XML 37 R24.htm IDEA: XBRL DOCUMENT
v3.19.2

Discontinued operations | 12 Months Ended
--- | ---
Mar. 30, 2019
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued operations |
17. | Discontinued operations
The Company considers a component to be classified as discontinued operations when it meets the criteria established under GAAP related to reporting discontinued operations and disclosures of disposals of components of the Company. The disposal of such components that represents a strategic shift that should have or will have a major effect on the Company’s operations and financial results qualify as discontinued operations. The results of discontinued operations are reported in discontinued operations in the consolidated statements of operations for current and prior periods commencing in the period in which the business meets the criteria of an asset held for sale and discontinued operation, and will include any gain or loss recognized on closing or adjustment of the carrying amount to fair value less cost to sell. On August 11, 2017, the Company entered into a stock purchase agreement with Aurum to sell its wholly-owned subsidiary, Mayors, which operated in Florida and Georgia and is engaged primarily in luxury timepieces and jewelry retail activities. The sale was completed on October 23, 2017 for total consideration of $135.0 million (USD $106.8 million). Because the Company’s retail operations in the U.S market were a signification part of the Company’s operations and financial results, the Company has determined that the disposal of Mayors represents a strategic shift. Accordingly, the activities of Mayors have been segregated and classified as discontinued operations in the consolidated statements of operations and cash flows for all periods presented. In fiscal 2019, the Company incurred transaction related costs of approximately $0.9 million which have been allocated to the results of discontinued operations. Furthermore, in fiscal 2019, the Company recognized a net operating expense recovery of approximately $ 0.5 million as part of the transition services agreement with Aurum (see below) which has been allocated to the results of discontinued operations. In fiscal 2018, legal and professional fees of approximately $3.8 million, as well as debt extinguishment charges of approximately $3.5 million were incurred as a result of the Aurum Transaction. These transaction fees along with the interest expense generated by the Company’s then outstanding credit facilities associated with Mayors were allocated to the results of the discontinued operations. In fiscal 2018, the results of the discontinued operations also included an obsolescence reserve on inventory of $2.7 million. As a condition to the closing of the Aurum Transaction, the Company and Mayors entered into (i) an inventory purchase agreement whereby the Company purchased approximately $2.3 million (USD $1.8 million) in inventory from Mayors; (ii) a transition services agreement whereby the Company agreed to provide certain transition services to Mayors for a period of six months following the closing date of the transaction, subject to certain renewal rights; (iii) a services agreement whereby Mayors agreed to provide certain services to the Company for a period of twelve months following the closing date of the transaction, subject to certain renewal rights and; (iv) an authorized five-year dealer agreement with Mayors whereby Mayors will promote the sale of Birks branded products and trademarks at its existing locations in the United States. The following table presents the net income from discontinued operations for the year ended March 30, 2019, March 31, 2018, and March 25, 2017:
|  | Fiscal Year Ended |
|  | March 30, 2019 |  |  | March 31, 2018* |  |  | March 25, 2017* |
|  | (In thousands, except per share amounts) |
Net sales |  | $ | - |  |  | $ | 110,789 |  |  | $ | 224,319 |
Cost of sales |  |  | - |  |  |  | 72,615 |  |  |  | 143,194 |
Gross profit |  |  | - |  |  |  | 38,174 |  |  |  | 81,125 |
Selling, general and administrative expenses |  |  | 381 |  |  |  | 30,902 |  |  |  | 61,970 |
Restructuring charges |  |  | - |  |  |  | - |  |  |  | 211 |
Depreciation and amortization |  |  | - |  |  |  | 1,674 |  |  |  | 3,170 |
Total operating expenses |  |  | 381 |  |  |  | 32,576 |  |  |  | 65,351 |
Operating (loss) income |  |  | (381 | ) |  |  | 5,598 |  |  |  | 15,774 |
Interest and other financial costs |  |  | - |  |  |  | 3,683 |  |  |  | 6,905 |
Debt extinguishment charges |  |  | - |  |  |  | 3,415 |  |  |  | - |
(Loss) income before taxes |  |  | (381 | ) |  |  | (1,500 | ) |  |  | 8,869 |
Income tax expense (benefit) |  |  | - |  |  |  | 92 |  |  |  | (7,065 | )
(Loss) income from discontinued operations, net of taxes |  |  | (381 | ) |  |  | (1,592 | ) |  |  | 15,934 |
Gain on disposal, net of taxes |  |  | - |  |  |  | 37,682 |  |  |  | - |
Net (loss) income from discontinued operations |  | $ | (381 | ) |  | $ | 36,090 |  |  | $ | 15,934 |
Weighted average common shares outstanding: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 17,961 |  |  |  | 17,961 |  |  |  | 17,961 |
Diluted |  |  | 17,961 |  |  |  | 18,393 |  |  |  | 18,418 |
Net (loss) income from discontinued operations per common share: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | (0.02 | ) |  | $ | 2.01 |  |  | $ | 0.89 |
Diluted |  | $ | (0.02 | ) |  | $ | 1.96 |  |  | $ | 0.87 |
(*) | Recast (refer to note 1)
The table below presents the reconciliation of the gain on the sale of Mayors:
|  | October 23, 2017* |
Cash proceeds on disposal |  | $ | 134,982 |
Legal and professional fees incurred as a result of the Aurum Transaction |  |  | (3,759 | )
Cash |  |  | 3,083 |
Accounts receivable |  |  | 15,705 |
Inventory |  |  | 89,101 |
Prepaid expenses |  |  | 1,110 |
Property and equipment |  |  | 11,176 |
Intangible assets |  |  | 343 |
Other assets |  |  | 244 |
Deferred income tax asset |  |  | 6,705 |
Accounts payable |  |  | (27,207 | )
Accrued expenses |  |  | (3,552 | )
Long-term debt |  |  | (333 | )
Other long-term liabilities |  |  | (2,834 | )
Total identifiable net assets |  |  | 93,541 |
Gain on disposal, net of taxes of nil |  | $ | 37,682 |
(*) | Recast (refer to note 1)

X
- References No definition available. + Details
Name: | us-gaap_DiscontinuedOperationsAndDisposalGroupsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 http://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 http://asc.fasb.org/subtopic&trid=2122178 + Details
Name: | us-gaap_DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration