Annual report pursuant to Section 13 and 15(d)

Discontinued Operations and Divestitures

v2.4.0.8
Discontinued Operations and Divestitures
 12 Months Ended
Aug. 31, 2014
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations
Discontinued Operations and Divestitures
On June 13, 2014, the Company completed the divestiture of its Recreational Vehicle ("RV") business for $36.5 million in cash. This product line divestiture resulted in a $13.5 million pre-tax gain on sale ($2.8 million net of tax). The results of the RV business (which had sales of $22 million in fiscal 2014) are not material to the consolidated financial results and are included in continuing operations.





The former Electrical segment designed, manufactured and distributed a broad range of electrical products to the retail DIY, wholesale, OEM, solar, utility and marine markets. On December 13, 2013, the Company completed the sale of the Electrical segment for net cash proceeds of $252.4 million, which resulted in a pre-tax gain on disposal of $34.5 million ($26.3 million net of tax). The following table summarizes the results of the Electrical segment which is reported as a discontinued operation for each of the last three fiscal years (in thousands):
 
Year Ended August 31,
 
2014
 
2013
 
2012
Net sales
$
72,139

 
$
286,308

 
$
328,821

 
 
 
 
 
 
Operating profit (loss) (1)
(4,873
)
 
34,536

 
28,148

Impairment charge
—

 
(159,104
)
 
(62,464
)
Gain on disposal
34,459

 
—

 
—

Income tax benefit (expense)
(7,466
)
 
7,039

 
(3,670
)
Income (loss) from discontinued operations, net of taxes
$
22,120

 
$
(117,529
)
 
$
(37,986
)
(1) The operating loss in fiscal 2014 includes the operating results of the Electrical segment through the sale date of December 13, 2013, certain divestiture costs and a $3.1 million non-cash charge for the accelerated vesting of equity compensation.

During fiscal 2013, the Company committed to a plan to divest the former Electrical segment due to its decision to focus on businesses that are tied to targeted energy, infrastructure, food/farm productivity and natural resources/sustainability secular demand. As a result, the Company recognized a non-cash impairment charge in fiscal 2013 of $159.1 million, including a write-down of $137.8 million of goodwill and $21.3 million of indefinite lived intangible assets (tradenames). The impairment charge represented the excess of the net book value of the assets held for sale over the estimated fair value, less selling costs.
During fiscal 2012, the Company recognized a $62.5 million non-cash impairment charge related to the goodwill and indefinite lived intangible assets of the Electrical segment's Mastervolt business. The impairment charge consisted of the write-down of $36.6 million of goodwill and $25.9 million of indefinite lived intangible assets (tradenames).