Discontinued Operations

On May 7, 2018, the Company sold certain assets, including the Betancourt Nutrition® brand, and liabilities of FDC Vitamins, LLC d/b/a Nutri-Force Nutrition (“Nutri-Force”) to Arizona Nutritional Supplements, LLC (“ANS”). Proceeds from the sale, net of transaction costs, were approximately $14.8 million after working capital adjustments in the third quarter of Fiscal 2018 of approximately $0.8 million. The Company recognized a pre-tax loss on the sale of Nutri-Force of $0.2 million. In connection with the sale, the parties executed a transition services agreement for an initial term of six months whereby the Company agreed to provide services to operate the manufacturing facilities in Miami Lakes, Florida and to transition the production of products to ANS facilities. In addition, the parties executed supply agreements in which the Company has agreed to purchase a total of $53.0 million annually of its private label products and Betancourt Nutrition® brand products from ANS for a term of five years.

The results of operations of Nutri-Force for the three and nine months ended September 29, 2018 are classified as discontinued operations in the consolidated statements of operations. The consolidated balance sheet as of December 30, 2017 and the statements of operations for the three and nine months ended September 30, 2017 have been restated to reflect the discontinued operations.



Reconciliation of the Carrying Amounts of Major Classes of Assets and Liabilities of the Discontinued Operation to Total Assets and Liabilities of the Disposal Group Classified as Held for Sale That Are Presented Separately in the Balance Sheet (in thousands)
	As of December 30, 2017
Carrying amounts of the major classes of assets included in discontinued operations:
Accounts receivable	$	6,265
Inventories	16,200
Prepaid expenses and other current assets	160
Total current assets	22,625
Property and equipment, net	8,513
Intangible assets, net	8,378
Total noncurrent assets	16,891
Total assets of the disposal group classified as held for sale	$	39,516
Carrying amounts of the major classes of liabilities included in discontinued operations:
Accounts payable	$	2,704
Accrued liabilities	2,633
Total current liabilities of the disposal group classified as held for sale	$	5,337



Reconciliation of the Major Line Items Constituting Loss of Discontinued Operations to the After-Tax Loss of Discontinued Operations That Are Presented in the Statements of Operations (in thousands)
	Three Months Ended						Nine Months Ended
	September 29, 2018			September 30, 2017			September 29, 2018			September 30, 2017
Major classes of line items constituting net loss on discontinued operations:
Net sales (1)	$	761		$	5,779		$	11,187		$	25,325
Cost of goods sold	2,417			6,273			9,756			34,873
Fixed assets impairment charges	—			—			7,236			1,820
Gross loss	(1,656		)	(494		)	(5,805		)	(11,368		)
Selling, general and administrative expenses	629			4,036			2,581			12,275
Intangible assets and fixed assets impairment charges	—			—			8,978			—
Discontinued operations loss	40			—			203			—
Loss before provision (benefit) for income taxes	(2,325		)	(4,530		)	(17,567		)	(23,643		)
Provision (benefit) for income taxes	1,301			(1,744		)	(2,322		)	(8,955		)
Net loss	$	(3,626	)	$	(2,786	)	$	(15,245	)	$	(14,688	)


(1)	Revenue related to the transition services agreement during the three and nine months ended September 29, 2018 was $0.8 million and $2.4 million, respectively.



Cash Flow Disclosures for Discontinued Operations (in thousands)
	Three Months Ended						Nine Months Ended
	September 29, 2018			September 30, 2017			September 29, 2018			September 30, 2017
Cash flows provided by (used in) operating activities	$	936		$	2,123		$	(14,180	)	$	1,227
Cash flows provided by (used in) investing activities	$	(882	)	$	(231	)	$	14,752		$	(1,110	)

Depreciation and amortization	$	—		$	281		$	769		$	840
Capital expenditures	$	—		$	231		$	94		$	1,110