Discontinued Operations

12 Months Ended

Mar. 27, 2022

Discontinued Operations

Discontinued Operations

Note 20. Discontinued Operations

On December 2, 2020, the Company sold most of its Retail inventory and certain other Retail-related assets to Voice Comm. In addition, we assigned or licensed Ventev^®- related intellectual property to Voice Comm, including the Ventev^® trademark, for their use in connection with the sale of mobile device and accessory products. Cash proceeds of $9.5 million were received at closing. 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. Additionally, future customer returns to the Company may be resold to Voice Comm over a two-year period after the closing.

A pre-tax gain on disposal of $3.0 million was recorded in the fiscal quarter ended December 27, 2020, which is included in Income (loss) from discontinued operations, net of taxes in the Consolidated Statements of Income (Loss).

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 fiscal years ended March 27, 2022, March 28, 2021, and March 29, 2020:

	Fiscal Years Ended
	March 27, 2022		March 28, 2021		March 29, 2020
Revenues	$	3,117,300	$	86,728,300	$	131,283,900
Cost of goods sold		2,090,700		74,238,800		119,102,800
Gross profit		1,026,600		12,489,500		12,181,100
Selling, general and administrative expenses		448,600		7,652,100		15,809,500
Goodwill impairment		—		—		2,569,100
Income (loss) from operations		578,000		4,837,400		(6,197,500)
Gain on disposal		—		3,020,800		—
Income (loss) from operations before income taxes		578,000		7,858,200		(6,197,500)
Provision for (benefit from) income taxes		(33,300)		2,227,800		(230,000)
Net income (loss) attributable to discontinued operations	$	611,300	$	5,630,400	$	(5,967,500)

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 March 27, 2022 and March 28, 2021:

	March 27,		March 28,
	2022		2021
ASSETS
Product inventory, net	$	—	$	1,196,900
Current portion of assets held for sale	$	—	$	1,196,900

Discontinued operations related to this Retail sale in future years will primarily include:

● Revenues related to royalty income and purchase price adjustments

● Changes in allowance for bad debts related to Retail accounts receivable and amounts owed to the Company by its former Retail vendors

● Minor operating expenses related to above items

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 during fiscal 2022, 2021 and 2020 was $4.2 million, $13.2 million and $11.3 million, respectively. Cash provided by investing activities from discontinued operations during fiscal 2022, 2021 and 2020 was $0, $9.2 million, $0 million, respectively.