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Discontinued Operations
 3 Months Ended
Mar. 31, 2012
Discontinued Operations [Abstract]  
Discontinued Operations

Note 5. Discontinued Operations

Effective April 28, 2011, the Board of Directors committed to management’s plan to dispose of the assets of Difco Performance Fabrics, Inc. (“Difco”). On April 29, 2011, we entered into an agreement to sell certain assets and the working capital of Difco (the “April 2011 Asset Sale”), and the sale was completed on May 10, 2011. The April 2011 Asset Sale agreement provided that Difco would continue to produce goods during a three month manufacturing transition services arrangement that expired in the third quarter of 2011. Upon completion of the April 2011 Asset Sale, Difco retained certain of its property, plant and equipment that was eventually sold in the third quarter of 2011 (the “September 2011 Asset Sale”).

At that time, pursuant to ASC 360, the Company determined that the assets of Difco represented assets held for sale, since the cash flows of Difco have been eliminated from our ongoing operations and the Company has no continuing involvement in the operations of the business after the disposal transaction and wind-down period.

 

As a result, this business has been accounted for as a discontinued operation in accordance with the authoritative guidance for the periods presented in this report. The following amounts, which relate to the Company’s Oriented Polymers segment, have been segregated from continuing operations and included in (Loss) income from discontinued operations, net of tax in the Consolidated Statements of Operations (in thousands):

 

                             
    Successor          Predecessor  
    Three Months
Ended
March  31,
2012		     Two Months
Ended
April  2,
2011		          One Month
Ended
January 28,
2011		  

Net sales

   $ —       $ 8,607         $ 4,060  
   

 

 

    

 

 

        

 

 

  

Pre-tax (loss) income

     —         (477 )          320  

Income tax expense

     —         14           138  
   

 

 

    

 

 

        

 

 

  

Net (loss) income

   $ —       $ (491 )        $ 182  
   

 

 

    

 

 

        

 

 

  

The tax expense for Difco was $0.01 million and $0.1 million for the two months ended April 2, 2011 and the one month ended January 28, 2011, respectively. The actual tax expense differs from such expense determined at the U.S. statutory rate primarily due to intercompany profits, currency differences, losses with no expectation of future benefits and unrecognized tax benefits (“UTB”). The differences of the tax expense between respective periods are primarily due to differences in the pre-tax book profits.

The Company received $10.9 million of cash proceeds on the sale of Difco consisting of $9.2 million related to working capital assets from the April 2011 Asset Sale and $1.7 million for the sale of the land, building and remaining equipment from the September 2011 Asset Sale.