Restructuring Provision

12 Months Ended

Jan. 31, 2022

NOTE 5 – RESTRUCTURING PROVISION

On June 29, 2020, the Company committed to a Restructuring Plan as part of the Company’s corporate initiatives to reduce operating expenses and adjust cash flows in light of the ongoing economic challenges resulting from the COVID-19 pandemic and its impact on the Company’s business. The Restructuring Plan was substantially completed during the second quarter of fiscal 2021, although cash severance will be paid over a period of time with the final $0.2 million to be paid in fiscal 2023. Of the total $12.6 million provision incurred in fiscal 2021, $8.5 million has been paid out through fiscal 2022 ($6.7 million of which was paid out during fiscal 2021), approximately $0.2 million is expected to result in cash payments during fiscal 2023 with the remaining $0.1 million resulting in non-cash use ($0.7 million and $2.1 million had been used in fiscal 2022 and 2021, respectively).

A summary rollforward of the provision related to the Company’s corporate initiatives, including the provision associated with the Restructuring Plan, is as follows for the twelve months ended January 31, 2022 (in thousands):


	Balance January 31, 2021		Recovery			Non-Cash Use			Cash Payments			Balance January 31, 2022
Restructuring Plan:
Severance and Employee Related (1)	$	2,378	$	(133	)	$	(343	)	$	(1,722	)	$	180
Other		51		(5	)		(36	)		(10	)		—
Other Corporate Initiatives:
Severance and Employee Related		—		—			—			—			—
Inventory (3)		407		—			(300	)		—			107
Accounts receivable (4)		926		(926	)		—			—			—
Other		19		—			—			(19	)		—
Total	$	3,781	$	(1,064	)	$	(679	)	$	(1,751	)	$	287

A summary rollforward of the provision related to the Company's corporate initiatives, including the provision associated with the Restructuring Plan, is as follows for the twelve months ended January 31, 2021 (in thousands):


	Balance January 31, 2020		Provision		Non-Cash Use			Cash Payments			Balance January 31, 2021
Restructuring Plan:
Severance and Employee Related	$	—	$	7,331	$	—		$	(4,953	)	$	2,378
Other (2)		—		975		(315	)		(609	)		51
Other Corporate Initiatives:
Severance and Employee Related		—		923		—			(923	)		—
Inventory (3)		—		691		(284	)		—			407
Accounts receivable (4)		—		926		—			—			926
Other (2)		—		1,783		(1,517	)		(247	)		19
Total	$	—	$	12,629	$	(2,116	)	$	(6,732	)	$	3,781

The following amounts are included in the Consolidated Balance Sheet at January 31, 2022:

(1)

$0.2 million included in Accrued payroll and benefits.

(2)

Balance included in Accrued liabilities. Included in non-cash use is approximately a $1.5 million write-off related to unrefunded deposits for a canceled global customer event.

(3)

Reserve included in Inventories.

(4)

During fiscal 2022, the Company collected fully on a customer account previously reserved as part of the corporate initiative. The reserve had been included in Trade receivables, net.

The corporate initiative costs by operating segment are as follows:


	For the Twelve Months Ended January 31, 2022 (Income)			For the Twelve Months Ended January 31, 2021 Provision
Watch and Accessory Brands:
United States	$	(99	)	$	7,994
International		(965	)		4,635
Total Watch and Accessory Brands		(1,064	)		12,629
Total Company Stores		—			—
Total Consolidated	$	(1,064	)	$	12,629

Cost of sales	$	-		$	735
Selling, general and administrative		(1,064	)		11,894
Total	$	(1,064	)	$	12,629