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Discontinued Operations

3 Months Ended

Mar. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

Note 2. DISCONTINUED OPERATIONS

As discussed in Note 1, the Company sold WMI, Miller Stuart, WPI and Compac to CPI in December 2018. As such, these businesses are reported as discontinued operations for the three months ended March 31, 2018. 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 Condensed Consolidated Financial Statements refers to the Company's continuing operations.

Also discussed in Note 1, the Company disposed of its EPC and ECC subsidiaries in March 2019. As required, the Company has retrospectively recast its consolidated statements of operations for all periods presented. As such, these businesses are reported as discontinued operations for the three months ended March 31, 2019. 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 Condensed Consolidated Financial Statements refers to the Company's continuing operations.

At December 31, 2018, the Company recorded a loss on abandoned assets of $386,000 and a goodwill impairment charge for ECC in the amount of $109,000, as a result of the Companies decision to close its EPC and ECC businesses.

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 months ended March 31, 2019 and March 31, 2018:

		Three Months Ended March 31,
		2019				2018
		(unaudited)				(unaudited)
Net revenue		$	132,000			$	2,876,000
Cost of goods sold			105,000				2,456,000
Gross profit			27,000				420,000
Operating expenses:
Selling, general and administrative			96,000				627,000
Gain on impairment of assets			41,000				—
Total operating loss			(28,000	)			(207,000	)
Interest expense			(1,000	)			(1,000	)
Other income			101,000				1,000
Income (loss) from discontinued operations before income taxes			72,000				(207,000	)

Provision for income taxes			—				(2,000	)
Income (loss) from discontinued operations, net of income tax		$	72,000			$	(209,000	)

Non-cash operating amounts for discontinued operations for the three months ended March 31, 2019 include depreciation and amortization of $6,000. The Company did not incur any capital expenditures for discontinued operations for the three months ended March 31, 2019. There were no other significant non-cash operating amounts or investing items of the discontinued operations for the period.

Non-cash operating amounts for discontinued operations for the three months ended March 31, 2018 include depreciation of $49,000 and amortization of $38,000. The Company did not incur any capital expenditures for discontinued operations for the three months ended March 31, 2018. There were no other significant non-cash operating amounts or investing items of the discontinued operations for the period.