Note 12 - Discontinued Operations

3 Months Ended

Feb. 26, 2022

Notes to Financial Statements

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

12. Discontinued Operations

On January 31, 2022, we entered into a definitive agreement to sell substantially all of the assets of Zenith Freight Lines, LLC (“Zenith”) to J.B. Hunt Transport Services, Inc. (“J.B. Hunt”) for approximately $86,900 in cash subject to a customary post-closing working capital adjustment. The sale was completed on February 28, 2022. Accordingly, the operations of our logistical services segment, which consisted entirely of the operations of Zenith, are presented in the accompanying condensed consolidated statements of income as discontinued operations, and the assets sold to and liabilities assumed by J.B. Hunt are presented in the accompanying condensed consolidated balance sheets as assets and liabilities of discontinued operations held for sale.

The following table summarizes the major classes of assets and liabilities of the discontinued operations, as reported in the condensed consolidated balance sheets as of February 26, 2022 and November 27, 2021:

	February 26, 2022		November 27, 2021
Carrying amounts of major classes of assets included as part of discontinued operations:
Accounts receivable, net	$	7,174	$	7,601
Other current assets		3,506		3,463
Property and equipment, net		23,891		24,898
Goodwill and other intangible assets		9,023		9,094
Right of use assets under operating leases		17,729		18,193
Other		565		572
	$	61,888	$	63,821
Balance sheet classification:
Current assets of discontinued operations held for sale	$	61,888	$	11,064
Long-term assets of discontinued operations held for sale		-		52,757
Total assets of discontinued operations held for sale	$	61,888	$	63,821
Carrying amounts of major classes of liabilities included as part of discontinued operations:
Accounts payable	$	3,575	$	4,336
Accrued compensation and benefits		2,582		3,295
Current portion operating lease obligations		7,585		7,458
Other current liabilites and accrued expenses		902		1,006
Long-term portion of operating lease obligations		10,332		10,996
Other long-term liabilities		4,916		5,214
	$	29,892	$	32,305
Balance sheet classification:
Current liabilities of discontinued operations held for sale	$	29,892	$	16,095
Long-term liabilities of discontinued operations held for sale		-		16,210
Total liabilities of discontinued operations held for sale	$	29,892	$	32,305

The following table summarizes the major classes of line items constituting income of the discontinued operations, as reported in the condensed consolidated statements of income for the three months ended February 26, 2022 and February 27, 2021:

	Quarter Ended
	February 26, 2022			February 27, 2021
Major line items constituting pretax income of discontinued operations:
Logistical services revenue	$	16,776		$	12,018
Cost of logistical services		15,001			11,558
Other loss, net		(63	)		(38	)
Pretax income of discontinued operations		1,712			422
Income tax expense		430			109
Income from discontinued operations	$	1,282		$	313

The amounts shown above represent the results of Zenith’s business transactions with third parties. During the three months ended February 26, 2022 and February 27, 2021, Zenith also charged Bassett $9,121 and $8,063, respectively, for logistical services provided to our wholesale segment. We have entered into a service agreement with J.B. Hunt for the continuation of these services for a period of seven years following the sale of Zenith.

Other loss, net, of discontinued operations for the three months ended February 26, 2022 and February 27, 2021 includes interest in the amount of $78 and $43, respectively, arising from finance leases assumed by J.B. Hunt as part of the transaction.

The following table summarizes the cash flows generated by discontinued operations during the three months ended February 26, 2022 and February 27, 2021:

	Quarter Ended
	February 26, 2022			February 27, 2021
Cash provided by operating activities	$	1,681		$	2,841
Cash used in investing activities		(81	)		(120	)
Cash used in financing activities		(371	)		(173	)
Net cash provided by discontinued operations	$	1,229		$	2,548