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Discontinued Operations | 9 Months Ended
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Sep. 30, 2023
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | Discontinued Operations During the fourth quarter of 2022, the Company began a strategic reassessment of certain operations to drive an increased focus on its core operations and to continue to improve overall performance and operating profitability. As a result of this reassessment, management and the Board of Directors decided to pursue an exit of the Company's galvanized pipe and tube operations at its Munhall facility ("Munhall"). During the second quarter of 2023, the Board of Directors of the Company made the decision to permanently cease operations at Munhall effective on or around August 31, 2023. It is anticipated that the complete exit and disposal of all assets at Munhall will be completed within one year from the date the decision was made. The strategic decision to cease manufacturing operations at Munhall is part of the Company’s ongoing efforts to consolidate manufacturing to drive an increased focus on its core operations and to improve profitability while driving operational efficiencies. As a result of this decision, during the second quarter ended June 30, 2023, the Company incurred asset impairment charges of $6.4 million related to the write down of inventory and long-lived assets as well as $1.4 million in increased reserves on accounts receivable at the facility. During the third quarter ended September 30, 2023, the Company incurred additional asset impairment charges of $2.4 million related to the write down of inventory to net realizable value. Certain assets of Munhall were also classified as held for sale and the results of operations have been classified as discontinued operations for all periods presented. See Note 4 for further discussion of the assets held for sale and related fair value measurements. The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations of Munhall:
(in thousands) | September 30, 2023 |  | December 31, 2022
Carrying amounts of assets included as part of discontinued operations: |  |  |
Cash and cash equivalents | $ | — |  |  | $ | 1 |
Accounts receivable, net | 500 |  |  | 8,058 |
Inventories | — |  |  | 28,880 |
Prepaid expenses and other current assets | 120 |  |  | 1,181 |
Current assets classified as discontinued operations | 620 |  |  | 38,120 |
Property, plant and equipment, net | — |  |  | 5,301 |
Right-of-use assets, operating leases, net | 6 |  | 26
Intangible assets, net | — |  |  | 386
Other non-current assets, net | — |  |  | 1904
Long-term assets classified as discontinued operations | 6 |  |  | 7,617 |
Total assets classified as discontinued operations | $ | 626 |  |  | $ | 45,737 |
Carrying amounts of current liabilities included as part of discontinued operations: |  |  |
Accounts payable | $ | 348 |  |  | $ | 3,108 |
Accrued expenses and other current liabilities | 615 |  |  | 521 |
Current portion of operating lease liabilities | 7 |  |  | 27 |
Total current liabilities classified as discontinued operations | $ | 970 |  |  | $ | 3,656 |
The financial results of Munhall are presented as loss from discontinued operations, net of tax on the unaudited condensed consolidated statements of income (loss). The following table summarizes the results of discontinued operations of Munhall:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(in thousands) | 2023 |  | 2022 |  | 2023 |  | 2022
Net sales | $ | 2,650 |  |  | $ | 21,945 |  |  | $ | 25,313 |  |  | $ | 86,057 |
Cost of sales | 6,640 |  |  | 24,469 |  |  | 36,868 |  |  | 86,854 |
Gross profit | (3,990) |  |  | (2,524) |  |  | (11,555) |  |  | (797) |
Selling, general and administrative expense | 170 |  |  | 595 |  |  | 4,310 |  |  | 1,699 |
Asset impairments | 2,416 |  |  | — |  |  | 8,720 |  |  | — |
Earnout adjustments | — |  |  | — |  |  | — |  |  | (7) |
Operating loss of discontinued operations | (6,576) |  |  | (3,119) |  |  | (24,585) |  |  | (2,489) |
Loss on classification as held for sale | — |  |  | — |  |  | 83 |  |  | — |
Loss on discontinued operations before income taxes | (6,576) |  |  | (3,119) |  |  | (24,668) |  |  | (2,489) |
Income tax benefit | (1,413) |  |  | (638) |  |  | (5,367) |  |  | (496) |
Net loss from discontinued operations | $ | (5,163) |  |  | $ | (2,481) |  |  | $ | (19,301) |  |  | $ | (1,993) |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//360/tableOfContent + Details
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