights Offering and recorded proceeds of $ 40.0 million and recognized a non-cash charge of approximately $ 14.5 million as a result of the change in fair value of the Company’s common stock issued to the Backstop Party as measured from the consummation of the Exchange through the close date (“Backstop Premium”). The change in fair value was determined by reference to the Company’s stock price, traded over the counter, discounted for the restrictions that limited the holders ability to resell securities until they were registered pursuant to a Registration Rights Agreement entered into on February 9, 2021 between the Company and Backstop Party. In addition, on February 9, 2021, the Company issued warrants with rights to purchase 10 million shares of common stock with an exercise price of $ 1.65 and a five-year term to the Backstop Party (“Warrants”). The Company classified the Warrants as equity instruments and recognized expense of $ 3.5 million measured at fair value using the Black-Scholes model. Significant inputs used in the model were: i) An expected term of 5 years ; ii) a volatility rate of 37.98 %; iii) a risk-free interest rate of 0.36 %; iv) a discount for lack of marketability of 30 %. Finally, on February 9, 2021, the Backstop Party received a backstop fee in the amount of $ 2.0 million (payable in shares of common stock valued at $ 1.10 per share) that was classified as an equity instrument. The non-cash charges of approximately $ 14.5 million for the Backstop Premium, the $ 3.5 million of expense related to the Warrants, and backstop fee of approximately $ 2.0 million are recorded in Reorganization items, net in our Consolidated Statements of Operations for the fiscal year ended June 30, 2021. In accordance with the terms of the Plan of Reorganization, all proceeds from the Rights Offering were used to make payments of the claims of general unsecured creditors in the Chapter 11 Cases. Ownership Restrictions In order to continue to assist the Company in preserving certain tax attributes (the “Tax Benefits”), the Company’s Amended and Restated Certificate of incorporation imposes certain restrictions on the transferability and ownership of the Company’s capital stock (the “Ownership Restrictions”). Subject to certain exceptions, the Ownership Restrictions restrict (i) any transfer that would result in any person acquiring 4.5 % or more of our Common Stock, (ii) any transfer that would result in an increase of the ownership percentage of any person already owning 4.5% or more of our Common Stock, or (iii) any transfer during the five-year period following December 31, 2020 that would result in a decrease of the ownership percentage of any person already owning 4.5% or more of our Common Stock. Pursuant to the Company’s Amended and Restated Certificate of Incorporation, any transferee receiving shares of our Common Stock that would result in a violation of the Ownership Restrictions will not be recognized as a stockholder of the Company or entitled to any rights of stockholders. The Company’s Amended and Restated Certificate of Incorporation allows the Ownership Restrictions to be waived by the Company’s board of directors on a case-by-case basis. The board of directors has taken action to waive the restrictions with respect to sale of shares acquired in the Rights Offering by the Backstop Party. The Ownership Restrictions will remain in effect until the earliest of (i) the repeal of Section 382 of the Internal Revenue Code or any successor statute if the board of directors determines the Ownership Restrictions are no longer necessary for preservation of the Tax Benefits, (ii) the beginning of a taxable year in which the board of directors determines no Tax Benefits may be carried forward, or (iii) such other date as shall be established by the board of directors. In order to allow completion of the Private Placement, the board of directors waived these restrictions with respect to the securities purchased in the Private Placement. On September 21, 2022, following the closing of the Private Placement, the SPV elected to immediately convert a portion of the Convertible Debt into 90,000,000 shares of the Company’s common stock and acquired majority ownership of the Company’s common stock. As a result, a change of control of the Company occurred, which is triggering event for Section 382 of the Internal Revenue Code, its impact on the realization of positive tax attributes will be evaluated immediately. It is expected likely to result in restrictions on the Company’s ability to use of its net operating losses and certain other tax attributes in future periods. Share-based Awards We have established the Tuesday Morning Corporation 2008 Long-Term Equity Incentive Plan (the “2008 Plan”) and the Tuesday Morning Corporation 2014 Long-Term Incentive Plan, as amended (the “2014 Plan”), which allow for the granting of stock options to directors, officers and key employees of the Company, and certain other key individuals who perform services for us and our subsidiaries. Equity awards may no longer be granted under the 2008 Plan, but equity awards granted under the 2008 Plan are still outstanding. On September 16, 2014, our Board of Directors adopted the Tuesday Morning Corporation 2014 Plan and the 2014 Plan was approved by our stockholders at the 2014 annual meeting of stockholders on November 12, 2014. Our Board of Directors also approved the termination of the Company’s ability to grant new awards under the 2008 Plan, effective upon the date of stockholder approval of the 2014 Plan, and no new awards will be made under the 2008 Plan. On September 22, 2016, our Board of Directors adopted amendments to the 2014 Plan, which were approved at the 2016 Annual Meeting of Stockholders, to increase the number of shares of our common stock available for issuance under the 2014 Plan and to make additional amendments to the 2014 Plan to, among other things, remove liberal share recycling, reduce the number of shares exempt from minimum vesting, and eliminate discretion to accelerate vesting upon a change in control. On August 22, 2017, our Board of Directors adopted a Second Amendment to the 2014 Plan that modified the minimum vesting provisions as they apply to non-employee directors. As provided in the Plan of Reorganization, on December 31, 2020, the 2014 Plan was further amended to increase the number of shares available for issuance under the 2014 Plan. The maximum number of shares reserved for issuance under the 2014 Plan, as amended, is 8.5 million shares plus any awards under the 2008 Plan (i) that were outstanding on September 16, 2014, and, on or after September 16, 2014, are forfeited, expired or are cancelled, and (ii) any shares subject to such awards that, on or after September 16, 2014 are used to satisfy the exercise price or tax withholding obligations with respect to such awards. The 2014 Plan provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights, and other awards which may be granted singly, in combination, or in tandem, and which may be paid in cash, shares of common stock, or a combination of cash and shares of common stock. Under the 2014 Plan, stock options may not vest earlier than one year after the date of grant. “Full Value Awards” (i.e., restricted stock or restricted stock units) that constitute performance awards must vest no earlier than one year after the date of grant and Full Value Awards that constituted “Tenure Awards” (i.e., awards that vest upon passage of time) may not vest earlier than over the three-year period commencing on the date of grant (other than awards to non-employee directors which may not vest earlier than one year from the date of grant). The Compensation Committee of our Board of Directors may grant only stock options or Full Value Awards with vesting conditions that are more favorable than the foregoing restrictions with respect to up to 5 % of the shares of common stock authorized under the 2014 Plan (referred to in the 2014 Plan as “exempt shares”). Stock options were awarded with a strike price at a fair market value equal to the closing price of our common stock on the date of the grant under the 2008 Plan and the 2014 Plan. Options granted under the 2008 Plan and the 2014 Plan typically vest over periods of one to four years and expire ten years from the date of grant. Options granted under the 2008 Plan and the 2014 Plan may have certain performance requirements in addition to service terms. If the performance conditions are not satisfied, the options are forfeited. The exercise prices of stock options outstanding at July 2, 2022 , range between $ 1.64 per share and $ 19.36 per share. The 2008 Plan terminated with respect to the granting of new awards as the 2014 Plan became effective to provide new awards as of September 16, 2014. There were 2.5 million shares available for grant under the 2014 Plan at July 2, 2022. Following is a summary of transactions relating to the 2008 Plan and 2014 Plan options for the fiscal years ended July 2, 2022, June 30, 2021, and 2020: Number of Weighted-Average Weighted-Average Aggregate Options Outstanding at June 30, 2019 3,698,043 5.63 7.10 $ — Granted during year 12,000 1.64 Exercised during the year — — Forfeited or expired during year ( 1,015,427 ) 6.22 Options Outstanding at June 30, 2020 2,694,616 5.33 6.11 $ — Granted during year — — Exercised during the year ( 22,308 ) 1.98 Forfeited or expired during year ( 327,565 ) 5.37 Options Outstanding at June 30, 2021 2,344,743 5.36 4.70 $ 1,642,845 Granted during year — — Exercised during the year ( 187,538 ) 2.45 Forfeited or expired during year ( 1,228,009 ) 5.03 Options Outstanding at July 2, 2022 929,196 $ 6.39 3.07 $ — Options Exercisable at July 2, 2022 905,633 The weighted average grant date fair value of stock options granted during the fiscal year ended June 30, 2020, was $ 0.83 per share. There were no stock options granted during the fiscal years ended July 2, 2022, and June 30, 2021. The aggregate intrinsic value of stock options exercised w as $ 280.8 thousand, $ 43.6 thousand, and $ 0 during the fiscal years ended July 2, 2022, June 30, 2021, and 2020, respectively. At July 2, 2022, we had $ 8.5 thousand of total unrecognized share‑based compensation expense related to stock options that is expected to be recognized over a weighted average period of 0.41 years. The following table summarizes information about stock options outstanding at July 2, 2022: Options Outstanding Options Exercisable Range of Exercise Prices Number Weighted Average Weighted Number Weighted $ 1.64 - $ 2.10 130,424 3.16 $ 2.03 125,549 $ 2.05 $ 2.45 - $ 3.12 77,393 3.71 2.58 77,393 2.58 $ 3.25 - $ 3.25 105,808 4.50 3.25 87,120 3.25 $ 5.45 - $ 5.59 53,293 1.38 5.54 53,293 5.54 $ 5.95 - $ 5.95 200,000 2.94 5.95 200,000 5.95 $ 6.71 - $ 6.71 88,176 4.04 6.71 88,176 6.71 $ 7.90 - $ 7.90 134,772 3.17 7.90 134,772 7.90 $ 7.91 - $ 14.72 86,372 1.21 11.40 86,372 11.40 $ 18.42 - $ 18.42 22,596 2.15 18.42 22,596 18.42 $ 19.36 - $ 19.36 30,362 2.61 19.36 30,362 19.36 929,196 3.07 6.39 905,633 6.48 Restricted Stock Awards/Units The 2008 Plan and the 2014 Plan authorize the grant of restricted stock and restricted stock unit awards to directors, officers, key employees and certain other key individuals who perform services for us and our subsidiaries. Equity awards may no longer be granted under the 2008 Plan, but restricted stock awards granted under the 2008 Plan are still outstanding. Restricted stock awards are not transferable but bear certain rights of common stock ownership including voting and dividend rights. Restricted stock units are not transferable and do not have voting or dividend rights. Restricted shares or units are valued at the fair market value of our common stock at the date of award. Restricted shares and units may be subject to certain performance requirements. If the performance requirements are not met, the restricted shares or units are forfeited. Under the 2008 Plan, the 2014 Plan and the inducement awards described below, as of July 2, 2022, there were 238,711 shares of restricted stock awards and 7,634,279 restricted stock units outstanding with award vesting periods, both performance-based and service-based, of one to four years and a weighted average grant date fair value of $ 1.94 and $ 2.21 per share, respectively. On May 19, 2021, Fred Hand was awarded 1,230,769 performance-based and 1,538,462 service based restricted stock units as an inducement to become CEO. These awards vest over a period of one to five years . In addition, on September 15, 2021, Marc Katz was awarded 867,052 performance-based and 867,052 service based restricted stock units as an inducement to become chief operating officer, and Paul Metcalf was awarded 578,035 performance-based and 289,017 service based restricted stock units as an inducement to become chief merchant. The following table summarizes information about restricted stock units, performance stock units, restricted stock awards and performance stock awards granted and outstanding for the fiscal years ended July 2, 2022, June 30, 2021, and 2020: Restricted and Performance Stock Units Weighted- Restricted and Performance Stock Awards Weighted- Outstanding at June 30, 2019 57,693 $ 3.25 1,839,861 $ 3.36 Granted during year 57,693 1.58 1,422,927 1.63 Vested during year ( 57,693 ) 1.58 ( 446,987 ) 3.55 Forfeited during year — — ( 836,321 ) 2.38 Outstanding at June 30, 2020 57,693 $ 3.25 1,979,480 $ 2.43 Granted during year 3,021,924 2.81 1,121,250 1.50 Vested during year ( 57,693 ) 1.91 ( 595,190 ) 2.26 Forfeited during year — — ( 797,172 ) 2.29 Outstanding at June 30, 2021 3,021,924 $ 2.83 1,708,368 $ 1.94 Granted during year 5,580,713 2.02 — — Vested during year ( 619,264 ) 3.24 ( 800,984 ) 1.71 Forfeited during year ( 349,094 ) 2.72 ( 668,673 ) 2.25 Outstanding at July 2, 2022 7,634,279 $ 2.21 238,711 $ 1.84 Cash Settled Awards In the fiscal years ending 2022, 2021, and 2020 we granted stock-based awards to certain employees, which vest over a period of three to four years , and will be settled in cash (“cash settled awards”). Both performance based and service-based awards were granted. Except for the performance-based awards which have been deemed unlikely to vest, the fair value of the cash settled awards at each reporting period is based on the price of our common stock. The fair value of the cash settled awards will be remeasured at each reporting period until the awards are settled. The following table summarizes the activity of cash settled awards during fiscal 2022, 2021, and 2020. Performance Service Total Outstanding at June 30, 2019 — — — Grant during year 287,348 1,132,548 1,419,896 Vested during year — — — Forfeited during year — ( 269,616 ) ( 269,616 ) Outstanding at June 30, 2020 287,348 862,932 1,150,280 Grant during year — — — Vested during year — ( 208,328 ) ( 208,328 ) Forfeited during year ( 143,675 ) ( 105,030 ) ( 248,705 ) Outstanding at June 30, 2021 143,673 549,574 693,247 Grant during year — 565,492 565,492 Vested during year — ( 177,719 ) ( 177,719 ) Forfeited during year ( 84,223 ) ( 202,270 ) ( 286,493 ) Outstanding at July 2, 2022 59,450 735,077 794,527 The liability associated with the cash settled awards was $ 0.2 million and $ 1.7 million at July 2, 2022 and June 30, 2021, respectively. Share-based compensation costs: We recognized share‑based compensation costs as follows (in thousands): Fiscal Years Ended July 2, June 30, June 30, 2022 2021 2020 Amortization of share-based compensation during the period $ 5,881 $ 1,851 $ 2,555 Amounts capitalized in inventory ( 1,194 ) ( 410 ) ( 681 ) Amount recognized and charged to cost of sales 1,233 613 846 Amounts charged against income for the period before tax $ 5,920 $ 2,054 $ 2,720 Share-based Compensation from Related Party to CEO Upon his appointment as the Company’s Chief Executive Officer, Fred Hand entered into agreements with Osmium Partners, LLC., pursuant to which Mr. Hand became entitled to receive 30 % of all carry distributions (“Carried Interest”) payable by certain members of Osmium Partners (Larkspur SPV) LP (Larkspur “SPV”) in respect of its approximately 31.4 % of the outstanding shares of common stock of the Company, at the date of the Carried Interest Arrangement, May 4, 2021 (including warrants to purchase 10,000,000 shares of common stock), to Osmium Partners, LLC, the Larkspur SPV’s carry partner. Subject to Mr. Hand’s continued employment with the Company, such entitlement will vest over 42 months as follows: (a) on the second anniversary of Mr. Hand’s employment by the Company, Mr. Hand’s entitlement to approximately 17.14 % (the product of 30% times 24/42) of the Carried Interest will become vested , and (b) thereafter, Mr. Hand’s entitlement to approximately 0.71 % (the product of 30% times 1/42) of the Carried Interest will become vested each month. In addition, Mr. Hand’s entitlement to a portion of the Carried Interest will be subject to a participation threshold in the minimum amount necessary to render his entitlement a valid profit interest for tax purposes. Share-based payments awarded to an employee of the reporting entity by a related party or other holder of an economic interest in the entity as compensation for services provided to the entity, are share-based payment transactions to be accounted for unless the transfer is clearly for a purpose other than compensation for services to the reporting entity. The substance of such a transaction is that the economic interest holder makes a capital contribution to the reporting entity, and that entity makes a share-based payment to its employee in exchange for services rendered. The Company concluded that the Carried Interest entitlement granted by Osmium Partners, LLC to Mr. Hand falls under this category and therefore it is treated as share-based compensation in the accounts of the Company. We performed a valuation on the Carried Interest to determine the Level 2 fair value measurement, using: the Option Pricing method. The significant inputs utilized in the model assumed the following: i) a risk-free interest rate of 0.34 %: ii) a volatility rate of 70.0 %; iii) an expected time to liquidity of 3 years ; iv) a discount for lack of marketability of 25 % and v) expected dividend of 0 %. Shared-based compensation expense with respect to the Carried Interest Agreement was $ 0.5 million and $ 0.1 million for fiscal 2022 and 2021 respectively. |
Leases
Leases | 12 Months Ended |
Jul. 02, 2022 | |
Leases [Abstract] | |
