Assets and Liabilities Held for Sale and Discontinued Operations

6 Months Ended

Jun. 30, 2023

Discontinued Operations and Disposal Groups [Abstract]

Assets and Liabilities Held for Sale and Discontinued Operations

Assets and Liabilities Held for Sale and Discontinued OperationsIn the second quarter of 2023, we announced plans to explore strategic disposition opportunities in our Direct-to-Consumer business as we pursue a capital-light business model focused on our most valuable brands, Playboy and Honey Birdette. As of June 30, 2023, we determined that Yandy and TLA disposal groups met the criteria discussed in Note 1, Basis of Presentation and Summary of Significant Accounting Policies, to be classified as discontinued operations for all periods presented, as the divestiture of Yandy and TLA in the aggregate represents a strategic shift that has or will have a major effect on our operations and financial results. Their assets and liabilities are classified as current assets and liabilities held for sale in the condensed consolidated balance sheets for all periods presented. On April 4, 2023, we completed the sale of Yandy, recognizing a loss on sale of $0.3 million, which is recorded in Other Operating Income, Net in the condensed consolidated statements of operations.

The following table summarizes the components of income (loss) from discontinued operations, net of tax in the accompanying condensed consolidated statements of operations (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net revenues	$	10,003	$	17,533	$	26,241	$	39,851
Costs and expenses:
Cost of sales	(3,810)		(8,513)		(12,179)		(19,427)
Selling and administrative expenses	(5,686)		(9,627)		(15,016)		(19,982)
Total operating expense	(9,496)		(18,140)		(27,195)		(39,409)
Operating income (loss)	507		(607)		(954)		442
Nonoperating income (expense):
Other income, net	11		30		51		82
Total nonoperating income	11		30		51		82
Income (loss) from discontinued operations before income taxes	518		(577)		(903)		524
(Expense) benefit from income tax	(66)		374		(17)		650
Net income (loss) from discontinued operations	$	452	$	(203)	$	(920)	$	1,174

The major classes of assets and liabilities classified as held for sale in the condensed consolidated balance sheets were as follows (in thousands):


	June 30, 2023		December 31, 2022
Assets
Receivables, net of allowance for credit losses	$	12	$	4,206
Inventories, net	4,842		12,477
Prepaid expenses and other current assets	341		539
Property and equipment, net	1,502		3,571
Operating right of use assets	11,906		13,183
Other intangible assets, net	433		471
Other noncurrent assets	275		463
Total assets held for sale	$	19,311	$	34,910
Liabilities
Accounts payable	$	1,100	$	6,541
Deferred revenues	—		282
Operating lease liabilities	12,411		13,682
Other current liabilities and accrued expenses	2,306		6,621
Total liabilities held for sale	$	15,817	$	27,126