Annual report [Section 13 and 15(d), not S-K Item 405]

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2024

NOTE 3. DISCONTINUED OPERATIONS

On February 29, 2024, the Company and Everest/Sapphire Acquisition, LLC, its wholly-owned subsidiary, completed the sale to Bullseye Acquisitions, LLC, an affiliate of JDH Capital Company, of all of the equity associated with the Company’s Precision Sport segment, which is comprised of the Company’s subsidiaries Sierra and Barnes, pursuant to a Purchase and Sale Agreement dated as of December 29, 2023, by and among, Bullseye Acquisitions, LLC, Everest/Sapphire Acquisition, LLC and the Company (the “Precision Sport Purchase Agreement”). The Precision Sport segment engaged in the business of designing, developing, manufacturing, and marketing bullets and ammunition to the military, law enforcement, and commercial/consumer markets. Under the terms of the Precision Sport Purchase Agreement, the Buyer agreed to pay $175,000 in cash, which is subject to a customary working capital adjustment. The Company received $175,674 in cash under the terms of the Precision Sport Purchase Agreement, which included a preliminary working capital adjustment. As of December 31, 2024, the working capital adjustment had been finalized, with no changes from the preliminary working capital adjustment. The Company recognized a pre-tax gain on such sale of $40,585. The activities of the Precision Sport segment have been segregated and reported as discontinued operations for all periods presented.

The carrying amounts of the assets and liabilities of the Precision Sport segment were classified as held for sale in our consolidated balance sheets as of December 31, 2023. The asset and liability balances as of December 31, 2023, were classified as current as we anticipated the sale of these assets and liabilities within a one year period. The carrying amounts were as follows:


	December 31, 2023

Accounts receivable, net	$	9,914
Inventories		44,208
Prepaid and other current assets		2,931
Total current assets held for sale		57,053

Property and equipment, net		24,075
Other intangible assets, net		4,926
Indefinite-lived intangible assets		24,500
Goodwill		26,715
Other long-term assets		15
Total assets held for sale	$	137,284

Accounts payable	$	2,441
Accrued liabilities		3,303
Total current liabilities held for sale		5,744

Total liabilities held for sale	$	5,744

Summarized results of discontinued operations for the Precision Sport segment are as follows:


	Year Ended December 31,
	2024		2023		2022

Sales	$	10,585	$	89,950	$	132,855
Cost of goods sold		(6,543)		(56,980)		(79,392)
Selling, general and administrative		(2,062)		(11,639)		(14,225)
Restructuring charges		(3)		(47)		-
Transaction costs		(3,440)		(2,162)		(149)
Interest expense, net		(2,455)		(11,437)		(7,895)
Other, net		(38)		(19)		(807)

(Loss) income from operations of discontinued operations		(3,956)		7,666		30,387
Gain on sale of discontinued operations		40,585		-		-

Income from discontinued operations before taxes		36,629		7,666		30,387
Income tax expense		479		2,024		7,365
Income from discontinued operations, net of tax	$	36,150	$	5,642	$	23,022

In connection with the sale of the Precision Sport segment, all outstanding debt that was required to be repaid with the proceeds received from the sale pursuant to the terms of the Company’s credit facility and all associated interest expense has been allocated to discontinued operations in our consolidated financial statements for the years ended December 31, 2024, 2023, and 2022.

Summarized cash flow information for the Precision Sport segment discontinued operations are as follows:


	Year Ended December 31,
	2024		2023		2022

Depreciation of property and equipment	$	-	$	3,452	$	3,238
Amortization of intangible assets	$	-	$	2,033	$	2,769
Stock-based compensation	$	5	$	151	$	163
Purchase of property and equipment	$	886	$	1,848	$	3,100