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Discontinued Operations | 12 Months Ended
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Sep. 30, 2013
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | NOTE 2: DISCONTINUED OPERATIONS During the third quarter of fiscal 2013, we implemented a plan to close 107 legacy stores (102 and 94 of which were in operation at September 30, 2012 and 2011, respectively) in a variety of locations. These stores are generally older, smaller stores that do not fit our future growth profile. Store closures as discontinued operations include:
▪ | 57 stores in Mexico, 52 of which are small, jewelry-only asset group formats. We will continue to operate our full-service SWS stores under the Empeño Fácil brand, and expect to continue our storefront growth in Mexico.
▪ | 29 stores in Canada, where we are in the process of transitioning to an integrated buy/sell and financial services model under the Cash Converters brand. The affected asset group consists of stores that are not optimal for that model because of location or size. We will continue to operate full-service buy/sell and financial services center stores under the Cash Converters brand in Canada and the United States.
▪ | 20 financial services stores in Dallas, Texas and the State of Florida, where we are exiting both locations primarily due to onerous regulatory requirements. In addition, one jewelry-only concept store will be closed, which was our only jewelry-only store in the United States.
Due to discontinued operations, we incurred charges for lease termination costs, asset and inventory write-down to net realizable liquidation value, uncollectible receivables, and employee severance costs. We recognized $22.2 million of pre-tax charges related to discontinued operations during fiscal 2013. The following table summarizes these costs, which have been recorded as part of loss from discontinued operations in our fiscal 2013 consolidated statement of operations:
| Fiscal Year Ended
| September 30, 2013
| (in thousands)
Lease termination costs | $ | 8,608 |
Employee severance | 896 |
Inventory write-down to liquidation value | 7,081 |
Fixed asset write-down to liquidation value | 5,605 |
Total termination costs related to the reorganization | $ | 22,190 |
As of September 30, 2013, $1.6 million in cash payments had been made with regard to the recorded termination costs. As of September 30, 2013 accrued severance and lease termination costs related to discontinued operations were $7.1 million. This amount is included in “Accounts payable and accrued liabilities” in our consolidated balance sheets and in “Loss from discontinued operations, net of tax” in the consolidated statements of operations. Discontinued operations in fiscal 2013, 2012, and 2011 include $15.1 million, $17.3 million, and $16.5 million, respectively, of revenues and $27.2 million, $4.8 million, and $1.5 million, respectively, of pre-tax operating losses from stores being closed. The table below summarizes the operating income (losses) from discontinued operations by operating segment:
| Fiscal Year Ended September 30,
| 2013 |  | 2012 |  | 2011
| (in thousands)
U.S. & Canada |  |  |  |  |
Net revenues | $ | 4,308 |  |  | $ | 6,183 |  |  | $ | 5,495 |
Operations expense | 10,090 |  |  | 10,031 |  |  | 5,891 |
Operating loss from discontinued operations before taxes | (5,782 | ) |  | (3,848 | ) |  | (396 | )
Total termination costs related to the reorganization | 13,049 |  |  | — |  |  | — |
Loss from discontinued operations before taxes | (18,831 | ) |  | (3,848 | ) |  | (396 | )
Income tax (benefit) provision | (1,392 | ) |  | 77 |  |  | 404 |
Loss from discontinued operations, net of tax | $ | (17,439 | ) |  | $ | (3,925 | ) |  | $ | (800 | )
Latin America |  |  |  |  |
Net revenues | $ | 5,215 |  |  | $ | 3,645 |  |  | $ | 3,138 |
Operations expense | 4,461 |  |  | 4,560 |  |  | 4,220 |
Operating income (loss) from discontinued operations before taxes | 754 |  |  | (915 | ) |  | (1,082 | )
Total termination costs related to the reorganization | 9,141 |  |  | — |  |  | — |
Loss from discontinued operations before taxes | (8,387 | ) |  | (915 | ) |  | (1,082 | )
Income tax benefit | (2,516 | ) |  | (307 | ) |  | (324 | )
Loss from discontinued operations, net of tax | $ | (5,871 | ) |  | $ | (608 | ) |  | $ | (758 | )
Consolidated |  |  |  |  |
Net revenues | $ | 9,523 |  |  | $ | 9,828 |  |  | $ | 8,633 |
Operations expense | 14,551 |  |  | 14,591 |  |  | 10,111 |
Operating loss from discontinued operations before taxes | (5,028 | ) |  | (4,763 | ) |  | (1,478 | )
Total termination costs related to the reorganization | 22,190 |  |  | — |  |  | — |
Loss from discontinued operations before taxes | (27,218 | ) |  | (4,763 | ) |  | (1,478 | )
Income tax (benefit) provision | (3,908 | ) |  | (230 | ) |  | 80 |
Loss from discontinued operations, net of tax | $ | (23,310 | ) |  | $ | (4,533 | ) |  | $ | (1,558 | )
The following tables present stores by segment:
| Fiscal Year Ended September 30, 2013
| Company-owned Stores |  |
| U.S. & Canada |  | Latin America |  | Other International |  | Consolidated |  | Franchises
Stores in operation: |  |  |  |  |  |  |  |  |
Beginning of period | 987 |  | 275 |  | — |  |  | 1262 |  | 10 |
De novo | 84 |  | 73 |  | — |  |  | 157 |  | — |
Acquired | 12 |  | 26 |  | — |  |  | 38 |  | — |
Sold, combined, or closed | (3) |  | (5) |  | — |  |  | (8) |  | (2 | )
Discontinued operations | (50) |  | (57) |  | — |  |  | (107) |  | — |
End of period | 1,030 |  | 312 |  | — |  |  | 1,342 |  | 8 |

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- Definition The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 144 -Paragraph 43-48 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6391110&loc=d3e2941-110230 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1361-107760 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e957-107759 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1510-107760 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1012-107759 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1020-107759 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1474-107760 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 45 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=8077374&loc=d3e2443-110228 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1436-107760 + Details
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