XML 24 R11.htm IDEA: XBRL DOCUMENT
v3.21.2

Discontinued Operations | 6 Months Ended
--- | ---
Jul. 03, 2021
Discontinued Operations and Disposal Groups [Abstract] |
Disposal Groups, Including Discontinued Operations, Disclosure | Discontinued Operations In the first quarter of 2021, the Company announced that as part of its strategic plan, it was exploring alternatives for its European Innerwear business and subsequently reached the decision to exit this business. The Company determined that its European Innerwear business met held-for-sale and discontinued operations accounting criteria at the end of the first quarter of 2021. Accordingly, the Company began to separately report the results of its European Innerwear business as discontinued operations in its Condensed Consolidated Statements of Income, and to present the related assets and liabilities as held for sale in the Condensed Consolidated Balance Sheets. These changes have been applied to all periods presented. The Company is actively marketing the business to prospective buyers and expects to complete the sale of this business before the end of the first quarter of 2022. The operations of the European Innerwear business were previously reported primarily in the International segment. Certain expenses related to its operations were included in general corporate expenses, restructuring and other action-related charges and amortization of intangibles which were previously excluded from segment operating profit and have been reclassified to discontinued operations for all periods presented. Discontinued operations does not include any allocation of corporate overhead expense or interest expense. Upon meeting the criteria for held for sale classification which qualified as a triggering event, the Company performed a full impairment analysis of the disposal group's indefinite-lived intangible assets and goodwill. As a result of the strategic decision to exit the European Innerwear business, a strategic review was completed in the first quarter of 2021 with revised forecasts to include updated market conditions and the removal of strategic operating decisions that would no longer occur under the Company's ownership. The revised forecasts indicated impairment charges of certain indefinite-lived trademarks and license agreements as well as the full goodwill balance. A non-cash charge of $155,745 was recorded as "Impairment of intangible assets and goodwill" in the summarized discontinued operations financial information for the six months ended July 3, 2021. In addition, the Company recorded non-cash charges of $9,828 and $236,180 as "Loss on classification of assets held for sale" in the summarized discontinued operations financial information for the quarter and the six months ended July 3, 2021, respectively, to record a valuation allowance against the net assets held for sale to write down the carrying value of the disposal group to the estimated fair value less costs of disposal. The non-cash charge recorded in the quarter ended July 3, 2021 resulted from changes in working capital balances and foreign exchange rates. The Company will continue to assess the valuation allowance in each interim period until the European Innerwear business is sold. Additionally, the Company recorded an impairment charge of $7,302 in continuing operations on an indefinite-lived trademark for the six months ended July 3, 2021 which is reflected in the “Selling, general and administrative expenses” line in the Condensed Consolidated Statement of Income. This charge relates to the full impairment of an indefinite-lived trademark related to a specific brand within the European Innerwear business that was excluded from the disposal group as it is not being marketed for sale. The Company intends to exit this brand subsequent to the sale of the European Innerwear business. During the second quarter of 2020, the Company completed a quantitative impairment analysis for certain indefinite-lived intangible assets as a result of the significant impact of the COVID-19 pandemic on their performance. Based on this analysis, the Company recorded impairment charges of $20,319 on certain indefinite-lived trademarks and other intangible assets within the European Innerwear business which are reflected in the “Impairment of intangible assets and goodwill” line in the summarized discontinued operations financial information for the quarter and six months ended June 27, 2020. The Company expects to continue certain sales from its supply chain to the European Innerwear business after the sale of the business. Those sales and the related profit are included in continuing operations in the Condensed Consolidated Statements of Income and in “Other” in note “Business Segment Information” in all periods presented and have not been eliminated as intercompany transactions in consolidation. The related receivables from the European Innerwear business have been reclassified to “Trade accounts receivable, net” in the Condensed Consolidated Balance Sheets for all periods presented. The operating results of the discontinued operations only reflect revenues and expenses that are directly attributable to the European Innerwear business that will be eliminated from continuing operations. The key components from discontinued operations related to the European Innerwear business are as follows:
