Discontinued Operations
On September 10, 2013, the Company sold its Hardware business, including the Levolor®-branded and private label drapery hardware business, for net cash consideration of $182.9 million, of which $2.5 million was received in January 2014. The products sold by the Hardware business included convenience and window hardware, manual paint applicators, and drapery and cabinet hardware. The proceeds are net of $3.9 million of transaction expenses and $2.6 million of cash included in the assets sold. The net assets of the Hardware business were $72.8 million, including $21.2 million of goodwill, resulting in a pretax gain of $110.1 million. In addition, the Company retained approximately$27.0 million of accounts receivable, net of customer-related liabilities, associated with the Hardware business.
On July 12, 2013, the Company completed the sale of its Teach business, which provided interactive teaching technology solutions. The Company recorded $22.7 million of pretax losses during 2013 relating to the impairments of goodwill, intangibles and other long-lived assets and write-downs of working capital associated with the Teach business.
On July 1, 2011, the Company sold its hand torch and solder business to an affiliate of Worthington Industries, Inc. (“Worthington”) for cash consideration of $51.0 million, $8.0 million of which was held in escrow for a period of one year. The cash consideration paid in connection with the transaction provided for settlement of all claims involving the Company’s litigation with Worthington. In connection with the sale of the business, the Company transferred net assets with a carrying value of approximately $11.1 million to Worthington, representing property, plant and equipment, certain intangible assets, and net working capital. The Company allocated $35.2 million of goodwill to the hand torch and solder business, and the $35.2 million of goodwill was written off in connection with the sale. The Company retained approximately $13.0 million of accounts receivable associated with the hand torch and solder business that resulted from sales prior to July 1, 2011. During 2012, the conditions related to the escrow were satisfied and resolved, and the Company received $7.8 million from the escrow and recognized the proceeds as a gain from the sale of the hand torch and solder business in discontinued operations.
The following table provides a summary of amounts included in discontinued operations, which primarily relate to the Hardware, Teach and hand torch and solder businesses (in millions):
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| | | | | | | | | | | |
| 2013 | | 2012 | | 2011 |
Net sales | $ | 194.7 |
| | $ | 322.8 |
| | $ | 411.7 |
|
(Loss) income from discontinued operations before income taxes(1) | $ | (5.4 | ) | | $ | 11.6 |
| | $ | (47.6 | ) |
Income tax (benefit) expense | (1.0 | ) | | 4.0 |
| | (0.8 | ) |
(Loss) income from discontinued operations | (4.4 | ) | | 7.6 |
| | (46.8 | ) |
Net gain (loss) on disposal(2) | 58.9 |
| | 1.7 |
| | (15.2 | ) |
Income (loss) from discontinued operations, net of tax | $ | 54.5 |
| | $ | 9.3 |
| | $ | (62.0 | ) |
(1) The results of operations from discontinued operations for 2011 includes goodwill impairment charges of $64.7 million (pretax) related to the Hardware business. See Footnote 7 for further details.
| |
(2) | 2013 includes pretax gains of $87.4 million (related tax expense of $28.5 million) relating to net gains from sale; impairments and write-offs of goodwill, intangibles and other long-lived assets; and write-downs and write-offs of net working capital. For 2012, net gain on disposal includes pretax gains of $5.1 million (related tax expense of $3.4 million) relating to the sale of the hand torch and solder business. For 2011, net loss on disposal includes a pretax loss of $13.9 million (related tax expense of $1.3 million) relating to the sale of the hand torch and solder business. |