Leases | 8. LEASES We conduct substantially all operations from leased facilities. Our retail store locations, our corporate office and our distribution center are under operating leases that will expire over the next 1 to 10 years . Many of our leases include options to renew at our discretion. We include the lease renewal option periods in the calculation of our operating lease assets and liabilities when it is reasonably certain that we will renew the lease. We also lease certain equipment under finance leases that generally expire within 5 years. In accordance with the Plan of Reorganization, on December 31, 2020, we sold our corporate office and Dallas distribution center properties and leased back those facilities. The lease of the corporate office is for a term of 10 years, and the lease of the distribution center is for an initial term of two and one-half years , with an option to extend the distribution center lease for one additional year. We believe it is reasonably certain the option to extend will be exercised. We determined the sale price represented the fair value of the underlying assets sold and have no continuing involvement with the properties sold other than a normal leaseback. The consideration received for the sale, as reduced by the closing and transaction costs, was $ 68.5 million, and the net book value of the properties sold was $ 18.9 million, resulting in a $ 49.6 million gain, which was recognized as of December 31, 2020. Cash proceeds were deposited directly into the Unsecured Creditor Claim Fund (See Note 2). The two leases, associated with the transaction, were recorded as operating leases. As of July 2, 2022, we will pay approximately $ 7.6 million in fixed rents and in-substance fixed rents, over the remaining lease term for the corporate office and we will pay approximately $ 8.6 million in fixed rents and in-substance fixed rents for the Dallas distribution center property over the remaining lease term, including the one-year option period as noted above. Fixed rents and in-substance fixed rents for each lease were discounted using the incremental borrowing rate we established for the respective term of each lease. In accordance with ASC 842, we determine whether an agreement contains a lease at inception based on our right to obtain substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset. Lease liabilities represent the present value of future lease payments, and the ROU assets represent our right to use the underlying assets for the respective lease terms. The operating lease liability is measured as the present value of the unpaid lease payments and the ROU asset is derived from the calculation of the operating lease liability. As our leases do not generally provide an implicit rate, we use our incremental borrowing rate as the discount rate to calculate the present value of lease payments. The incremental borrowing rate represents an estimate of the interest rate that would be required to borrow over a similar term, on a collateralized basis in a similar economic environment. Rent escalations occurring during the term of the leases are included in the calculation of the future minimum lease payments and the rent expense related to these leases is recognized on a straight-line basis over the lease term. In addition to minimum lease payments, certain leases require payment of a proportionate share of real estate taxes and certain building operating expenses allocated on a percentage of sales in excess of a specified base. These variable lease costs are not included in the measurement of the ROU asset or lease liability due to unpredictability of the payment amount and are recorded as lease expense in the period incurred. The ROU asset is adjusted to account for previously recorded lease-related expenses such as deferred rent and other lease liabilities. Our lease agreements do not contain residual value guarantees or significant restrictions or covenants other than those customary in such arrangements. The components of lease cost are as follows (in thousands): Fiscal Years Ended July 2, June 30, 2022 2021 Operating lease cost $ 67,724 $ 62,617 Variable lease cost 9,568 10,924 Amortization of right-of-use assets 124 210 Interest on lease liabilities 1 8 Total lease cost $ 77,417 $ 73,759 The table below presents additional information related to the Company’s leases as follows: Fiscal Years Ended July 2, June 30, 2022 2021 Weighted average remaining lease term (in years) Operating leases 4.1 4.6 Finance leases — 0.7 Weighted average discount rate Operating leases 9.1 % 8.5 % Finance leases 0.0 % 2.4 % Other information related to leases, including supplemental disclosures of cash flow information, is as follows (in thousands): Fiscal Years Ended July 2, June 30, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 75,132 $ 64,496 Operating cash flows from finance leases $ 1 $ 9 Financing cash flows from finance leases $ 124 $ 217 Right-of-use assets obtained in exchange for operating lease liabilities $ 15,522 $ ( 107,497 ) Maturities of lease liabilities were as follows as of July 2, 2022 (in thousands): Operating Fiscal year: 2023 $ 65,051 2024 48,755 2025 35,474 2026 22,246 2027 16,604 Thereafter 15,023 Total lease payments $ 203,153 Less: Interest 34,969 Total lease liabilities $ 168,184 Less: Current lease liabilities 52,258 Non-current lease liabilities $ 115,926 There were no financing lease agreements at July 2, 2022. Current and non-current finance lease liabilities are recorded in “Accrued liabilities” and “Other liabilities – non-current”, respectively, on our Consolidated Balance Sheets. As of July 2, 2022, and June 30, 2021 , there were no operating lease payments for legally binding minimum lease payments for leases signed by not yet commenced. Rent expense for real estate leases for the fiscal years ended July 2, 2022, June 30, 2021, and 2020 was $ 77.3 million , $ 73.5 million , and $ 118.3 million, respectively. Rent expense includes minimum base rent as well as contractually required payments for maintenance, insurance and taxes on our leased store locations and distribution centers. Total lease cost in fiscal 2022 was $ 77.4 million, including finance lease costs. Total lease costs of $ 73.8 million for fiscal 2021 excludes $ 5.6 million recorded for accelerated recognition of rent expense due to our abandonment of our Phoenix distribution center. |
401(K) Profit Sharing Plan
401(K) Profit Sharing Plan | 12 Months Ended |
Jul. 02, 2022 | |
Retirement Benefits [Abstract] | |
401(K) Profit Sharing Plan | 9. 401(K) PROFIT SHARING PLAN We have a 401(k) profit sharing plan for the benefit of our full‑time employees who become eligible after one month of service, and for our part-time employees who become eligible after both 12 months of service and a minimum of 1,000 hours worked. Under the plan, eligible employees may request us to deduct and contribute from 1 % to 75 % of their salary to the plan, subject to Internal Revenue Service Regulations. We match each participant’s contribution up to 4 % of participant’s compensation. We expensed contributions of $ 1.4 million for three consecutive fiscal years ended July 2, 2022, June 30, 2021, and 2020 , respectively. |
Earnings Per Common Share
Earnings Per Common Share | 12 Months Ended |
Jul. 02, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | 10. EARNINGS PER COMMON SHARE The Company uses the two-class method of computing basic EPS due to the existence of non-vested restricted stock awards with non-forfeitable rights to dividends or dividend equivalents (referred to as participating securities). Basic EPS is computed using the weighted average number of common shares outstanding during each of the respective years. Diluted EPS is computed using the weighted average number of common and common equivalent shares outstanding during each of the respective years using the more dilutive of either the treasury stock method or two-class method. The difference between basic and diluted shares, if any, largely results from common equivalent shares, which represents the dilutive effect of the assumed exercise of certain outstanding share options, the assumed vesting of restricted stock granted to employees and directors, or the satisfaction of certain necessary conditions for contingently issuable shares. The following table sets forth the computation of our basic and diluted earnings (loss) per common share (in thousands, except per share amounts): Fiscal Years Ended July 2, June 30, June 30, 2022 2021 2020 Net earnings/(loss) $ ( 59,003 ) $ 2,982 $ ( 166,328 ) Less: Income to participating securities — ( 135 ) — Net earnings/(loss) attributable to common shares $ ( 59,003 ) $ 2,847 $ ( 166,328 ) Weighted average common shares outstanding—basic 84,885 60,584 45,208 Effect of dilutive stock equivalents — 1,105 — Weighted average common shares outstanding—dilutive 84,885 61,689 45,208 Net earnings/(loss) per common share—basic $ ( 0.70 ) $ 0.05 $ ( 3.68 ) Net earnings/(loss) per common share—diluted $ ( 0.70 ) $ 0.05 $ ( 3.68 ) For July 2, 2022, June 30, 2021, and 2020 , options and awards representing the rights to purchase approximately 4.5 million, 2.8 million and 3.9 million weighted average shares respectively, were excluded in the dilutive earnings per share calculation because the assumed exercise of such options would have been anti-dilutive. On February 9, 2021, as part of the Rights Offering, the Company issued warrants to purchase 10 million shares of common stock with an exercise price of $ 1.65 and a five-year term, all which remained outstanding and anti-dilutive as of July 2, 2022. See Note 12 below for a discussion of the Private Placement, pursuant to which the Company issued debt securities convertible for shares of the Company’s common stock. The Private Placement was completed on September 20, 2022. |
Related Party
Related Party | 12 Months Ended |
Jul. 02, 2022 | |
Related Party Transactions [Abstract] | |
Related Party | 11. RELATED PARTY On November 16, 2020, following approval of the Bankruptcy Court, the Company and Osmium entered into a backstop commitment agreement, pursuant to which Osmium Partners agreed that they or an affiliate would serve as the Backstop Party and purchase all unsubscribed shares for a price of $ 1.10 per share in a $ 40 million Rights Offering, pursuant to which eligible holders of the Company’s common stock could purchase up to $ 24 million of shares of the Company’s common stock for a price of $ 1.10 per share. The Rights Offering is described in more detail in Note 7. Larkspur SPV, jointly owned by Osmium and Tensile, was formed to serve as the Backstop Party. In addition, on November 15, 2020, the Company and Tensile entered into a commitment letter (the “Commitment Letter”) pursuant to which Tensile agreed to provide $ 25 million in subordinated debt financing to the Company. See Note 3 for discussion of certain amendments to the Term Loan Credit Agreement. In accordance with the Plan of Reorganization and the Commitment Letter, on December 31, 2020, the Company, Alter Domus (US), LLC, as administrative agent, and the lenders named therein, including Tensile and an affiliate of Osmium, entered into the Term Loan Credit Agreement described in Note 3 above which provided for the $ 25 million Term Loan to the Company. In accordance with the Plan of Reorganization and the backstop commitment agreement, on December 31, 2020, the Company, Osmium and Larkspur SPV (collectively, the “Osmium Group”) entered into an agreement pursuant to which the Osmium Group was entitled to appoint three directors to the Company’s Board of Directors (the “Directors Agreement”). Pursuant to the Directors Agreement, Douglas J. Dossey of Tensile Capital Management LP, John H. Lewis of Osmium and W. Paul Jones were appointed as members of the Company’s Board of Directors. The Directors Agreement provided that the Osmium Group may appoint one additional member of the Board of Directors under certain circumstances. As a result of the Company's EBIT (as defined in the Director's Agreement) results over the twelve months period ended December 31, 2021, the Osmium Group became entitled to appoint one additional member to the Board of Directors. The Directors Agreement also specified various other board-related and voting-related procedures and includes a standstill provision limiting certain actions by the Osmium Group. On September 20, 2022, the Directors Agreement was terminated in connection with the closing of the Private Placement. On February 9, 2021, the Company received proceeds of approximately $ 40 million upon the closing of the Rights Offering, as contemplated by the Plan of Reorganization. In accordance with the terms of the backstop commitment agreement, Larkspur SPV purchased 18,340,411 shares of the Company’s common stock in the Rights Offering for an aggregate purchase price of approximately $ 20.2 million. In addition, in accordance with the Plan of Reorganization and the backstop commitment agreement, Larkspur SPV received (1) 1,818,182 additional shares of the Company’s common stock as payment of the commitment fee for serving as Backstop Party in the Rights Offering, and (2) a warrant to purchase 10 million additional shares of the Company’s common stock at a purchase price of $ 1.65 per share. Based on Schedule 13D filings made by Osmium and Tensile, and their respective affiliates, on February 19, 2021, Osmium and Tensile each are deemed to beneficially own the 30,158,593 shares of the Company’s stock beneficially owned by Larkspur SPV (representing approximately 31.4 % of outstanding shares). Based on the Schedule 13D and subsequent filings with the SEC, Osmium beneficially owns an additional 2,026,840 shares of the Company’s common stock. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jul. 02, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. SUBSEQUENT EVENTS July 2022 Amendments to ABL Credit Agreement and Term Loan Credit Agreement On the July 11, 2022, the Company, the Borrower, certain other subsidiaries of the Company (together with the Company and the Borrower, the “Credit Parties”), certain lenders (the “ABL Lenders”), Wells Fargo Bank, National Association, as administrative agent (the “ABL Administrative Agent”), and 1903P Loan Agent, LLC, as FILO B documentation agent (the “FILO B Agent”), entered into a first amendment (the “ABL Amendment”) to the New ABL Credit Agreement. Pursuant to the ABL Amendment, the FILO B Lenders agreed to make the FILO B Delayed Incremental Loan to the Borrower on July 11, 2022. The ABL Amendment also provides that, until certain minimum borrowing availability levels are satisfied as described in the ABL Amendment, the Borrower will be subject to additional reporting obligations, the Borrower will retain a third-party business consultant acceptable to the ABL Administrative Agent, and the ABL Administrative Agent may elect to apply amounts in controlled deposit accounts to the repayment of outstanding borrowings under the ABL Facility. In addition, pursuant to the ABL Amendment, certain subsidiaries of the Borrower agreed to enter into and maintain a supply agreement with Gordon Brothers Retail Partners, LLC (the “Program Agent”), an affiliate of a FILO B Lender, pursuant to which the Program Agent supplies inventory to the Borrower and certain of its subsidiaries. On July 11, 2022, the Credit Parties, certain term loan lenders, and Alter Domus (US) LLC, as administrative agent (the “Term Loan Agent”), entered into a third amendment (the “Term Loan Amendment”) to the Term Loan Credit Agreement, dated as of December 31, 2020, and as previously amended (the “Original Term Loan Credit Agreement”), among the Credit Parties, the term loan lenders and the Term Loan Agent. The Term Loan Amendment was executed in connection with the ABL Amendment and makes certain conforming changes to the Original Term Loan Credit Agreement. September 2022 Private Placement On September 20, 2022, the Company, the Borrower, certain members of management of the Company (the “Management Purchasers”), TASCR Ventures, LLC (the “SPV”), a special purpose entity formed by Retail Ecommerce Ventures LLC (“REV”) and Ayon Capital L.L.C., and TASCR Ventures CA, LLC, as collateral agent, entered into an Amended and Restated Note Purchase Agreement dated as of September 20, 202 2 (the “Note Purchase Agreement”). Pursuant to the Note Purchase Agreement, on September 20, 2022, the SPV purchased: (i) $ 7.5 million in aggregate principal amount of a junior secured convertible notes issued by the Company (the “FILO C Convertible Notes”), and (ii) $ 24.5 million in aggregate principal amount of junior secured convertible notes (the “SPV Convertible Notes”). In addition, the Management Purchasers purchased $ 3.0 million in aggregate principal amount of junior secured convertible notes issued by the Company (the “Management Convertible Notes” and, together with the SPV Convertible Notes, the “Junior Convertible Notes”). The FILO C Convertible Notes and the Junior Convertible Notes are referred to herein as the “Convertible Debt” and the issuance of the Convertible Debt is referred to herein as the “Private Placement.” The Convertible Debt was issued by the Company and guaranteed by the Company's subsidiaries. The Convertible Debt is convertible into shares of the Company’s common stock at a conversion price of $ 0.077 per share. Accordingly, 415,584,415 shares of the Company’s common stock would be issuable upon conversion in full of the Convertible Debt purchased by the SPV . In addition, 38,961,039 shares of the Company’s common stock would be issuable upon conversion in full of the Convertible Debt to be purchased by the Management Purchasers. Because the Company does not currently have a sufficient number of authorized and unreserved shares of common stock to issue upon conversion of all of the Convertible Debt, as described below only a portion of the Convertible Debt was immediately converted into common stock. The remaining portion of the Convertible Debt cannot be convertible into common stock unless and until the Company’s certificate of incorporation is amended to increase the number of authorized shares of common stock to permit such conversion and/or provide for a reverse stock split of the common stock. The Convertible Debt is subject to customary anti-dilution adjustments for structural events, such as splits, distributions, dividends or combinations, and customary anti-dilution protections with respect to issuances of equity securities at a price below the applicable conversion price of the Convertible Debt. A portion of the Convertible Debt issued to the SPV was immediately convertible for up to 90 million shares of the Company's common stock. On September 21, 2022, the SPV elected to immediately convert a portion of the Convertible Debt into 90 million shares of the Company's common stock, and through such conversion, acquired ownership of a majority of the Company's outstanding common stock. As a result, the SPV accordingly, has the ability to approve an amendment to the Company's certificate of incorporation to (i) increase the number of authorized shares to allow for conversion in full of the remaining Convertible Debt, and provide such additional authorized shares as deemed