American Tire Distributors Holdings, Inc.

CIK:0001323891|SEC Filings

Discontinued Operations

12 Months Ended

Jan. 03, 2015

19. Discontinued Operations:

As part of the acquisition of Terry’s Tire, the Company acquired Terry’s Tire’s commercial and retread businesses. As the Company’s core business does not include commercial and retread operations, the Company decided that it would divest of these businesses. As it was management’s intention to divest the commercial and retread businesses during fiscal 2014 and as all held for sale criteria had been met, the related assets and liabilities of the commercial and retread businesses were classified as held for sale at the acquisition date. On July 31, 2014, the Company completed a transaction to sell the commercial and retread businesses for cash proceeds of $3.9 million. The carrying value of the commercial and retread businesses was $4.0 million. During third quarter 2014, the Company finalized the post-closing working capital adjustments which resulted in a payment due to the buyer of approximately $0.2 million. Accordingly, the Company has recognized a pre-tax loss on the sale of discontinued operations of $0.3 million within the accompanying consolidated statements of comprehensive income (loss) for the fiscal year ended January 3, 2015.

The Company has reflected the results of Terry’s Tire’s commercial and retread businesses as discontinued operations in the accompanying consolidated statement of comprehensive income (loss) for the fiscal year ended January 3, 2015. The components of income (loss) from discontinued operations, net of tax for the fiscal year ended January 3, 2015 were as follows:


	Fiscal Year
	Ended
	January 3,
In thousands	2015
Net sales	$	7,502

Income (loss) from operations before income taxes	$	(165	)
Loss on sale before income taxes		(346	)
Income tax provision (benefit)		(198	)

Income (loss) from discontinued operations, net of tax	$	(313	)

Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jan. 03, 2015	Dec. 28, 2013	Dec. 29, 2012
Cash flows from operating activities:
Net income (loss)	$ (94,599)us-gaap_NetIncomeLoss	$ (6,357)us-gaap_NetIncomeLoss	$ (14,346)us-gaap_NetIncomeLoss
Adjustments to reconcile net income (loss) to net cash provided by (used in) continuing operating activities:
(Income) loss from discontinued operations, net of tax	102
Loss on disposal of discontinued operations, net of tax	211
Loss on extinguishment of debt	17,195
Call premium and interest paid on redemption of Senior Secured Notes	(16,303)us-gaap_InterestAndDebtExpense
Depreciation and amortization	152,553us-gaap_DepreciationAndAmortization	105,458us-gaap_DepreciationAndAmortization	89,167us-gaap_DepreciationAndAmortization
Amortization of other assets	6,525us-gaap_AdjustmentForAmortization	4,456us-gaap_AdjustmentForAmortization	7,487us-gaap_AdjustmentForAmortization
Provision (benefit) for deferred income taxes	(48,917)us-gaap_DeferredIncomeTaxExpenseBenefit	(25,657)us-gaap_DeferredIncomeTaxExpenseBenefit	(11,879)us-gaap_DeferredIncomeTaxExpenseBenefit
Provision for doubtful accounts	1,489us-gaap_ProvisionForDoubtfulAccounts	2,237us-gaap_ProvisionForDoubtfulAccounts	1,996us-gaap_ProvisionForDoubtfulAccounts
Non-cash inventory step-up amortization	35,923us-gaap_InventoryWriteDown	5,379us-gaap_InventoryWriteDown	4,074us-gaap_InventoryWriteDown
Stock-based compensation	4,392us-gaap_ShareBasedCompensation	2,634us-gaap_ShareBasedCompensation	4,349us-gaap_ShareBasedCompensation
Non-cash changes in fair value of contingent consideration liabilities	(5,142)
Other, net	7,002us-gaap_OtherNoncashIncomeExpense	3,292us-gaap_OtherNoncashIncomeExpense	2,601us-gaap_OtherNoncashIncomeExpense
Change in operating assets and liabilities (excluding impact from acquisitions):
Accounts receivable	24,850	10,101	6,434
Inventories	(29,796)us-gaap_IncreaseDecreaseInInventories	(30,339)us-gaap_IncreaseDecreaseInInventories	(33,470)us-gaap_IncreaseDecreaseInInventories
Income tax receivable	(10,681)	644	1,232
Other current assets	(23)	1,160	(5,971)
Accounts payable and accrued expenses	(16,890)	29,916	(38,257)
Other, net	2,236	6,807	(3,391)
Net cash provided by (used in) continuing operating activities	30,127	109,731	10,026
Net cash provided by (used in) discontinued operations	1,580
Net cash provided by (used in) operating activities	31,707	109,731	10,026
Cash flows from investing activities:
Acquisitions, net of cash acquired	(865,003)	(77,017)	(115,334)
Purchase of property and equipment	(72,149)	(47,127)	(52,388)
Purchase of assets held for sale	(988)	(2,239)	(3,939)
Proceeds from dispoal of discontinued operations	3,854
Proceeds from sale of assets held for sale	784	7,751	3,738
Proceeds from sale of property and equipment	471	197	102
Net cash provided by (used in) continuing investing activities	(933,031)	(118,435)	(167,821)
Net cash provided by (used in) discontinued investing activities	0	0	0
Net cash provided by (used in) investing activities	(933,031)	(118,435)	(167,821)
Cash flows from financing activities:
Borrowings from revolving credit facility	4,380,548us-gaap_ProceedsFromLinesOfCredit	2,973,584us-gaap_ProceedsFromLinesOfCredit	3,333,642us-gaap_ProceedsFromLinesOfCredit
Repayments of revolving credit facility	(4,222,869)us-gaap_RepaymentsOfLinesOfCredit	(2,955,576)us-gaap_RepaymentsOfLinesOfCredit	(3,217,298)us-gaap_RepaymentsOfLinesOfCredit
Outstanding checks	30,754	6,599	(1,754)
Payments of other long-term debt	(8,272)us-gaap_RepaymentsOfOtherLongTermDebt	(503)us-gaap_RepaymentsOfOtherLongTermDebt	(1,987)us-gaap_RepaymentsOfOtherLongTermDebt
Payments of deferred financing costs	(15,951)us-gaap_PaymentsOfFinancingCosts	(1,106)us-gaap_PaymentsOfFinancingCosts	(3,779)us-gaap_PaymentsOfFinancingCosts
Payment for Senior Secured Notes redemption	(246,900)us-gaap_RepaymentsOfSeniorDebt
Payment of contingent consideration liabilities	(1,154)
Proceeds from issuance of long-term debt	940,313
Equity contribution	50,000us-gaap_ProceedsFromContributedCapital		60,000us-gaap_ProceedsFromContributedCapital
Net cash provided by (used in) continuing financing activities	906,469	22,998	168,824
Net cash provided by (used in) discontinued financing activities	0	0	0
Net cash provided by (used in) financing activities	906,469	22,998	168,824
Effect of exchange rate changes on cash	(5,170)	(4,485)	(57)
Net increase (decrease) in cash and cash equivalents	(25)	9,809	10,972
Cash and cash equivalents-beginning of period	35,760	25,951	14,979
Cash and cash equivalents-end of period	35,735	35,760	25,951
Supplemental disclosures of cash flow information:
Cash payments for interest, net of capitalized interest	116,774us-gaap_InterestPaid	66,623us-gaap_InterestPaid	63,221us-gaap_InterestPaid
Cash payments (receipts) for taxes, net	13,282us-gaap_IncomeTaxesPaidNet	23,740us-gaap_IncomeTaxesPaidNet	6,510us-gaap_IncomeTaxesPaidNet
Supplemental disclosures of noncash activities:
Capital expenditures financed by debt		$ 128	$ 515

