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Discontinued Operations
 6 Months Ended
Jun. 30, 2014
Discontinued Operations [Abstract]  
Discontinued Operations

(3) Discontinued Operations

 

Wiring Business

 

On May 26, 2014, the Company entered into an asset purchase agreement to sell substantially all of the assets and liabilities of the former Wiring segment to Motherson Sumi Systems Ltd., an India-based manufacturer of diversified products for the global automotive industry and a limited company incorporated under the laws of the Republic of India, and MSSL (GB) LIMITED, a limited company incorporated under the laws of the United Kingdom (collectively, “Motherson”) for $65,700 in cash and the assumption of certain related liabilities of the Wiring business. The final price to be paid is subject to working capital and other customary adjustments.  

 

In the second quarter of 2014 the Company recorded a charge of $1,000  ($660 after tax) to adjust the carrying value of the Wiring assets to their estimated fair value less cost to sell, based on the terms of the agreement.  The charge is included in loss on disposal, net of tax within discontinued operations in the condensed consolidated statements of operations. 

 

On August 1, 2014, the Company completed the sale of substantially all of the assets and liabilities of its Wiring business to Motherson for $71,400 in cash and consisted of $65,700 stated purchase price, a $2,600 working capital adjustment, and $3,100 Wiring business cash on the closing date, which is subject to final working capital and other customary adjustments. The Company also entered into a transition services agreement with Motherson for the period July through December 2014 associated with information systems, accounting, administrative and support services as well as production in Estonia and China. In addition, the Company’s Electronics segment will have ongoing sales to the Wiring business acquired by Motherson.

 

The total assets and liabilities that are included as held for sale in our condensed consolidated balance sheet as of June 30, 2014 are approximately $106,347 and $33,084, respectively.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following tables display summarized activity in our condensed consolidated statements of operations for discontinued operations during the three and six months ended June 30, 2014 and 2013, related to the Wiring business.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

 

 

 

June 30,

 

June 30,

 

 

 

 
2014 

 
2013 

 
2014 

 
2013 

Net sales

 

 

$
71,234 

$
72,952 

$
146,293 

$
149,800 

Cost of goods sold (B)

 

 

 
64,711 

 
67,035 

 
133,118 

 
136,434 

Selling, general and administrative (A) (B)

 

 

 
5,228 

 
5,844 

 
10,597 

 
11,492 

Interest expense, net

 

 

 
15 

 
71 

 
26 

 
195 

Other expense, net

 

 

 
58 

 
(326)

 
89 

 
(92)

Income from operations of discontinued operations

 

 

 

 

 

 

 

 

 

 

before income taxes (A) (B) (C)

 

 

 
1,222 

 
328 

 
2,463 

 
1,771 

Income tax expense on discontinued operations

 

 

 
(628)

 
(350)

 
(816)

 
(678)

Income (loss) from discontinued operations, net of tax

 

 

 
594 

 
(22)

 
1,647 

 
1,093 

 

 

 

 

 

 

 

 

 

 

 

Loss on disposal

 

 

 
(1,750)

 

 -

 
(1,897)

 

 -

Income tax benefit on loss on disposal

 

 

 
612 

 

 -

 
664 

 

 -

Loss on disposal, net of tax

 

 

 
(1,138)

 

 -

 
(1,233)

 

 -

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations

 

 

$
(544)

$
(22)

$
414 

$
1,093 

 

 

(A)

Included in earnings of discontinued operations before income tax expenses for the three and six months ended June 30, 2014 were transaction costs of $750 and $897, respectively, and a $1,000 write-down

 

(B)

The assets and liabilities of the Wiring business were reclassified to held for sale effective May 26, 2014.  Accordingly, depreciation and amortization for the Wiring assets were not recorded after that date.

 

(C)

Management fees, which had been reported in the Wiring business in prior periods, of $1,863 and $3,726 for the three and six months ended June 30, 2013, respectively, have been excluded as they are not directly attributable to the business.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

 

 

 

June 30,

 

June 30,

 

 

 

 
2014 

 
2013 

 
2014 

 
2013 

Depreciation and amortization

 

 

$
856 

$
1,196 

$
2,111 

$
2,407 

Capital expenditures

 

 

 
362 

 
988 

 
841 

 
1,504 

 

 

Wiring intercompany sales were $1,669 and $2,198 for the three months ended June 30, 2014 and 2013, respectively, and $3,544 and $3,801 for the six months ended June 30, 2014 and 2013, respectively. 

 

Wiring intercompany purchases were $7,510 and $6,736 for the three months ended June 30, 2014 and 2013, respectively, and $15,290 and $13,401 for the six months ended June 30, 2014 and 2013, respectively.

 

 

 

 

 

The following table displays a summary of the Wiring assets and liabilities held for sale as of June 30, 2014 and December 31, 2013.

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

 

 
2014 

 
2013 

Assets

 

 

 

 

 

 

Accounts receivable, less reserves

 

 

$
41,936 

$
31,287 

Inventories, net

 

 

 
35,856 

 
34,530 

Prepaid expenses and other current assets

 

 

 
2,078 

 
1,786 

Property, plant and equipment, net

 

 

 
21,704 

 
24,549 

Goodwill

 

 

 
4,173 

 
4,173 

Intangible assets, net

 

 

 
300 

 
344 

Other assets

 

 

 
300 

 
300 

Total assets

 

 

$
106,347 

$
96,969 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Accounts payable

 

 

 
25,262 

 
27,413 

Accrued expenses and other current liabilities

 

 

 
7,822 

 
9,341 

Total liabilities

 

 

$
33,084 

$
36,754 

 

 

 

 

 

 

 

Total net assets held for sale

 

 

$
73,263 

$
60,215