12. Discontinued Operations

Based on the transaction noted in Note 11, the operating results of M&I Electric Industries Inc. in the United States are classified as discontinued operation and its assets and associated liabilities are carried as assets and liabilities held for sale. Future periods will continue to report M&I Electric Industries Inc. in the United States results as discontinued in all comparative periods.

The following tables summarize the M&I Electric Industries Inc. United States assets and liabilities held for sale and operating results.

M&I Electric Industries Inc. in the United States

Assets and Liabilities held for sale

(in thousands)

	June 30,		December 31,
	2018		2017
Assets	(unaudited)
Current assets:
Cash and cash equivalents	$	2,858	$	2,046
Restricted short-term investments		50		50
Accounts receivable-trade, net		5,405		5,266
Inventories, net		1,206		1,325
Cost and estimated earnings in excess of billings on uncompleted contracts		1,973		5,841
Prepaid expenses and other current assets		379		384
Total current portion of assets held for sale		11,871		14,912
Property, plant and equipment, net		6,000		6,323
Intangibles		506		458
Retainage receivables		-		785
Total non-current assets held for sale		6,506		7,566
Total assets held for sale	$	18,377	$	22,478
Liabilities
Current liabilities:
Accounts payable and other accrued expenses	$	9,378	$	11,278
Short-term note payable		116		150
Accrued payroll and benefits		415		338
Billings in excess of costs and estimated earnings on uncompleted contracts		3,801		1,792
Total current liabilities held for sale		13,710		13,558
Total liabilities held for sale	$	13,710	$	13,558

M&I Electric Industries Inc. in the United States

Statements of Operations

Unaudited

(in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net sales	$	7,750		$	11,629		$	14,163		$	18,444
Cost of sales		8,301			11,172			16,032			18,688
Gross margin		(551	)		457			(1,869	)		(244	)
Operating expenses:
Research and development		42			78			85			183
Selling and marketing		641			568			1,231			1,042
General and administrative		618			399			1,273			975
Total operating expenses		1,301			1,045			2,589			2,200
Loss from discontinued operations		(1,852	)		(588	)		(4,458	)		(2,444	)
Other income (expense):
Interest expense and other, net		(127	)		(356	)		(380	)		(505	)
Loss from discontinued operations before income taxes		(1,979	)		(944	)		(4,838	)		(2,949	)
Provision for (benefit from) income taxes on discontinued operations		-			-			-			-
Loss from discontinued operations	$	(1,979	)	$	(944	)	$	(4,838	)	$	(2,949	)

Cash provided by operating activities of discontinued operations for the six months ended June 30, 2018 was $0.4 million. Cash provided by operating activities of discontinued operations for the six months ended June 30, 2017 was $1.1 million. Cash used in investing activities of discontinued operations for the six months ended June 30, 2018 was $0.2 million. Cash used in investing activities of discontinued operations for the six months ended June 30, 2017 was $0.1 million.