appropriate by the Company's board of directors and (ii) provide for a reverse stock split of the common stock at a ratio sufficient to cause the Company to regain compliance with the Minimum Bid Price requirement under Nasdaq's listing rules (the Certificate of Incorporation Amendment"). Upon conversion in full of the Convertible Debt and based on the Company's outstanding shares on a fully diluted basis as of September 21, 2022, the SPV would hold approximately 75 % and the SPV and the Management Purchasers collectively would hold 81 % of the total diluted voting power of the Company's common stock (not including any additional Convertible Debt that may be issued a result of the Company being required or electing to make in-kind payments of interest as described further below). In connection with the conversion of the portion of the Convertible Debt that was immediately convertible, an aggregate $ 6,930,000 principal amount of the SPV Junior Convertible Notes were retired. In connection with the Private Placement, the Company entered into a registration rights agreement with the purchasers of the Convertible Debt, pursuant to which the purchasers received customary shelf registration, piggyback and demand registration rights with respect to the resale of shares of the Company’s common stock acquired upon conversion or exchange of the Convertible Debt. The Nasdaq Stock Market rules would normally require stockholder approval prior to closing the Private Placement; however, the Company requested and has received a financial viability exception to the stockholder approval requirement pursuant to Nasdaq Stock Market Rule 5635(f). The financial viability exception allows an issuer to issue securities upon prior written application to Nasdaq when the delay in securing stockholder approval of such issuance would seriously jeopardize the financial viability of the Company. As required by Nasdaq rules, the Company’s Audit Committee, which is comprised solely of independent and disinterested directors, expressly approved reliance on the financial viability exception in connection with the Private Placement and related transactions. The proceeds of the Private Placement were used (i) repay $ 7.5 million of the FILO A term loans and FILO B term loans under the New ABL Credit Agreement; (ii) repay of a portion of the Borrower’s revolving loans under the New ABL Credit Agreement; and (iii) pay of transaction costs. In addition, the remaining proceeds will be used for working capital and other general corporate purposes of the Company and its subsidiaries. In connection with its approval of the Private Placement, the board of directors approved a waiver of the ownership restrictions in Article 11 of the Company’s certificate of incorporation with respect to the securities issuable in the Private Placement. Article 11 generally prohibits any person or group from acquiring more than 4.5 % of the Company’s outstanding common stock and restricts transfers in securities owned by holders of 4.5% or more of the Company’s outstanding common stock. FILO C Convertible Notes . In connection with the Private Placement, pursuant to the Note Purchase Agreement, the SPV purchased the FILO C Convertible Notes. The FILO C Convertible Notes will mature upon the earlier of (i) December 31, 2027, or (ii) the maturity of the FILO B term loan under the ABL Credit Agreement. Interest will accrue on the FILO C Convertible Notes at a rate equal to the secured overnight financing rate (“SOFR”) plus 6.50 % and will be payable semiannually. Under the terms of the FILO C Convertible Notes, during the two-year period following the closing of the Private Placement, the Company may elect to pay interest on the FILO C Convertible Notes “in kind” by increasing the principal of the FILO C Convertible Notes by the amount of any such interest payable. The provisions of the intercreditor agreements relating to the FILO C Convertible Notes and other outstanding indebtedness of the Company require such payments to be made “in-kind" subject to certain limited exceptions applicable after the second anniversary of the Private Placement. The FILO C Convertible Note is secured by the same collateral that secures (i) the revolving loans and FILO A and FILO B term loans under the ABL Credit Agreement (collectively, the ABL Obligations), (ii) the term loan issued under the Term Loan Credit Agreement, and (iii) the Junior Convertible Notes. With respect to the collateral as to which borrowings under the New ABL Credit Agreement have a first priority lien, the ABL Obligations have a first priority lien, the lien on such collateral securing the FILO C Convertible Note ranks junior to the lien securing the ABL Obligations and senior to the Term Loan and the Junior Convertible Notes. With respect to the collateral as to which Term Loan has a first priority lien, the lien on such collateral securing the FILO C Note ranks junior to the liens securing the ABL Obligations and the Term Loan and senior to the lien securing the Junior Convertible Notes. With respect to payment priority, the FILO C Convertible Note is subordinate to the ABL Obligations, pari passu with the Term Loan, and senior to the Junior Convertible Notes. The FILO C Convertible Notes contain covenants and events of default that are customary for this type of financing. Junior Convertible Notes . The Junior Convertible Notes will mature on December 31, 2027. Interest will accrue on the Junior Convertible Notes at a rate equal to SOFR plus 6.50 % and will be payable semiannually. Under the terms of the Junior Convertible Notes, during the two-year period following the closing of the Private Placement, the Company may elect to pay interest on the Junior Convertible Notes “in kind.” The provisions of the intercreditor agreements relating to the Junior Convertible Notes and other outstanding indebtedness of the Company will require such payments to be made “in-kind” subject to certain limited exceptions applicable after the second anniversary of the Private Placement. The Junior Convertible Notes are secured by the same collateral that secures the revolving loans and FILO B term loans under the ABL Credit Agreement, the Term Loan and the FILO C Convertible Notes (the “Other Secured Debt”). The liens securing the Junior Convertible Notes rank junior to the liens securing the Other Secured Debt. With respect to payment priority, the Junior Convertible Notes are subordinated to all of the Other Secured Debt. The Junior Convertible Notes contain covenants and events of default that are customary for this type of financing. Amendments to New ABL Credit Agreement. In connection with the Private Placement, the parties to the ABL Credit Agreement entered into an amendment to the ABL Credit Agreement (the “ABL Amendment”) to permit the Private Placement to be completed and to make certain other amendments. The ABL Amendment will restrict certain actions by the Company for the next two years, including making certain acquisitions and debt prepayments. With respect to pricing on the Revolving Loans, the applicable margin was increased by 50 bps depending upon availability as reflected below. Average Quarterly Availability Applicable Margin for SOFR Loans Applicable Margin for Base Rate Loans ≥ $50,000,000 1.75 % 0.75 % < $50,000,000 but ≥ $30,000,000 2.00 % 1.00 % < $30,000,000 2.25 % 1.25 % For the FILO B Loans, pricing remains at SOFR + 9% and Base Rate + 8%, but there is no longer a 50 bps reduction in FILO B Loan pricing during the January through September period. The ABL Amendment requires that the Company engage and retain (at the Company’s expense) Gordon Brothers Retail Partners for a certain period of time for the purpose of performing appraisal validations, monitoring and evaluating the Company’s inventory mix and other services. The ABL Amendment also permits the change in control caused by the issuance in shares to the SPV upon exchange of the Convertible Debt for shares. Amendments to Term Loan Credit Agreement . In connection with the Private Placement, the parties to the Term Loan Credit Agreement entered into an amendment to the Term Loan Credit Agreement to permit the Private Placement to be completed and to make certain other amendments, including removal of the total secured net leverage ratio covenant from the Term Loan Credit Agreement and permitting the change in control caused by the issuance of shares to the SPV upon conversion of the Convertible Debt for shares. Agreements with Osmium Partners, LLC and Osmium Partners (Larkspur SPV) LP On September 20, 2022, effective upon the closing of the Private Placement, the agreement between the Company, Osmium Partners, LLC and Osmium Partners (Lakespur SPV) LP ("Osmium Larkspur"), pursuant to which Osmium Larkspur was entitled to designate members of the Company's board of directors (the "Director Agreement"), was terminated. The Director Agreement had provided Osmium Larkspur with certain rights to appoint members of the Company's board of directors. Termination of the Director Agreement was a condition to the closing of the Private Placement. In connection with the Private Placement, the Company entered into a voting agreement, dated as of September 12, 2022 (the "Voting Agreement"), with Osmium Larkspur. Pursuant to the Voting Agreement, Osmium Larkspur has agreed to vote the 20,158,593 shares of the Company's common stock it beneficially owns (the "Owned Shares") to approve, at any meeting of stockholders or by written consent, the Certificate of Incorporation Amendment. Osmium Larkspur further agreed not to transfer the Owned Shares or enter into any hedging transactions with respect to the Owned Shares during the term of the Voting Agreement. The Voting Agreement will terminate upon the earliest to occur of the effectiveness of the Certificate of Incorporation Amendment and December 31, 2022. |
Nature of Operations and Summ_2
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jul. 02, 2022 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation —The accompanying consolidated financial statements include the accounts of Tuesday Morning Corporation, and its wholly‑owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. We have one operating segment and one reportable segment as our chief operating decision maker, the Executive Committee composed of the Chief Executive Officer, Chief Finance Officer, and other senior executives, reviews financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance. Certain reclassifications were made to prior period amounts to conform to the current period presentation. None of the reclassifications affected our net earnings/(loss) in any period. We do not present a separate statement of comprehensive income, as we have no other comprehensive income items. On February 23, 2022, the board of directors of the Company approved a change in the fiscal year end from a calendar year ending on June 30 to a 52-53-week year ending on the Saturday closest to June 30, effective beginning with fiscal year 2022. In a 52-week fiscal year, each of the Company’s quarterly periods will comprise 13 weeks. The additional week in a 53- week fiscal year is added to the fourth quarter, making such quarter consist of 14 weeks. The Company made the fiscal year change on a prospective basis and will not adjust operating results for prior periods. |
Use of Estimates | (b) Use of Estimates —The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles ("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 consolidated financial statements, and the reported amounts of net sales and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | (c) Cash and Cash Equivalents —Cash and cash equivalents include credit card receivables and all highly liquid instruments with original maturities of three months or less. Cash equivalents are carried at cost, which approximates fair value. At July 2, 2022, and June 30, 2021, credit card receivables from third party consumer credit card providers were $ 6.3 million and $ 3.2 million , respectively. Such receivables generally are collected within one week of the balance sheet date. |
Restricted Cash | (d) Restricted Cash —There was no restricted cash as of July 2, 2022 . Restricted cash was $ 22.3 million, as of June 30, 2021 , which was held in the Unsecured Creditor Claims Fund (defined below in Note 2). |
Inventories | (e) Inventories —Inventories, consisting of finished goods, are stated at the lower of cost or net realizable value using the retail inventory method for store inventory and the specific identification method for warehouse inventory. We have a perpetual inventory system that tracks on-hand inventory and inventory sold at a stock-keeping unit (“SKU”) level. Inventory is relieved and cost of sales is recorded based on the current calculated cost of the item sold. Buying, distribution, freight and certain other costs are capitalized as part of inventory and are charged to cost of sales as the related inventory is sold. We charged $ 112.2 million , $ 95.1 million , and $ 97.8 million of such capitalized inventory costs to cost of sales for the fiscal years ended July 2, 2022, June 30, 2021, and June 30, 2020, respectively. We have capitalized $ 29.0 million and $ 24.2 million of such costs in inventory at July 2, 2022, and June 30, 2021, respectively. Stores conduct annual physical inventories, staggered during the second half of the fiscal year. During periods in which physical inventory observations do not occur, we utilize an estimate for recording inventory shrink based on the historical results of our previous physical inventories. The estimated shrink rate may require a favorable or unfavorable adjustment to costs of sales based on actual results to the extent that our subsequent actual physical inventory yields a different result. Although inventory shrink rates have not fluctuated significantly in recent years, if the actual rate were to differ from our estimates, then an adjustment to inventory shrink would be required. We review our inventory during and at the end of each quarter to ensure that all necessary pricing actions are taken to adequately value our inventory at the lower of cost or net realizable by recording permanent markdowns to our on-hand inventory. Management believes these markdowns result in the appropriate prices necessary to stimulate demand for the merchandise. Actual recorded permanent markdowns could differ materially from management’s initial estimates based on future customer demand or economic conditions. |
Property and Equipment | (f) Property and Equipment —Property and equipment are recorded at cost less accumulated depreciation. Furniture, fixtures, leasehold improvements, finance leases and equipment are depreciated on a straight‑line basis over the estimated useful lives of the assets as follows: Estimated Useful Lives Furniture and fixtures 3 to 7 years Leasehold improvements Shorter of useful life or lease term Equipment 5 to 10 years Assets under finance lease Shorter of useful life or lease term Software 3 to 10 years Upon sale or retirement of an asset, the related cost and accumulated depreciation are removed from our balance sheet and any gain or loss is recognized in the statement of operations. Expenditures for maintenance, minor renewals and repairs are expensed as incurred, while major replacements and improvements are capitalized. |
Deferred Financing Costs | (g) Deferred Financing Costs — Deferred financing costs represent costs paid in connection with obtaining bank and other long‑term financing. These costs for the term loan are reported in the balance sheet as a direct deduction from the face amount of the term loan and the ABL credit agreements (defined in Note 3 below) are presented as deferred financing costs in the balance sheet. |
Income Taxes | (h) Income Taxes —Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using statutory tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period that includes the date of enactment. Valuation allowances are established against deferred tax assets when it is more likely than not that the realization of those deferred tax assets will not occur. Valuation allowances are released when positive evidence becomes available that future taxable income is sufficient to utilize the underlying deferred tax assets. We file our annual federal income tax return on a consolidated basis. Furthermore, we recognize uncertain tax positions when we have determined it is more likely than not that a tax position will be sustained upon examination. However, new information may become available, or applicable laws or regulations may change, thereby resulting in a favorable or unfavorable adjustment to amounts recorded. On March 27, 2020, in an effort to mitigate the economic impact of the COVID-19 pandemic, the U.S. Congress enacted the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). The CARES Act included certain corporate income tax provisions, which among other things, included a five-year carryback of net operating losses and acceleration of the corporate AMT credit. The Company has evaluated the CARES Act and it did not have a material impact on the income tax provision. The CARES Act also contains provisions for deferral of the employer portion of social security taxes incurred through the end of calendar 2020 and an employee retention credit, a refundable payroll credit for 50% of wages and health benefits paid to employees not providing services due to the pandemic. As a result of the CARES Act, we continued to defer qualified payroll taxes through December 31, 2020. As of July 2, 2022, we have $ 2.6 million in current qualified deferred payroll taxes in “Accrued Liabilities" in the Consolidated Balance Sheets, which are due December 31, 2022. |
Self Insurance Reserves | (i) Self-Insurance Reserves —We use a combination of insurance and self‑insurance plans to provide for the potential liabilities associated with workers’ compensation, general liability, property insurance, director and officers’ liability insurance, vehicle liability and employee health care benefits. Our stop loss limits per claim ar e $ 500,000 for workers ’ compensation, $ 250,000 for general liability, and $ 150,000 for medical. Liabilities associated with the risks that are retained by us are estimated, in part, by historical claims experience, severity factors and the use of loss development factors by third-party actuaries. The insurance liabilities we record are primarily influenced by the frequency and severity of claims and include a reserve for claims incurred but not yet reported. Our estimated reserves may be materially different from our future actual claim costs, and, when required adjustments to our estimate reserves are identified, the liability will be adjusted accordingly in that period. Our self‑insurance reserves for workers’ compensation, general liability and medical were $ 6.9 million , $ 0.6 million , and $ 1.0 million , respectively, at July 2, 2022, and $ 7.3 million , $ 1.2 million , and $ 1.0 million , respectively, at June 30, 2021. We recognize insurance expenses based on the date of an occurrence of a loss including the actual and estimated ultimate costs of our claims. Claims are paid from our reserves and our current period insurance expense is adjusted for the difference in prior period recorded reserves and actual payments as well as changes in estimated reserves. Current period insurance expenses also include the amortization of our premiums paid to our insurance carriers. Expenses for workers’ compensation, general liability and medical insurance were $ 2.3 million , $ 3.4 million and $ 7.0 million , respectively, for the fiscal year ended July 2, 2022, $ 1.4 million , $ 3.7 million , and $ 7.8 million , respectively, for the fiscal year ended June 30, 2021, and $ 2.7 million , $ 3.3 million and $ 8.7 million , respectively, for the fiscal year ended June 30, 2020 . |
