| Discontinued Operations |
16. Discontinued Operations
As described in Note 1, FFTRG previously entered into area development and franchise agreements with MOD Pizza related to the development of MOD Pizza franchised restaurant locations throughout Florida and, through 2019, had opened nine restaurant locations. In September 2019, the Company entered into an agreement with MOD Pizza to terminate the area development and franchise agreements and transferred seven of its restaurant locations, including the related assets, operations, and lease obligations, to MOD Pizza. In addition, the Company closed the remaining two locations and terminated the related lease agreements.
FFTRG’s operations as a franchisee of MOD Pizza are presented as discontinued operations in the Company’s condensed consolidated financial statements.
The carrying amount of major classes of assets and liabilities included as part of discontinued operations is as follows (in thousands):
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September 30,
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December 31,
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2020
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2019
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ASSETS
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Cash and cash equivalents
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$
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—
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35
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Operating lease assets
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—
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772
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Other assets
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—
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185
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Discontinued operations total assets
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$
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—
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992
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LIABILITIES AND EQUITY
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Liabilities:
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Accounts payable
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$
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—
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2
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Accrued expenses
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—
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134
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Operating lease liability
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—
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905
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Discontinued operations total liabilities
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$
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—
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1,041
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The major components of loss from discontinued operations are as follows (in thousands):
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For the Three Months Ended
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For the Nine Months Ended
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September 30,
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September 30,
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2020
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2019
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2020
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2019
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Revenues:
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Trade sales
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$
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—
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2,057
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—
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6,044
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Other revenue
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—
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31
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—
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89
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Total revenues
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—
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2,088
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—
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6,133
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Costs and Expenses:
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Cost of trade sales
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—
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1,156
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—
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2,452
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Depreciation, amortization and accretion, net
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—
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183
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—
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690
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Impairment losses
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—
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3,993
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71
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6,749
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Selling, general and administrative expenses
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—
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1,585
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20
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5,715
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Total costs and expenses
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—
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6,917
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91
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15,606
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Pre-tax loss from discontinued operations
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$
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—
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(4,829)
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(91)
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(9,473)
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The following are the major components of the statement of cash flows from discontinued operations (in thousands):
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For the Nine Months Ended
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September 30,
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2020
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2019
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Operating activities:
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Pre-tax loss from discontinued operations
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$
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(91)
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(9,473)
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Adjustment to reconcile pre-tax loss to net cash
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used in operating activities:
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Depreciation, amortization and accretion, net
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—
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690
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Impairment losses
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71
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6,749
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Decrease in trade inventory
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—
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64
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Decrease in other assets
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94
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470
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Change in operating lease assets and liabilities
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(113)
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(269)
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Decrease in accounts payable
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(2)
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(57)
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Decrease in accrued expenses
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(134)
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(540)
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Net cash used in operating activities
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$
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(175)
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(2,366)
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Investing activities:
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Cash paid for intangible assets
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$
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—
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(40)
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Purchases of property and equipment
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—
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(542)
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Net cash used in investing activities
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$
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—
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(582)
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