Note 18 - Discontinued Operations

12 Months Ended

Nov. 30, 2024

Notes to Financial Statements

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

18. Discontinued Operations

On January 31, 2022, we entered into a definitive agreement to sell substantially all of the assets of Zenith to J.B. Hunt. The sale was completed on February 28, 2022, at which time we received the following net proceeds:

Sales price prior to post-closing working capital adjustment	$	86,939
Less:
Amount held in escrow for contingencies related to representations and warranties (1)		1,000
Seller expenses paid at closing		418
Working capital adjustment paid to buyer		987
Net proceeds from the sale	$	84,534

(1) This was held in escrow until the first anniversary of the sale, at which time the full amount was released to the Company on March 2, 2023.

The sales price was subject to customary post-closing working capital adjustments which were paid during the second half of fiscal 2022 and resulted in a pre-tax gain from the sale of Zenith of $52,534.

The operations of our logistical services segment, which consisted entirely of the operations of Zenith, are presented in the accompanying consolidated statements of operations as discontinued operations.

Following the sale of Zenith, certain of Zenith’s liabilities primarily representing reserves and accrued liabilities for pre-disposal workers’ compensation, health insurance and auto liability claims were retained by Bassett. The remaining balance of these reserves and accruals totaled $114 and $358 at November 30, 2024 and November 25, 2023, respectively, and are included in accrued compensation and benefits and other current liabilities and accrued expenses in the accompanying condensed consolidated balance sheets.

The following table summarizes the major classes of line items constituting income of the discontinued operations, as reported in the consolidated statements of operations for fiscal 2022 (there was no income from discontinued operations in 2024 or 2023):

	2022
Major line items constituting pretax income of discontinued operations:
Logistical services revenue	$	16,776
Cost of logistical services		15,001
Other loss, net		(63	)
Income from operations of logistical services		1,712
Gain on disposal		52,534
Pretax income of discontinued operations		54,246
Income tax expense		14,261
Income from discontinued operations, net of tax	$	39,985

The amounts for revenue and costs of logistical services shown above represent the results of Zenith’s business transactions with third parties. Zenith also charged Bassett for logistical services provided to our wholesale segment in the amount of $9,121 during 2022 prior to disposal. 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. Subsequent to the sale, we incurred $22,721, $26,125 and $27,604 of expense during fiscal 2024, 2023 and 2022, respectively, for the performance of logistical services.

The following table summarizes the cash flows generated by discontinued operations during 2022 (there were no cash flows from discontinued operation in 2024 or 2023):

	2022 (1)
Cash provided by operating activities	$	1,681
Cash used in investing activities		(81	)
Cash used in financing activities		(371	)
Net cash provided by (used in) discontinued operations	$	1,229

(1) Excludes net proceeds from the sale of Zenith.