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Discontinued Operations, Exit Activities, and Clinic Obligations
 9 Months Ended
Sep. 30, 2016
Discontinued Operations, Exit Activities, and Clinic Obligations [Abstract]  
Discontinued Operations, Exit Activities, and Clinic Obligations

11. Discontinued Operations, Exit Activities, and Clinic Obligations



In 2014, the Company exited the Medifast Weight Control corporate center model by selling 41 company owned centers to existing franchise partners (24 centers were sold in June 2014 and the remaining 17 centers were sold in December 2014) and closure of the remaining 34 corporate centers.  In accordance with ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity the assets, liabilities, operating results, and cash flows of the corporate Medifast Weight Control Center business unit have been presented separately as discontinued operations in the Consolidated Financial Statements for all periods presented. 



The following is a summary of the Company’s operating results for discontinued operations for the:







 

 

 

 

 

 

 



Three Months Ended September 30,

 

Nine Months Ended September 30,



2016

 

2015

 

2016

 

2015



 

 

 

 

 

 

 

Income before income taxes from discontinued operations

$                       - 

 

$              140 

 

$                       - 

 

$              834 

Income tax provision

 -

 

 36 

 

 -

 

 301 

Income from discontinued operations, net of tax

$                       - 

 

$                  104 

 

$                       - 

 

$                  533 





 

The following table presents the aggregate carrying amounts of the major classes of assets and liabilities included in discontinued operations as of:







 

 

 



 

September 30, 2016

ASSETS

 

 

 

Current assets:

 

 

 

Other assets

 

$

 15 



 

 

 

     Total assets

 

$

 15 



 

 

 

LIABILITIES

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued expenses

 

$

 294 

     Total current liabilities

 

 

 294 



 

 

 

Long-term lease obligations

 

 

 7 



 

 

 

     Total liabilities

 

$

 301 

   

The following table summarizes the exit obligations, primarily for lease obligations related to closed corporate Medifast Weight Control Centers, severance accruals, and customer refunds incurred as of September 30, 2016:







 

 

 

Ending accrued balance as of December 31, 2015

 

$

 1,129 

Adjustments recorded during the period (1)

 

 

 192 

Payments during the period

 

 

 (1,020)

Ending accrued balance as of September 30, 2016

 

$

 301 





(1)- The adjustments to the accrual recorded in 2016 relate primarily to agreements reached with franchisees related to lease obligations for previously owned MWCC Corporate Centers.



These charges were recorded in the balance sheet as of September 30, 2016 as follows:







 

 

 

Total current liabilities of discontinued operations

 

$

 294 

Total long-term liabilities of discontinued operations

 

 

 7 

Ending accrued balance as of September 30, 2016

 

$

 301