Sale of Algenist and Discontinued Operations (Notes)

12 Months Ended

Dec. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

Sale of Algenist and Discontinued Operations

SALE OF ALGENIST AND DISCONTINUED OPERATIONS

On August 16, 2016, we sold our Algenist skincare business to TCP Algenist LLC, an affiliate of Tengram Capital Partners and Algenist Holdings, Inc., in exchange for $18.8 million in cash, net of closing costs, 19.9% of the fully diluted equity of Algenist Holdings, Inc. and the assumption of substantially all of the liabilities related to the Algenist skincare business by Algenist Holdings, Inc. The gain on the sale of the Algenist business was as follows (in thousands):

Cash received, net of closing costs	$	18,837
19.9% interest in Algenist at fair value	1,600
	20,437
Net assets sold (primarily working capital)	(11,470		)
Gain on sale of Algenist before income taxes	$	8,967

The summary comparative financial results of the Algenist discontinued operations were as follows (in thousands):

	Year ended December 31,
	2016			2015			2014
Total revenues	$	13,674		$	23,278		$	24,429
Costs and operating expenses:
Cost of product revenues	4,724			7,616			7,746
Sales, general and administrative	12,525			18,692			17,645
Total costs and operating expenses	17,249			26,308			25,391
Income (loss) before other expense	(3,575		)	(3,030		)	(962		)
Other expense	(29		)	(35		)	(18		)
Gain on sale of Algenist	8,967			—			—
Income (loss) from discontinued operations before income taxes	5,363			(3,065		)	(980		)
Income tax provision	2,062			—			—
Income (loss) from discontinued operations	$	3,301		$	(3,065	)	$	(980	)

Assets and liabilities related to Algenist presented as discontinued operations as of December 31, 2015 were as follows (in thousands):

Accounts receivable	$	1,941
Inventories	8,806
Prepaid expenses and other current assets	2,642
Current assets of discontinued operations	$	13,389
Property, plant and equipment, net	$	348
Accounts payable	$	2,065
Accrued liabilities	849
Current liabilities of discontinued operations	$	2,914
Noncurrent liabilities of discontinued operations	$	26

After the sale, we consider that we have sufficient influence over Algenist Holdings, Inc. to require equity accounting. Hence we recognize our proportionate share of the earnings (losses) of Algenist Holdings, Inc. under the equity method of accounting within results of continuing operations. Our investment in Algenist Holdings, Inc. included in equity method investment assets on our consolidated balance sheet was $1.5 millionas of December 31, 2016, and our equity loss from our investment in Algenist Holdings, Inc. for the period from August 16, 2016 to December 31, 2016 was $0.1 million.

Summarized financial information

Summarized financial information for the Algenist Holdings, Inc. balance sheet as of December 31, 2016 and the income statement for the period from August 16, 2016 to December 31, 2016 was as follows (in thousands):

Current assets	$	14,883
Property, plant and equipment, net	666
Other assets	15,044
Total assets	$	30,593
Current liabilities	$	2,580
Noncurrent liabilities	1
Stockholders' equity	28,012
Total liabilities and stockholders' equity	$	30,593
Statements of Operations:
Net sales	$	8,843
Gross profit	$	5,861
Net loss	$	(768	)