Revenue Recognition | (j) Revenue Recognition —Our revenue is earned from sales of merchandise within our stores and is recorded at the point of sale and conveyance of merchandise to customers. Revenue is measured based on the amount of consideration that we expect to receive, reduced by point of sale discounts and estimates for sales returns, and excludes sales tax. Payment for our sales is due at the time of sale. We maintain a reserve for estimated sales returns, and we use historical customer return behavior to estimate our reserve requirements. No impairment of the returns asset was indicated or recorded for the fiscal year ended July 2, 2022. Gift cards are sold to customers in our stores, and we issue gift cards for merchandise returns in our stores. Revenue from sales of gift cards and issuances of merchandise credits is recognized when the gift card is redeemed by the customer, or if the likelihood of the gift card being redeemed by the customer is remote (“gift card breakage”). The gift card breakage rate is determined based upon historical redemption patterns. An estimate of the rate of gift card breakage is applied over the period of estimated performance and the breakage amounts are included in net sales in the Consolidated Statements of Operations. Breakage income recognized was $ 0.7 million , $ 0.4 million , and $ 0.8 million for the fiscal years ended July 2, 2022, June 30, 2021, and 2020, respectively. The gift card liability totals $ 1.1 million and $ 1.0 million included in “Accrued Liabilities” in the Consolidated Balance Sheets at July 2, 2022 and June 30, 2021 , respectively (See Note 5). |
Advertising | (k) Advertising —Costs for direct mail, television, radio, newspaper, digital and other media are expensed as the advertised events take place. Advertising expenses for the fiscal years ended July 2, 2022, June 30, 2021, and 2020 were $ 6.6 million , $ 8.3 million , and $ 18.6 million , respectively. We do not and did not receive consideration from vendors to support our advertising expenditures during fiscal 2022, 2021 and 2020 . |
Share-Based Compensation | (l) Share‑Based Compensation — The Company accounts for share-based compensation in accordance ASC 718, Compensation-Stock Compensation , which requires the fair value of share-based payments to be recognized in the consolidated financial statements as share-based compensation expense over the requisite service period. For time-based awards, share-based compensation expense is recognized on a straight-line basis, net of forfeitures, over the requisite service period for awards that actually vest. For performance-based awards, share-based compensation expense is estimated based on achievement of the performance condition and is recognized using the accelerated attribution method over the requisite service period for awards that actually vest. Share-based compensation expense is recorded in the selling, general and administrative expenses line in the consolidated statements of operations. ASC 718 also provides guidance for determining whether certain financial instruments awarded in share-based payment transactions are liabilities. The guidance requires that instruments that include conditions other than service, performance or market conditions that affect their fair value, exercisability or vesting be classified as a liability and be remeasured at fair value at each fiscal period (See Note 7 for further discussion on share-based compensation). During fiscal years ended July 2, 2022, and June 30, 2021, no stock options were granted. The fair value of each stock option granted during the fiscal year ended June 30, 2020, was estimated at the date of grant using a Black‑Scholes option pricing model, using the following assumptions: Fiscal Years Ended July 2, June 30, June 30, 2022 2021 2020 Risk-free interest rate — — 2.4 % Expected term (years) — — 4.6 Expected stock volatility — — 64.8 % Expected dividend yield — — 0.0 % • Risk‑free interest rate - the risk‑free interest rate is the constant maturity risk-free interest rate for U.S. Treasury instruments with terms consistent with the expected lives of the awards. • Expected term - the expected term of an option is based on our historical review of employee exercise behavior based on the employee class (executive or non‑executive) and based on our consideration of the remaining contractual term if limited exercise activity existed for a certain employee class. • Expected stock volatility - the expected stock volatility is based on both the historical volatility of our stock based on our historical stock prices and implied volatility of our traded stock options. • Expected dividend yield - the expected dividend yield is based on our expectation of not paying dividends on our common stock for the foreseeable future. |
Net Earnings/(Loss) Per Common Share | (m) Net Earnings/(Loss) Per Common Share —Basic net earnings/(loss) per common share for the fiscal years ended July 2, 2022, June 30, 2021, and 2020, was calculated by dividing net earnings/(loss) by the weighted average number of common shares outstanding for each period. Diluted net earnings/(loss) per common share for the fiscal years ended July 2, 2022, June 30, 2021, and 2020 was calculated by dividing net earnings/(loss) by the weighted average number of common shares including the impact of dilutive common stock equivalents and warrants (unless anti-dilutive) as shown in Note 10. |
Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of | (n) Impairment of Long‑Lived Assets and Long‑Lived Assets to Be Disposed Of — Long‑lived assets, principally property and equipment, including leasehold improvements, and lease right-of-use ("ROU") assets are reviewed for impairment when, in management’s judgment, events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable. If the carrying value of the asset or asset group exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the asset group, the Company will write the carrying value down to the fair value in the period identified. Since there is typically no active market for our long-lived tangible assets, we estimate fair values based on the expected future cash flows. We estimate future cash flows based on store-level historical results, current trends, and operating and cash flow projections. We also perform an entity-wide assessment for impairment of shared assets such as our distribution center and corporate right of use assets using the residual cash flow method. While we believe our estimates and judgments about future cash flows are reasonable, future impairment charges may be required if the expected cash flow estimates, as projected, do not occur or if events change requiring us to revise our estimates. Assets subject to fair value measurement under ASC 820, “Fair Value Measurement”, are categorized into one of three different levels of the fair value hierarchy depending on the observability of the inputs employed in the measurement, as follows: • Level 1 – observable inputs that reflect quoted prices (unadjusted) for identical assets in active markets. • Level 2 – inputs that reflect quoted prices for identical assets in markets which are not active; quoted prices for similar assets in active markets; inputs other than quoted prices that are observable for the asset; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. • Level 3 – unobservable inputs reflecting the Company’s own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. See Note 4 and Note 8 for additional information. |
Intellectual Property | (o) Intellectual Property —Our intellectual property primarily consists of indefinite-lived trademarks. We evaluate annually whether the trademarks continue to have an indefinite life. Trademarks and other intellectual property are reviewed for impairment annually in the fourth quarter and may be reviewed more frequently if indicators of impairment are present. Due to change in the Company’s management in the fourth quarter of fiscal 2021 and their future strategy related to the reduced use of certain intellectual properties, the Company concluded the related assets no longer held value which resulted in a $ 1.6 million impairment of the intangible assets. |
Asset Retirement Obligations | (p) Asset Retirement Obligations —We account for asset retirement obligations (“ARO”) in accordance with ASC 410, Asset Retirement and Environmental Obligations , which requires the recognition of a liability for the fair value of a legally required asset retirement obligation when incurred if the liability’s fair value can be reasonably estimated. Our ARO liabilities are associated with the disposal and retirement of leasehold improvements and removal of installed equipment, resulting from contractual obligations, at the end of a lease to restore a facility to a condition specified in the lease agreement. For leases that contractually result in an ARO, we record the net present value of the ARO liability and also record a related capital asset, in an equal amount. The estimated ARO liability is based on a number of assumptions, including costs to return facilities back to specified conditions, inflation rates and discount rates. Accretion expense related to the ARO liability is recognized as operating expense in our Consolidated Statements of Operations. The capitalized asset is depreciated on a straight-line basis over the useful life of the related leasehold improvements. Upon ARO fulfillment, any difference between the actual retirement expense incurred and the recorded estimated ARO liability is recognized as an operating gain or loss in our Consolidated Statements of Operations. Our ARO liability, which totaled $ 1.1 million as of July 2, 2022, is included in “Other liabilities—non-current” on our Consolidated Balance Sheet at July 2, 2022. Our ARO liability, which totaled $ 1.0 million as of June 30, 2021, is included in “Other liabilities—non-current” on our Consolidated Balance Sheet at June 30, 2021 . |
Leases | (q) Leases —We adopted ASU No. 2016-02, “Leases (Topic 842)” (“ASC 842”) effective July 1, 2019 using the modified retrospective adoption method, which resulted in an adjustment to opening retained earnings of $ 0.6 million as of July 1, 2019 to recognize impairment of the opening right-of-use asset balance for two stores for which assets had been previously impaired under ASC 360, “Property, Plant, and Equipment.” We utilized the simplified transition option available in ASC 842, which allowed the continued application of the legacy guidance in ASC 840, including disclosure requirements, in the comparative periods presented in the year of adoption. We conduct substantially all operations from leased facilities, including our corporate offices in Dallas and the Dallas warehouse, distribution, and retail complex, which were leased on December 31, 2020, subsequent to the sale and leaseback of those facilities on that date. Our retail store locations, our corporate office and our distribution center are under operating leases that will expire over the next 1 to 10 years. Many of our leases include options to renew at our discretion. We include the lease renewal option periods in the calculation of our operating lease assets and liabilities when it is reasonably certain that we will renew the lease. We also lease certain equipment under finance leases that generally expire within 5 years. In addition, subsequent to the petition date noted above, we commenced negotiations with our landlords on substantially all of our ongoing leases, resulting in significant modifications and remeasurement recorded in the fiscal 2021. As a result of the remeasurements and terminations of rejected leases, we reduced our operating lease ROU assets by approximately $ 31.0 million and our operating lease liabilities by approximately $ 124.0 million, recording a gain of approximately $ 93 million, which would have been reduced by the $ 80.1 million impairment loss recorded on ROU assets in fiscal 2020, if the liability had been adjusted in the same fiscal year. The results of our fourth quarter fiscal 2020 impairment analysis indicated an impairment of our property and equipment as well as operating lease ROU assets at approximately 200 of our stores along with property and equipment of our Phoenix distribution center facility totaling $ 80.1 million, which is included in restructuring costs in the consolidated statement of operations for fiscal 2020. The impairments were the result of closing plans for these stores and the Phoenix distribution center. The $ 93 million gain was further reduced by an amount of estimated claims allowable by the bankruptcy court, resulting in a $ 66 million net gain which is included in Reorganization items, net (see Note 2) in the Consolidated Statement of Operations. |
Legal Proceedings | (r) Legal Proceedings — Information related to the Chapter 11 Cases that were filed on May 27, 2020, is included in Note 1 (under the heading “Emergence from Chapter 11 Bankruptcy Proceedings”) and Note 2 in the Notes to Consolidated Financial Statements. In addition, we are involved in legal and governmental proceedings as part of the normal course of our business. Reserves have been established when a loss is considered probable and are based on management’s best estimates of our potential liability in these matters. These estimates have been developed in consultation with internal and external counsel and are based on a combination of litigation and settlement strategies. Management believes that such litigation and claims will be resolved without material effect on our financial position or results of operations. |
Recent Accounting Pronouncements | (s) Accounting Pronouncements Recently Adopted — In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update ("ASU") 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, with early adoption permitted. We adopted this standard in the first quarter of fiscal 2022 and it did not result in a material impact to the Company’s consolidated financial statements. In March 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815w-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force) . This update is intended to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange and is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted for all entities, including adoption in an interim period. We adopted this standard in the first quarter of fiscal 2022 and it did not result in a material impact to the Company’s consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued. The guidance was effective upon issuance and may be applied prospectively to contract modifications made, hedging relationships entered into, and other transactions affected by reference rate reform, evaluated on or before December 31, 2022, beginning during the reporting period in which the guidance has been elected. We do not have any receivables, hedging relationships, or lease agreements that reference LIBOR or another reference rate expected to be discontinued. We are currently evaluating the impact of the new guidance on our consolidated financial statements; however, we have determined that, of our current debt commitments as outlined in detai l in Note 3, only the obligations under the Post-Emergence ABL Facility may be impacted by ASU 2020-04. Our Term Loan described in Note 3 has fixed interest rate and our New ABL Credit Agreement bears interest at a variable rate based on adjusted term Secured Overnight Financing Rate ("SOFR"). |
Nature of Operations and Summ_3
Nature of Operations and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jul. 02, 2022 | |
Accounting Policies [Abstract] | |
Summary of Property and Equipment Estimated Useful Lives | Furniture and fixtures 3 to 7 years Leasehold improvements Shorter of useful life or lease term Equipment 5 to 10 years Assets under finance lease Shorter of useful life or lease term Software 3 to 10 years |
Schedule of Fair Value Assumptions of Stock Option Granted | Fiscal Years Ended July 2, June 30, June 30, 2022 2021 2020 Risk-free interest rate — — 2.4 % Expected term (years) — — 4.6 Expected stock volatility — — 64.8 % Expected dividend yield — — 0.0 % |
Bankruptcy Accounting (Tables)
Bankruptcy Accounting (Tables) | 12 Months Ended |
Jul. 02, 2022 | |
Reorganizations [Abstract] | |
Schedule of Restructuring and Abandonment Charges | Restructuring, impairment and abandonment charges are as follows (in thousands): Fiscal Years Ended July 2, June 30, June 30, 2022 2021 2020 Restructuring costs: Severance and compensation related costs (adjustments) $ 499 $ 3,557 $ 3,122 Professional fees — — 5,212 Total restructuring costs $ 499 $ 3,557 $ 8,334 Impairment costs: Corporate long-lived assets $ 1,963 $ — $ — Intangible asset — 1,639 — Operating lease right-of-use assets — — 51,626 Distribution center long-lived assets — — 16,794 Store long-lived assets — — 11,656 Total impairment costs $ 1,963 $ 1,639 $ 80,076 Abandonment costs: Accelerated recognition of operating lease right-of-use assets $ — $ 5,638 $ 25,082 Total abandonment costs $ — $ 5,638 $ 25,082 Total restructuring, impairment and abandonment costs $ 2,462 $ 10,834 $ 113,492 |
Schedule of Reorganization Items | Reorganization items included in our consolidated statement of operations represent amounts resulting from the Chapter 11 Cases are as follows (in thousands): Fiscal Years Ended July 2, June 30, June 30, 2022 2021 2020 Reorganization items, net: Professional and legal fees $ 367 $ 34,579 $ 3,619 Claims related costs 594 1,302 — Gains on lease termination, net of estimated claims — ( 66,247 ) — Gain on sale-leaseback — ( 49,639 ) — Rights Offering and Backstop Agreement — 19,990 — Total reorganization items, net $ 961 $ ( 60,015 ) $ 3,619 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Jul. 02, 2022 | |
Debt Disclosure [Abstract] | |