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jan. 03, 2015	Dec. 28, 2013
Current assets:
Cash and cash equivalents	$ 35,735	$ 35,760
Accounts receivable, net of allowance for doubtful accounts of $2,603 and $2,169 in fiscal 2014 and 2013, respectively	387,549us-gaap_AccountsReceivableNetCurrent	291,547us-gaap_AccountsReceivableNetCurrent
Inventories	1,061,067us-gaap_InventoryNet	786,433us-gaap_InventoryNet
Deferred income taxes	26,802us-gaap_DeferredTaxAssetsNetCurrent	15,719us-gaap_DeferredTaxAssetsNetCurrent
Income tax receivable	10,822us-gaap_IncomeTaxesReceivable	369us-gaap_IncomeTaxesReceivable
Assets held for sale	799	910
Other current assets	27,118us-gaap_OtherAssetsCurrent	19,684us-gaap_OtherAssetsCurrent
Total current assets	1,549,892us-gaap_AssetsCurrent	1,150,422us-gaap_AssetsCurrent
Property and equipment, net	220,466us-gaap_PropertyPlantAndEquipmentNet	147,856us-gaap_PropertyPlantAndEquipmentNet
Goodwill	733,254us-gaap_Goodwill	504,333us-gaap_Goodwill
Other intangible assets, net	1,042,718	713,294
Other assets	52,641us-gaap_OtherAssetsNoncurrent	43,421us-gaap_OtherAssetsNoncurrent
Total assets	3,598,971us-gaap_Assets	2,559,326us-gaap_Assets
Current liabilities:
Accounts payable	742,682us-gaap_AccountsPayableCurrent	563,691us-gaap_AccountsPayableCurrent
Accrued expenses	100,674us-gaap_AccruedLiabilitiesCurrent	47,723us-gaap_AccruedLiabilitiesCurrent
Current maturities of long-term debt	9,768	564
Total current liabilities	853,124us-gaap_LiabilitiesCurrent	611,978us-gaap_LiabilitiesCurrent
Long-term debt	1,806,347	966,436
Deferred income taxes	291,106	270,576
Other liabilities	24,442us-gaap_OtherLiabilitiesNoncurrent	17,362us-gaap_OtherLiabilitiesNoncurrent
Commitments and contingencies (See Note 14)
Stockholder's equity:
Common stock, par value $.01 per share; 1,000 shares authorized; 50 shares issued and outstanding	0us-gaap_CommonStockValue	0us-gaap_CommonStockValue
Additional paid-in capital	813,364	758,972
Accumulated earnings (deficit)	(151,497)	(56,898)
Accumulated other comprehensive income (loss)	(37,915)	(9,100)
Total stockholder's equity	623,952us-gaap_StockholdersEquity	692,974us-gaap_StockholdersEquity
Total liabilities and stockholder's equity	$ 3,598,971	$ 2,559,326