Discontinued Operations

6 Months Ended

Jun. 30, 2022

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

ote C — Discontinued Operations

Sale of Advanced Circuits

On January 10, 2023, the LLC, solely in its capacity as the representative of the holders of stock and options of Compass AC Holdings, Inc., a majority owned subsidiary of the LLC, entered into a definitive Agreement and Plan of Merger with APCT Inc. (“ACI Purchaser”), Circuit Merger Sub, Inc. (“ACI Merger Sub”) and Advanced Circuits, pursuant to which ACI Purchaser agreed to acquire all of the issued and outstanding securities of Advanced Circuits, the parent company of the operating entity, Advanced Circuits, Inc., through a merger of ACI Merger Sub with and into Advanced Circuits, with Advanced Circuits surviving the merger and becoming a wholly owned subsidiary of ACI Purchaser (the “ACI Merger”). The ACI Merger was completed on February 14, 2023. The sale price of Advanced Circuits was based on an enterprise value of $220 million, subject to certain adjustments based on matters such as the working capital and cash and debt balances of Advanced Circuits at the time of the closing. After the allocation of the sales price to Advanced Circuits non-controlling equity holders and the payment of transaction expenses, the Company received approximately $170.9 million of total proceeds at closing, of which $66.9 million related to the repayment of intercompany loans with the Company. The Company recorded a gain on the sale of ACI of $102.2 million, net of an income tax provision of $4.6 million, in the first half of 2023.

Summarized results of operations of ACI for the period of January 1, 2023 through the date of disposition and the three and six months ended June 30, 2022 and are as follows (in thousands):


	For the period January 1, 2023 through disposition		Three months ended June 30, 2022		Six months ended June 30, 2022
Net sales	$	8,829	$	22,157	$	45,406
Gross profit	$	3,663	$	10,095	$	21,025
Operating income	$	1,058	$	5,806	$	12,330
Income (loss) from continuing operations before income taxes (1)	$	(2,464)	$	5,826	$	12,303
Provision (benefit) for income taxes	$	(1,073)	$	822	$	1,929
Income (loss) from discontinued operations (1)	$	(1,391)	$	5,004	$	10,374

(1) The results of operations for the period from January 1, 2023 through disposition and the three and six months ended June 30, 2022, each exclude $1.4 million, $1.6 million and $3.3 million, respectively, of intercompany interest expense.

The following table presents summary balance sheet information of ACI that is presented as discontinued operations as of December 31, 2022 (in thousands):


	December 31, 2022
Assets
Cash and cash equivalents	$	3,391
Accounts receivable, net	10,044
Inventories, net	4,345
Prepaid expenses and other current assets	346
Current assets of discontinued operations	$	18,126
Property, plant and equipment, net	6,949
Goodwill	66,678
Other non-current assets	6,220
Non-current assets of discontinued operations	$	79,847

Liabilities
Accounts payable	$	3,810
Accrued expenses	5,570
Due to related party	250
Other current liabilities	1,518
Current liabilities of discontinued operations	$	11,148
Deferred income taxes	10,999
Other non-current liabilities	5,193
Non-current liabilities of discontinued operations	$	16,192
Noncontrolling interest of discontinued operations	$	1,533