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Note 19 - Discontinued Operations

12 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

19. DISCONTINUED OPERATIONS

In pursuing our business strategy, the Company continues to divest certain businesses and record activities of these businesses as discontinued operations.

During the third quarter of fiscal 2020, in order to focus its financial assets and managerial resources on its remaining portfolio of businesses, the Company entered into a definitive agreement to sell the Refrigerated Solutions Group, consisting of the Master-Bilt and NorLake operating segments, to Ten Oaks Group for a cash purchase price of $10.6 million, subject to post-closing adjustments and various transaction fees. The Refrigerated Solutions Group was a part of the Company's Food Service Equipment segment, and manufactured refrigerated cabinets and walk-ins for customers food service and retail end markets.

The transaction closed on April 16, 2020 and resulted in a pre-tax loss of $20.0 million less related transaction expenses of $1.9 million. The Company reported a tax benefit related to the loss on sale of $2.6 million.

During the first quarter of 2019, in order to focus its financial assets and managerial resources on its remaining portfolio of businesses, the Company decided to divest its Cooking Solutions Group, which consisted of three operating segments and a minority interest investment. In connection with the divestiture, during the second quarter of 2019, the Company sold its minority interest investment to the majority shareholders. During the third quarter of fiscal 2019, the Company entered into a definitive agreement to sell the three operating segments to the Middleby Corporation for a cash purchase price of $105 million, subject to post-closing adjustments and various transaction fees. The transaction closed on March 31, 2019 and resulted in a pre-tax gain of $20.5 million less related transaction expenses of $4.4 million. The Company reported a tax benefit related to the sale due to the write-off of deferred tax liabilities related to the Cooking Solutions Group. A cash payment of $106.9 million was received on April 1, 2019. The proceeds received were subsequently used to pay down borrowings on our revolving credit facility.

Results of the Refrigerated Solutions Group in current and prior periods and results of the Cooking Solutions Group in prior periods have been classified as discontinued operations in the Condensed Consolidated Financial Statements and excluded from the results of continuing operations. Activity related to the Refrigerated Solutions Group, the Cooking Solutions Group and other discontinued operations for the years ended June 30, 2020, 2019, and 2018 is as follows (in thousands):

		*Year Ended June 30,*
		*2020*				*2019*				*2018*
Net Sales		$	111,841			$	223,067			$	272,867

Gain (Loss) on Sale of Business		$	(19,996	)		$	20,539			$	-
Transaction Fees			(1,933	)			(4,397	)			-
Income (loss) from Discontinued Operations		$	(23,553	)		$	17,541			$	8,006
Non-operating Income (Expense)			-				(366	)			809
Profit (loss) Before Taxes		$	(23,439	)		$	17,175			$	8,815
Benefit (Provision) for Taxes			2,613				2,453				(2,578	)
Net income (loss) from Discontinued Operations		$	(20,826	)		$	19,628			$	6,237

Assets and liabilities related to our discontinued operations appear in the condensed consolidated balance sheets are as follows (in thousands):

		*June 30, 2020*				*June 30, 2019*
Accounts receivable		$	2,936			$	16,215
Inventories			-				12,343
Prepaid Expenses			-				9,052
Due from Buyer			-				-
Total current assets			2,936				37,610

Property, plant, equipment, net			-				13,785
Intangible assets, net			-				-
Goodwill			-				7,660
Other non-current assets			-				584
Total non-current assets			-				22,029
Total Assets			2,936				59,639

Accounts Payable			-				18,402
Accrued Liabilities			610				13,101
Income Tax Payable			0				-
Total current liabilities			610				31,503

Non-current Liabilities			-				2,223
Total Liabilities			610				33,726

Net Assets		$	2,326			$	25,913