Discontinued Operations

4 Months Ended

Sep. 18, 2012

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

On May 16, 2012, the Company closed on the sale of its Golden Corral restaurant operations to Golden Corral Corporation, from which the Company had previously been granted licenses to operate the 29 restaurants that comprised the assets that were sold in the transaction. A pretax loss on the sale of $5,590,000 was recorded in Fiscal Year 2012.

The Company had previously closed six under performing Golden Corral restaurants in August 2011. As a result, a non-cash pretax asset impairment charge (with related closing costs) of $4,000,000 was recorded during the 16 week period ended September 20, 2011 (First Quarter Fiscal 2012). The impairment charge lowered the carrying values of the six restaurant properties (all owned in fee simple title) to their estimated fair values, which in the aggregate amounted to approximately $6,909,000. The total impairment charge included $69,000 for impaired intangible assets and $180,000 for certain other costs.

The impairments of long lived assets were recorded as significant unobservable inputs (level 3 under the fair value hierarchy), which are summarized below (also see Impairment of Long-Lived Assets along with Real Estate Held for Sale in NOTE A —ACCOUNTING POLICIES):

	Fair Value Measurements Using
	(in thousands)
First Quarter Fiscal 2012	Level 1		Level 2		Level 3		Gains (Losses)
Six former Golden Corral restaurants	$	—	$	—	$	6,909	$	(4,000	)

Additional non-cash pretax impairment charges of $388,000 were subsequently recorded during Fiscal Year 2012: a) $94,000 in the third quarter ended March 6, 2012 based on a contract that was accepted for less than the original estimate of fair value and b) $294,000 in the fourth quarter to reflect revised opinions of value from real estate brokers.

Results of Golden Corral for the 16 weeks ended September 20, 2011 (First Quarter Fiscal 2012) are presented as discontinued operations in the consolidated financial statements. Income tax expense presented in discontinued operations in the 16 weeks ended the September 18, 2012 (First Quarter Fiscal 2013) represents adjustments to tax related balance sheet accounts.

	16 weeks ended
	September 18, 2012			September 20, 2011
	(in thousands)
Sales	$	—		$	30,367
Food and paper	—			11,619
Payroll and related	—			8,892
Other operating costs	—			8,234
	—			28,745
Gross profit	—			1,622
Administrative and advertising	—			927
Impairment of long-lived assets	—			4,000
Loss from discontinued operations before income taxes	—			(3,305		)
Income tax expense (benefit)	158			(571		)
Loss from discontinued operations, net of tax	$	(158	)	$	(2,734	)

Assets and liabilities related to discontinued operations consisted of:

	September 18, 2012		May 29, 2012
	(in thousands)
Assets
Cash and equivalents	$	—	$	—
Trade and other receivables	137		190
Inventories	—		—
Prepaid expenses and sundry deposits	—		—
Prepaid and deferred income taxes	—		—
Total current assets	137		190
Net property and equipment	—		—
Other intangible assets	—		—
Assets of discontinued operations	$	137	$	190
Liabilities
Accounts payable	$	37	$	47
Accrued expenses	241		636
Total current liabilities	278		683
Deferred other	—		—
Deferred income taxes	—		—
Liabilities of discontinued operations	$	278	$	683

In addition, three of the six Golden Corral restaurants that closed in August 2011 had yet to be sold as of September 18, 2012. The aggregate fair value of the three restaurants ($3,055,000) is carried in the consolidated balance sheet as "Property held for sale" as of September 18, 2012 (four restaurants - $4,136,000 at May 29, 2012). (See "Property Held for Sale" in NOTE A —ACCOUNTING POLICIES.)