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Discontinued Operations | 12 Months Ended
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Jun. 30, 2020
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | Discontinued Operations On August 20, 2019, the Company announced plans to divest the product distribution businesses in Europe, the UK, Mexico, Colombia, Chile, Peru and the Miami-based export operations as these businesses have been performing below management's expectations. The Company will continue to operate its digital business in these countries. Management determined that the Company did not have sufficient scale in these markets to maximize our value-added model for product distribution, leading us to focus and invest in our higher-growth, higher margin businesses. Results from the Divestitures were included within each of our reportable segments; Worldwide Barcode, Networking & Security segment and Worldwide Communications & Services segment. The Company actively marketed the sale these businesses during fiscal year 2020. An agreement was signed July 23, 2020, subsequent to our fiscal year end, with Intcomex for our divestitures located in Latin America, outside of Brazil. The Company expects to finalize the sale of the Latin America divestitures on or around September 30, 2020. The Company is actively working on sales opportunities for our divestitures in Europe and the UK and expects to finalize a sale within twelve months from the current reporting period. Major components of net loss from discontinued operations for the years ended June 30, 2020, 2019 and 2018 were as follows:
| Fiscal Year Ended June 30, |  |  |  |
| 2020 |  | 2019 |  | 2018
| (in thousands) |  |  |  |
Net sales | $ | 561,496 |  |  | $ | 623,312 |  |  | $ | 681,551 |
Cost of goods sold | 513,003 |  |  | 563,543 |  |  | 614,731 |
Gross profit | 48,493 |  |  | 59,769 |  |  | 66,820 |
Selling, general and administrative expenses | 53,946 |  |  | 61,574 |  |  | 65,183 |
Depreciation expense | 975 |  |  | 1,127 |  |  | 1,026 |
Intangible amortization expense | 1,403 |  |  | 1,839 |  |  | 1,977 |
Impairment charges | 13,747 |  |  | — |  |  | — |
Operating loss | (21,578) |  |  | (4,771) |  |  | (1,366) |
Interest expense, net | 1,399 |  |  | 195 |  |  | 24 |
Loss on held for sale classification | 88,923 |  |  | — |  |  | — |
Other expense, net | 1,124 |  |  | 763 |  |  | 733 |
Loss from discontinued operations before taxes | (113,024) |  |  | (5,729) |  |  | (2,123) |
Income tax expense | 403 |  |  | 1,533 |  |  | 180 |
Net loss from discontinued operations | $ | (113,427) |  |  | $ | (7,262) |  |  | $ | (2,303) |
For fiscal year ended June 30, 2020, the Company allocated goodwill to our discontinued operations based on relative fair value of the discontinued operations compared to the consolidated reporting units and impaired such goodwill totaling $1.0 million for the Worldwide Barcode, Networking & Security segment and $7.5 million for the Worldwide Communications & Services segment. Identifiable intangible assets, including customer relationships and distributor agreements, were impaired for discontinued operations totaling $5.2 million for fiscal year ended June 30, 2020. The impairment charges are included in net loss from discontinued operations in the Consolidated Income Statements. The major classes of assets and liabilities classified as held-for-sale in the accompanying consolidated balance sheets, were as follows as of June 30, 2020 and 2019:
| June 30, 2020 |  | June 30, 2019
| (in thousands) |  |
Assets |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 4,970 |  |  | $ | 4,513 |
Accounts receivable, net | 117,200 |  |  | 131,560 |
Inventories, net | 106,779 |  |  | 143,263 |
Prepaid expenses and other current assets | 23,808 |  |  | 17,417 |
Total current assets | 252,757 |  |  | 296,753 |
Property and equipment, net | 1,833 |  |  | 2,793 |
Goodwill | — |  |  | 8,823 |
Identifiable intangible assets, net | — |  |  | 6,726 |
Deferred income taxes | 9,349 |  |  | 9,277 |
Other non-current assets | 6,215 |  |  | 1,460 |
Total assets, before valuation allowance | 270,154 |  |  | 325,832 |
Less: valuation allowance | (88,923) |  |  | — |
Total assets, net of valuation allowance (1) | $ | 181,231 |  |  | $ | 325,832 |
Liabilities |  |  |
Current liabilities: |  |  |
Accounts payable | $ | 56,098 |  |  | $ | 69,810 |
Accrued expenses and other current liabilities | 14,815 |  |  | 14,763 |
Other taxes payable | 20,378 |  |  | 12,018 |
Short-term borrowings | 3,524 |  |  | 4,590 |
Income tax payable | 1,085 |  |  | 351 |
Total current liabilities | 95,900 |  |  | 101,532 |
Borrowings under revolving credit facility | 24,704 |  |  | 28,427 |
Other long-term liabilities | 7,418 |  |  | 3,730 |
Total liabilities(1) | 128,022 |  |  | 133,689 |
(1) Total assets and liabilities of discontinued operations are classified in current assets and liabilities, respectively, in the Company's consolidated balance sheet as of June 30, 2020, as the discontinued operations are expected to be disposed of within twelve months of the balance sheet date. The assets and liabilities of discontinued operations are classified in their respective current and long-term classifications, respectively, in the Company's consolidated balance sheet as of June 30, 2019 in accordance with the nature and underlying classification of such assets and liabilities. The Company has a bank overdraft facility with Bank of America used by its European subsidiaries recognized as Short-term borrowings. The facility allows the Company to disburse checks in excess of bank balances up to $14.0 million U.S. dollar equivalent for up to seven days. Borrowings under the overdraft facility bear interest at a rate equal to a spread of 1.0% over the applicable currency's London Interbank Offered Rate ("LIBOR") with a zero percent floor. Since borrowings outstanding under the overdraft facility at June 30, 2020 were denominated in euros, which bore a negative LIBOR rate, the interest applicable to the Company was 1.0%. Significant non-cash operating items and capital expenditures reflected in the cash flows from discontinued operations for the fiscal years ended June 30, 2020, 2019 and 2018 were as follows:
| Fiscal Year Ended June 30, |  |  |  |
| 2020 |  | 2019 |  | 2018
| (in thousands) |  |  |  |
Loss on held for sale classification | $ | 88,923 |  |  | $ | — |  |  | $ | — |
Impairment charges | 13,747 |  |  | — |  |  | — |
Depreciation and amortization | 2,378 |  |  | 2,966 |  |  | 3,003 |
Capital expenditures | (77) |  |  | (1,416) |  |  | (1,161) |

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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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