Discontinued Operations

6 Months Ended

Oct. 25, 2014

Discontinued Operations

Discontinued Operations

Note 3: Discontinued Operations

During the fourth quarter of fiscal 2014, we sold substantially all of the assets of our Bauhaus U.S.A. business unit to a group of investors and also classified Lea Industries, a division of La-Z-Boy Greensboro, Inc., as a business held for sale as part of a larger restructuring initiative (see Note 2 for additional information).

The operating results of Bauhaus and Lea Industries are reported as discontinued operations for all periods presented. We had historically reported the results of our Bauhaus business unit as a component of our Upholstery segment and Lea Industries as a component of our Casegoods segment.

In the first quarter of fiscal 2015, we recorded $3.8 million of income in discontinued operations related to our previously owned subsidiary, American Furniture Company, Incorporated. We sold this subsidiary in fiscal 2007, and reported it as discontinued operations at that time. The income related to the Continued Dumping and Subsidy Offset Act of 2000, which provides for distribution of duties, collected by U.S. Customs and Border Protection from antidumping cases, to domestic producers that supported the antidumping petition related to wooden bedroom furniture imported from China. When we sold American Furniture Company, Incorporated, our contract provided that we would receive a portion of any such duties to which that entity was entitled. That entity subsequently filed for bankruptcy. The funds were distributed by U.S. Customs to the bankruptcy trustee and by the trustee to be held in trust for us during the first quarter of fiscal 2015 and were received by us early in the second quarter of fiscal 2015.

The results of our discontinued operations for the quarter and six months ended October 25, 2014, and October 26, 2013, were as follows:

	Quarter Ended						Six Months Ended
(Amounts in thousands)	10/25/14			10/26/13			10/25/14			10/26/13
Net sales	$	3,301		$	14,132		$	6,788		$	27,543
Operating income (loss) from discontinued operations	$	459		$	(699	)	$	561		$	(643	)
Income from Continued Dumping and Subsidy Offset Act, net	—			—			3,763			—
Income tax (expense) benefit	(174		)	259			(1,542		)	237
Income (loss) from discontinued operations, net of tax	$	285		$	(440)		$	2,782		$	(406)

The assets and liabilities of Lea Industries that we classified as held for sale were as follows:

(Amounts in thousands)	10/25/14		4/26/14
Assets
Receivables, net	$	1,015	$	1,190
Inventories, net	376		3,013
Other current assets	16		87
Total assets	$	1,407	$	4,290
Liabilities
Accounts payable	$	9	$	234
Accrued expenses and other current liabilities	433		576
Other long-term liabilities	—		22
Total liabilities	$	442	$	832

In our consolidated statement of cash flows, we included the activity of these discontinued operations along with our activity from continuing operations.