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Discontinued Operations | 3 Months Ended
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Jul. 27, 2019
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | 2. Discontinued Operations ​ On June 29, 2018, the Company completed the sale of the EES Business to Webasto. In accordance with the terms of the Purchase Agreement, as amended by a side letter agreement executed at the closing, the Company received cash consideration of $31,994,000 upon closing, which resulted in a gain of $11,420,000 which has been recorded in gain on sale of business, net of tax in the consolidated statements of operations for the three months ended July 28, 2018. The Company has disputed $1,085,000 of Webasto’s working capital adjustment claim, which is being submitted to an independent accounting firm for resolution pursuant to the terms of Purchase Agreement. No amounts have been recorded in the consolidated financial statements related to the additional working capital dispute as the Company has assessed the likelihood of a loss to be less than probable. ​ The Company is entitled to receive additional cash consideration of $6,500,000 (the “Holdback”) upon tendering consents to assignment of two remaining customer contracts to Webasto. The Holdback was not recorded in the Company’s consolidated financial statements as the amount was not realized or realizable as of July 27, 2019. The Company’s satisfaction of the requirements for the payment of the Holdback is currently in dispute. ​ On February 22, 2019, Webasto filed a lawsuit alleging several claims against the Company for breach of contract, indemnity, and bad faith, including allegations regarding inaccuracy of certain diligence disclosures, failure to provide certain consents to contract assignments and related to a previously announced product recall. Webasto seeks to recover the costs of the recall and other damages totaling a minimum of $6,500,000 in addition to attorneys’ fees, costs, and punitive damages. On August 16, 2019, the Company filed a counterclaim against Webasto seeking payment of the Holdback and declaratory relief regarding Webasto’s cancellation of an assigned contract. The Company believes that the allegations are generally meritless and is mounting a vigorous defense. ​ During the three months ended October 27, 2018, Webasto filed a recall report with the National Highway Traffic Safety Administration that named certain of the Company’s EES products as subject to the recall. The Company is continuing to assess the facts giving rise to the recall. Under the terms of the Purchase Agreement, the Company may be responsible for certain costs of such recall of named products the Company manufactured, sold or serviced prior to the closing of the sale of the EES Business. ​ Concurrent with the execution of the Purchase Agreement, the Company entered into a transition services agreement (the “TSA”) to provide certain general and administrative services to Webasto for a defined period. Income from performing services under the TSA was $444,000 and $399,000 has been recorded in other income, net in the consolidated statements of operations for three months ended July 27, 2019 and July 28, 2018, respectively. ​ The Company determined that the EES Business met the criteria for classification as an asset held for sale as of April 30, 2018 and represents a strategic shift in the Company’s operations. Therefore, the assets and liabilities and the results of operations of the EES Business are reported as discontinued operations for all periods presented. The table below presents the statements of operations data for the EES Business (in thousands). ​
​ | ​ | ​ | ​ | ​
​ |  | July 28, | ​
​ | ​ | 2018 | ​
Net sales |  | $ | 4,256 | ​
Cost of sales | ​ |  | 4,278 | ​
Gross margin | ​ |  | (22) | ​
Selling, general and administrative | ​ |  | 1,453 | ​
Research and development | ​ |  | 1,065 | ​
Other income, net | ​ | ​ | 1 | ​
Loss from discontinued operations before income taxes | ​ |  | (2,539) | ​
Benefit for income taxes | ​ | ​ | (689) | ​
Net loss from discontinued operations | ​ | $ | (1,850) | ​
Gain on sale of business, net of tax expense of $2,577 | ​ | ​ | 8,843 | ​
Net income from discontinued operations | ​ | $ | 6,993 | ​
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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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