Annual report pursuant to Section 13 and 15(d)

Discontinued Operations

v3.6.0.2
Discontinued Operations
 12 Months Ended
Dec. 31, 2016
Discontinued Operations And Disposal Groups [Abstract]  
Discontinued Operations

11. Discontinued Operations

Sale of the Gaiam Brand segment

On May 4, 2016 we sold our 51.4% equity interest in Natural Habitat, our eco-travel subsidiary, in exchange for $12.85 million in cash, and recognized a gain of $10.3 million.

On July 1, 2016, we sold the assets and liabilities of our Gaiam Brand business in exchange for a gross sale price of $167.0 million and recognized a gain of $114.5 million. Our Gaiam Brand business previously constituted the majority of our consolidated revenues and expenses, and consisted of Gaiam branded yoga, fitness and wellness consumer products, and content (excluding streaming rights).

The Gaiam Brand business and our interest in our eco-travel subsidiary constituted all the assets and liabilities of our Gaiam Brand segment.

Discontinued Operations

The assets and liabilities, operating results, and cash flows of our Gaiam Brand segment are presented as discontinued operations, separate from our continuing operations, for all periods presented in these consolidated financial statements and footnotes, unless otherwise indicated. Discontinued operating results for 2015 also include legal expenses associated with the sale of our former DVD distribution business to Cinedigm. We were involved in arbitration with Cinedigm associated with the sale, which was settled during 2015.

The major components of assets and liabilities of our discontinued operations were as follows

 

 

 

As of December 31,

 

(in thousands)

 

2016

 

 

2015

 

Current assets:

 

 

 

 

 

 

 

 

Cash

 

$

—

 

 

$

12,605

 

Accounts receivable, net

 

 

—

 

 

 

26,441

 

Inventory, less allowances

 

 

—

 

 

 

17,302

 

Other current assets

 

 

—

 

 

 

12,512

 

Total current assets of discontinued operations

 

$

—

 

 

$

68,860

 

Property, equipment and media library, net

 

 

—

 

 

 

6,237

 

Goodwill and other intangibles, net

 

 

—

 

 

 

5,497

 

Other assets

 

 

—

 

 

 

3,599

 

Total noncurrent assets of discontinued

   operations

 

$

—

 

 

$

15,333

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

—

 

 

 

32,214

 

Total current liabilities of discontinued

   operations

 

$

—

 

 

$

32,214

 

 

The income from discontinued operations amounts as reported on our consolidated statements of operations was comprised of the following amounts:

 

 

 

Years Ended December 31,

 

(in thousands)

 

2016

 

 

2015

 

 

2014

 

Net revenue

 

$

52,627

 

 

$

174,559

 

 

$

158,456

 

Cost of goods sold

 

 

32,975

 

 

 

100,652

 

 

 

91,670

 

Gross profit

 

 

19,652

 

 

 

73,907

 

 

 

66,786

 

Operating expenses

 

 

33,641

 

 

 

73,118

 

 

 

64,623

 

Income (loss) from operations

 

 

(13,989

)

 

 

789

 

 

 

2,163

 

Other (expense) income

 

 

234

 

 

 

(1,560

)

 

 

(55

)

Income (loss) before income taxes and

   noncontrolling interest

 

 

(13,755

)

 

 

(771

)

 

 

2,108

 

Income tax expense (benefit)

 

 

(4,831

)

 

 

1,222

 

 

 

1,219

 

Loss from discontinued operations attributable to

   the non-controlling interest, net of tax

 

 

(310

)

 

 

(694

)

 

 

(959

)

Loss from the operation of discontinued

   operations

 

 

(9,234

)

 

 

(2,687

)

 

 

(70

)

Gain on disposal of discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of Gaiam Brand segment

 

 

124,826

 

 

 

—

 

 

 

—

 

Write-off of assets impacted by, but not included

   in sale

 

 

3,740

 

 

 

—

 

 

 

—

 

Income tax expense

 

 

14,004

 

 

 

—

 

 

 

—

 

Income (loss) from discontinued operations, net of

   tax

 

$

97,848

 

 

$

(2,687

)

 

$

(70

)