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Discontinued Operations
 6 Months Ended
Jul. 03, 2022
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations DISCONTINUED OPERATIONS
On February 6, 2022, we signed the Definitive Agreement with TotalEnergies Renewables for the sale of our C&I Solutions business. The transaction closed on May 31, 2022 pursuant to the terms of the Definitive Agreement, and TotalEnergies Renewables acquired all of the issued and outstanding common stock of our C&I Solutions business. The preliminary purchase price of $190.0 million was subject to certain adjustments, including cash, indebtedness, and an estimated closing date working capital adjustment. Upon closing, we received net cash consideration of $149.2 million based on the estimated net assets of the business on that date. As of July 3, 2022, we recorded a payable of $6.3 million to Total, based on the latest estimate of closing date working capital. The consideration and working capital adjustment are currently estimates and subject to further review and adjustment by both parties within 90 days of closing, as per the terms of the Definitive Agreement.

As the sale represented a transaction between entities under common control, the gain was recorded as “additional paid-in capital” and “non-controlling interest” in our condensed consolidated balance sheets as of July 3, 2022, with a portion of the gain recorded in “non-controlling interest” due to the transfer of our safe harbor inventory from our consolidated VIE, Solar Sail, LLC (“Solar Sail”), to Total. The sale of the C&I Solutions business is a common control transaction in accordance with the guidance in ASC 805, Business Combinations, as TotalEnergies Renewables is a wholly owned subsidiary of TotalEnergies SE that holds a more than 50% voting interest in the Company and TotalEnergies Renewables as of July 3, 2022. As such, the difference between the total cash consideration received and the net book value of the C&I Solutions business, and the estimated working capital adjustment recorded, was recorded as an equity transaction.
We also incurred transaction costs in connection with the sale of $8.3 million and $10.6 million for the three and six months ended July 3, 2022, respectively, which were expensed as incurred and included within “loss from discontinued operations before income taxes” in our condensed consolidated statements of operations. We began incurring these transaction costs in the second quarter of fiscal 2021, and incurred transaction costs of $0.3 million in the three and six months ended July 4, 2021.

The following table presents the gain on sale of our C&I Solutions business recorded within our condensed consolidated statements of equity for the three months ended July 3, 2022:
Three Months Ended
July 3, 2022
Net cash consideration$149,171 
Less: Estimated final working capital adjustment (as of July 3, 2022)6,265 
Less: Net book value of assets sold
24,562 
Gain on sale of C&I Solutions business$118,344 
Gain on sale of C&I Solutions business - within additional paid-in capital$114,401 
Gain on sale of C&I Solutions business - within non-controlling interest$3,943 

In accordance with the accounting guidance, the C&I Solutions business is presented as discontinued operations for the period up to and including the date of the sale, including the first quarter of fiscal 2022 as the signing of the Definitive Agreement had occurred and the sale represented a strategic shift in our business with major impacts on our current and historical financial results. As such, for all periods presented, the financial results of C&I Solutions are presented as net earnings from discontinued operations on the condensed consolidated statement of operations, as well as assets and liabilities of discontinued operations on the condensed consolidated balance sheets.
The following table presents the assets and liabilities of C&I Solutions as of January 2, 2022, presented as assets and liabilities of discontinued operations on the condensed consolidated balance sheet:

 January 2, 2022
Assets
Current assets:
Cash and cash equivalents$3,395 
Restricted cash and cash equivalents, current portion3,466 
Accounts receivable, net5,522 
Contract assets55,673 
Inventories28,561 
Advances to suppliers, current portion2,813 
Project assets - plants and land, current portion8,105 
Prepaid expenses and other current assets13,257 
Total current assets of discontinued operations120,792 
Restricted cash and cash equivalents, net of current portion2,439 
Property, plant and equipment, net1,734 
Operating lease right-of-use assets27,572 
Other long-term assets15,781 
Total assets of discontinued operations$168,318 
Liabilities 
Current liabilities: 
Accounts payable$38,541 
Accrued liabilities16,895 
Operating lease liabilities, current portion1,400 
Contract liabilities, current portion26,559 
Short-term debt3,101 
Total current liabilities of discontinued operations86,496 
Operating lease liabilities, net of current portion10,200 
Contract liabilities, net of current portion9,096 
Other long-term liabilities23,365 
Total liabilities of discontinued operations$129,157 
The following table presents financial results of C&I Solutions presented as discontinued operations in the condensed consolidated statement of operations in the corresponding periods:

 Three Months EndedSix Months Ended
July 3, 2022July 4, 2021July 3, 2022July 4, 2021
Total revenues$8,256 $48,176 $36,710 $114,438 
Total cost of revenues14,830 47,856 59,860 110,210 
Gross (loss) profit(6,574)320 (23,150)4,228 
Operating expenses13,781 12,771 22,131 18,639 
Operating (loss) income(20,355)(12,451)(45,281)(14,411)
Other (expense) income, net(502)(1,054)(1,874)(948)
(Loss) earnings before income taxes(20,857)(13,505)(47,155)(15,359)
Benefits from (provision for) income taxes241 1,169 584 1,267 
Net (loss) income from discontinued operations, net of taxes(20,616)(12,336)(46,571)(14,092)
Net loss (income) from discontinued operations attributable to noncontrolling interests— 449 250 967 
Net (loss) income from discontinued operations attributable to stockholders$(20,616)$(11,887)$(46,321)$(13,125)

The following table presents significant non-cash items and capital expenditures of discontinued operations:

 Six Months Ended
July 3, 2022July 4, 2021
Depreciation and amortization$85 $2,436 
Stock-based compensation$21 $1,445 
(Gain) loss on change in valuation of equity method investments$— $(726)
(Gain) loss on sale of investments$— $(1,162)
Loss (gain) on business divestiture$— $5,066