Quarterly report pursuant to Section 13 or 15(d)

Discontinued Operations

v3.3.0.814
Discontinued Operations
 9 Months Ended
Oct. 03, 2015
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations
Discontinued Operations

On July 17, 2014, the Company entered into an agreement to sell its retail bowling business to AMF Bowling Centers, Inc. In connection with its decision to sell its bowling centers, the Company also announced its intention to divest its bowling products business. As a result of these actions, these businesses, which were previously recorded in the Company's Bowling & Billiards segment, were reported as discontinued operations in the Condensed Consolidated Statements of Comprehensive Income for all periods presented. The Company does not have any significant continuing involvement or continuing cash flows associated with these businesses. The assets and liabilities of these businesses met the accounting criteria to be classified as held for sale and were aggregated and reported on separate lines of the Condensed Consolidated Balance Sheets for all periods presented.

On September 18, 2014, the Company completed the sale of its retail bowling business to AMF Bowling Centers, Inc. as well as, in separate transactions, completed the sale of two retail bowling centers in California. The sales resulted in net cash proceeds of $272.1 million, which includes a $2.5 million working capital adjustment and $5.3 million of other proceeds received in the third quarter of 2015. The sales also resulted in an after-tax gain of $55.1 million, which included an after-tax gain of $2.5 million in both the three months and nine months ended October 3, 2015. In connection with the sale of its retail bowling business, the Company entered into a trademark licensing agreement allowing AMF Bowling Centers, Inc. to use the Company's bowling retail related trademarks and trade names over a five year period from the date of acquisition. As a result, the Company recorded deferred income of $20.7 million related to this agreement, which will be recognized as Other income in the Condensed Consolidated Statements of Comprehensive Income over five years. In connection with the sale of its retail bowling business, the Company has retained certain liabilities and provided guarantees on the leases of certain bowling centers.

On May 22, 2015, the Company completed the sale of its bowling products business which resulted in net cash proceeds of $42.2 million, which included a $2.0 million working capital adjustment recorded in the third quarter of 2015, and an after-tax gain of $10.3 million. In connection with the sale of its bowling products business, the Company has retained certain liabilities.

The following table discloses the results of operations of the businesses reported as discontinued operations for the three months and nine months ended October 3, 2015 and September 27, 2014:
 
Three Months Ended
 
Nine Months Ended
(in millions)
October 3,
2015
 
September 27,
2014
 
October 3,
2015
 
September 27,
2014
Net sales
$
—

 
$
68.8

 
$
37.5

 
$
209.8

 
 
 
 
 
 
 
 
Earnings (loss) from discontinued operations before income taxes
$
1.0

 
$
(14.4
)
 
$
1.4

 
$
0.3

Income tax provision (benefit)
0.1

 
(5.2
)
 
(0.1
)
 
0.1

Earnings (loss) from discontinued operations, net of tax
0.9

 
(9.2
)
 
1.5

 
0.2

Gain on disposal of discontinued operations, net of tax (A)
2.8

 
52.6

 
12.8

 
52.6

Net earnings from discontinued operations, net of tax
$
3.7

 
$
43.4

 
$
14.3

 
$
52.8


(A) The Gain on disposal of discontinued operations for the three months ended October 3, 2015 includes a pre-tax gain of $4.4 million and a net tax provision of $1.6 million. The Gain on disposal of discontinued operations for the nine months ended October 3, 2015 includes a pre-tax gain of $12.8 million and a net tax benefit of $0.0 million. The Gain on disposal of discontinued operations for both the three months and nine months ended September 27, 2014 includes a pre-tax gain of $65.6 million and a net tax provision of $13.0 million.

There were no assets and liabilities held for sale as of October 3, 2015. The following table reflects the summary of assets and liabilities held for sale for the bowling products business as of December 31, 2014 and September 27, 2014:
(in millions)
December 31,
2014
 
September 27,
2014
Accounts and notes receivable, net
$
14.0

 
$
20.8

Net inventory
15.3

 
17.5

Prepaid expenses and other
0.7

 
1.0

Current assets held for sale
30.0

 
39.3

 
 
 
 
Net property
8.8

 
8.7

Other long-term assets
3.8

 
4.3

Long-term assets held for sale
12.6

 
13.0

Assets held for sale
$
42.6

 
$
52.3

 
 
 
 
Accounts payable
$
4.5

 
$
6.8

Accrued expenses
11.2

 
11.3

Current liabilities held for sale
15.7

 
18.1

 
 
 
 
Other liabilities
8.2

 
7.2

Long-term liabilities held for sale
8.2

 
7.2

Liabilities held for sale
$
23.9

 
$
25.3