Quarterly report pursuant to Section 13 or 15(d)

Discontinued Operations

v2.4.0.8
Discontinued Operations
 9 Months Ended
Sep. 27, 2014
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations
Note 2 – 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 announced in July 2014 its intention to divest its bowling products business. On December 31, 2012, the Board of Directors authorized the Company to exit its Hatteras and Cabo boat businesses. As a result of these actions, these businesses, which were previously recorded in the Bowling & Billiards segment and Boat segment, respectively, are being reported as discontinued operations in the Condensed Consolidated Statements of Comprehensive Income for all periods presented. The Company does not have or anticipate 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 have been 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 $264.3 million and an after-tax gain of $52.6 million. In connection with the sale of its retail bowling business, the Company recorded deferred income of $20.7 million related to a trademark license agreement with AMF Bowling Centers, Inc. which will be recognized in the results of operations from continuing operations over 5 years. In connection with the sale of its retail bowling business, the Company has retained certain liabilities and provided guarantees on certain leased bowling centers.

In August 2013, the Company completed the sale of its Hatteras and Cabo boat businesses resulting in an after-tax gain of $1.6 million.

The following table discloses the results of operations of the businesses reported as discontinued operations for the three months and nine months ended September 27, 2014 and September 28, 2013, respectively:
 
Three Months Ended
 
Nine Months Ended
(in millions)
September 27,
2014
 
September 28,
2013
 
September 27,
2014
 
September 28,
2013
Net sales
$
68.8

 
$
70.1

 
$
209.8

 
$
236.2

 
 
 
 
 
 
 
 
Earnings (loss) from discontinued operations before income taxes
(14.4
)
 
(1.4
)
 
$
0.3

 
7.3

Income tax provision (benefit)
(5.2
)
 
(0.4
)
 
0.1

 
(1.0
)
Earnings (loss) from discontinued operations, net of tax
(9.2
)
 
(1.0
)
 
0.2

 
8.3

Gain on disposal of discontinued operations, net of tax (A)
52.6

 
1.6

 
52.6

 
1.6

Net earnings from discontinued operations, net of tax
$
43.4

 
$
0.6

 
$
52.8

 
$
9.9


(A) The Gain on disposal of discontinued operations for 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. The Gain on disposal of discontinued operations for the three months and nine months ended September 28, 2013, includes a pre-tax loss of $1.4 million and a net tax benefit of $3.0 million.

The following table reflects the summary of assets and liabilities held for sale as of September 27, 2014 for the bowling products business and as of December 31, 2013 and September 28, 2013, for the retail bowling and bowling products businesses:
(in millions)
September 27
2014
 
December 31,
2013
 
September 28
2013
Accounts and notes receivable, net
$
20.8

 
$
18.9

 
$
24.3

Net inventory
17.5

 
15.4

 
17.1

Prepaid expenses and other
1.0

 
2.5

 
2.5

Current assets held for sale
39.3

 
36.8

 
43.9

 
 
 
 
 
 
Net property
8.7

 
197.9

 
198.1

Other long-term assets
4.3

 
6.4

 
6.2

Long-term assets held for sale
13.0

 
204.3

 
204.3

Assets held for sale
$
52.3

 
$
241.1

 
$
248.2

 
 
 
 
 
 
Accounts payable
$
6.8

 
$
18.0

 
$
17.4

Accrued expenses
11.3

 
31.7

 
30.5

Current liabilities held for sale
18.1

 
49.7

 
47.9

 
 
 
 
 
 
Other liabilities
7.2

 
9.2

 
8.8

Long-term liabilities held for sale
7.2

 
9.2

 
8.8

Liabilities held for sale
$
25.3

 
$
58.9

 
$
56.7