| Quarters Ended |  | Six Months Ended
| July 3, 2021 |  | June 27, 2020 |  | July 3, 2021 |  | June 27, 2020
Net sales | $ | 117,506 |  |  | $ | 205,591 |  |  | $ | 253,351 |  |  | $ | 333,262 |
Cost of sales | 63,137 |  |  | 86,441 |  |  | 138,660 |  |  | 158,548 |
Gross profit | 54,369 |  |  | 119,150 |  |  | 114,691 |  |  | 174,714 |
Selling, general and administrative expenses | 61,134 |  |  | 59,428 |  |  | 144,526 |  |  | 128,815 |
Impairment of intangible assets and goodwill | — |  |  | 20,319 |  |  | 155,745 |  |  | 20,319 |
Loss on classification of assets held for sale | 9,828 |  |  | — |  |  | 236,180 |  |  | — |
Operating income (loss) | (16,593) |  |  | 39,403 |  |  | (421,760) |  |  | 25,580 |
Other expenses | 280 |  |  | 397 |  |  | 614 |  |  | 786 |
Interest expense, net | 69 |  |  | 584 |  |  | 159 |  |  | 1,406 |
Income (loss) from discontinued operations before income tax expense | (16,942) |  |  | 38,422 |  |  | (422,533) |  |  | 23,388 |
Income tax expense (benefit) | 2,245 |  |  | 13,809 |  |  | (11,680) |  |  | 11,767 |
Net income (loss) from discontinued operations, net of tax | $ | (19,187) |  |  | $ | 24,613 |  |  | $ | (410,853) |  |  | $ | 11,621 |
Assets and liabilities of discontinued operations classified as held for sale in the Condensed Consolidated Balance Sheets as of July 3, 2021, January 2, 2021 and June 27, 2020 consist of the following:
| July 3, 2021 |  | January 2, 2021(1) |  | June 27, 2020(1)
Cash and cash equivalents | $ | 8,921 |  |  | $ | 8,822 |  |  | $ | 127,015 |
Trade accounts receivable, net | 70,432 |  |  | 84,632 |  |  | 68,041 |
Inventories | 119,627 |  |  | 123,337 |  |  | 184,304 |
Other current assets | 15,114 |  |  | 17,295 |  |  | 21,987 |
Property, net | 63,222 |  |  | 67,950 |  |  | 68,916 |
Right-of-use assets | 34,051 |  |  | 34,637 |  |  | 40,994 |
Trademarks and other identifiable intangibles, net | 211,534 |  |  | 284,170 |  |  | 282,362 |
Goodwill | — |  |  | 96,692 |  |  | 88,445 |
Deferred tax assets | 10,376 |  |  | 5,438 |  |  | 6,947 |
Other noncurrent assets | 4,421 |  |  | 5,614 |  |  | 5,381 |
Allowance to adjust assets to estimated fair value, less costs of disposal | (235,712) |  |  | — |  |  | — |
Total assets of discontinued operations | $ | 301,986 |  |  | $ | 728,587 |  |  | $ | 894,392 |
Accounts payable | $ | 70,185 |  |  | $ | 77,636 |  |  | $ | 61,179 |
Accrued liabilities | 111,321 |  |  | 133,431 |  |  | 115,465 |
Lease liabilities | 8,693 |  |  | 10,332 |  |  | 13,026 |
Notes payable | 377 |  |  | 784 |  |  | 8,790 |
Current portion of long-term debt | — |  |  | — |  |  | 112,512 |
Lease liabilities - noncurrent | 26,766 |  |  | 28,775 |  |  | 31,971 |
Pension and postretirement benefits | 44,328 |  |  | 46,569 |  |  | 45,405 |
Other noncurrent liabilities | 28,081 |  |  | 37,645 |  |  | 38,988 |
Total liabilities of discontinued operations | $ | 289,751 |  |  | $ | 335,172 |  |  | $ | 427,336 |
(1)Amounts at January 2, 2021 and June 27, 2020 have been classified as current and long-term in the Condensed Consolidated Balance Sheets. The cash flows related to discontinued operations have not been segregated and are included in the Condensed Consolidated Statements of Cash Flows. The following table presents cash flow and non-cash information related to discontinued operations:
| Quarters Ended |  | Six Months Ended
| July 3, 2021 |  | June 27, 2020 |  | July 3, 2021 |  | June 27, 2020
Depreciation | $ | — |  |  | $ | 2,682 |  |  | $ | 2,608 |  |  | $ | 5,347 |
Amortization | — |  |  | 1,262 |  |  | 1,460 |  |  | 2,544 |
Capital expenditures | 735 |  |  | 1,862 |  |  | 4,070 |  |  | 5,400 |
Impairment of intangible assets and goodwill | — |  |  | 20,319 |  |  | 155,745 |  |  | 20,319 |
Loss on classification of assets held for sale | 9,828 |  |  | — |  |  | 236,180 |  |  | — |
Other investing activities | 1,580 |  |  | 615 |  |  | 3,374 |  |  | 1,831 |
Capital expenditures included in accounts payable at end of period | 486 |  |  | 264 |  |  | 486 |  |  | 264 |
Right-of-use assets obtained in exchange for lease obligations | 1,642 |  |  | — |  |  | 3,137 |  |  | 201 |

X
- References No definition available. + Details
Name: | us-gaap_DiscontinuedOperationsAndDisposalGroupsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration