Leases |
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| Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases |
Note 6: Leases
The following table details the Company's right of use assets and lease liabilities as of September 30, 2023 and 2022, respectively (in $000’s):
The weighted average remaining lease term for operating leases is 10.5 years. The Company’s weighted average discount rate for operating leases is 9.47%. Total cash payments for operating leases for the year ended September 30, 2023 were approximately $13.2 million.
The weighted average remaining lease term for finance leases is 27.6 years. The Company’s weighted average discount rate for finance leases is 11.69%. Total cash payments for finance leases for the year ended September 30, 2023 were approximately $2.4 million.
As discussed in Note 4, on June 28, 2022, Precision Marshall acquired all of the capital stock of Kinetic and certain Real Estate assets used in its operations. As of the date of execution of the Real Estate purchase, Precision Marshall sold the Real Estate, in exchange for which Precision Marshall entered into a 20-year lease, with two options to renew for an additional five years each, which the Company is reasonably certain to exercise. This transaction is being treated as a failed sales and leaseback arrangement for accounting purposes, as described in ASC 842 “Leases”.
As discussed in Note 4, on July 1, 2022, Marquis acquired certain assets and intellectual property related to the carpet-backing operations of Better Backers. In connection with the acquisition, Marquis entered into two 20-year building leases, with two options to renew for an additional five years each, which the Company is reasonably certain to exercise. These leases are being treated as finance leases for accounting purposes, as described in ASC 842 “Leases”.
As discussed in Note 4, on January 18, 2023, Live Ventures acquired 100% of the issued and outstanding equity interests of Flooring Liquidators, Inc., Elite Builder Services, Inc., 7 Day Stone, Inc., Floorable, LLC, K2L Leasing, LLC, and SJ & K Equipment, Inc. (collectively, the “Acquired Companies”). The Acquired Companies are leading retailers and installers of floors, carpets, and countertops to consumers, builders and contractors in California and Nevada. In connection with the acquisition, the Company acquired several real and personal property leases, which are a combination of both operating and finance leases, as described in ASC 842 “Leases”.
As discussed in Note 4, on July 20, 2023, the Company acquired PMW, a Kentucky-based Metal Stamping and Value-Added Manufacturing Company. As of the date of execution, the PMW sold two real properties in exchange for which PMW entered into a 20-year lease, with two options to renew for an additional five years each, which the Company is reasonably certain to exercise. This transaction is being treated as a failed sales and leaseback for accounting purposes, as described in ASC 842 “Leases”.
The Company records finance lease right of use assets as property and equipment. The balance, as of September 30, 2023 and September 30, 2022 is as follows (in $000’s):
Total present value of future lease payments of operating leases as of September 30, 2023 (in 000’s):
Total present value of future lease payments of finance leases as of September 30, 2023 (in 000’s):
During the year ended September 30, 2022, in connection with the winding down of ApplianceSmart's operations (see Note 17), the Company recorded a loss on write-off of an ROU of approximately $522,000 related to the decision to close the one remaining ApplianceSmart retail location in operation. There were no such transactions during the year ended September 30, 2023.
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| Leases |
Note 6: Leases
The following table details the Company's right of use assets and lease liabilities as of September 30, 2023 and 2022, respectively (in $000’s):
The weighted average remaining lease term for operating leases is 10.5 years. The Company’s weighted average discount rate for operating leases is 9.47%. Total cash payments for operating leases for the year ended September 30, 2023 were approximately $13.2 million.
The weighted average remaining lease term for finance leases is 27.6 years. The Company’s weighted average discount rate for finance leases is 11.69%. Total cash payments for finance leases for the year ended September 30, 2023 were approximately $2.4 million.
As discussed in Note 4, on June 28, 2022, Precision Marshall acquired all of the capital stock of Kinetic and certain Real Estate assets used in its operations. As of the date of execution of the Real Estate purchase, Precision Marshall sold the Real Estate, in exchange for which Precision Marshall entered into a 20-year lease, with two options to renew for an additional five years each, which the Company is reasonably certain to exercise. This transaction is being treated as a failed sales and leaseback arrangement for accounting purposes, as described in ASC 842 “Leases”.
As discussed in Note 4, on July 1, 2022, Marquis acquired certain assets and intellectual property related to the carpet-backing operations of Better Backers. In connection with the acquisition, Marquis entered into two 20-year building leases, with two options to renew for an additional five years each, which the Company is reasonably certain to exercise. These leases are being treated as finance leases for accounting purposes, as described in ASC 842 “Leases”.
As discussed in Note 4, on January 18, 2023, Live Ventures acquired 100% of the issued and outstanding equity interests of Flooring Liquidators, Inc., Elite Builder Services, Inc., 7 Day Stone, Inc., Floorable, LLC, K2L Leasing, LLC, and SJ & K Equipment, Inc. (collectively, the “Acquired Companies”). The Acquired Companies are leading retailers and installers of floors, carpets, and countertops to consumers, builders and contractors in California and Nevada. In connection with the acquisition, the Company acquired several real and personal property leases, which are a combination of both operating and finance leases, as described in ASC 842 “Leases”.
As discussed in Note 4, on July 20, 2023, the Company acquired PMW, a Kentucky-based Metal Stamping and Value-Added Manufacturing Company. As of the date of execution, the PMW sold two real properties in exchange for which PMW entered into a 20-year lease, with two options to renew for an additional five years each, which the Company is reasonably certain to exercise. This transaction is being treated as a failed sales and leaseback for accounting purposes, as described in ASC 842 “Leases”.
The Company records finance lease right of use assets as property and equipment. The balance, as of September 30, 2023 and September 30, 2022 is as follows (in $000’s):
Total present value of future lease payments of operating leases as of September 30, 2023 (in 000’s):
Total present value of future lease payments of finance leases as of September 30, 2023 (in 000’s):
During the year ended September 30, 2022, in connection with the winding down of ApplianceSmart's operations (see Note 17), the Company recorded a loss on write-off of an ROU of approximately $522,000 related to the decision to close the one remaining ApplianceSmart retail location in operation. There were no such transactions during the year ended September 30, 2023.
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