Summary of Term Loan | The following table provides details on our long-term debt (in thousands): July 2, June 30, 2022 2021 Term loan balance $ 24,400 $ 25,000 Debt issuance costs, net ( 420 ) ( 432 ) Accrued paid-in-kind interest — 1,806 FILO A, non-current 4,750 — Loan balance, ending $ 28,730 $ 26,374 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Jul. 02, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net of Accumulated Depreciation | Property and equipment, net of accumulated depreciation, consisted of the following (in thousands): July 2, June 30, 2022 2021 Furniture and fixtures $ 47,501 $ 47,587 Equipment 50,191 50,231 Software 41,880 41,575 Leasehold improvements 51,386 49,651 Assets under finance lease 680 681 191,638 189,725 Less accumulated depreciation ( 163,196 ) ( 151,941 ) Net property and equipment $ 28,442 $ 37,784 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Jul. 02, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following (in thousands): July 2, June 30, 2022 2021 Sales and use tax $ 3,854 $ 2,698 Self-insurance reserves 8,451 9,405 Wages, benefits and payroll taxes 5,892 9,639 Property taxes 1,476 1,510 Freight and distribution 6,484 8,658 Capital expenditures 122 348 Utilities 1,261 1,466 Gift card liability 1,095 1,045 Reorganization expenses 20 6,337 Other expenses 4,836 5,348 Total accrued liabilities $ 33,491 $ 46,454 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jul. 02, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provision (Benefit) | Income tax provision/(benefit) consisted of the following (in thousands): Current Deferred Total Fiscal Year Ended July 2, 2022 Federal $ — $ ( 96 ) $ ( 96 ) State and local 191 ( 22 ) 169 Total $ 191 $ ( 118 ) $ 73 Fiscal Year Ended June 30, 2021 Federal $ — $ 20 $ 20 State and local 267 4 271 Total $ 267 $ 24 $ 291 Fiscal Year Ended June 30, 2020 Federal $ ( 286 ) $ 306 $ 20 State and local 196 5 201 Total $ ( 90 ) $ 311 $ 221 |
Reconciliation of Income Taxes Computed at Blended Statutory Federal Income Tax Rate | A reconciliation between income taxes computed at the statutory federal income tax rate of 21 % and taxes recognized in the Consolidated Statements of Operations was as follows (in thousands): Fiscal Years Ended July 2, June 30, June 30, 2022 2021 2020 Federal income tax (benefit) expense computed at statutory rate $ ( 12,375 ) $ 687 $ ( 34,883 ) State income taxes, net of related federal tax benefit (excluding state valuation allowance) ( 3,051 ) 3,133 ( 6,874 ) Increase (decrease) in state valuation allowance 3,202 ( 2,919 ) 7,033 Increase (decrease) in federal valuation allowance 11,816 ( 11,637 ) 34,586 Federal tax credits ( 244 ) ( 113 ) ( 91 ) Stock option expiration or deficiencies 556 250 620 Warrant issue expenses — 4,324 — Reorganization expenses 19 6,202 — Other, net 150 364 ( 170 ) Provision for income taxes $ 73 $ 291 $ 221 |
Schedule of Deferred Tax Assets and Liabilities | Significant components of our deferred tax assets and liabilities as of July 2, 2022, and June 30, 2021, all of which are classified as non-current in our Consolidated Balance Sheets, were comprised of the following (in thousands): July 2, June 30, 2022 2021 Deferred tax assets: Other payroll and benefits $ 384 $ 1,182 Inventory reserves 604 931 Self-insurance reserves 2,083 2,318 Share-based compensation 1,981 1,800 Other current assets 1,007 1,160 Operating lease liabilities 41,503 52,008 Property and equipment 2,992 727 Disallowed interest expense 6,671 2,954 Net operating loss and tax credits 54,327 41,833 Other noncurrent assets 435 556 Total gross deferred tax assets $ 111,987 $ 105,469 Deferred tax liabilities: Inventory costs $ 3,855 $ 2,924 Prepaid supplies 1,436 1,353 Operating lease - right of use 38,681 47,627 Total gross deferred tax liabilities 43,972 51,904 Valuation allowance ( 68,015 ) ( 53,683 ) Net deferred tax liability $ — $ ( 118 ) |
Schedule of Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Balance at June 30, 2019 $ 147 Additions for tax positions of prior years — Reductions for lapse of statute of limitations — Balance at June 30, 2020 $ 147 Additions for tax positions of prior years — Reductions for lapse of statute of limitations — Balance at June 30, 2021 $ 147 Additions for tax positions of prior years — Reductions for lapse of statute of limitations — Balance at July 2, 2022 $ 147 |
Common Stock & Share-Based In_2
Common Stock & Share-Based Incentive Plans (Tables) | 12 Months Ended |
Jul. 02, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Transactions Relating to Options | Following is a summary of transactions relating to the 2008 Plan and 2014 Plan options for the fiscal years ended July 2, 2022, June 30, 2021, and 2020: Number of Weighted-Average Weighted-Average Aggregate Options Outstanding at June 30, 2019 3,698,043 5.63 7.10 $ — Granted during year 12,000 1.64 Exercised during the year — — Forfeited or expired during year ( 1,015,427 ) 6.22 Options Outstanding at June 30, 2020 2,694,616 5.33 6.11 $ — Granted during year — — Exercised during the year ( 22,308 ) 1.98 Forfeited or expired during year ( 327,565 ) 5.37 Options Outstanding at June 30, 2021 2,344,743 5.36 4.70 $ 1,642,845 Granted during year — — Exercised during the year ( 187,538 ) 2.45 Forfeited or expired during year ( 1,228,009 ) 5.03 Options Outstanding at July 2, 2022 929,196 $ 6.39 3.07 $ — Options Exercisable at July 2, 2022 905,633 |
Summary of Information about Stock Options Outstanding | The following table summarizes information about stock options outstanding at July 2, 2022: Options Outstanding Options Exercisable Range of Exercise Prices Number Weighted Average Weighted Number Weighted $ 1.64 - $ 2.10 130,424 3.16 $ 2.03 125,549 $ 2.05 $ 2.45 - $ 3.12 77,393 3.71 2.58 77,393 2.58 $ 3.25 - $ 3.25 105,808 4.50 3.25 87,120 3.25 $ 5.45 - $ 5.59 53,293 1.38 5.54 53,293 5.54 $ 5.95 - $ 5.95 200,000 2.94 5.95 200,000 5.95 $ 6.71 - $ 6.71 88,176 4.04 6.71 88,176 6.71 $ 7.90 - $ 7.90 134,772 3.17 7.90 134,772 7.90 $ 7.91 - $ 14.72 86,372 1.21 11.40 86,372 11.40 $ 18.42 - $ 18.42 22,596 2.15 18.42 22,596 18.42 $ 19.36 - $ 19.36 30,362 2.61 19.36 30,362 19.36 929,196 3.07 6.39 905,633 6.48 |
Summary of Information about Restricted and Performance Stock Units and Awards Granted and Outstanding | The following table summarizes information about restricted stock units, performance stock units, restricted stock awards and performance stock awards granted and outstanding for the fiscal years ended July 2, 2022, June 30, 2021, and 2020: Restricted and Performance Stock Units Weighted- Restricted and Performance Stock Awards Weighted- Outstanding at June 30, 2019 57,693 $ 3.25 1,839,861 $ 3.36 Granted during year 57,693 1.58 1,422,927 1.63 Vested during year ( 57,693 ) 1.58 ( 446,987 ) 3.55 Forfeited during year — — ( 836,321 ) 2.38 Outstanding at June 30, 2020 57,693 $ 3.25 1,979,480 $ 2.43 Granted during year 3,021,924 2.81 1,121,250 1.50 Vested during year ( 57,693 ) 1.91 ( 595,190 ) 2.26 Forfeited during year — — ( 797,172 ) 2.29 Outstanding at June 30, 2021 3,021,924 $ 2.83 1,708,368 $ 1.94 Granted during year 5,580,713 2.02 — — Vested during year ( 619,264 ) 3.24 ( 800,984 ) 1.71 Forfeited during year ( 349,094 ) 2.72 ( 668,673 ) 2.25 Outstanding at July 2, 2022 7,634,279 $ 2.21 238,711 $ 1.84 |
Summary of Activity of Cash Settled Awards | The following table summarizes the activity of cash settled awards during fiscal 2022, 2021, and 2020. Performance Service Total Outstanding at June 30, 2019 — — — Grant during year 287,348 1,132,548 1,419,896 Vested during year — — — Forfeited during year — ( 269,616 ) ( 269,616 ) Outstanding at June 30, 2020 287,348 862,932 1,150,280 Grant during year — — — Vested during year — ( 208,328 ) ( 208,328 ) Forfeited during year ( 143,675 ) ( 105,030 ) ( 248,705 ) Outstanding at June 30, 2021 143,673 549,574 693,247 Grant during year — 565,492 565,492 Vested during year — ( 177,719 ) ( 177,719 ) Forfeited during year ( 84,223 ) ( 202,270 ) ( 286,493 ) Outstanding at July 2, 2022 59,450 735,077 794,527 |
Schedule of Recognized Share-Based Compensation Costs | We recognized share‑based compensation costs as follows (in thousands): Fiscal Years Ended July 2, June 30, June 30, 2022 2021 2020 Amortization of share-based compensation during the period $ 5,881 $ 1,851 $ 2,555 Amounts capitalized in inventory ( 1,194 ) ( 410 ) ( 681 ) Amount recognized and charged to cost of sales 1,233 613 846 Amounts charged against income for the period before tax $ 5,920 $ 2,054 $ 2,720 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jul. 02, 2022 | |
Leases [Abstract] | |
Components of Lease Cost | The components of lease cost are as follows (in thousands): Fiscal Years Ended July 2, June 30, 2022 2021 Operating lease cost $ 67,724 $ 62,617 Variable lease cost 9,568 10,924 Amortization of right-of-use assets 124 210 Interest on lease liabilities 1 8 Total lease cost $ 77,417 $ 73,759 |
Schedule of Additional Information Related to Leases | The table below presents additional information related to the Company’s leases as follows: Fiscal Years Ended July 2, June 30, 2022 2021 Weighted average remaining lease term (in years) Operating leases 4.1 4.6 Finance leases — 0.7 Weighted average discount rate Operating leases 9.1 % 8.5 % Finance leases 0.0 % 2.4 % |
Schedule of Other Information Related to Leases Including Supplemental Disclosures of Cash Flow Information | Other information related to leases, including supplemental disclosures of cash flow information, is as follows (in thousands): Fiscal Years Ended July 2, June 30, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 75,132 $ 64,496 Operating cash flows from finance leases $ 1 $ 9 Financing cash flows from finance leases $ 124 $ 217 Right-of-use assets obtained in exchange for operating lease liabilities $ 15,522 $ ( 107,497 ) |
Schedule of Maturities of Lease Liabilities | Maturities of lease liabilities were as follows as of July 2, 2022 (in thousands): Operating Fiscal year: 2023 $ 65,051 2024 48,755 2025 35,474 2026 22,246 2027 16,604 Thereafter 15,023 Total lease payments $ 203,153 Less: Interest 34,969 Total lease liabilities $ 168,184 Less: Current lease liabilities 52,258 Non-current lease liabilities $ 115,926 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 12 Months Ended |
Jul. 02, 2022 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings (Loss) Per Common Share | The following table sets forth the computation of our basic and diluted earnings (loss) per common share (in thousands, except per share amounts): Fiscal Years Ended July 2, June 30, June 30, 2022 2021 2020 Net earnings/(loss) $ ( 59,003 ) $ 2,982 $ ( 166,328 ) Less: Income to participating securities — ( 135 ) — Net earnings/(loss) attributable to common shares $ ( 59,003 ) $ 2,847 $ ( 166,328 ) Weighted average common shares outstanding—basic 84,885 60,584 45,208 Effect of dilutive stock equivalents — 1,105 — Weighted average common shares outstanding—dilutive 84,885 61,689 45,208 Net earnings/(loss) per common share—basic $ ( 0.70 ) $ 0.05 $ ( 3.68 ) Net earnings/(loss) per common share—diluted $ ( 0.70 ) $ 0.05 $ ( 3.68 ) |
Subsequent Events (Tables)
Subsequent Events (Tables) | 12 Months Ended |
Jul. 02, 2022 | |
Subsequent Events [Abstract] | |
Schedule of revolving credit facility bear interest at variable rate based upon average quarterly availability | The ABL Amendment will restrict certain actions by the Company for the next two years, including making certain acquisitions and debt prepayments. With respect to pricing on the Revolving Loans, the applicable margin was increased by 50 bps depending upon availability as reflected below. Average Quarterly Availability Applicable Margin for SOFR Loans Applicable Margin for Base Rate Loans ≥ $50,000,000 1.75 % 0.75 % < $50,000,000 but ≥ $30,000,000 2.00 % 1.00 % < $30,000,000 2.25 % 1.25 % |
Nature of Operations and Summ_4
Nature of Operations and Summary of Significant Accounting Policies - Narrative (Details) | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Sep. 20, 2022 USD ($) | Sep. 29, 2021 USD ($) | Jan. 04, 2021 shares | Jan. 04, 2021 shares | Jul. 15, 2020 Store | Jun. 08, 2020 Store | Mar. 25, 2020 Store | Dec. 31, 2020 Director | Sep. 30, 2020 Store | Jun. 30, 2020 USD ($) Store State | Jun. 30, 2020 USD ($) Store State | Jul. 02, 2022 USD ($) State Store shares | Jun. 30, 2021 USD ($) State Store shares | Jun. 30, 2020 USD ($) Store State | Jun. 26, 2022 $ / shares | May 09, 2022 USD ($) | Sep. 30, 2021 | Jul. 01, 2019 USD ($) | Jun. 30, 2019 USD ($) | |
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Number of discount retail stores operated | Store | 685 | 685 | 489 | 490 | 685 | ||||||||||||||
Number of states in which the entity operates | State | 39 | 39 | 40 | 40 | 39 | ||||||||||||||
Minimum bid price requirement | $ / shares | $ 1 | ||||||||||||||||||
Conversion of Stock, description | the Company will have a compliance period of 180 calendar days, or until December 5, 2022, to regain compliance with the Minimum Bid Price Requirement. To regain compliance, during the 180-calendar day compliance period, the closing bid price of the Company’s common stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days. | ||||||||||||||||||
Number of stores temporarily closed | Store | 687 | ||||||||||||||||||
Number of stores reopened | Store | 685 | 685 | 685 | ||||||||||||||||
Number of stores permanently closed | Store | 197 | 2 | |||||||||||||||||
Percentage of gross margin | 25.60% | 29.80% | |||||||||||||||||
Additional financing amount | $ 35,000,000 | ||||||||||||||||||
Petition date | May 27, 2020 | ||||||||||||||||||
Number of store locations in process to close | Store | 132 | ||||||||||||||||||
Number of stores expect to close | Store | 65 | ||||||||||||||||||
Maximum amounts reserved and retained in unsecured creditor claim fund | $ 14,000,000 | ||||||||||||||||||
Remaining escrow account | $ 14,000,000 | ||||||||||||||||||
Credit card receivables from third party consumer credit card providers | $ 6,300,000 | $ 3,200,000 | |||||||||||||||||
Restricted cash | 0 | 22,321,000 | |||||||||||||||||
Capitalized inventory costs expensed in cost of sales | 112,200,000 | 95,100,000 | $ 97,800,000 | ||||||||||||||||
Capitalized cost in inventory | 29,000,000 | 24,200,000 | |||||||||||||||||
Current and non-current qualified deferred payroll taxes CARES Act | 2,600,000 | ||||||||||||||||||
Impairment charges | $ 80,100,000 | 1,963,000 | 1,639,000 | 80,076,000 | |||||||||||||||
Gift card liability | 1,095,000 | 1,045,000 | |||||||||||||||||
Advertising expenses | $ 6,600,000 | $ 8,300,000 | 18,600,000 | ||||||||||||||||
Stock options granted | shares | 0 | 0 | |||||||||||||||||
Impairment of intangible assets | $ 1,639,000 | ||||||||||||||||||
Asset retirement obligations | $ 1,100,000 | 1,000,000 | |||||||||||||||||
Existence of option to renew | true | ||||||||||||||||||
Cumulative effect adjustment to retained earnings | $ 6,935,000 | $ 6,935,000 | $ 18,987,000 | 71,801,000 | 6,935,000 | $ 171,309,000 | |||||||||||||
Reduction of operating lease right-of-use assets upon remeasurements and termination of rejected leases | 31,000,000 | ||||||||||||||||||
Reduction of operating lease liabilities upon remeasurements and termination of rejected leases | 124,000,000 | ||||||||||||||||||
Gain on terminations of rejected leases | 93,278,000 | ||||||||||||||||||
Number of stores impaired | Store | 200 | ||||||||||||||||||
Gain on lease liabilities of estimated claims | 66,000,000 | 66,247,000 | |||||||||||||||||
New ABL Credit Agreement | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Line Of credit facility borrowing capacity | $ 7,500,000 | ||||||||||||||||||
New ABL Credit Agreement | Subsequent Event [Member] | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Issuance of convertible debt Securities | $ 35,000,000 | ||||||||||||||||||
Proceeds of the private placement repay | 7,500,000 | ||||||||||||||||||
Payment of transaction costs | $ 5,000,000 | ||||||||||||||||||
First-In Last-Out Term Loan B Facility [Member] | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Line Of credit facility borrowing capacity | 5,000,000 | ||||||||||||||||||
Cumulative Effect Period of Adoption Adjustment | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Cumulative effect adjustment to retained earnings | (601,000) | ||||||||||||||||||
Retained Earnings | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Cumulative effect adjustment to retained earnings | $ (230,729,000) | $ (230,729,000) | $ (286,750,000) | (227,747,000) | (230,729,000) | (63,800,000) | |||||||||||||
Retained Earnings | Cumulative Effect Period of Adoption Adjustment | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Cumulative effect adjustment to retained earnings | $ (601,000) | ||||||||||||||||||
Distribution Center and Retail Store Location | Minimum | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Operating lease term of contract | 1 year | ||||||||||||||||||
Distribution Center and Retail Store Location | Maximum | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Operating lease term of contract | 10 years | ||||||||||||||||||
Equipment | Maximum | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Finance lease term of contract | 5 years | ||||||||||||||||||
Intellectual Property | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Impairment of intangible assets | 1,600,000 | ||||||||||||||||||
Accounting Standards Update 2014-09 | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Impairment charges | $ 0 | ||||||||||||||||||
Accounting Standards Update 2014-09 | Breakage | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Breakage income recognized | $ 700,000 | 400,000 | 800,000 | ||||||||||||||||
ASU 2016-02 | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Change in accounting principle, accounting standards update, adoption date | Jul. 01, 2019 | ||||||||||||||||||
ASU 2016-02 | Retained Earnings | Cumulative Effect Period of Adoption Adjustment | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Cumulative effect adjustment to retained earnings | $ 600,000 | ||||||||||||||||||
ASU 2019-12 | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Change in accounting principle, accounting standards update, adopted [true false] | true | ||||||||||||||||||
Change in accounting principle, accounting standards update, immaterial effect [true false] | true | ||||||||||||||||||
ASU 2021-04 | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Change in accounting principle, accounting standards update, adopted [true false] | true | ||||||||||||||||||
Change in accounting principle, accounting standards update, immaterial effect [true false] | true | ||||||||||||||||||
Accrued Liabilities | Accounting Standards Update 2014-09 | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Gift card liability | $ 1,100,000 | 1,000,000 | |||||||||||||||||
