Annual report pursuant to Section 13 and 15(d)

7. Assets of held for sale - discontinued operations

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7. Assets of held for sale - discontinued operations
 12 Months Ended
Dec. 30, 2017
Notes to Financial Statements  
Assets of held for sale - discontinued operations

Note 7:       Assets of held for sale – discontinued operations

 

On December 30, 2017, we signed an agreement to dispose of our Appliancesmart retail appliance segment. ApplianceSmart Holdings LLC (the “Purchaser”), a wholly owned subsidiary of Live Ventures Incorporated, entered into a Stock Purchase Agreement (the “Agreement”) with the Company and ApplianceSmart, Inc. (“ApplianceSmart”), a subsidiary of the Company. ApplianceSmart is a 17-store chain specializing in new and out-of-the-box appliances with annualized revenues of approximately $65,000. Pursuant to the Agreement, the Purchaser purchased from the Company all the issued and outstanding shares of capital stock (the “Stock”) of ApplianceSmart in exchange for $6,500 (the “Purchase Price”). See Note 25. The Purchase Price per agreement is due and payable on or before March 31, 2018. As of December 30, 2017, the Company has an amount due from ApplianceSmart Holdings LLC a subsidiary of Live Ventures Incorporated in the sum of $6,500 recorded as a current asset.

 

Discontinued operations and assets held for sale include our retail appliance business Appliancesmart. Results of operations, financial position and cash flows for this business are separately reported as discontinued operations for all periods presented. The Company made the decision to sell Appliancesmart to eliminate losses and poor financial performance from our retail segment, decrease existing leverage, assign and eliminate long term lease liabilities for store leases, increase cash balances, enhance shareholder value and focus Company resources on its’ two remaining segments, Recycling and Technology.

 

FINANCIAL INFORMATION FOR HELD FOR SALE AND DISCONTINUED OPERATIONS (In Thousands)

 

    52 weeks     52 weeks  
    Ended     Ended  
    December 30, 2017     December 31, 2016  
Revenue   $ 56,296     $ 63,130  
Cost of revenue     42,252       46,824  
Gross profit     14,044       16,306  
Selling, general and administrative expense     15,911       17,970  
Operating loss - discontinued operations     (1,867 )     (1,664 )
Other income     862       141  
Other expense     (5 )     (251 )
Net loss - discontinued operations before income tax benefit     (1,010 )     (1,774 )
Income tax benefit     270       475  
Net loss - discontinued operations, net of tax   $ (740 )   $ (1,299 )

 

ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (In Thousands)

As of December 30, 2017 (date of sale), and December 31, 2016

 

    2017     2016  
Accounts Receivable   $ 2,356     $ 1,538  
Inventories     8,836       14,793  
Prepaid expenses     173       –  
Total current assets held for sale     11,365       16,331  
Buildings and improvements     2,073       1,948  
Equipment     1,756       1,753  
Accumulated depreciation     (3,319 )     (3,148 )
Restricted cash     1,298       500  
Other assets     204       221  
Total non-current assets held for sale     2,012       1,274  
Total assets held for sale - discontinued operations   $ 13,377     $ 17,605  
Purchase price     6,500          
Loss of sale of assets held for sale     (6,877 )        
Income tax benefit     1,842          
Net loss on sale of assets held for sale and discontinued operations, net of tax   $ (5,035 )