Sales of Assets

Sale of Office Coffee Assets

In order to focus on its core product offerings, in July 2019, the Company completed the sale of certain assets associated with its office coffee customers for $9.3 million in cash paid at the time of closing plus an earnout of up to an additional $2.3 million if revenue expectations are achieved during test periods scheduled to occur at various branches at various times and concluding by early third quarter of fiscal ended 2020. The Company recognized an initial net gains on the assets sale of $7.2 million during the three months ended September 30, 2019. The sale of office coffee assets did not represent a strategic shift for the Company and did not have a material impact on the Company's results of operations because the Company has signed a supply agreement to provide certain coffee products to the assets purchaser.

Sale of Seattle Office Branch Property

On August 28, 2019, the Company completed the sale of its branch property in Seattle, Washington State for a gross sale price of $7.9 million. The Company recognized a net gain on the branch property sale of $6.8 million during the three months ended September 30, 2019.

Sale leaseback of Houston Facility

On September 6, 2019, the Company signed a purchase and sale agreement (the “PSA”) for the sale of its Houston, Texas manufacturing facility and warehouse (the “Property”) for an aggregate purchase price, exclusive of closing costs, of $10.0 million. Pursuant to the PSA and upon the closing of the sale of the Property, the Company and the purchaser have agreed to enter into a three year leaseback agreement with respect to the Property. The Company may terminate the leaseback no earlier than the first day of the eighteenth full calendar month of the term providing at least nine months’ notice. There is no assurance at this time that the purchaser will in fact purchase any or all of the Property. The closing of the sale of the Property, which is subject to customary diligence and closing conditions, is expected to occur on or around November 20, 2019. The purchaser does not have any material relationship with the Company or its subsidiaries, other than through the PSA and leaseback.

In connection with the sale leaseback contemplated by the PSA, on September 6, 2019, the Company made a clarifying amendment to its amended and restated credit agreement originally dated as of November 6, 2018, to make clear that any sale and leaseback already permitted under the asset sale covenant would not be inadvertently prohibited under the sale and leaseback covenant.

As of September 30, 2019, the Houston Property met the accounting guidance criteria to be classified as held for sale. As such, the Company evaluated the assets to determine whether the carrying value exceeded the fair value less any costs to sell based on the agreed-upon sale price. No loss was recorded as of September 30, 2019 and the aggregate assets held for sale have been presented as a separate line items in the condensed consolidated condensed balance sheet. The Houston Property did not meet the accounting guidance criteria to be classified as discontinued operations.

The following table presents information related to the major classes of assets that were classified as held for sale:



(In thousands)	September 30, 2019
Buildings and facilities	$	982
Land	736
Assets held for sale	$	1,718