Discontinued Operations

9 Months Ended

Dec. 26, 2021

Discontinued Operations

Discontinued Operations

Note 9. Discontinued Operations

At a closing on December 2, 2020, the Company sold most of its retail inventory, the Ventev brand as it relates to mobile device accessory products, and certain other retail-related assets to Voice Comm, LLC (“Voice Comm”). Cash proceeds of $9.5 million were received at closing, which occurred during the third quarter of fiscal 2021. As part of the sale agreement, the Company is entitled to royalty payments of up to $3.0 million in the aggregate on the sale of Ventev branded products by Voice Comm over a four-year period after the closing.

As a result of the disposal described above, the operating results of the former Retail segment has been included in Income (loss) from discontinued operations, net of taxes, in the Consolidated Statements of Income (Loss) for all periods presented.

The accompanying Consolidated Financial Statements for all periods presented reflect the results of the Retail segment as a discontinued operation. The following table presents the financial results of the Retail segment for the three and nine months ended December 26, 2021 and December 27, 2020:

	Three Months Ended				Nine Months Ended
	December 26, 2021		December 27, 2020		December 26, 2021		December 27, 2020
Revenues	$	383,800	$	26,413,900	$	2,992,700	$	80,512,800
Cost of goods sold		56,700		21,529,700		1,179,600		67,704,600
Gross profit		327,100		4,884,200		1,813,100		12,808,200
Selling, general and administrative expenses		83,200		3,215,700		636,400		7,442,000
Income (loss) from operations		243,900		1,668,500		1,176,700		5,366,200
Gain on disposal		—		3,020,800		—		3,020,800
Income (loss) from operations before income taxes		243,900		4,689,300		1,176,700		8,387,000
Provision for (benefit from) income taxes		100		(98,200)		(11,200)		681,000
Net income (loss) attributable to discontinued operations	$	243,800	$	4,787,500	$	1,187,900	$	7,706,000

The financial results reflected above may not fully represent our former Retail segment stand-alone operating net profit, as the results reported within Income (loss) from discontinued operations, net of taxes, include only certain costs that are directly attributable to this former segment and exclude certain corporate overhead and operational costs that may have been previously allocated for each period.

The following table summarizes the major classes of assets attributable to discontinued operations that are included in the Current portion of assets held for sale in the Company’s Consolidated Balance Sheets as of December 26, 2021 and March 28, 2021:

	December 26,		March 28,
	2021		2021
ASSETS
Product inventory, net	$	—	$	1,196,900
Current portion of assets held for sale	$	—	$	1,196,900

In our Consolidated Statements of Cash Flows, the cash flows from discontinued operations are not separately classified. Cash provided by operating activities from discontinued operations for the nine months ended December 26, 2021 and December 27, 2020 was $5.3 million and $10.6 million, respectively. Cash provided

by investing activities from discontinued operations was $0 and $9.2 million for the nine months ended December 26, 2021 and December 27, 2020, respectively.