Annual report pursuant to Section 13 and 15(d)

Discontinued Operations

v3.3.1.900
Discontinued Operations
12 Months Ended
Dec. 31, 2015
Discontinued Operations [Abstract]  
Discontinued Operations

NOTE 2.  DISCONTINUED OPERATIONS

 

As discussed above in Note 1, during the year ended December 31, 2014, the Company and Gregory, its then wholly-owned subsidiary, completed the GMP Sale pursuant to the terms of the GMP Purchase Agreement.  The Company received $84,135 in cash for the GMP Sale and paid $2,995 in transaction fees for net proceeds of $81,140.  The Company recognized a pre-tax gain on such sale of $39,491 and tax expense of $19,424.  The Company performed certain transition services related to the GMP Sale and received $232 and $568, which were recorded as a reduction of selling, general and administrative expenses in our consolidated financial statements during the years ended December 31, 2015 and 2014, respectively.

 

Additionally, as discussed above in Note 1, on October 7, 2015, the Company sold POC to Dainese and the assets and liabilities of POC are classified as held for sale as of December 31, 2014.  The Company received $63,639 in cash for the POC Disposition and paid $2,946 in transaction fees for net proceeds of $60,693.  $739 of cash was sold as part of the transaction.  Also, as of December 31, 2015, there was an unsettled working capital adjustment of $921 owed to Dainese.  The Company recognized a pre-tax gain on such sale of $8,436The Company performed certain transition services related to the POC Disposition and received $270, which was recorded as a reduction of selling, general and administrative expenses in our consolidated financial statements during the year ended December 31, 2015.

 

The carrying amounts of the assets and liabilities of POC were classified as held for sale in our consolidated balance sheet as of December 31, 2014.  The carrying amounts were as follows:

 

 

 

 

 

 

 

 

December 31, 2014

 

 

 

 

Cash

 

$

1,246 

Accounts receivable

 

 

10,980 

Inventories

 

 

7,692 

Prepaid and other current assets

 

 

837 

Income tax receivable

 

 

10 

Deferred income taxes

 

 

483 

Total current assets held for sale

 

 

21,248 

 

 

 

 

Property and equipment, net

 

 

1,525 

Other intangible assets, net

 

 

12,354 

Indefinite lived intangible assets

 

 

12,607 

Goodwill

 

 

12,355 

Other long-term assets

 

 

89 

Total assets held for sale

 

$

60,178 

 

 

 

 

Accounts payable and accrued liabilities

 

$

3,967 

Current portion of long-term debt

 

 

3,875 

Total current liabilities held for sale

 

 

7,842 

 

 

 

 

Long-term debt

 

 

Deferred income taxes

 

 

5,103 

Total liabilities held for sale

 

$

12,948 

 

 

 

 

 

 

 

Summarized results of discontinued operations for both GMP and POC are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

2015

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

Sales

 

$

26,179 

 

$

55,521 

 

$

61,916 

Cost of goods sold

 

 

(13,124)

 

 

(29,247)

 

 

(31,765)

Selling, general and administrative

 

 

(11,081)

 

 

(21,293)

 

 

(20,608)

Restructuring charge

 

 

 -

 

 

 -

 

 

(175)

Merger and integration

 

 

 -

 

 

 -

 

 

(381)

Transaction costs

 

 

 -

 

 

 -

 

 

(12)

Interest expense, net

 

 

(66)

 

 

(757)

 

 

(1,203)

Other, net

 

 

281 

 

 

608 

 

 

160 

 

 

 

 

 

 

 

 

 

 

Income from operations of discontinued operations

 

 

2,189 

 

 

4,832 

 

 

7,932 

Gain on sale of discontinued operations

 

 

8,436 

 

 

39,491 

 

 

 -

 

 

 

 

 

 

 

 

 

 

Income before taxes

 

 

10,625 

 

 

44,323 

 

 

7,932 

Income tax expense

 

 

61 

 

 

20,698 

 

 

3,127 

Income from discontinued operations, net of tax

 

$

10,564 

 

$

23,625 

 

$

4,805 

 

 

 

 

 

 

 

 

 

 

In connection with the GMP Sale on July 23, 2014, all interest related to outstanding debt that was required to be repaid pursuant to the terms of the Company’s amended and restated loan agreement with Zions First National Bank (the “Lender”) is allocated to discontinued operations in our consolidated financial statements for the years ended December 31, 2014 and 2013.  As the outstanding debt was repaid during the year ended December 31, 2014, there was no interest allocated to discontinued operations in our consolidated financial statements for the year ended December 31, 2015. 

 

Summarized cash flow information for both GMP and POC discontinued operations are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

2015

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

Depreciation of property and equipment

 

 

423 

 

 

571 

 

 

700 

Amortization of intangible assets

 

 

866 

 

 

1,792 

 

 

2,174 

Stock-based compensation

 

 

(645)

 

 

418 

 

 

551 

Purchase of property and equipment

 

 

(671)

 

 

(1,095)

 

 

(658)