Discontinued Operations

12 Months Ended

Dec. 31, 2015

Discontinued Operations And Disposal Groups [Abstract]

Discontinued Operations

4.  Discontinued Operations

On June 20, 2014, the Company completed the sale of the assets and associated liabilities of its wholly-owned subsidiaries WEK Industries, Inc. and Whiteridge Plastics LLC (collectively “WEK”) for approximately $20.7 million, which includes a working capital adjustment of approximately $0.8 million. Of the total proceeds from the sale of WEK, approximately $1.0 million was held in escrow until it was received in December 2015. The Company recorded a gain on the sale of WEK in 2014 of approximately $3.0 million, net of tax of $1.6 million, which was included in income (loss) from discontinued operations in the Consolidated Statements of Operations.

During the second quarter of 2014, the Company’s Board of Directors approved the commencement of the sale process to divest its Lawn and Garden business to allow it to focus resources on its core growth platforms. The Lawn and Garden business served the North American horticulture market with plastic products such as seedling trays, nursery products, hanging baskets, custom print containers as well as decorative resin planters. The business was sold February 17, 2015 to an entity controlled by Wingate Partners V, L.P., a private equity firm, for $110.0 million, subject to a working capital adjustment. The sale of the Lawn & Garden business included manufacturing facilities and offices located in Twinsburg, Ohio; Middlefield, Ohio; Elyria, Ohio; Sparks, Nevada; Sebring, Florida; Brantford, Ontario; and Burlington, Ontario. The terms of the agreement include a $90.0 million cash payment, promissory notes totaling $20.0 million that mature in August 2020, a 6% interest rate and approximately $8.6 million placed in escrow that is due to be settled by August 2016. The fair market value of the notes at February 17, 2015 was $17.8 million and is included in Notes Receivable in the accompanying Consolidated Statements of Financial Position, in which the carrying value represents the fair value at date of sale plus accretion as of December 31, 2015. The fair value of the notes receivable was calculated using level 2 inputs as defined in Note 1. A disagreement between the parties over the calculation of the final working capital adjustment was resolved by arbitration on March 9, 2016. As a result of the final ruling, the Company recorded an additional gain of $0.6 million, net of tax, in 2015. The final working capital adjustment will result in a cash payment to the buyer of approximately $4.0 million in 2016. The total gain on the sale of the Lawn and Garden business was $4.7 million, net of tax, during 2015 and is included in income (loss) from discontinued operations in the accompanying Consolidated Statements of Operations.

Since the second quarter of 2014 and until the business was sold on February 17, 2015, the Lawn and Garden business met the held-for-sale criteria under the requirements of ASC 360, Property, Plant and Equipment. Accordingly, at December 31, 2014, the Company had classified and accounted for the assets and liabilities of the Lawn and Garden business as held for sale in the accompanying Consolidated Statements of Financial Position and the operating results of Lawn and Garden and WEK, for periods prior to the sale, net of tax, as discontinued operations in the accompanying Consolidated Statements of Operations for all periods presented. In addition, the Company performed a fair value assessment of the Lawn and Garden business. The fair value, determined as sales price less cost to sell the business, was less than its carrying value at December 31, 2014, resulting in an $18.9 million impairment charge reported as discontinued operations in the accompanying Consolidated Statements of Operations for the year ended December 31, 2014.

Summarized selected financial information for the Lawn and Garden business and WEK for the years ended December 31, 2015, 2014 and 2013 are presented in the following table:

	Year Ended
	December 31,
	2015*			2014**			2013
Net sales	$	29,335		$	204,716		$	240,477
Loss from discontinued operations before income taxes	$	(1,214	)	$	(30,038	)	$	(394	)
Income tax (benefit) expense		(262	)		(9,408	)		46
Loss from discontinued operations		(952	)		(20,630	)		(440	)
Net gain on sale of discontinued operations, inclusive of tax benefit of ($2.8 million) for the year ended December 31, 2015 and tax provision of $1.6 million for the year ended December 31, 2014		4,661			2,988			—
Income (loss) from discontinued operations, net of income taxes	$	3,709		$	(17,642	)	$	(440	)

* Includes Lawn and Garden operating results through February 17, 2015.

** Includes WEK operating results through June 20, 2014.

The assets and liabilities of discontinued operations are stated separately as of December 31, 2014 in the Consolidated Statements of Financial Position and are comprised of the following items:

	December 31, 2014
Assets
Accounts receivable-net	$	29,794
Inventories		50,951
Prepaid expenses and other current assets		1,709
Goodwill		9,107
Patents and other intangible assets, net		6,030
Property, plant and equipment, net		38,168
Net asset impairment*		(18,858	)
Other		874
Total Assets Held for Sale	$	117,775
Liabilities
Accounts payable	$	22,239
Accrued expenses and other liabilities		4,883
Total Liabilities Held for Sale	$	27,122

* Impairment includes the cumulative translation credit adjustment associated with the Lawn and Garden business.

The Lawn and Garden business restructuring plan, announced in July 2013, detailed the closure of two manufacturing plants: one in Brantford, Ontario and the second in Waco, Texas. The restructuring actions included closure, relocation and employee related costs. Through December 31, 2014, the Lawn and Garden business incurred approximately $14.0 million of severance charges and personnel costs under its restructuring plan. Restructuring actions under the plan have been completed.

Restructuring charges related to discontinued operations for the year ended 2015, 2014 and 2013 are presented in the following table:

	Year Ended December 31,
	2015		2014		2013*
Severance and personnel	$	—	$	1,743	$	2,614
Other exit costs		—		3,762		6,189
Total	$	—	$	5,505	$	8,803

* Includes WEK restructuring charges of $0.2 million in 2013.