Worker's compensation | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Stop loss limits per claim | 500,000 | ||||||||||||||||||
Self insurance reserve | 6,900,000 | 7,300,000 | |||||||||||||||||
Insurance expenses recognized | 2,300,000 | 1,400,000 | 2,700,000 | ||||||||||||||||
General liability | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Stop loss limits per claim | 250,000 | ||||||||||||||||||
Self insurance reserve | 600,000 | 1,200,000 | |||||||||||||||||
Insurance expenses recognized | 3,400,000 | 3,700,000 | 3,300,000 | ||||||||||||||||
Medical liabilities | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Stop loss limits per claim | 150,000 | ||||||||||||||||||
Self insurance reserve | 1,000,000 | 1,000,000 | |||||||||||||||||
Insurance expenses recognized | $ 7,000,000 | $ 7,800,000 | $ 8,700,000 | ||||||||||||||||
Backstop Commitment Agreement | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Number of directors | Director | 9 | ||||||||||||||||||
Number of continuing directors | Director | 5 | ||||||||||||||||||
Backstop Commitment Agreement | Osmium Partners LLC | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Number of new shares exchanged for business close | shares | 1 | 1 | |||||||||||||||||
Backstop Commitment Agreement | Backstop Party | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Number of new directors appointed | Director | 3 | ||||||||||||||||||
Backstop Commitment Agreement | Equity Committee | |||||||||||||||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Number of new directors appointed | Director | 1 |
Nature of Operations and Summ_5
Nature of Operations and Summary of Significant Accounting Policies - Summary of Property and Equipment Estimated Useful Lives (Details) | 12 Months Ended |
Jul. 02, 2022 | |
Furniture and Fixtures | Minimum | |
Property Plant And Equipment [Line Items] | |
Estimated useful life (in years) | 3 years |
Furniture and Fixtures | Maximum | |
Property Plant And Equipment [Line Items] | |
Estimated useful life (in years) | 7 years |
Leasehold Improvements | |
Property Plant And Equipment [Line Items] | |
Estimated useful life of Leasehold improvements | Shorter of useful life or lease term |
Equipment | Minimum | |
Property Plant And Equipment [Line Items] | |
Estimated useful life (in years) | 5 years |
Equipment | Maximum | |
Property Plant And Equipment [Line Items] | |
Estimated useful life (in years) | 10 years |
Assets Under Finance Lease | |
Property Plant And Equipment [Line Items] | |
Estimated useful life of Leasehold improvements | Shorter of useful life or lease term |
Software | Minimum | |
Property Plant And Equipment [Line Items] | |
Estimated useful life (in years) | 3 years |
Software | Maximum | |
Property Plant And Equipment [Line Items] | |
Estimated useful life (in years) | 10 years |
Nature of Operations and Summ_6
Nature of Operations and Summary of Significant Accounting Policies - Schedule of Fair Value Assumptions of Stock Option Granted (Details) | 12 Months Ended |
Jun. 30, 2020 | |
Factors used in estimating the fair value of each stock option granted | |
Risk-free interest rate | 2.40% |
Expected term (years) | 4 years 7 months 6 days |
Expected stock volatility (as a percent) | 64.80% |
Expected dividend yield (as a percent) | 0% |
Bankruptcy Accounting - Narrati
Bankruptcy Accounting - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Sep. 29, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jul. 02, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Bankruptcy Accounting [Line Items] | ||||||
Proceeds from issuance of term loan under sale and leaseback after payment of property taxes | $ 67,500 | |||||
Proceeds from issuance of term loan under sale and leaseback | 18,800 | |||||
Restricted cash deposits | 14,200 | |||||
Net cash remaining deposited in unrestricted cash account | $ 1,900 | |||||
Additional contribution to unsecured creditor claim fund | 40,000 | |||||
Bankruptcy claims, amount of claim fund to be distributed | $ 22,300 | 0 | $ 22,300 | |||
Restructuring, impairment and abandonment charges | 2,462 | 10,834 | $ 113,492 | |||
Maximum amounts reserved and retained in unsecured creditor claim fund | $ 14,000 | |||||
Impairment of intangible assets | 1,639 | |||||
Professional and legal fees | 400 | |||||
Claims related costs | 594 | 1,302 | ||||
Impairment costs | $ 80,100 | 1,963 | 1,639 | 80,076 | ||
Abandonment costs | 5,638 | 25,082 | ||||
Professional fees | 5,212 | |||||
Compensation costs related to reorganization reduction in force | 499 | 3,557 | 3,122 | |||
Reorganization items, net | 961 | (60,015) | 3,619 | |||
Professional and legal fees | 367 | 34,579 | $ 3,619 | |||
Charges related to rights offering and backstop agreement | 19,990 | |||||
Gain on lease liabilities of estimated claims | 66,000 | 66,247 | ||||
Gain on sale-leaseback | 49,639 | |||||
Software | ||||||
Bankruptcy Accounting [Line Items] | ||||||
Restructuring, impairment and abandonment charges | 2,000 | |||||
Severance and Employee Retention Costs | ||||||
Bankruptcy Accounting [Line Items] | ||||||
Restructuring, impairment and abandonment charges | $ 500 | 3,600 | ||||
Permanent Closure Stores and Phoenix Distribution Center | ||||||
Bankruptcy Accounting [Line Items] | ||||||
Restructuring, impairment and abandonment charges | $ 5,600 |
Bankruptcy Accounting - Schedul
Bankruptcy Accounting - Schedule of Restructuring, Impairment and Abandonment Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jul. 02, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Restructuring costs: | ||||
Severance and compensation related costs (adjustments) | $ 499 | $ 3,557 | $ 3,122 | |
Professional fees | 5,212 | |||
Total restructuring costs | 499 | 3,557 | 8,334 | |
Impairment costs: | ||||
Corporate long-lived assets | 1,963 | |||
Intangible asset | 1,639 | |||
Operating lease right-of-use assets | 51,626 | |||
Distribution center long-lived assets | 16,794 | |||
Store long-lived assets | 11,656 | |||
Total impairment costs | $ 80,100 | 1,963 | 1,639 | 80,076 |
Abandonment costs: | ||||
Accelerated recognition of operating lease right-of-use assets | 5,638 | 25,082 | ||
Total abandonment costs | 5,638 | 25,082 | ||
Total restructuring, impairment and abandonment costs | $ 2,462 | $ 10,834 | $ 113,492 |
Bankruptcy Accounting - Sched_2
Bankruptcy Accounting - Schedule of Reorganization Items (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 02, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Reorganization items, net: | |||
Professional and legal fees | $ 367 | $ 34,579 | $ 3,619 |
Claims related costs | 594 | 1,302 | |
Gains on lease termination, net of estimated claims | (66,000) | (66,247) | |
Gain on sale-leaseback | (49,639) | ||
Rights Offering and Backstop Agreement | 19,990 | ||
Total reorganization items, net | $ 961 | $ (60,015) | $ 3,619 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 12 Months Ended | |||||||
May 09, 2022 USD ($) | Dec. 31, 2020 USD ($) Director | Jul. 02, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2020 USD ($) | Nov. 09, 2022 USD ($) | Jul. 10, 2020 USD ($) | May 29, 2020 USD ($) | |
Line Of Credit Facility [Line Items] | ||||||||
Borrowings under revolving credit facility | $ 62,191,000 | $ 12,000,000 | ||||||
Deferred financing costs | 3,129,000 | 2,459,000 | ||||||
Secured net leverage ratio 2023 fiscal | 8 | |||||||
Secured net leverage ratio 2024 fiscal | 6 | |||||||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 1% | |||||||
Base Rate [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 0.50% | |||||||
DIP DDTL Agreement | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | $ 25,000,000 | |||||||
Pre-Petition ABL Credit Agreement | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | $ 180,000,000 | |||||||
Revolving credit facility maturity date | Jan. 29, 2024 | |||||||
Term of credit facility (in years) | 5 years | |||||||
Borrowings under revolving credit facility | $ 0 | |||||||
Interest expense | $ 1,900,000 | |||||||
Accrued paid-in-kind interest | 1,500,000 | |||||||
Amortization of financing fees | 200,000 | |||||||
Commitment fees | $ 200,000 | |||||||
DIP ABL Facility | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | $ 100,000,000 | |||||||
Post-Emergence ABL Facility [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Accrued paid-in-kind interest | 3,400,000 | |||||||
New ABL Credit Agreement | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | 110,000,000 | |||||||
Borrowings under revolving credit facility | $ 57,200,000 | |||||||
Debt instrument, maturity date | Dec. 31, 2023 | |||||||
Outstanding letters of credit | $ 14,600,000 | |||||||
Availability under the credit facility | $ 10,300,000 | |||||||
Line of credit facility, description | The New ABL Credit Agreement includes conditions to borrowings, representations and warranties, affirmative and negative covenants, and events of default customary for financings of this type and size. Pursuant to the New ABL Credit Agreement, the Borrower and its subsidiaries must maintain borrowing availability under the New ABL Facility at least equal to the greater of (i) $7.5 million and (ii) 7.5% of the Modified Revolving Loan Cap (as defined in the New ABL Credit Agreement). | |||||||
Line Of credit facility borrowing capacity | $ 7,500,000 | |||||||
Percentage of modified revolving loan cap | 7.50% | |||||||
New ABL Credit Agreement | Swingline Loan [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | $ 10,000,000 | |||||||
New ABL Credit Agreement | Standby Letters of Credit [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | 25,000,000 | |||||||
New ABL Credit Agreement | Line of Credit [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Borrowings | $ 75,200,000 | |||||||
New ABL Credit Agreement | LIBOR | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 2.75% | |||||||
New ABL Credit Agreement | Commercial Bank Floating Bank Rate | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 1.75% | |||||||
New ABL Credit Agreement | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 0.10% | |||||||
New ABL Credit Agreement | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Maximum [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 1.75% | |||||||
New ABL Credit Agreement | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Minimum [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 1.25% | |||||||
New ABL Credit Agreement | Base Rate [Member] | Maximum [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 0.75% | |||||||
New ABL Credit Agreement | Base Rate [Member] | Minimum [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 0.25% | |||||||
New ABL Credit Agreement | Base Rate [Member] | Interest Rate Floor [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 0% | |||||||
New ABL Credit Facility Member | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | $ 110,000,000 | |||||||
Deferred financing costs | $ 3,100,000 | |||||||
Term Loan Credit Agreement | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | 25,000,000 | |||||||
Revolving credit facility maturity date | Dec. 31, 2024 | |||||||
Borrowings under revolving credit facility | $ 28,700,000 | 26,400,000 | ||||||
Outstanding term loan held | 25,000,000 | |||||||
Term loan credit agreement interest rate | 14% | |||||||
Term loan credit agreement prepayment terms | The Term Loan is subject to optional prepayment after the first anniversary of the date of issuance at prepayment price equal to the greater of (i) the original principal amount of the Term Loan plus accrued interest thereon, and (ii) 125% of the original principal amount of the Term Loan. | |||||||
Term loan credit agreement prepayment percentage on principal | 125% | |||||||
Loan Repurchase | $ 5,000,000 | |||||||
Accrued paid-in-kind interest | 1,806,000 | |||||||
Long-term debt, fair value | $ 28,900,000 | 29,600,000 | ||||||
Term Loan Credit Agreement | Backstop Party | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Number of new directors appointed | Director | 3 | |||||||
Term Loan Credit Agreement | Tensile Capital Partners Master Fund, LP | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Outstanding term loan held | $ 19,000,000 | |||||||
Term Loan Credit Agreement | Affiliates of Osmium Partners, LLC | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Outstanding term loan held | $ 1,000,000 | |||||||
DIP ABL Credit Agreement and DIP Term Facility | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Interest expense | 7,200,000 | 8,200,000 | ||||||
Accrued paid-in-kind interest | 1,900,000 | |||||||
Amortization of financing fees | 1,600,000 | 5,500,000 | ||||||
Commitment fees | 2,200,000 | 800,000 | ||||||
First-In Last-Out Term Loan A Facility [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | 5,000,000 | |||||||
Borrowings under revolving credit facility | 4,750,000 | $ 0 | ||||||
First-In Last-Out Term Loan A Facility [Member] | Line of Credit [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Borrowings | $ 5,000,000 | |||||||
First-In Last-Out Term Loan A Facility [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 3% | |||||||
First-In Last-Out Term Loan A Facility [Member] | Base Rate [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 2% | |||||||
First-In Last-Out Term Loan B Facility [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | $ 5,000,000 | |||||||
Line Of credit facility borrowing capacity | $ 5,000,000 | |||||||
First-In Last-Out Term Loan B Facility [Member] | Forecast [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Additional loans | $ 5,000,000 | |||||||
First-In Last-Out Term Loan B Facility [Member] | Maximum [Member] | Subsequent Event [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | 5,000,000 | |||||||
Additional loans | $ 5,000,000 | |||||||
First-In Last-Out Term Loan B Facility [Member] | Line of Credit [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Borrowings | $ 5,000,000 | |||||||
First-In Last-Out Term Loan B Facility [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Maximum [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 9% | |||||||
First-In Last-Out Term Loan B Facility [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Minimum [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 8.50% | |||||||
First-In Last-Out Term Loan B Facility [Member] | Base Rate [Member] | Maximum [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 8% | |||||||
First-In Last-Out Term Loan B Facility [Member] | Base Rate [Member] | Minimum [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 7.50% | |||||||
First-In Last-Out Term Loan A and B Facility [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 0% | |||||||
First-In Last-Out Term Loan A and B Facility [Member] | Base Rate [Member] | Interest Rate Floor [Member] | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 1% |
Debt - Summary of Term Loan (De
Debt - Summary of Term Loan (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 02, 2022 | Jun. 30, 2021 | |
Line Of Credit Facility [Line Items] | ||
FILO A, non-current | $ 62,191 | $ 12,000 |
Term Loan Credit Agreement | ||
Line Of Credit Facility [Line Items] | ||
Term loan balance | 26,374 | 25,000 |
Debt issuance costs, net | (432) | |
Accrued paid-in-kind interest | 1,806 | |
FILO A, non-current | 28,700 | 26,400 |
Loan balance, ending | 26,374 | |
New A B L Facility And Term Loan Agreement [Member] | ||
Line Of Credit Facility [Line Items] | ||
Term loan balance | 24,400 | |
Debt issuance costs, net | (420) | |
Accrued paid-in-kind interest | 0 | |
Loan balance, ending | 28,730 | 24,400 |
FILO A Facility | ||
Line Of Credit Facility [Line Items] | ||
FILO A, non-current | $ 4,750 | $ 0 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net of Accumulated Depreciation (Details) - USD ($) $ in Thousands | Jul. 02, 2022 | Jun. 30, 2021 |
Property and equipment, net of accumulated depreciation | ||
Gross property and equipment | $ 191,638 | $ 189,725 |
Less accumulated depreciation | (163,196) | (151,941) |
Net property and equipment | 28,442 | 37,784 |
Furniture and Fixtures | ||
Property and equipment, net of accumulated depreciation | ||
Gross property and equipment | 47,501 | 47,587 |
Equipment | ||
Property and equipment, net of accumulated depreciation | ||
Gross property and equipment | 50,191 | 50,231 |
Software | ||
Property and equipment, net of accumulated depreciation | ||
Gross property and equipment | 41,880 | 41,575 |
Leasehold Improvements | ||
Property and equipment, net of accumulated depreciation | ||
Gross property and equipment | 51,386 | 49,651 |
Assets Under Finance Lease | ||
Property and equipment, net of accumulated depreciation | ||
Gross property and equipment | $ 680 | $ 681 |
Property and Equipment, Net - N
Property and Equipment, Net - Narrative (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2021 USD ($) | |
Property, Plant and Equipment [Abstract] | |
Impairment, Long-Lived Asset, Held-for-Use, Statement of Income or Comprehensive Income [Extensible Enumeration] | Restructuring Impairment And Abandonment Charges |
Impairment charges for property and equipment | $ 18.9 |
Accrued Liabilities - Schedule
Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Jul. 02, 2022 | Jun. 30, 2021 |
Payables and Accruals [Abstract] | ||
Sales and use tax | $ 3,854 | $ 2,698 |
Self-insurance reserves | 8,451 | 9,405 |
Wages, benefits and payroll taxes | 5,892 | 9,639 |
Property taxes | 1,476 | 1,510 |
Freight and distribution | 6,484 | 8,658 |
Capital expenditures | 122 | 348 |
Utilities | 1,261 | 1,466 |
Gift card liability | 1,095 | 1,045 |
Reorganization expenses | 20 | 6,337 |
Other expenses | 4,836 | 5,348 |
Total accrued liabilities | $ 33,491 | $ 46,454 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Provision (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 02, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Current | |||
Federal | $ (286) | ||
State and local | $ 191 | $ 267 | 196 |
Total | 191 | 267 | (90) |
Deferred | |||
Federal | (96) | 20 | 306 |
State and local | (22) | 4 | 5 |
Total | (118) | 24 | 311 |
Total | |||
Federal | (96) | 20 | 20 |
State and local | 169 | 271 | 201 |
Total | $ 73 | $ 291 | $ 221 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 12 Months Ended | ||
Jul. 02, 2022 USD ($) Subsidiary | Jun. 30, 2021 USD ($) | Jun. 30, 2020 USD ($) | |
Income Tax [Line Items] | |||
Statutory federal income tax rate | 21% | ||
Deferred tax assets, valuation allowance | $ 14,300,000 | ||
Operating loss carryforward - Federal | 200,500,000 | ||
Federal tax credit carryforwards | 3,800,000 | ||
Operating loss carryforward - State | $ 8,400,000 | ||
Number of subsidiaries filing income tax returns in the U.S. federal jurisdiction, and various state jurisdictions | Subsidiary | 1 | ||
Unrecognized tax benefits that, if recognized, would affect the effective tax rate | $ 400,000 | ||
