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Assets Held for Sale and Discontinued Operations

6 Months Ended

Apr. 30, 2024

Assets Held for Sale and Discontinued Operations

Assets Held for Sale and Discontinued Operations

11.Assets Held for Sale and Discontinued Operations

We and certain of our subsidiaries have entered into non-binding negotiations regarding the potential sale of all of the assets used in our Fresh Cut business and certain related real property. The terms, including price and structure, remain under negotiation, and we are targeting completion of the Proposed Transaction during the third quarter of fiscal 2024. The Fresh Cut business represents substantially all of the business of the Prepared segment other than the guacamole business, which would be retained following the Proposed Transaction.

During the six-month period ended April 30, 2024, management has concluded that the Fresh Cut business meets the requirements to be classified as held for sale and discontinued operations. As a result, the financial results of that business are reported as discontinued operations in the accompanying statements of operations, and its assets and liabilities are reflected as amounts held for sale in the accompanying balance sheets. The Company's reporting segments have also been changed for the effects of the planned divestiture, as described in Note 2.

The following table presents the major classes of assets and liabilities of the Fresh Cut business that are classified as held for sale in the accompanying balance sheets (in thousands).


	April 30,		October 31,
	2024		2023

Accounts receivable, net	$	26,532	$	27,479
Inventories, net		7,485		7,859
Prepaid expenses and other current assets		2,529		2,195
Property, plant, and equipment, net		49,872		51,805
Operating lease right-of-use assets		28,942		29,676
Goodwill		18,442		18,442
Intangibles		5,047		5,423
Other assets		78		78
Total assets held for sale	$	138,927	$	142,957


Trade accounts payable	$	9,901	$	10,440
Accrued expenses		11,901		15,299
Current portion of operating leases		3,360		3,399
Current portion of long-term obligations and finance leases		467		773
Long-term operating leases, less current portion		26,520		28,065
Long-term obligations and finance leases, less current portion		908		1,002
Other long-term liabilities		204		228
Total liabilities held for sale	$	53,261	$	59,206

Goodwill related to our Prepared segment was allocated between our Fresh Cut and guacamole businesses based on the relative fair value of the disposal group and the portion of the reporting unit to be retained.

The following table summarizes the results of operations of the Fresh Cut business that are being reported as discontinued operations (in thousands):


	Three months ended				Six months ended
	April 30,				April 30,
	2024		2023		2024		2023

Net sales	$	83,959	$	86,410	$	170,372	$	179,851
Cost of sales		80,149		87,044		165,731		179,138
Gross profit (loss)		3,810		(634)		4,641		713
Selling, general and administrative		4,207		4,715		8,703		9,426
Operating loss		(397)		(5,349)		(4,062)		(8,713)
Interest expense		(26)		(29)		(54)		(68)
Other income (expense), net		15		(29)		25		(15)
Loss from discontinued operations before income taxes		(408)		(5,407)		(4,091)		(8,796)
Income tax benefit		—		—		—		1,039
Net loss from discontinued operations	$	(408)	$	(5,407)	$	(4,091)	$	(7,757)

Select cash flow information related to the Fresh Cut business follows (in thousands):


	Six months ended
	April 30,
	2024		2023

Net cash used in operating activities	$	(1,970)	$	(3,770)
Net cash used in investing activities	$	(353)	$	(4,651)