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Discontinued Operations | 9 Months Ended
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Sep. 30, 2015
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | DISCONTINUED OPERATIONS As part of the strategy to align our resources with developing and selling our energy-efficient LED products into the commercial and government markets, we completed the exit of EFLS, formerly known as our turnkey solutions business, during the three months ended September 30, 2015. During 2014, we shifted our focus away from the turnkey solutions business. We stopped accepting new projects and completed all outstanding solutions-based projects in the first quarter of 2015. Following the completion of these projects, a remaining warranty liability existed for the replacement of potential defective products that were installed as a part of certain solutions-based jobs. The period for potential warranty replacement lasted one year from the time of job commencement. As of September 30, 2015, all remaining warranty periods had expired and the exit of our turnkey solutions business was complete. Accordingly, the operating results related to EFLS have been included as discontinued operations in the Condensed Consolidated Statements of Operations for all periods presented. There were no assets disposed as a result of the disposition, and we did not recognize a gain or loss on disposal or record an income tax expense or benefit. We do not anticipate any significant continuing involvement related to this discontinued operation. In August 2015, we sold our wholly-owned United Kingdom subsidiary, Crescent Lighting Limited. The sale was for nominal consideration under the terms of the agreement. As a result of the transaction and the elimination of this foreign subsidiary consolidated under the equity method of accounting, we recorded a one-time loss of $44 thousand, which included a $469 thousand accumulated other comprehensive income reclassification adjustment for foreign currency translation adjustments. The loss was recorded to the Condensed Consolidated Statements of Operations under the caption "Loss on disposal of discontinued operations" during the three months ended September 30, 2015. We do not anticipate any significant continuing involvement related to this discontinued operation. The operating results related to CLL and EFLS have been included as discontinued operations in the Condensed Consolidated Statements of Operations for all periods presented. The following table shows the components included in assets and liabilities of discontinued operations by business for the period presented (in thousands):
| December 31, 2014
| EFLS |  | CLL |  | Total
Cash and cash equivalents | $ | 93 |  |  | $ | 4 |  |  | $ | 97 |
Trade accounts receivable | 312 |  |  | 145 |  |  | 457 |
Inventories | — |  |  | 414 |  |  | 414 |
Prepaid and other current assets | 7 |  |  | 95 |  |  | 102 |
Current assets of discontinued operations | 412 |  |  | 658 |  |  | 1,070 |
Property and equipment, net | — |  |  | 23 |  |  | 23 |
Other assets | — |  |  | 50 |  |  | 50 |
Non-current assets of discontinued operations | — |  |  | 73 |  |  | 73 |
Total assets of discontinued operations | $ | 412 |  |  | $ | 731 |  |  | $ | 1,143 |
Accounts payable | $ | 163 |  |  | $ | 318 |  |  | $ | 481 |
Accrued liabilities | 73 |  |  | 362 |  |  | 435 |
Billings in excess of costs and estimated earnings on uncompleted contracts | 23 |  |  | — |  |  | 23 |
Current liabilities of discontinued operations | 259 |  |  | 680 |  |  | 939 |
Total liabilities of discontinued operations | $ | 259 |  |  | $ | 680 |  |  | $ | 939 |
The following table summarizes the components included in loss from discontinued operations in our Condensed Consolidated Statements of Operations for the periods presented (in thousands):
| Three months ended September 30, |  | Nine months ended September 30,
| 2015 |  | 2014 |  | 2015 |  | 2014
Net sales | $ | 132 |  |  | $ | 585 |  |  | $ | 1,078 |  |  | $ | 5,651 |
Cost of sales | 84 |  |  | 523 |  |  | 588 |  |  | 4,104 |
Gross profit | 48 |  |  | 62 |  |  | 490 |  |  | 1,547 |
Operating expenses of discontinued operations | 95 |  |  | 703 |  |  | 657 |  |  | 2,445 |
Other expenses | 6 |  |  | 18 |  |  | — |  |  | 18 |
Loss on disposal of discontinued operations | 89 |  |  | — |  |  | 161 |  |  | — |
Loss from discontinued operations before income taxes | (142 | ) |  | (659 | ) |  | (328 | ) |  | (916 | )
Benefit from income taxes | — |  |  | — |  |  | (10 | ) |  | (2 | )
Loss from discontinued operations | $ | (142 | ) |  | $ | (659 | ) |  | $ | (318 | ) |  | $ | (914 | )
The following table shows the components of loss from discontinued operations by business for the periods presented (in thousands):
| Three months ended September 30, |  | Nine months ended September 30,
| 2015 |  | 2014 |  | 2015 |  | 2014
Crescent Lighting Limited | $ | (55 | ) |  | $ | (274 | ) |  | $ | (138 | ) |  | $ | (538 | )
Energy Focus LED Solutions, LLC | 2 |  |  | (385 | ) |  | (29 | ) |  | (358 | )
Pool division | — |  |  | — |  |  | — |  |  | (20 | )
Loss from discontinued operations | (53 | ) |  | (659 | ) |  | (167 | ) |  | (916 | )
Crescent Lighting Limited | (44 | ) |  | — |  |  | (44 | ) |  | — |
Pool division | (45 | ) |  | — |  |  | (117 | ) |  | — |
Loss on disposal of discontinued operations | (89 | ) |  | — |  |  | (161 | ) |  | — |
Loss from discontinued operations before income taxes | (142 | ) |  | (659 | ) |  | (328 | ) |  | (916 | )
Benefit from income taxes | — |  |  | — |  |  | (10 | ) |  | (2 | )
Loss from discontinued operations | $ | (142 | ) |  | $ | (659 | ) |  | $ | (318 | ) |  | $ | (914 | )
Included in the loss on disposal of discontinued operations are legal fees incurred for the arbitration associated with our pool products business, as described in further detail below. There were no other revenues or expenses associated with this business. In November 2013, we sold our pool products business for a cash purchase price of $5.2 million. The Purchase Agreement provided for an escrow of $500 thousand of the purchase price to secure customary indemnification obligations with respect to our representations, warranties, covenants and other obligations under the Purchase Agreement. At September 30, 2015, $300 thousand remained in escrow subject to the resolution of outstanding buyer claims. The parties were unable to resolve these claims through mediation and during the quarter ended September 30, 2015, began arbitration proceedings. The buyer amended the original arbitration claim filed on February 18, 2015 to now assert claims for damages of $1.6 million under the Purchase Agreement and relating to product development. As the arbitration is still in the early stages, we remain unable to estimate a range of possible loss. For more information on this matter and the cash remaining in escrow, please refer to Note 17. Legal matters, included under Item 8. of our 2014 Annual Report.

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- Definition The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1436-107760 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1361-107760 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1474-107760 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1510-107760 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e957-107759 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1020-107759 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1012-107759 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 45 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=8077374&loc=d3e2443-110228 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6391110&loc=d3e2941-110230 + Details
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