Discontinued Operations

3 Months Ended

Apr. 01, 2017

Discontinued Operations

Discontinued Operations

2.Discontinued Operations

On March 23, 2017, the Company soldcertain assets, properties and rights of our wholly owned subsidiary, Fresh Frozen Foods, to Pictsweet pursuant to the Purchase Agreement.  In accordance with the Purchase Agreement, Pictsweet acquired Fresh Frozen Food’s frozen food processing equipment assets, certain real property and associated facilities located in Jefferson, Georgia and Thomasville, Georgia, and other intellectual property and inventory.  As consideration for the acquisition, Pictsweet paid the Company $23.7 million in cash. The Fresh Frozen business was part of the Company’s frozen products segment.  The net proceeds from the Fresh Frozen Asset Sale were $19.5 million, after payment of professional fees and other transaction expenses, and were used to pay down amounts outstanding under the Credit Facilities.  As of December 31, 2016, total assets and total liabilities related to the Fresh Frozen Foods business were $32.2 million and $2 million, respectively.  The results of operations for the Fresh Frozen Foods business have been classified as discontinued operations for all periods presented.

The summary comparative financial results of the Fresh Frozen Foods business, included within discontinued operations, were as follows (in thousands):

	Quarter Ended
	April 1, 2017		March 26, 2016
Net revenues	$	8,677	$	12,674
Cost of revenues		8,594		13,139
Gross profit		83		(465)
Operating expenses:
Selling, general and administrative expenses		629		954
Operating loss		(546)		(1,419)
Loss on sale of Fresh Frozen Foods		10,146		—
Interest expense, net		332		353
Loss before income taxes		(11,024)		(1,772)
Income tax expense		(1,909)		677
Net loss from discontinued operations	$	(12,933)	$	(1,095)