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Commitments And Contingencies
12 Months Ended
Aug. 31, 2020
Commitments And Contingencies [Abstract]  
Commitments And Contingencies





9.COMMITMENTS AND CONTINGENCIES



Warehouse Outsourcing Contract



Effective July 1, 2016, we entered into a warehousing services agreement with an independent warehouse and distribution company to provide product kitting, warehousing, and order fulfillment services at a facility in Des Moines, Iowa.  Under the terms of this contract, we paid a fixed charge of approximately $19,000 per month for account management services and variable charges for other warehousing services based on specified activities, including shipping charges.  The warehouse charges may be increased each year of the contract based upon changes in the Employment Cost Index.  The original warehousing and distribution contract expired on June 30, 2019, and we extended the contract with essentially the same terms until June 30, 2020.  We are currently negotiating a new warehouse services agreement with the same facility in Des Moines and expect that contract to be completed in fiscal 2021.  Until a new agreement is reached, we are accounting for these services on a month-to-month basis.



During fiscal years 2020, 2019, and 2018, we expensed $2.1 million, $3.1 million, and $2.9 million for services provided under the terms of our warehouse and distribution outsourcing contract.  The total amount expensed each year includes freight charges, which are billed to us based upon activity.  Freight charges included in the warehouse and distribution outsourcing costs totaled $1.3 million, $2.1 million, and $1.9 million during the fiscal years ended August 31, 2020, 2019, and 2018.  Because of the variable component of the agreement, our payments for warehouse and distribution services may fluctuate in the future due to changes in sales and levels of specified activities.



Purchase Commitments



During the normal course of business, we issue purchase orders to various vendors for products and services.  At August 31, 2020, we had open purchase commitments totaling $4.8 million for products and services to be delivered primarily in fiscal 2021.



Letters of Credit



At August 31, 2020 and 2019, we had standby letters of credit totaling $10,000 and $0.1 million.  These letters of credit were required to secure commitments for certain insurance policies.  No amounts were drawn on the letters of credit at either August 31, 2020 or August 31, 2019.



Legal Matters and Loss Contingencies



We are the subject of certain legal actions, which we consider routine to our business activities.  At August 31, 2020, we believe that, after consultation with legal counsel, any potential liability to us under these other actions will not materially affect our financial position, liquidity, or results of operations.