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Discontinued Operations | 9 Months Ended
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Sep. 30, 2018
Discontinued Operations and Disposal Groups [Abstract] |
DISCONTINUED OPERATIONS | Note 2. DISCONTINUED OPERATIONS As discussed above, in March 2018, the Company entered into an agreement to sell WMI Group. As such, these businesses are reported as discontinued operations for the three and nine months ended September 30, 2018 and 2017. As required, the Company has retrospectively recast its consolidated statements of operations and balance sheets for all periods presented. The Company has not segregated the cash flows of these businesses in the consolidated statements of cash flows. Management was also required to make certain assumptions and apply judgment to determine historical expenses related to the discontinued operations presented in prior periods. Unless noted otherwise, discussion in the Notes to Consolidated Financial Statements refers to the Company’s continuing operations. At September 30, 2018, the Company has recorded a liability for loss on assets held for sale of $930,000. The following table presents a reconciliation of the major financial lines constituting the results of operations for discontinued operations to the net loss from discontinued operations presented separately in the consolidated statement of operations for the three and nine months ended September 30, 2018 and September 30, 2017:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
|  | (unaudited) |  |  | (unaudited) |  |  | (unaudited) |  |  | (unaudited) |
Net revenue |  | $ | 4,951,000 |  |  | $ | 3,588,000 |  |  | $ | 11,396,000 |  |  | $ | 10,280,000 |
Cost of sales |  |  | 3,935,000 |  |  |  | 2,988,000 |  |  |  | 9,269,000 |  |  |  | 8,033,000 |
Gross profit |  |  | 1,016,000 |  |  |  | 600,000 |  |  |  | 2,127,000 |  |  |  | 2,247,000 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Selling, general and administrative |  |  | (298,000 | ) |  |  | (531,000 | ) |  |  | (1,033,000 | ) |  |  | (1,957,000 | )
Loss on assets held for sale |  |  | (2,493,000 | ) |  |  | - |  |  |  | (930,000 | ) |  |  | - |
Total Operating expenses |  |  | (2,791,000 | ) |  |  | (531,000 | ) |  |  | (1,963,000 | ) |  |  | (1,957,000 | )
Interest income (expense) and financing costs |  |  | 1,000 |  |  |  | (12,000 | ) |  |  | 1,000 |  |  |  | (12,000 | )
Other Income, net |  |  | 4,000 |  |  |  | 5,000 |  |  |  | 7,000 |  |  |  | 2,000 |
Gain (loss) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Loss from discontinued operations before income taxes |  |  | (1,770,000 | ) |  |  | 62,000 |  |  |  | 172,000 |  |  |  | 280,000 |
Provision for income taxes |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Net income (loss) from discontinued operations |  | $ | (1,770,000 | ) |  | $ | 62,000 |  |  | $ | 172,000 |  |  | $ | 280,000 |
Non-cash operating amounts for discontinued operations for the three and nine month periods ended September 30, 2018 include depreciation of $41,000 and $124,000, respectively. Capital expenditures were $0. There were no other significant non-cash operating amounts or investing items of the discontinued operations for the periods. Non-cash operating amounts for discontinued operations for the three and nine month periods ended September 30, 2017 include depreciation of $41,000 and $131,000, respectively, and amortization of $49,000 and $159,000, respectively. Capital expenditures were $29,000. There were no other significant non-cash operating amounts or investing items of the discontinued operations for the periods. See Note 6 for a reconciliation of the carrying amounts of major classes of assets and liabilities of the discontinued operations to the total assets and liabilities of the disposal group classified as held for sale that are presented separately in the consolidated balance sheets. Subsequent Events On April 30, 2018 Eur Pac Corporation (EPC) received a “Notice of Proposed Debarment” from the Department of the Navy – its principal customer. The proposed debarment would prohibit EPC from bidding on and executing on future contracts with the Federal Government. Despite this action, EPC would be entitled to complete existing contracts that had already been awarded. Immediately after receiving this notice, EPC and Air Industries retained counsel to appeal the proposed debarment, and submitted information in opposition to the proposed debarment, and EPC representatives met with the Navy to discuss the matter. On November 8, 2018 EPC received formal notice from the Department of the Navy that EPC’s opposition to debarment was rejected and that the EPC was debarred from future government contracts until October 29, 2020. Management is considering completing existing contracts that had already been awarded, and management’s plan is to eventually close EPC in the first or second quarter of 2019. Management has determined that the impact of the eventual closing of Eur Pac is immaterial to the September 30, 2018 financial position of the Company. EPC’s net sales for the three and nine months ended September 30, 2018 were $310,000 and $1,554,000, respectively. Also refer to Notes 7 and 8 that discuss subsequent events. Management has evaluated subsequent events through the date of this filing.

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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 -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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