v3.20.2
Sale of Latin American Subsidiaries
6 Months Ended
Aug. 01, 2020
Discontinued Operations

NOTE 3. Discontinued Operations

During the fourth quarter of 2018, the Company completed the closure of its verykool business segment.  Also, as discussed in Note 18, the Company sold OneClick Argentino, its business unit in Argentina, and Verablue Caribbean Group, its business unit in the Dominican Republic, which resulted in losses on sale of $13,000 and $136,000 in the transition period from January 1, 2020 to February 1, 2020 and in the 26 weeks ended August 1, 2020, respectively.  Consequently, these business units, plus OneClick International, the wholly owned parent of the two business units, are also reported as discontinued operations in our consolidated financial statements for all periods presented.

The results of discontinued operations for the three months ended June 30, 2019 are as follows (in thousands):

 

 

Verykool

 

 

OneClick International

 

 

OneClick Argentino

 

 

Verablue Caribbean

 

 

TOTAL

 

Net sales

$

 

 

$

 

 

$

2,102

 

 

$

901

 

 

$

3,003

 

Cost of sales

 

 

 

 

1

 

 

 

1,355

 

 

 

624

 

 

 

1,980

 

Gross profit (loss)

 

 

 

 

(1

)

 

 

747

 

 

 

277

 

 

 

1,023

 

Selling, general and administrative expenses

 

19

 

 

 

137

 

 

 

739

 

 

 

298

 

 

 

1,193

 

Operating loss

 

(19

)

 

 

(138

)

 

 

8

 

 

 

(21

)

 

 

(170

)

Other expense, net

 

(4

)

 

 

 

 

 

(38

)

 

 

 

 

 

(42

)

Loss from discontinued operations before income taxes

 

(23

)

 

 

(138

)

 

 

(30

)

 

 

(21

)

 

 

(212

)

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

Net loss from discontinued operations

$

(23

)

 

$

(138

)

 

$

(30

)

 

$

(21

)

 

$

(212

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The results of discontinued operations for the six months ended June 30, 2019 are as follows (in thousands):

 

 

Verykool

 

 

OneClick International

 

 

OneClick Argentino

 

 

Verablue Caribbean

 

 

TOTAL

 

Net sales

$

47

 

 

$

 

 

$

3,890

 

 

$

1,808

 

 

$

5,745

 

Cost of sales

 

47

 

 

 

12

 

 

 

2,546

 

 

 

1,234

 

 

 

3,839

 

Gross profit (loss)

 

 

 

 

(12

)

 

 

1,344

 

 

 

574

 

 

 

1,906

 

Selling, general and administrative expenses

 

27

 

 

 

254

 

 

 

1,594

 

 

 

611

 

 

 

2,486

 

Operating loss

 

(27

)

 

 

(266

)

 

 

(250

)

 

 

(37

)

 

 

(580

)

Other income (expense), net

 

26

 

 

 

(13

)

 

 

(220

)

 

 

 

 

 

(207

)

Loss from discontinued operations before income taxes

 

(1

)

 

 

(279

)

 

 

(470

)

 

 

(37

)

 

 

(787

)

Provision for income taxes

 

(2

)

 

 

 

 

 

 

 

 

 

 

 

(2

)

Net loss from discontinued operations

$

(3

)

 

$

(279

)

 

$

(470

)

 

$

(37

)

 

$

(789

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The results of discontinued operations for the transition period from January 1, 2020 to February 1, 2020 are as follows (in thousands):

 

 

Verykool

 

 

OneClick International

 

 

OneClick Argentino

 

 

Verablue Caribbean

 

 

TOTAL

 

Net sales

$

 

 

$

 

 

$

821

 

 

$

334

 

 

$

1,155

 

Cost of sales

 

8

 

 

 

 

 

 

544

 

 

 

223

 

 

 

775

 

Gross profit (loss)

 

(8

)

 

 

 

 

 

277

 

 

 

111

 

 

 

380

 

Selling, general and administrative expenses

 

2

 

 

 

1

 

 

 

203

 

 

 

81

 

 

 

287

 

Operating loss

 

(10

)

 

 

(1

)

 

 

74

 

 

 

30

 

 

 

93

 

Other income (expense), net

 

 

 

 

 

 

 

(21

)

 

 

(6

)

 

 

(27

)

Loss from discontinued operations before income taxes

 

(10

)

 

 

(1

)

 

 

53

 

 

 

24

 

 

 

66

 

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income from discontinued operations

$

(10

)

 

$

(1

)

 

$

53

 

 

$

24

 

 

$

66

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

There were no results of discontinued operations for the 13 weeks ended August 1, 2020.  The results of discontinued operations for the 26 weeks ended August 1, 2020 are as follows (in thousands):

 

 

Verykool

 

 

Verablue Caribbean

 

 

TOTAL

 

Net sales

$

 

 

$

407

 

 

$

407

 

Cost of sales

 

 

 

 

319

 

 

 

319

 

Gross profit (loss)

 

 

 

 

88

 

 

 

88

 

Selling, general and administrative expenses

 

6

 

 

 

192

 

 

 

198

 

Operating loss

 

(6

)

 

 

(104

)

 

 

(110

)

Other income (expense), net

 

3

 

 

 

(129

)

 

 

(126

)

Loss from discontinued operations before income taxes

 

(3

)

 

 

(233

)

 

 

(236

)

Provision for income taxes

 

 

 

 

 

 

 

 

Net loss from discontinued operations

$

(3

)

 

$

(233

)

 

$

(236

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Latin American Subsidiaries [Member]  
Discontinued Operations

NOTE 18.  Sale of Latin American Subsidiaries

On January 31, 2020, the Company entered into a definitive agreement with two employees of the Company to sell all of its ownership interest in OneClick Argentino S.R.L., the Company’s subsidiary that operated 6 retail electronics stores in Argentina.  The purchase price to the buyers was the assumption of all liabilities of the Argentinian subsidiary, including $321,000 of debt owed to two major distribution suppliers.  OneClick Argentino S.R.L. has been classified as a discontinued operation in the Company’s consolidated financial statements for all periods presented.

On April 6, 2020, the Company entered into a definitive agreement with an employee of the Company to sell all of its ownership interest in Verablue Caribbean Group, S.R.L. (“Verablue”), the Company’s subsidiary that operated 7 retail electronics stores in in the Dominican Republic.  The buyers assumed all liabilities of Verablue, and agreed to pay the Company $100,000 in additional consideration, evidenced by a 6-month installment promissory note.  Verablue has also been classified as a discontinued operation in the Company’s consolidated financial statements for all periods presented.