Discontinued Operations

3 Months Ended

Sep. 30, 2021

Discontinued Operations and Disposal Groups [Abstract]

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 ("Divestitures") as these businesses had been performing below management's expectations. The Company continues to operate its digital business in these countries. Management determined that the Company did not have sufficient scale in these markets to maximize the value-added model for product distribution, leading the Company to focus and invest in its higher-growth, higher-margin businesses. Results from the Divestitures were included within each reportable segment, which includes the Specialty Technology Solutions and Modern Communications & Cloud segments.

During the quarter ended June 30, 2020, the Company recorded a pre-tax loss on sale classification of $88.9 million to reduce the carrying value of the Divestitures to its estimate of fair value (the net proceeds received at closing), less estimated costs to sell. As this loss was determined not to be attributable to any individual components in the Divestitures' net assets, it was reflected as a valuation allowance against the total assets of the Divestitures. During the quarter ended September 30, 2020, the Company recorded an additional pre-tax loss on disposal group of $10.7 million. This additional loss was attributable primarily to a reduction in the net proceeds expected to be realized at closing for the Divestitures.

The Company signed an agreement on July 23, 2020 with Intcomex for its businesses located in Latin America, outside of Brazil. The Company finalized the sale of the Latin America businesses on October 30, 2020. The Company also finalized the sale of the Europe and UK business on November 12, 2020. Total cash received for the sale of divestitures was $34.4 million.

Major components of net loss from discontinued operations for the quarter ended September 30, 2020 were as follows:



	Quarter ended September 30, 2020
	(in thousands)
Net sales	$	145,049
Cost of goods sold	134,534
Gross profit	10,515
Selling, general and administrative expenses	10,913



Operating loss	(398)
Interest expense, net	125
Loss on disposal group	10,686
Other (income) expense, net	492
Loss from discontinued operations before taxes	(11,701)
Income tax expense	3
Net loss from discontinued operations	$	(11,704)

There were no assets or liabilities classified as held-for-sale in the accompanying consolidated balance sheets at September 30, 2021 and June 30, 2021.

Significant non-cash operating items and capital expenditures reflected in the cash flows from discontinued operations for the three months ended September 30, 2020 were as follows:



	Three months ended September 30, 2020
	(in thousands)
Loss on disposal group	$	10,686


Capital expenditures	(36)