Divestiture |
6 Months Ended |
|---|---|
Jul. 03, 2026 | |
| Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract] | |
| Divestiture | Divestiture On February 26, 2026, the Company divested its Phoenix, Arizona AAG operations, including the Shock Therapy, Upfit UTV, and Geiser businesses, as part of ongoing efforts to streamline operations. The Company sold the businesses to S&G Holdings and Investments Company (“S&G”) and the former general manager of the businesses who was also the prior owner of Shock Therapy, whose employment with the Company ended upon execution of the transaction. The transaction was conducted on terms comparable to those that would have been obtained in a transaction with an unrelated party. The consideration consisted of $5,000 in cash and a promissory note receivable of $22,575, bearing interest at a rate of 6.75% per annum, with a maturity date of June 30, 2028. The Company recorded a $10,612 loss associated with the sale that is presented in other (income) expense, net on the condensed consolidated statement of operations. The divestiture did not represent a strategic shift with a major effect on the Company’s operations and financial results and, therefore, is not reported as a discontinued operation. As part of the divestiture, the Company obtained a warrant to purchase 10% of the fully diluted common equity of S&G at a nominal exercise price of $0.01 per share. The warrant is exercisable beginning on the earlier of February 26, 2029 or upon notice of a fundamental transaction involving S&G, and expires on February 26, 2036. The warrant is exercisable through cash exercise only. The initial fair value of the warrant was determined to be zero based on a Level 3 measurement under ASC 820, using unobservable inputs including management's assessment of the enterprise value of S&G, the capital structure and leverage of the entity, the historical financial performance of the underlying businesses, and the impact of the exercise lockout period on time value. The Company elected to account for the warrant under the measurement alternative in ASC 321-10-35-2, measuring it at cost minus impairment, adjusted for observable price changes. As of July 3, 2026, the carrying amount of the warrant was zero. No impairments, downward adjustments, or upward adjustments have been recognized since the warrant was obtained. In connection with the divestiture, the Company retained an operating lease for a facility previously shared with Shock Therapy and entered into a sublease arrangement with the buyer. The sublease had a remaining term of approximately four years and was expected to provide aggregate sublease income of approximately $630. The Company's obligations under the head lease were unchanged by the sublease arrangement.
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