Assets And Liabilities Held-For-Sale

9 Months Ended

Sep. 30, 2020

Discontinued Operations and Disposal Groups [Abstract]

ASSETS AND LIABILITIES HELD-FOR-SALE

As part of our strategic decision to renew our focus on connect in-home fitness we are selling Octane Fitness®. The Octane Fitness disposal group is reported within our Retail segment.

We met the relevant criteria for reporting the assets and liabilities of Octane Fitness® as held-for-sale as of June 30, 2020, as a result, assessed the disposal group for losses in accordance with ASC 360. The net carrying value of Octane Fitness® was compared to its fair value less estimated costs to sell as of June 30, 2020 and September 30, 2020. The Octane Fitness® disposal group resulted in a gain on disposal group within continuing operations for the three months ended September 30, 2020 of $8.3 million and a loss on disposal group for the same period ended June 30, 2020 of $29.0 million.

In the second quarter of 2020 the original estimate of fair value was based upon a range of fair value estimates determined using a combination of a discounted cash flow and market multiples that existed as of that original valuation date. During the third quarter, we received several letters of intent that were consistent with the range of fair values estimated during the second quarter. Prior to the end of the third quarter, management selected a single buyer to negotiate with exclusively and therefore had new information based upon the negotiated purchase price that supported a higher fair value.

For additional information related to assets and liabilities held-for-sale, see Notes 4 and 18.

The assets and liabilities of the Octane Fitness® disposal group were recorded on the condensed consolidated balance sheets as current assets held-for-sale of $28.7 million and current liabilities held-for-sale of $9.7 million as follows (in thousands):


	As of
	September 30, 2020
Assets:
Cash and cash equivalents	$	108
Trade receivables	3,937
Inventories	10,703
Prepaids and other current assets	586
Property, plant and equipment, net	1,571
Other intangible assets	32,045
Loss on disposal group	(20,272)
Other assets	23
Total current assets held-for-sale	$	28,701
Liabilities:
Trade payables	$	4,659
Accrued liabilities	759
Warranty obligations	2,779
Deferred income tax liabilities	1,513

Total current liabilities held-for-sale	$	9,710