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Discontinued Operations | 6 Months Ended
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Jun. 29, 2018
Discontinued Operations and Disposal Groups [Abstract] |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS On May 3, 2018, the Company announced that it entered into a definitive agreement to sell its AS&O Product Line to Viant, and on July 2, 2018, completed the sale for $600 million in cash, subject to certain post-closing adjustments. Refer to Note 17 “Subsequent Events” for additional information. For disposal transactions, a component of an entity that is anticipated to be sold in the future is reported in discontinued operations after it meets the criteria for held-for-sale classification, and if the disposition represents a strategic shift that has (or will have) a major effect on the entity's operations and financial results. The Company evaluated the quantitative and qualitative factors related to the expected sale of the AS&O Product Line and concluded that it met the held-for-sale criteria and that all other conditions for discontinued operations presentation were met as of May 3, 2018. Property, plant and equipment are not depreciated, and intangibles assets are not amortized once classified as held-for-sale. As a result, the operating results of the AS&O Product Line have been classified as discontinued operations in the Condensed Consolidated Statements of Operations and for all periods presented and the assets and liabilities of the AS&O Product Line have been classified as assets and liabilities of discontinued operations in the Condensed Consolidated Balance Sheets at June 29, 2018 and December 29, 2017. The discontinued operations of the AS&O Product Line are reported in the Medical segment. The assets and liabilities of a discontinued operation held for sale, other than goodwill, are measured at the lower of carrying amount or fair value less cost to sell. The assets of the AS&O Product Line, other than goodwill based on relative fair value, are measured at carrying amount. The fair value of the AS&O Product Line assets was based primarily on the purchase price of $600 million. In accordance with the guidance set forth in ASC 350, the Company calculated the portion of goodwill included in the AS&O Product Line and, using a relative fair value approach, allocated goodwill to discontinued operations from the Medical segment. As of June 29 2018, all assets and liabilities of the AS&O Product Line are presented as current in the Condensed Consolidated Balance Sheet as management believes the sale transaction is deemed probable and proceeds will be collected within one year. The carrying amounts of the AS&O Product Line assets and liabilities that were classified as assets and liabilities of discontinued operations held for sale were as follows (in thousands):
| June 29, 2018 |  | December 29, 2017
Cash and cash equivalents | $ | 1,204 |  |  | $ | 6,755 |
Accounts receivable, net of allowance for doubtful accounts of $0.2 million and $0.3 million, respectively | 45,757 |  |  | 47,611 |
Inventories | 52,953 |  |  | 50,796 |
Prepaid expenses and other current assets | 3,325 |  |  | 1,584 |
Property, plant and equipment, net | 131,007 |  |  | — |
Goodwill | 149,733 |  |  | — |
Other intangible assets, net | 55,773 |  |  | — |
Current assets of discontinued operations held for sale | 439,752 |  |  | 106,746 |
Property, plant and equipment, net | — |  |  | 135,195 |
Goodwill | — |  |  | 150,368 |
Other intangible assets, net | — |  |  | 57,520 |
Other noncurrent assets | — |  |  | 1,551 |
Noncurrent assets of discontinued operations held for sale | — |  |  | 344,634 |
Total assets | 439,752 |  |  | 451,380 |
Accounts payable and other current liabilities | 51,843 |  |  | 47,703 |
Deferred taxes | 4,400 |  |  | — |
Current liabilities of discontinued operations held for sale | 56,243 |  |  | 47,703 |
Deferred taxes and other long-term liabilities | — |  |  | 14,966 |
Total liabilities | 56,243 |  |  | 62,669 |
Net assets | $ | 383,509 |  |  | $ | 388,711 |
(2.) DISCONTINUED OPERATIONS (Continued) Loss from discontinued operations, net of taxes, were as follows (in thousands):
| Three Months Ended |  | Six Months Ended
| June 29, 2018 |  | June 30, 2017 |  | June 29, 2018 |  | June 30, 2017
Sales | $ | 88,701 |  |  | $ | 81,803 |  |  | $ | 178,020 |  |  | $ | 160,480 |
Cost of sales | 71,276 |  |  | 71,706 |  |  | 148,357 |  |  | 141,185 |
Gross profit | 17,425 |  |  | 10,097 |  |  | 29,663 |  |  | 19,295 |
Selling, general and administrative expenses | 4,096 |  |  | 4,578 |  |  | 8,905 |  |  | 9,283 |
Research, development and engineering costs | 1,090 |  |  | 1,649 |  |  | 2,352 |  |  | 3,423 |
Other operating expenses | 2,497 |  |  | 193 |  |  | 3,990 |  |  | 270 |
Interest expense | 11,007 |  |  | 10,589 |  |  | 21,857 |  |  | 21,115 |
Other (income) loss, net | 109 |  |  | (1,214 | ) |  | 182 |  |  | (1,166 | )
Loss from operations of discontinued operations | (1,374 | ) |  | (5,698 | ) |  | (7,623 | ) |  | (13,630 | )
Provision for income taxes | 1,660 |  |  | 871 |  |  | 377 |  |  | 226 |
Loss from discontinued operations | $ | (3,034 | ) |  | $ | (6,569 | ) |  | $ | (8,000 | ) |  | $ | (13,856 | )
The Company allocates interest to discontinued operations if the interest is directly attributable to the discontinued operations or is interest on debt that is required to be repaid as a result of the disposal transaction. Interest expense included in discontinued operations reflects an estimate of interest expense related to the debt that will be required to be repaid with the proceeds from the sale of the AS&O Product Line. Refer to Note 17 “Subsequent Events” for additional information. Cash flow information from discontinued operations was as follows (in thousands):
|  |  |  |  | Six Months Ended
|  |  |  |  | June 29, 2018 |  | June 30, 2017
Cash used in operating activities |  |  |  |  | $ | (5,465 | ) |  | $ | (1,692 | )
Cash used in investing activities |  |  |  |  | (3,596 | ) |  | (9,141 | )
Depreciation and amortization |  |  |  |  | $ | 7,450 |  |  | $ | 10,507 |
Capital expenditures |  |  |  |  | 3,610 |  |  | 9,214 |

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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