Discontinued Operations

12 Months Ended

Jan. 02, 2016

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

During the second and third quarters of 2015, the Company began actively marketing for sale its Packaging Business to multiple strategic parties. As of the end of the third quarter, management was given the appropriate authority to move forward with these strategic parties on a potential sale of the Packaging Business. In accordance with the guidance in ASC 205-20 Presentation of Financial Statements - Discontinued Operations and ASC 360 Property, Plant & Equipment, at that time, the financial results of the Packaging Business were accounted for as discontinued operations.

On January 19, 2016, the Company completed the sale of the Packaging Business. The Company received total cash proceeds of approximately $86.6 million, net of transaction costs of approximately $6.4 million. In the fourth quarter of 2015, the Company recorded a non-cash loss on sale of $5.0 million. The Company recorded a non-cash goodwill impairment charge of $9.9 million related to this transaction. This loss was based on the executed purchase agreement and the net assets of the Packaging Business. In addition to the proceeds, $5.0 million of purchase price consideration has been held in escrow ("the Holdback Amount") and will be paid to the Company subject to the satisfaction of certain conditions, which is expected to be completed within 90 days of the closing date. Any amount received from the Holdback Amount will be recognized as income when received.

During the fourth quarter of 2013, the Company made the decision to retire a certain indefinite lived trade name during 2014 as a result of rebranding the Company's packaging business line. Accordingly, based on its evaluation using a relief-from-royalty and other discounted cash flow methodologies, the Company concluded that the trade name asset was impaired. An impairment charge of $8.9 million was recorded to reduce the carrying value to the estimated fair value. The trade name was fully amortized during 2014. The non-cash impairment charge was reported in in discontinued operations in the Company's consolidated financial statements.

On September 28, 2013, the Company completed the sale of Custom Envelope. The Company received total net cash proceeds of approximately $47.0 million, of which $2.2 million was received in 2014. This resulted in the recognition of a total after-tax gain of $16.5 million, of which $14.9 million was recognized in the year ended 2013. The operating results of Custom Envelope are reported in discontinued operations in the Company's financial statements for all periods presented herein.

During the second quarter of 2013, the Company decided to exit the San Francisco market and closed a manufacturing facility within its print segment. The operating results of this manufacturing facility are reported in discontinued operations in the Company's consolidated financial statements for all periods presented herein.

The following table shows the components of assets and liabilities that are classified as discontinued operations in the Company's consolidated balance sheets as of January 2, 2016, and December 27, 2014 (in thousands):

	2015		2014
Accounts receivable, net	$	23,244	$	29,344
Inventories	18,603		18,119
Other current assets	6,719		5,106
Assets of discontinued operations - current	48,566		52,569
Property, plant and equipment, net	48,244		54,585
Goodwill and other long-term assets	14,607		32,028
Assets of discontinued operations - long-term	62,851		86,613
Accounts payable	17,917		19,145
Other current liabilities	4,351		5,058
Liabilities of discontinued operations - current	22,268		24,203
Long-term debt and other liabilities	1,153		3,520
Liabilities of discontinued operations - long-term	1,153		3,520
Net assets of discontinued operations	$	87,996	$	111,459

The following table summarizes certain statement of operations information for discontinued operations (in thousands, except per share data):

	For The Years Ended
	2015			2014			2013
Net sales	$	178,850		$	187,725		$	228,178
Cost of sales	154,570			162,448			192,237
Selling, general and administrative expenses	20,630			20,826			22,278
Amortization of intangible assets	2,062			2,597			2,482
Restructuring and other charges	390			932			514
Impairment of goodwill	9,857			—			—
Impairment of intangible assets	—			—			8,874
Interest expense, net	117			137			99
Other income, net	(954		)	(6,563		)	(3,141		)
(Loss) income from discontinued operations before income taxes	(7,822		)	7,348			4,835
(Loss) gain on sale of discontinued operations before income taxes	(4,987		)	2,519			25,597
Total (loss) income from discontinued operations before income taxes	(12,809		)	9,867			30,432
Income tax (benefit) expense on discontinued operations	(1,419		)	(1,323		)	12,942
(Loss) income from discontinued operations, net of taxes	$	(11,390	)	$	11,190		$	17,490
(Loss) income per share - basic	$	(0.16	)	$	0.17		$	0.27
(Loss) income per share - diluted	$	(0.16	)	$	0.17		$	0.27