Discontinued Operations discontinued operations (Notes)

9 Months Ended

Sep. 30, 2014

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

On September 4, 2014, the Company, ViSalus and certain of ViSalus’s preferred stockholders entered into a recapitalization agreement pursuant to which ViSalus was recapitalized by exchanging each share of ViSalus preferred stock for 38.2 shares of ViSalus common stock, thereby (i) reducing the Company’s ownership interest in ViSalus from approximately 80.9% to 10.0% and (ii) eliminating the obligation of ViSalus to redeem the preferred stock in 2017 (for approximately $143.2 million) and the related guaranty by the Company of ViSalus’s performance of such obligation.

In connection with this transaction, the Company amended the indenture governing its 6.00% Senior Notes to provide for the mandatory redemption of the Senior Notes on the earlier of March 4, 2015 and the date, if any, that the Company consummates a new financing in the amount of at least $50.0 million. In addition, the Company agreed to make available to ViSalus a revolving credit facility. On October 17, 2014, the Company and ViSalus entered into a revolving loan agreement (the "Blyth Revolving Loan Agreement") pursuant to which the Company agreed to lend ViSalus up to $6.0 million. Loans under the revolving credit agreement will bear interest at a rate of 10% per annum. Interest will be paid monthly and there will be no higher default rate of interest. The revolving loan involves related parties. Robert B. Goergen, Robert B. Goergen, Jr. and Todd A. Goergen own 8.29%, 0.34% and 2.81%, respectively, of the outstanding capital stock of ViSalus. On October 17, 2014, the founders of ViSalus and Robert B. Goergen (the “Founder Lenders”) entered into a substantially similar loan agreement with ViSalus (the “Founder Revolving Loan Agreement”) pursuant to which they made a revolving credit facility available to ViSalus in an amount up to $6.0 million on terms that are substantially identical to the terms of the Blyth Revolving Loan Agreement. Loans made under the Blyth Revolving Loan Agreement and loans made under the Founder Revolving Loan Agreement will be made at the same time in equal amounts and will rank equally with each other. In August 2014, the Company made a $3.0 million short-term loan to ViSalus, which amount was repaid by ViSalus in October 2014 with a borrowing in the same amount under the Blyth Revolving Loan Agreement.

As a result of its reduced ownership in ViSalus, the Company will no longer consolidate ViSalus's results in the Company's financial statements; rather, the ViSalus investment will be recorded at its fair value of $9.8 million as of the transaction date. The Company will perform periodic impairment reviews to ensure its investment is properly stated. This transaction is presented as discontinued operations in the consolidated financial statements and results of operations for the three and nine month periods ended September 30, 2014 and 2013.

The Company recorded a gain on the recapitalization of ViSalus of $119.8 million, net of tax, as a result of the exchange of the ViSalus preferred stock for ViSalus common stock, which eliminated the Company’s guaranty of ViSalus’s agreement to redeem the preferred stock. This transaction was a non-cash, tax free exchange as the preferred stockholders received ViSalus common stock in exchange for their preferred stock. For the three months ended September 30, 2014 and 2013, Net sales for ViSalus were $27.9 million and $82.4 million and loss before income taxes was $5.5 million and income was $1.5 million, respectively. For the nine months ended September 30, 2014 and 2013, Net sales for ViSalus were $138.9 million and $228.3 million and loss before income taxes was $8.7 million and income was $13.2 million, respectively. ViSalus income taxes for the three months ended September 30, 2014 and 2013 was a benefit of $0.5 million and an expense of $0.7 million, respectively, and expenses $0.9 million and $5.1 million for the nine months ended September 30, 2014 and 2013, respectively.

The following table details assets and liabilities of discontinued operations as of December 31, 2013:

Total assets of discontinued operations
Cash	$	7,914
Accounts receivable, net	149
Inventories	21,113
Prepaid and other	1,349
Deferred tax current	2,517
Other current assets	1,166
Current assets of discontinued operations	34,208
Net plant, property & equipment	18,602
Investments	1,177
Deferred tax non-current	5,800
Intangible assets	2,028
Non-current assets of discontinued operations	27,607
Total	$	61,815
Total liabilities of discontinued operations
Accounts payable	$	5,870
Accrued expenses	17,986
Income taxes payable	110
Current liabilities of discontinued operations	23,966
Other liabilities	865
Redeemable preferred stock	146,603
Non-current liabilities of discontinued operations	147,468
Total	$	171,434