Sales of Assets

12 Months Ended

Jun. 30, 2020

Discontinued Operations and Disposal Groups [Abstract]

Sales of Assets

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 were achieved during test periods scheduled to occur at various branches at various times and concluded by early third quarter of fiscal year 2020. The earnout of up to an additional $2.3 million was not paid to the Company because the revenue expectations were not achieved. The Company recognized a net gain on the asset sales of $7.2 million during the fiscal year ended June 30, 2020. 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 signed a supply agreement to provide certain coffee products to the assets purchaser.

Sale of Branch Properties

During the fiscal year ended June 30, 2020, the Company completed the sale of nine branch properties and entered into two operating lease agreements with the purchasers of two of the branch properties as detailed in the following table:

(In thousands)
Name of Branch Property	Date Sold	Sales Price		Net Proceed		Gain (loss)			Long-Term Leaseback	Lease Term	Monthly Base Rent
Seattle, Washington	8/28/2019	$	7,900	$	7,300	$	6,800		No	N/A	N/A
Indianapolis, Indiana	11/19/2019	$	250	$	186	$	(173	)	No	N/A	N/A
Hayward, California(1)	12/23/2019	$	7,050	$	6,569	$	2,016		Yes	5 years	$	28
Denver, Colorado(1)	12/31/2019	$	2,300	$	2,075	$	1,989		Yes	7 years	$	17
Casper, Wyoming	12/31/2019	$	385	$	355	$	304		No	N/A	N/A
Tempe, Arizona	1/28/2020	$	1,150	$	1,077	$	841		No	N/A	N/A
Great Falls, Montana	2/28/2020	$	385	$	356	$	283		No	N/A	N/A
Fort Collins, Colorado	6/24/2020	$	1,275	$	1,179	$	1,112		No	N/A	N/A
Oxnard, California	6/25/2020	$	1,650	$	1,545	$	1,390		No	N/A	N/A

___________

(1) Has an option to renew the lease for additional five years.

Sale leaseback of Houston Facility

In November 2019, the Company completed 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. Cash proceeds from the sale of the Property were $9.0 million. The Company recognized a net gain on the Property sale of $7.3 million during the fiscal year ended June 30, 2020. The Property did not meet the accounting guidance criteria to be classified as discontinued operations.

Following the close of the sale of the Property, the Company and the purchaser of the Property entered into a three-year leaseback agreement with respect to the Property for a base rent of $50,000 per month. 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. The purchaser of the Property does not have any material relationship with the Company or its subsidiaries.