Interest paid, net of tax | 0 | $ 0 | $ 0 |
Federal | |||
Income Tax [Line Items] | |||
Operating loss carryforward subject to expiration | 73,700,000 | ||
Operating loss carryforward not subject to expiration | $ 126,800,000 | ||
Federal | Earliest Tax Year | |||
Income Tax [Line Items] | |||
Operating loss carryforward expiration year | 2033 | ||
Deferred tax assets tax credit carryforward expiration year | 2032 | ||
Federal | Latest Tax Year | |||
Income Tax [Line Items] | |||
Operating loss carryforward expiration year | 2037 | ||
Deferred tax assets tax credit carryforward expiration year | 2042 | ||
State and Local Jurisdiction | Earliest Tax Year | |||
Income Tax [Line Items] | |||
Operating loss carryforward expiration year | 2022 | ||
State and Local Jurisdiction | Latest Tax Year | |||
Income Tax [Line Items] | |||
Operating loss carryforward expiration year | 2042 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Taxes Computed at Blended Statutory Federal Income Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 02, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Reconciliation of the expected federal income tax expense at the statutory income tax rate to the actual tax expense | |||
Federal income tax (benefit) expense computed at statutory rate | $ (12,375) | $ 687 | $ (34,883) |
State income taxes, net of related federal tax benefit (excluding state valuation allowance) | (3,051) | 3,133 | (6,874) |
Increase (decrease) in state valuation allowance | 3,202 | (2,919) | 7,033 |
Increase (decrease) in federal valuation allowance | 11,816 | (11,637) | 34,586 |
Federal tax credits | (244) | (113) | (91) |
Stock option expiration or deficiencies | 556 | 250 | 620 |
Warrant issue expenses | 4,324 | ||
Reorganization expenses | 19 | 6,202 | |
Other, net | 150 | 364 | (170) |
Total | $ 73 | $ 291 | $ 221 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jul. 02, 2022 | Jun. 30, 2021 |
Deferred tax assets: | ||
Other payroll and benefits | $ 384 | $ 1,182 |
Inventory reserves | 604 | 931 |
Self-insurance reserves | 2,083 | 2,318 |
Share-based compensation | 1,981 | 1,800 |
Other current assets | 1,007 | 1,160 |
Operating lease liabilities | 41,503 | 52,008 |
Property and equipment | 2,992 | 727 |
Disallowed interest expense | 6,671 | 2,954 |
Net operating loss and tax credits | 54,327 | 41,833 |
Other noncurrent assets | 435 | 556 |
Total gross deferred tax assets | 111,987 | 105,469 |
Deferred tax liabilities: | ||
Inventory costs | 3,855 | 2,924 |
Prepaid supplies | 1,436 | 1,353 |
Operating lease - right of use | 38,681 | 47,627 |
Total gross deferred tax liabilities | 43,972 | 51,904 |
Valuation allowance | $ (68,015) | (53,683) |
Net deferred tax liability | $ (118) |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 02, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | |||
Balance at beginning of the period | $ 147 | $ 147 | $ 147 |
Additions for tax positions of prior years | 0 | 0 | 0 |
Reductions for lapse of statute of limitations | 0 | 0 | 0 |
Balance at end of the period | $ 147 | $ 147 | $ 147 |
Common Stock & Share-Based In_3
Common Stock & Share-Based Incentive Plans - Narrative (Details) - USD ($) | 12 Months Ended | |||||||||||||
Sep. 21, 2022 | May 19, 2021 | May 04, 2021 | Feb. 09, 2021 | Jan. 04, 2021 | Jan. 04, 2021 | Nov. 16, 2020 | Aug. 21, 2017 | Sep. 16, 2014 | Jul. 02, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | Sep. 15, 2021 | Jun. 30, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||||||||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | ||||||||||||
Common stock, shares outstanding | 85,880,108 | 86,204,572 | ||||||||||||
Shares issued in connection with a rights offering | $ 59,959,000 | |||||||||||||
Expected term (years) | 4 years 7 months 6 days | |||||||||||||
Expected stock volatility (as a percent) | 64.80% | |||||||||||||
Risk-free interest rate | 2.40% | |||||||||||||
Threshold percentage on change in ownership of common stock | 4.50% | |||||||||||||
Exercise price of stock options outstanding, low end of range | $ 1.64 | |||||||||||||
Exercise price of stock option outstanding, high end of range | $ 19.36 | |||||||||||||
Liability associated with cash settled awards | $ 200,000 | 1,700,000 | ||||||||||||
Fair value of carried interest | 5,881,000 | 1,851,000 | $ 2,555,000 | |||||||||||
Expected dividend yield (as a percent) | 0% | |||||||||||||
Conversion of convertible debt to common stock | 90,000,000 | |||||||||||||
Share-based Awards | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Weighted average grant date fair value of awards granted (in dollars per share) | $ 0.83 | |||||||||||||
Aggregate intrinsic value of awards exercised (in dollars) | 280,800 | $ 43,600 | $ 0 | |||||||||||
Unrecognized share-based compensation expense (in dollars) | $ 8,500 | |||||||||||||
Weighted average period for recognition of unrecognized share-based compensation expense (in years) | 4 months 28 days | |||||||||||||
CEO Inducement Performance Based Award | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Shares available for grant | 1,230,769 | |||||||||||||
CEO Inducement Service Based Award | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Shares available for grant | 1,538,462 | |||||||||||||
2014 Plan | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Number of shares authorized | 8,500,000 | |||||||||||||
2014 Plan | Share-based Awards | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Shares available for grant | 2,500,000 | |||||||||||||
2008 Plan | Share-based Awards | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Expiration period (in years) | 10 years | |||||||||||||
2008 and 2014 Plan | Restricted Stock Awards | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Awards outstanding | 238,711 | |||||||||||||
Weighted average grant date fair value of awards granted (in dollars per share) | $ 1.94 | |||||||||||||
2008 and 2014 Plan | Restricted Stock Units | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Awards outstanding | 7,634,279 | |||||||||||||
Weighted average grant date fair value of awards granted (in dollars per share) | $ 2.21 | |||||||||||||
Maximum | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Vesting period (in years) | 4 years | 4 years | 4 years | |||||||||||
Maximum | C E O Inducement Award | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Vesting period (in years) | 5 years | |||||||||||||
Maximum | 2014 Plan | Full Value Awards | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Vesting percentage | 5% | |||||||||||||
Maximum | 2008 Plan | Share-based Awards | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Vesting period (in years) | 4 years | |||||||||||||
Maximum | 2008 and 2014 Plan | Restricted Stock Awards | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Vesting period (in years) | 4 years | |||||||||||||
Minimum | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Vesting period (in years) | 3 years | 3 years | 3 years | |||||||||||
Minimum | C E O Inducement Award | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Vesting period (in years) | 1 year | |||||||||||||
Minimum | 2014 Plan | Share-based Awards | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Vesting period (in years) | 1 year | |||||||||||||
Minimum | 2014 Plan | Full Value Awards | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Vesting period (in years) | 1 year | |||||||||||||
Minimum | 2014 Plan | Tenure Awards | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Vesting period (in years) | 3 years | |||||||||||||
Minimum | 2008 Plan | Share-based Awards | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Vesting period (in years) | 1 year | |||||||||||||
Minimum | 2008 and 2014 Plan | Restricted Stock Awards | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Vesting period (in years) | 1 year | |||||||||||||
Common Stock | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Common stock, shares outstanding | 85,880,000 | 86,205,000 | 47,341,000 | 46,683,000 | ||||||||||
Non Employee Directors | Minimum | 2014 Plan | Tenure Awards | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Vesting period (in years) | 1 year | |||||||||||||
Fred Hand, CEO | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Vesting period (in years) | 42 months | |||||||||||||
Fred Hand, CEO | Second Anniversary of Mr. Hand’s Employment | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Vesting description | on the second anniversary of Mr. Hand’s employment by the Company, Mr. Hand’s entitlement to approximately 17.14% (the product of 30% times 24/42) of the Carried Interest will become vested | |||||||||||||
Share based payment from related party carried interest vesting percentage | 17.14% | |||||||||||||
Fred Hand, CEO | Thereafter | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Vesting description | thereafter, Mr. Hand’s entitlement to approximately 0.71% (the product of 30% times 1/42) of the Carried Interest will become vested each month. | |||||||||||||
Share based payment from related party carried interest vesting percentage | 0.71% | |||||||||||||
Carried Interest Agreement | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Expected term (years) | 3 years | |||||||||||||
Expected stock volatility (as a percent) | 70% | |||||||||||||
Risk-free interest rate | 0.34% | |||||||||||||
Discount rate | 25% | |||||||||||||
Fair value of carried interest | $ 500,000 | $ 100,000 | ||||||||||||
Expected dividend yield (as a percent) | 0% | |||||||||||||
Marc Katz | Chief Operating Officer Inducement Performance Based Restricted Stock Units Award | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Shares available for grant | 867,052 | |||||||||||||
Marc Katz | Chief Operating Officer Inducement Service Based Award | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Shares available for grant | 867,052 | |||||||||||||
Paul Metcalf | Chief Merchant Inducement Performance Based Restricted Stock Units Award | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Shares available for grant | 578,035 | |||||||||||||
Paul Metcalf | Chief Merchant Inducement Service Based Award | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Shares available for grant | 289,017 | |||||||||||||
Backstop Commitment Agreement | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Expected term (years) | 5 years | |||||||||||||
Expected stock volatility (as a percent) | 37.98% | |||||||||||||
Risk-free interest rate | 0.36% | |||||||||||||
Discount rate | 30% | |||||||||||||
Osmium Partners LLC | Fred Hand, CEO | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Warrants to purchase shares of common stock | 10,000,000 | |||||||||||||
Share based payment from related party all carry distribution receivable percentage | 30% | |||||||||||||
Common stock outstanding shares percentage at the date of carried interest arrangement | 31.40% | |||||||||||||
Osmium Partners LLC | Backstop Commitment Agreement | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Number of new shares exchanged for business close | 1 | 1 | ||||||||||||
Subscription period for rights offering expired | Feb. 01, 2021 | |||||||||||||
Rights offering expects to close period | Feb. 09, 2021 | |||||||||||||
Osmium Partners LLC | Backstop Commitment Agreement | Warrant | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Warrants to purchase shares of common stock | 10,000,000 | |||||||||||||
Exercise price of warrant | $ 1.65 | |||||||||||||
Warrant right expense | $ 3,500,000 | |||||||||||||
Warrants term | 5 years | |||||||||||||
Osmium Partners LLC | Backstop Commitment Agreement | Backstop Party | Common Stock | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Shares issued in connection with a rights offering | $ 20,200,000 | |||||||||||||
Rights offering proposed to conduct, purchase price per share | $ 1.10 | |||||||||||||
Backstop party receive backstop fee | $ 2,000,000 | 2,000,000 | ||||||||||||
Osmium Partners LLC | Backstop Commitment Agreement | Rights Offering | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Shares issued in connection with a rights offering | 40,000,000 | $ 40,000,000 | ||||||||||||
Rights offering proposed to conduct, purchase price per share | $ 1.10 | |||||||||||||
Proceeds from rights offering | 40,000,000 | |||||||||||||
Non-cash charges | $ 14,500,000 | $ 14,500,000 | ||||||||||||
Osmium Partners LLC | Backstop Commitment Agreement | Rights Offering | Common Stock | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Shares issued in connection with a rights offering | 19,800,000 | |||||||||||||
Osmium Partners LLC | Backstop Commitment Agreement | Rights Offering | Eligible Holders | Common Stock | Maximum | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Shares issued in connection with a rights offering | $ 24,000,000 | $ 24,000,000 | ||||||||||||
Osmium Partners LLC | Backstop Commitment Agreement | Rights Offering | Backstop Party | Common Stock | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Rights offering proposed to conduct, purchase price per share | $ 1.10 | $ 1.10 | $ 1.10 | |||||||||||
Osmium Partners LLC | Backstop Commitment Agreement | Rights Offering | Backstop Party | Common Stock | Maximum | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Shares issued in connection with a rights offering (shares) | 16,000,000 |
Common Stock & Share-Based In_4
Common Stock & Share-Based Incentive Plans - Summary of Transactions Relating to Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Jul. 02, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Number of Shares | ||||
Granted during year | 0 | 0 | ||
Share-based Awards | ||||
Number of Shares | ||||
Options outstanding at the beginning of year | 2,344,743 | 2,694,616 | 3,698,043 | |
Granted during year | 0 | 0 | 12,000 | |
Exercised during the year | (187,538) | (22,308) | 0 | |
Forfeited or expired during year | (1,228,009) | (327,565) | (1,015,427) | |
Options outstanding at the end of year | 929,196 | 2,344,743 | 2,694,616 | 3,698,043 |
Exercisable at July 2, 2022 | 905,633 | |||
Weighted-Average Exercise Price | ||||
Options outstanding at the beginning of year | $ 5.36 | $ 5.33 | $ 5.63 | |
Granted during year | 0 | 0 | 1.64 | |
Exercised during the year | 2.45 | 1.98 | 0 | |
Forfeited or expired during year | 5.03 | 5.37 | 6.22 | |
Options outstanding at the end of year | $ 6.39 | $ 5.36 | $ 5.33 | $ 5.63 |
Weighted-Average Remaining Contractual Term (Years) | ||||
Options outstanding at the end of year | 3 years 25 days | 4 years 8 months 12 days | 6 years 1 month 9 days | 7 years 1 month 6 days |
Aggregate Intrinsic Value | ||||
Options outstanding at the end of year | $ 1,642,845 | $ 0 |
Common Stock & Share-Based In_5
Common Stock & Share-Based Incentive Plans - Summary of Information about Stock Options Outstanding (Details) | 12 Months Ended |
Jul. 02, 2022 $ / shares shares | |
Information about stock options outstanding | |
Low end of range of exercise prices | $ 1.64 |
High end of range of exercise prices | $ 19.36 |
Number Outstanding | shares | 929,196 |
Weighted Average Remaining Contractual Life (Years), Options Outstanding | 3 years 25 days |
Weighted Average Exercise Price Per Share, Options Outstanding | $ 6.39 |
Number Exercisable | shares | 905,633 |
Weighted Average Exercise Price Per Share, Options Exercisable | $ 6.48 |
$1.64 - $2.10 | |
Information about stock options outstanding | |
Low end of range of exercise prices | 1.64 |
High end of range of exercise prices | $ 2.10 |
Number Outstanding | shares | 130,424 |
Weighted Average Remaining Contractual Life (Years), Options Outstanding | 3 years 1 month 28 days |
Weighted Average Exercise Price Per Share, Options Outstanding | $ 2.03 |
Number Exercisable | shares | 125,549 |
Weighted Average Exercise Price Per Share, Options Exercisable | $ 2.05 |
$2.45 - $3.12 | |
Information about stock options outstanding | |
Low end of range of exercise prices | 2.45 |
High end of range of exercise prices | $ 3.12 |
Number Outstanding | shares | 77,393 |
Weighted Average Remaining Contractual Life (Years), Options Outstanding | 3 years 8 months 15 days |
Weighted Average Exercise Price Per Share, Options Outstanding | $ 2.58 |
Number Exercisable | shares | 77,393 |
Weighted Average Exercise Price Per Share, Options Exercisable | $ 2.58 |
$3.25 - $3.25 | |
Information about stock options outstanding | |
Low end of range of exercise prices | 3.25 |
High end of range of exercise prices | $ 3.25 |
Number Outstanding | shares | 105,808 |
Weighted Average Remaining Contractual Life (Years), Options Outstanding | 4 years 6 months |
Weighted Average Exercise Price Per Share, Options Outstanding | $ 3.25 |
Number Exercisable | shares | 87,120 |
Weighted Average Exercise Price Per Share, Options Exercisable | $ 3.25 |
$5.45 - $5.59 | |
Information about stock options outstanding | |
Low end of range of exercise prices | 5.45 |
High end of range of exercise prices | $ 5.59 |
Number Outstanding | shares | 53,293 |
Weighted Average Remaining Contractual Life (Years), Options Outstanding | 1 year 4 months 17 days |
Weighted Average Exercise Price Per Share, Options Outstanding | $ 5.54 |
Number Exercisable | shares | 53,293 |
Weighted Average Exercise Price Per Share, Options Exercisable | $ 5.54 |
$5.95 - $5.95 | |
Information about stock options outstanding | |
Low end of range of exercise prices | 5.95 |
High end of range of exercise prices | $ 5.95 |
Number Outstanding | shares | 200,000 |
Weighted Average Remaining Contractual Life (Years), Options Outstanding | 2 years 11 months 8 days |
Weighted Average Exercise Price Per Share, Options Outstanding | $ 5.95 |
Number Exercisable | shares | 200,000 |
Weighted Average Exercise Price Per Share, Options Exercisable | $ 5.95 |
$6.71 - $6.71 | |
Information about stock options outstanding | |
Low end of range of exercise prices | 6.71 |
High end of range of exercise prices | $ 6.71 |
Number Outstanding | shares | 88,176 |
Weighted Average Remaining Contractual Life (Years), Options Outstanding | 4 years 14 days |
Weighted Average Exercise Price Per Share, Options Outstanding | $ 6.71 |
Number Exercisable | shares | 88,176 |
Weighted Average Exercise Price Per Share, Options Exercisable | $ 6.71 |
$7.90 - $7.90 | |
Information about stock options outstanding | |
Low end of range of exercise prices | 7.90 |
High end of range of exercise prices | $ 7.90 |
Number Outstanding | shares | 134,772 |
Weighted Average Remaining Contractual Life (Years), Options Outstanding | 3 years 2 months 1 day |
Weighted Average Exercise Price Per Share, Options Outstanding | $ 7.90 |
Number Exercisable | shares | 134,772 |
Weighted Average Exercise Price Per Share, Options Exercisable | $ 7.90 |
$7.91 - $14.72 | |
Information about stock options outstanding | |
Low end of range of exercise prices | 7.91 |
High end of range of exercise prices | $ 14.72 |
Number Outstanding | shares | 86,372 |
