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Discontinued Operations | 12 Months Ended
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Jun. 30, 2023
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | Note 3. Discontinued Operations On June 30, 2023, the Company completed the sale of certain assets of the Company related to its direct ship and private label business, including the Company’s production facility and corporate office building in Northlake, Texas, pursuant to that certain Asset Purchase Agreement dated as of June 6, 2023, by and between the Company and TreeHouse Foods, Inc. (the "Buyer"), as amended by that certain Amendment to the Asset Purchase Agreement, dated June 30, 2023. The aggregate purchase price was $91.7 million in cash including $2.0 million of escrow receivable. The Company recognized an after-tax loss on the transaction of approximately $25.4 million. The accounting requirements for reporting the Sale as a discontinued operation were met when the Sale was completed. Accordingly, the consolidated financial statements reflect the results of the Sale as a discontinued operation for all periods presented. The Company incurred approximately $0.5 million of transaction-related costs associated with the Sale during the year ended June 30, 2023, which was primarily for professional fees. These amounts are recorded in the loss on disposition of discontinued operations before income taxes component of loss from discontinued operations, net of income taxes. Additionally, the Company was required to utilize a portion of the cash proceeds from the Sale to fully extinguish its outstanding term loan. The remaining proceeds were utilized to repay a portion of the outstanding revolving credit facility. The Company also entered into (i) a Transition Services Agreement with the Buyer pursuant to which the Company will provide the Buyer certain specified services on a temporary basis, (ii) a Co-Manufacturing Agreement with the Buyer pursuant to which the Company and Buyer will manufacture certain products for each other on a temporary basis and (iii) a Lease Agreement with the Buyer pursuant to which the Company will lease office and warehouse space from the Buyer on a temporary basis. Assets related to the divested operations have been reclassified in the Consolidated Balance Sheet as of June 30, 2022, which are detailed in the table below:
(In thousands) |  |  | June 30, 2022
Current assets, discontinued operations: |  |  |
Inventories |  |  | $ | 42,050 |
Non-current assets, discontinued operations: |  |  |
Property, plant and equipment, net |  |  | 95,943 |
The operating results of the divested operations, have been reclassified as discontinued operations in the Consolidated Statements of Operations for the years ended June 30, 2023, 2022 and 2021, as detailed in the table below:
|  | For the year ended June 30,
(In thousands) |  | 2023 |  | 2022 |  | 2021
Net sales |  | $ | 160,977 |  |  | $ | 154,410 |  |  | $ | 135,939 |
Cost of goods sold |  | 162,227 |  |  | 151,309 |  |  | 130,795 |
Gross (loss) profit |  | (1,250) |  |  | 3,101 |  |  | 5,144 |
Selling expenses |  | 6,578 |  |  | 7,819 |  |  | 7,220 |
General and administrative expenses |  | 4,750 |  |  | 3,929 |  |  | 3,968 |
Loss on sale of assets |  | 25,414 |  |  | — |  |  | — |
Operating expense |  | 36,742 |  |  | 11,748 |  |  | 11,188 |
Loss from discontinued operations |  | (37,992) |  |  | (8,647) |  |  | (6,044) |
Other (expense) income: |  |  |  |  |  |
Interest expense |  | (9,008) |  |  | (5,507) |  |  | (6,061) |
Other, net |  | 1,124 |  |  | 42 |  |  | 334 |
Total other (expense) |  | (7,884) |  |  | (5,465) |  |  | (5,727) |
Loss from discontinued operations before taxes |  | (45,876) |  |  | (14,112) |  |  | (11,771) |
Income tax benefit |  | (734) |  |  | (425) |  |  | (333) |
Loss from discontinued operations, net of income taxes |  | $ | (45,142) |  |  | $ | (13,687) |  |  | $ | (11,438) |
Interest expense for the Revolver was allocated on a ratio of net assets discontinued to the sum of consolidated net assets plus consolidated debt and the Term Loan was fully allocated to discontinued operations as it was required to be repaid in full. Applicable Consolidated Statements of Cash Flow information related to the divested operations for the years ended June 30, 2023, 2022 and 2021 are detailed in the table below:
|  | For the Years Ended June 30,
(In thousands) |  | 2023 |  | 2022 |  | 2021
Cash Flows from Discontinued Operations |  |  |  |  |  |
Net cash provided by (used in) operating activities |  | 444 |  |  | (13,192) |  |  | (1,935) |
Net cash provided by (used in) investing activities |  | 88,105 |  |  | (1,539) |  |  | (5,540) |
Note 4. Sales of Assets Sale of Branch Properties During the fiscal year ended June 30, 2023, the Company completed the sale of the following branch properties related to continuing operations (in thousands):
Name of Branch Property |  | Date Sold |  | Sales Price |  | Net Proceeds |  | Gain |  |  |  |  |  |
Portland, Oregon |  | 9/23/2022 |  | $ | 1,990 |  |  | $ | 1,880 |  |  | $ | 1,770 |  |  |  |  |  |  |
San Diego, California |  | 9/19/2022 |  | 7,574 |  |  | 7,169 |  |  | 6,425 |  |  |  |  |  |  |
Fresno, California |  | 10/7/2022 |  | 760 |  |  | 716 |  |  | 648 |  |  |  |  |  |  |
Sacramento, California |  | 2/15/2023 |  | 2,174 |  |  | 2,051 |  |  | 1,941 |  |  |  |  |  |  |
Assets Held for Sale The Company sometimes pursues options to divest corporate assets, primarily related to land and buildings. As of June 30, 2023 and 2022, certain branch properties met the accounting guidance criteria to be classified as held for sale, and it is the Company's intention to complete the sales of these assets within the twelve months following June 30, 2023. As such, the Company evaluated the assets to determine whether the carrying value exceeded the fair value less any costs to sell. No loss was recorded as of June 30, 2023 and 2022 and the aggregate assets held for sale are presented as a separate line item in the consolidated balance sheet. The following table presents net carrying value related to the major classes of assets that were classified as held for sale from continuing operations at June 30, 2023 and June 30, 2022 :
(In thousands) |  | June 30, 2023 |  | June 30, 2022
Building and facilities |  | $ | 4,327 |  |  | $ | 67 |
Land |  | 3,443 |  |  | 965 |
Assets held for sale - continuing operations |  | $ | 7,770 |  |  | $ | 1,032 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI https://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=2122178 + Details
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