Annual report pursuant to Section 13 and 15(d)

Note 13 - Commitments and Contingencies

v3.19.3.a.u2
Note 13 - Commitments and Contingencies
12 Months Ended
Oct. 31, 2019
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]
Note
13.
Commitments and Contingencies
 
Operating Leases
 
The Company leases facilities, equipment and vehicles under non-cancelable operating leases with various expiration dates through
April 2029.
Monthly lease payments range from
$100
to
$19,004.
Total rental expense for Successor period from
December 6, 2018
through
October 31, 2019,
the Predecessor period from
November 1, 2018
through
December 5, 2018,
the fiscal year ended
October 31, 2018,
was
$4.4
million,
$0.7
million,
$4.8
million, respectively, which also includes the Company’s month-to-month leases.
 
The following is a summary of future minimum lease payments for the years ended
October 31:
 
(in thousands)
 
Future Payments
 
2020
  $
2,997
 
2021
   
2,262
 
2022
   
1,928
 
2023
   
1,268
 
2024    
727
 
Thereafter
   
1,165
 
Total   $
10,347
 
 
Capital Leases
 
The Company has a limited number of capital leases related to land and buildings. The capital lease obligation recorded as of
October 31, 2019
was
$0.6
million while the net book value of the leased assets as of
October 31, 2018
was
$0.8
million.
 
The following is a summary of future minimum lease payments together with the present value of those payments for the years ended
October 31:
 
(in thousands)
 
Future Payments
 
2020
  $
105
 
2021
   
113
 
2022
   
115
 
2023
   
118
 
2024
   
120
 
Thereafter
   
60
 
Total minimum lease payments
   
631
 
Less the amount representing interest
   
(63
)
Present value of minimum lease payments
  $
568
 
 
Insurance
 
As of
October 31, 2019,
and
October 31, 2018,
the Company was partially insured for automobile, general and worker's compensation liability with the following deductibles (per occurrence):
 
   
Deductible
 
General liability
  $
250,000
 
General liability (in the case of accident and driver has completed NBIS driver training)
  $
125,000
 
Automobile
  $
100,000
 
Workers' compensation
  $
250,000
 
 
The Successor and Predecessor had accrued
$5.0
million and
$3.2
million, as of
October 31, 2019
and
October 31, 2018,
respectively, for claims incurred but
not
reported and estimated losses reported, which is included in accrued expenses and other current liabilities in the accompanying consolidated balance sheet.
 
The Company offers employee health benefits via a partially self-insured medical benefit plan. Participant claims exceeding certain limits are covered by a stop-loss insurance policy. As of
October 31, 2019,
and
October 31, 2018,
the Company had accrued
$1.1
million and
$1.0
million, respectively, for health claims incurred but
not
reported based on historical claims amounts and average lag time. These accruals are included in accrued expenses and other current liabilities in the accompanying consolidated balance sheet. The Company contracts with a
third
-party administrator to process claims, remit benefits, etc. The
third
-party administrator requires the Company to maintain a bank account to facilitate the administration of claims. The account balance was
$0.3
million and
$0.3
million, as of
October 31, 2019
and
October 31, 2018,
respectively, and is included in cash and cash equivalents in the accompanying consolidated balance sheet.
 
Litigation
 
The Company is currently involved in certain legal proceedings and other disputes with
third
parties that have arisen in the ordinary course of business. Management believes that the outcomes of these matters will
not
have a material impact on the Company’s financial statements and does
not
believe that any amounts need to be recorded for contingent liabilities in the Company’s consolidated balance sheet.
 
Letters of credit
 
The ABL Credit Agreement provides for up to
$7.5
million of standby letters of credit. As of
October 31, 2019,
total outstanding letters of credit totaled
$1.5
million, the vast majority of which had been committed to the Company’s general liability insurance provider.