Weighted Average Remaining Contractual Life (Years), Options Outstanding | 1 year 2 months 15 days |
Weighted Average Exercise Price Per Share, Options Outstanding | $ 11.40 |
Number Exercisable | shares | 86,372 |
Weighted Average Exercise Price Per Share, Options Exercisable | $ 11.40 |
$18.42 - $18.42 | |
Information about stock options outstanding | |
Low end of range of exercise prices | 18.42 |
High end of range of exercise prices | $ 18.42 |
Number Outstanding | shares | 22,596 |
Weighted Average Remaining Contractual Life (Years), Options Outstanding | 2 years 1 month 24 days |
Weighted Average Exercise Price Per Share, Options Outstanding | $ 18.42 |
Number Exercisable | shares | 22,596 |
Weighted Average Exercise Price Per Share, Options Exercisable | $ 18.42 |
$19.36 - $19.36 | |
Information about stock options outstanding | |
Low end of range of exercise prices | 19.36 |
High end of range of exercise prices | $ 19.36 |
Number Outstanding | shares | 30,362 |
Weighted Average Remaining Contractual Life (Years), Options Outstanding | 2 years 7 months 9 days |
Weighted Average Exercise Price Per Share, Options Outstanding | $ 19.36 |
Number Exercisable | shares | 30,362 |
Weighted Average Exercise Price Per Share, Options Exercisable | $ 19.36 |
Common Stock & Share-Based In_6
Common Stock & Share-Based Incentive Plans - Summary of Information about Restricted and Performance Stock Units and Awards Granted and Outstanding (Details) - $ / shares | 12 Months Ended | ||
Jul. 02, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Restricted and Performance Stock Units | |||
Number of Shares | |||
Outstanding at the beginning of year | 3,021,924 | 57,693 | 57,693 |
Granted during year | 5,580,713 | 3,021,924 | 57,693 |
Vested during year | (619,264) | (57,693) | (57,693) |
Forfeited during year | (349,094) | ||
Outstanding at the end of year | 7,634,279 | 3,021,924 | 57,693 |
Weighted-Average Fair Value at Date of Grant | |||
Outstanding at the beginning of year | $ 2.83 | $ 3.25 | $ 3.25 |
Granted during year | 2.02 | 2.81 | 1.58 |
Vested during year | 3.24 | 1.91 | 1.58 |
Forfeited during year | 2.72 | ||
Outstanding at the end of year | $ 2.21 | $ 2.83 | $ 3.25 |
Restricted and Performance Stock Awards | |||
Number of Shares | |||
Outstanding at the beginning of year | 1,708,368 | 1,979,480 | 1,839,861 |
Granted during year | 1,121,250 | 1,422,927 | |
Vested during year | (800,984) | (595,190) | (446,987) |
Forfeited during year | (668,673) | (797,172) | (836,321) |
Outstanding at the end of year | 238,711 | 1,708,368 | 1,979,480 |
Weighted-Average Fair Value at Date of Grant | |||
Outstanding at the beginning of year | $ 1.94 | $ 2.43 | $ 3.36 |
Granted during year | 1.50 | 1.63 | |
Vested during year | 1.71 | 2.26 | 3.55 |
Forfeited during year | 2.25 | 2.29 | 2.38 |
Outstanding at the end of year | $ 1.84 | $ 1.94 | $ 2.43 |
Common Stock & Share-Based In_7
Common Stock & Share-Based Incentive Plans - Summary of Activity of Cash Settled Awards (Details) - Cash Settled Awards - shares | 12 Months Ended | ||
Jul. 02, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share-based incentive plans | |||
Outstanding at the beginning of year | 693,247 | 1,150,280 | 0 |
Granted during year | 565,492 | 1,419,896 | |
Vested during year | (177,719) | (208,328) | |
Forfeited during year | (286,493) | (248,705) | (269,616) |
Outstanding at the end of year | 794,527 | 693,247 | 1,150,280 |
Performance Based | |||
Share-based incentive plans | |||
Outstanding at the beginning of year | 143,673 | 287,348 | 0 |
Granted during year | 287,348 | ||
Forfeited during year | (84,223) | (143,675) | |
Outstanding at the end of year | 59,450 | 143,673 | 287,348 |
Service Based | |||
Share-based incentive plans | |||
Outstanding at the beginning of year | 549,574 | 862,932 | 0 |
Granted during year | 565,492 | 1,132,548 | |
Vested during year | (177,719) | (208,328) | |
Forfeited during year | (202,270) | (105,030) | (269,616) |
Outstanding at the end of year | 735,077 | 549,574 | 862,932 |
Common Stock & Share-Based In_8
Common Stock & Share-Based Incentive Plans - Schedule of Recognized Share-Based Compensation Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 02, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share-based incentive plans | |||
Share-based compensation | $ 5,920 | $ 2,054 | $ 2,720 |
Amounts capitalized in inventory | (1,194) | (410) | (681) |
Share Based Compensation Amortization | |||
Share-based incentive plans | |||
Share-based compensation | 5,881 | 1,851 | 2,555 |
Cost of Sales | |||
Share-based incentive plans | |||
Share-based compensation | $ 1,233 | $ 613 | $ 846 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 USD ($) | Jul. 02, 2022 USD ($) Lease | Jun. 30, 2021 USD ($) | Jun. 30, 2020 USD ($) | |
Lessee Lease Description [Line Items] | ||||
Existence of option to renew | true | |||
Sale leaseback, consider received | $ 68,500,000 | |||
Sale and leaseback, net value of properties sold | 18,900,000 | |||
Sale and leaseback, gain recognized | $ 49,600,000 | $ 49,639,000 | ||
Number of operating leases under sale lease back | Lease | 2 | |||
Operating lease not yet commenced | $ 0 | 0 | ||
Rent expense for real estate lease | 77,300,000 | 73,500,000 | $ 118,300,000 | |
Total lease cost | $ 77,417,000 | 73,759,000 | ||
Accelerated recognition of rent expense due to abandonment | $ 5,600,000 | |||
Impairment for operating lease right-of-use assets | $ 51,626,000 | |||
Corporate Office | ||||
Lessee Lease Description [Line Items] | ||||
Sale lease back, lease term | 10 years | |||
Sale lease back fixed rent payable | $ 7,600,000 | |||
Distribution Center Facilities | ||||
Lessee Lease Description [Line Items] | ||||
Sale lease back, lease term | 2 years 6 months | |||
Sales-type lease, existence of option to extend [true false] | true | |||
Option to extend lease term | 1 year | |||
Sale lease back fixed rent payable | $ 8,600,000 | |||
Minimum | Distribution Center and Retail Store Location | ||||
Lessee Lease Description [Line Items] | ||||
Operating lease term of contract | 1 year | |||
Maximum | Distribution Center and Retail Store Location | ||||
Lessee Lease Description [Line Items] | ||||
Operating lease term of contract | 10 years | |||
Maximum | Equipment | ||||
Lessee Lease Description [Line Items] | ||||
Finance lease term of contract | 5 years |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 02, 2022 | Jun. 30, 2021 | |
Leases [Abstract] | ||
Operating lease cost | $ 67,724 | $ 62,617 |
Variable lease cost | 9,568 | 10,924 |
Amortization of right-of-use assets | 124 | 210 |
Interest on lease liabilities | 1 | 8 |
Total lease cost | $ 77,417 | $ 73,759 |
Leases - Schedule of Additional
Leases - Schedule of Additional Information Related to Leases (Details) | Jul. 02, 2022 | Jun. 30, 2021 |
Weighted average remaining lease term (in years) | ||
Operating leases | 4 years 1 month 6 days | 4 years 7 months 6 days |
Finance leases | 8 months 12 days | |
Operating leases | 9.10% | 8.50% |
Finance leases | 0% | 2.40% |
Leases - Schedule of Other Info
Leases - Schedule of Other Information Related to Leases Including Supplemental Disclosures of Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 02, 2022 | Jun. 30, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 75,132 | $ 64,496 |
Operating cash flows from finance leases | 1 | 9 |
Financing cash flows from finance leases | 124 | 217 |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 15,522 | $ (107,497) |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Lease Liabilities (Details) $ in Thousands | Jul. 02, 2022 USD ($) |
Operating Leases Fiscal year: | |
2023 | $ 65,051 |
2024 | 48,755 |
2025 | 35,474 |
2026 | 22,246 |
2027 | 16,604 |
Thereafter | 15,023 |
Total lease payments | 203,153 |
Less: Interest | 34,969 |
Total lease liabilities | 168,184 |
Less: Current lease liabilities | 52,258 |
Non-current lease liabilities | $ 115,926 |
401(K) Profit Sharing Plan - Na
401(K) Profit Sharing Plan - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 02, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Profit sharing plan | |||
Contributions expensed | $ 1.4 | $ 1.4 | $ 1.4 |
Full-time Employees | |||
Profit sharing plan | |||
Eligible service period (in months) | 1 month | ||
Part-time Employees | |||
Profit sharing plan | |||
Eligible service period (in months) | 12 months | ||
Eligible minimum service period (in hours) | 1000 hours | ||
Minimum | |||
Profit sharing plan | |||
Employee's contribution (as a percent) | 1% | ||
Maximum | |||
Profit sharing plan | |||
Employee's contribution (as a percent) | 75% | ||
Match contribution by employer (as a percent) | 4% |
Earnings Per Common Share - Com
Earnings Per Common Share - Computation of Basic and Diluted Earnings (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jul. 02, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |||
Net earnings /(loss) | $ (59,003) | $ 2,982 | $ (166,328) |
Less: Income to participating securities | (135) | ||
Net earnings/(loss) attributable to common shares | $ (59,003) | $ 2,847 | $ (166,328) |
Weighted average common shares outstanding—basic | 84,885 | 60,584 | 45,208 |
Effect of dilutive stock equivalents | 1,105 | ||
Weighted average common shares outstanding—dilutive | 84,885 | 61,689 | 45,208 |
Net earnings/(loss) per common share—basic | $ (0.70) | $ 0.05 | $ (3.68) |
Net earnings/(loss) per common share—diluted | $ (0.70) | $ 0.05 | $ (3.68) |
Earnings Per Common Share - Nar
Earnings Per Common Share - Narrative (Details) - $ / shares shares in Millions | 12 Months Ended | |||
Jul. 02, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | Feb. 09, 2021 | |
Share-based Awards | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Weighted average shares excluded from computation of diluted earnings per share | 4.5 | 2.8 | 3.9 | |
Backstop Commitment Agreement | Osmium Partners LLC | Warrant | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Warrants to purchase common stock | 10 | |||
Exercise price of warrant | $ 1.65 | |||
Warrants term | 5 years |
Related Party - Narrative (Deta
Related Party - Narrative (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||
Feb. 09, 2021 USD ($) $ / shares shares | Jan. 04, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) Director | Nov. 16, 2020 USD ($) $ / shares | Jun. 30, 2021 USD ($) | Nov. 15, 2020 USD ($) | |
Related Party Transaction [Line Items] | ||||||
Shares issued in connection with a rights offering | $ 59,959 | |||||
Plan of Reorganization | Rights Offering | ||||||
Related Party Transaction [Line Items] | ||||||
Proceeds from rights offering | $ 40,000 | |||||
Osmium Partners LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Number of additional shares beneficially own | shares | 2,026,840 | |||||
Osmium Partners LLC | Backstop Commitment Agreement | Backstop Party | Common Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Rights offering proposed to conduct, purchase price per share | $ / shares | $ 1.10 | |||||
Shares issued in connection with a rights offering | $ 20,200 | |||||
Osmium Partners LLC | Backstop Commitment Agreement | Rights Offering | ||||||
Related Party Transaction [Line Items] | ||||||
Rights offering proposed to conduct, purchase price per share | $ / shares | $ 1.10 | |||||
Shares issued in connection with a rights offering | 40,000 | $ 40,000 | ||||
Proceeds from rights offering | $ 40,000 | |||||
Osmium Partners LLC | Backstop Commitment Agreement | Rights Offering | Common Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Shares issued in connection with a rights offering | 19,800 | |||||
Osmium Partners LLC | Backstop Commitment Agreement | Rights Offering | Eligible Holders | Maximum | Common Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Shares issued in connection with a rights offering | $ 24,000 | $ 24,000 | ||||
Osmium Partners LLC | Backstop Commitment Agreement | Rights Offering | Backstop Party | Common Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Rights offering proposed to conduct, purchase price per share | $ / shares | $ 1.10 | $ 1.10 | ||||
Osmium Partners LLC | Backstop Commitment Agreement | Rights Offering | Backstop Party | Maximum | Common Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Shares issued in connection with a rights offering (shares) | shares | 16,000,000 | |||||
Tensile Capital Partners Master Fund LP | ||||||
Related Party Transaction [Line Items] | ||||||
Number of shares deemed to beneficially own | shares | 30,158,593 | |||||
Tensile Capital Partners Master Fund LP | Commitment Letter | ||||||
Related Party Transaction [Line Items] | ||||||
Agreed subordinated debt financing | $ 25,000 | |||||
Alter Domus (US) LLC and Tensile Capital Partners Master Fund LP | Term Loan Credit Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Due to related party | $ 25,000 | |||||
Osmium Partners and Larkspur SPV | Plan of Reorganization and Backstop Commitment Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Number of directors entitled to appoint | Director | 3 | |||||
Number of additional directors entitled to appoint | Director | 1 | |||||
Larkspur SPV | ||||||
Related Party Transaction [Line Items] | ||||||
Percentage of outstanding shares beneficially owned | 31.40% | |||||
Larkspur SPV | Backstop Commitment Agreement | Rights Offering | Common Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Shares issued in connection with a rights offering (shares) | shares | 18,340,411 | |||||
Proceeds from rights offering | $ 20,200 | |||||
Larkspur SPV | Plan of Reorganization and Backstop Commitment Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Warrant to purchase additional shares | shares | 10,000,000 | |||||
Exercise price of warrant | $ / shares | $ 1.65 | |||||
Larkspur SPV | Plan of Reorganization and Backstop Commitment Agreement | Rights Offering | ||||||
Related Party Transaction [Line Items] | ||||||
Additional shares issued | shares | 1,818,182 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 21, 2022 | Sep. 20, 2022 | Sep. 12, 2022 | Sep. 09, 2022 | May 09, 2022 | Jul. 02, 2022 |
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 1% | |||||
New A B L Credit Agreement [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Line Of credit facility borrowing capacity | $ 7,500 | |||||
New A B L Credit Agreement [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 0.10% | |||||
New A B L Credit Agreement [Member] | Maximum [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 1.75% | |||||
New A B L Credit Agreement [Member] | Minimum [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 1.25% | |||||
First-In Last-Out Term Loan A Facility [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 3% | |||||
First-In Last-Out Term Loan B Facility [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Line Of credit facility borrowing capacity | $ 5,000 | |||||
First-In Last-Out Term Loan B Facility [Member] | Maximum [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 9% | |||||
First-In Last-Out Term Loan B Facility [Member] | Minimum [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 8.50% | |||||
Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument principal amount | $ 6,930,000 | |||||
Shares issued up to convertible debt | 90 | |||||
Subsequent Event [Member] | Common Stock [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 4.50% | |||||
Subsequent Event [Member] | Special Purpose Entity SPV [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Shares issued up to convertible debt | 90 | |||||
Percentage of diluted voting power of common stock | 75% | |||||
Subsequent Event [Member] | Special Purpose Entity SPV [Member] | Common Stock [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Conversion price per share | $ 0.077 | |||||
Shares issued | 415,584,415 | |||||
Subsequent Event [Member] | SPV and Management Purchasers [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Percentage of diluted voting power of common stock | 81% | |||||
Subsequent Event [Member] | Larkspur S P V [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Common Stock, Voting Rights | Osmium Larkspur has agreed to vote the 20,158,593 shares of the Company's common stock | |||||
Subsequent Event [Member] | New A B L Credit Agreement [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Proceeds of the private placement repay | $ 7,500 | |||||
Payment of transaction costs | 5,000 | |||||
Subsequent Event [Member] | First In Last Out Term Loan C Facility [Member] | Special Purpose Entity SPV [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument principal amount | 7,500 | |||||
Subsequent Event [Member] | Junior Secured Convertible Notes [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 6.50% | |||||
Subsequent Event [Member] | Junior Secured Convertible Notes [Member] | Special Purpose Entity SPV [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument principal amount | 24,500 | |||||
Subsequent Event [Member] | Management Convertible Notes [Member] | Special Purpose Entity SPV [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument principal amount | $ 3,000 | |||||
Subsequent Event [Member] | Management Convertible Notes [Member] | Special Purpose Entity SPV [Member] | Common Stock [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Shares issued | 38,961,039 | |||||
Subsequent Event [Member] | First In Last Out C Convertible Notes [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 6.50% |
Subsequent Events - Schedule of
Subsequent Events - Schedule of Revolving Credit Facility Bear Interest at Variable Rate Based Upon Average Quarterly Availability (Details) - Subsequent Event [Member] - New A B L Credit Agreement [Member] | Jul. 11, 2022 |
Greater Than Or Equal To $50,000,000 [Member] | Applicable Margin For SOFR Loans [Member] | |
Subsequent Event [Line Items] | |
Debt instrument, basis spread on variable rate | 1.75% |
Greater Than Or Equal To $50,000,000 [Member] | Applicable Margin For Base Rate Loans [Member] | |
Subsequent Event [Line Items] | |
Debt instrument, basis spread on variable rate | 0.75% |
Lesser Than $50,000,000 but Greater Than Or Equal To $30,000,000 [Member] | Applicable Margin For SOFR Loans [Member] | |
Subsequent Event [Line Items] | |
Debt instrument, basis spread on variable rate | 2% |
Lesser Than $50,000,000 but Greater Than Or Equal To $30,000,000 [Member] | Applicable Margin For Base Rate Loans [Member] | |
Subsequent Event [Line Items] | |
Debt instrument, basis spread on variable rate | 1% |
Lesser Than $30,000,000 [Member] | Applicable Margin For SOFR Loans [Member] | |
Subsequent Event [Line Items] | |
Debt instrument, basis spread on variable rate | 2.25% |
Lesser Than $30,000,000 [Member] | Applicable Margin For Base Rate Loans [Member] | |
Subsequent Event [Line Items] | |
Debt instrument, basis spread on variable rate | 1.25% |