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DISCONTINUED OPERATIONS
 12 Months Ended
Dec. 31, 2016
DISCONTINUED OPERATIONS  
DISCONTINUED OPERATIONS

3. DISCONTINUED OPERATIONS

The Company’s former Services segment had substantial continued operating losses for several years, due to operating issues and an increasingly competitive environment due in part to increased in-sourcing of service functions by customers. In July, 2015 the Company’s Board of Directors (the “Board”) directed management to evaluate potential strategic alternatives with respect to the Services segment. In September 2015 the Board authorized management to sell substantially all of the assets of the Services segment to one or more third-party purchasers, and thereafter to liquidate or otherwise dispose of any such assets remaining unsold. The Company began negotiations to sell substantially all the assets of the Services segment in the third quarter of 2015. The exit of this business was a strategic shift that had a major effect on the Company; therefore, the Company reclassified the related assets and liabilities of the Services segment as held for sale. In connection with the divestiture, which was substantially completed in December 2015, the Company sold $5,406 of net assets, resulting in a $2,096 loss. In addition, the Company recorded an asset impairment charges to reduce the carrying value of the net assets held for sale to their estimated fair value. The impairment charge and loss on sale is included in “Loss before benefit for income taxes” in “Results of Discontinued Operations.”

Results of Discontinued Operations

Results of operations associated with the Services segment, which are reflected as discontinued operations in the Company’s condensed consolidated statements of income for the twelve months ended December 31, 2016 and 2015, were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

    

 

    

 

2016

    

2015

Revenues

 

 

 

 

$
109

 

$
10,486

Cost of sales

 

 

 

 

 
(1,006)

 

 
(14,395)

Selling, general and administrative

 

 

 

 

 
(69)

 

 
(2,153)

Interest expense, net

 

 

 

 

 
(5)

 

 
(36)

Other income and expense items

 

 

 

 

 

 —

 

 
133

Impairment of held for sale assets and liabilities and gain on sale of assets

 

 

 

 

 
(45)

 

 
(3,596)

Loss from discontinued operations before and after benefit for income taxes

 

 

 

 

$
(1,016)

 

$
(9,561)

The Company was notified of two warranty claims, which resulted in an additional $427 of warranty expense recorded during the second quarter of 2016; both of the warranty claims were resolved prior to the end of 2016. The Company also reviewed the status of remaining inventory, which resulted in $216 of impairment expense during year-ended December 31, 2016.

Assets and Liabilities Held for Sales

Assets and liabilities classified as held for sale in the Company’s consolidated balance sheets as of December 31, 2016 and 2015 include the following:

 

 

 

 

 

 

 

 

 

December 31,

 

December 31,

 

    

2016

    

2015

Assets:

 

 

 

 

 

 

Accounts receivable, net

 

$
172

 

$
2,119

Inventories, net

 

 
807

 

 
2,118

Prepaid expenses and other current assets

 

 
55

 

 
606

Assets Held For Sale Related To Discontinued Operations

 

 
1,034

 

 
4,843

Impairment of discontinued assets held for sale

 

 
(579)

 

 
(1,500)

Total Assets Held For Sale Related To Discontinued Operations

 

$
455

 

$
3,343

Liabilities:

 

 

 

 

 

 

Accounts payable

 

$
22

 

$
367

Accrued liabilities

 

 
121

 

 
433

Customer deposits and other current obligations

 

 
3

 

 
49

Other long-term liabilities

 

 
3

 

 
17

Total Liabilities Held For Sale Related To Discontinued Operations

 

$
149

 

$
866