Quarterly report pursuant to Section 13 or 15(d)

Note 9 - Discontinued Operations

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Note 9 - Discontinued Operations
 9 Months Ended
Sep. 30, 2015
Notes to Financial Statements  
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]
9
.
Discontinued Operations
 
The Company’s discontinued operations consist of subsidiaries included in our Industrial Segment: (1) subsidiaries divested in 2011 and prior, (2) two previously closed locations, and (3) our PFSG facility. On August 14, 2013, our PFSG facility incurred fire damage which left it non-operational. In 2014, the Company elected not to rebuild the PFSG facility. The Company carried general liability, pollution, property and business interruption, and workers compensation insurance with a maximum deductible of approximately $300,000. On June 20, 2014, the Company entered into a settlement agreement and release with one of its insurance carriers resulting in receipt of approximately $3,850,000 in insurance settlement proceeds on June 30, 2014, which was used for working capital purposes.
 
On May 11, 2015, PFSG received a Notice of Violation and proposed Consent Order (“CO”) from the Georgia Department of Natural Resources Environmental Protection Division (“GAEPD”), which alleged certain violations of Georgia hazardous waste management regulations and PFSG hazardous waste management permit. The proposed CO also established the process for formerly closing the PFSG hazardous waste management facilities, should PFSG elect to do so; and proposed the assessment of a civil penalty. The final terms of the CO, including a $201,200 civil penalty, were executed on July 1, 2015. The civil penalty was paid by the Company and recorded in the three months ended June 30, 2015. On August 28, 2015, the Company notified GAEPD its intent to close the PFSG facility; and on September 29, 2015, t
he Company submitted a draft Post-Closure Plan for review and approval by the GAEPD.
 
On June 4, 2015, the Perma-Fix of Michigan, Inc. (“PFMI”) entered into a letter of intent (“LOI”) to sell the property PFMI formerly operated for a sale price of approximately $450,000. PFMI is a closed location. As required by ASC 360, the Company concluded that tangible asset impairment existed for PFMI and recorded approximately $150,000 in asset impairment charge in the second quarter of 2015. On September 29, 2015, PFMI entered into a Purchase Agreement (the “Agreement”) for the sale of the property for a sale price of $450,000, which is subject to completion of a due diligence within 45 days of the Agreement. Upon execution of the Agreement, PFMI received $20,000 deposit which is being held in an escrow account (recorded as restricted cash within discontinued operations). Upon closing of the transaction, PFMI is to receive an additional $55,000 in cash in addition to the $20,000 held in escrow and PFMI and the seller will execute a Land Contract (“Contract”) which will provide for, among other things, the remaining balance of the sales price of $375,000 to be paid by the seller in 60 equal monthly installment payments of approximately $7,250, due on or before the 15
th
of each month immediately following the execution of the Contract. PFMI retains legal title to the property until the buyer fulfills the obligations under the Contract.
 
The following table summarizes the results of discontinued operations for the three and nine months ended September 30, 2015 and 2014. Operating loss for the nine months ended September 30, 2015 included the civil penalty recorded for PFSG and the asset impairment charge recorded for PFMI during the second quarter of 2015 as discussed above. Operating loss for the nine months ended September 30, 2014 included a tangible asset impairment charge of approximately $723,000 (of which $38,000 was recorded during the third quarter of 2014) for PFSG. Remaining operating losses for the periods reflected below were primarily due to costs incurred in the administration and continued monitoring of our discontinued operations, primarily for the PFSG site. 
 
   
Three Months Ended
    
Nine Months Ended
  
   
September 30,
   
September 30,
  
(Amounts in Thousands)
  
2015
    
2014
    
2015
    
2014
  
                                 
Net revenues
   $ —     $ —     $ —     $ —  
Interest expense
  $ —     $ (1 )   $ (1 )   $ (7 )
Operating loss from discontinued operations
   $ (356 )   $ (462 )   $ (1,292 )   $ (1,897 )
Income tax expense
   $ 21     $ —     $ 21     $ —  
(Loss) gain on insurance settlement of discontinued
operations
   $ —     $ (11 )   $ —     $ 3,530  
(Loss) income from discontinued operations
  $ (377 )   $ (473 )   $ (1,313 )   $ 1,633  
 
The following table presents the major class of assets of discontinued operations that are classified as held for sale as of September 30, 2015 and December 31, 2014. The held for sale assets may differ at the closing of a sale transaction from the reported balances as of September 30, 2015. Assets and liabilities previously classified as held for sale for PFSG for as of December 31, 2014 have been reclassified to assets and liabilities not held for sale (see charts below) due to the Company’s decision to close PFSG as discussed above.
 
   
September 30,
    
December 31,
  
(Amounts in Thousands)
  
2015
    
2014
  
                 
Property
   $ 450     $ 600  
Total assets held for sale
   $ 450     $ 600  
 
 
The following table presents the major classes of assets and liabilities of discontinued operations that are not held for sale as of September 30, 2015 and December 31, 2014:
 
 
   
September 30,
    
December 31,
  
(Amounts in Thousands)
  
2015
    
2014
  
Current assets
 
 
 
 
 
 
 
 
Other assets
   $ 37       20  
Total current assets
     37       20  
Long-term assets
 
 
 
 
 
 
 
 
Property, plant and equipment, net
(1)
     81       81  
Total long-term assets
     81       81  
Total assets not held for sale
   $ 118     $ 101  
Current liabilities
 
 
 
 
 
 
 
 
Accounts payable
   $ 930     $ 947  
Accrued expenses and other liabilities
     474       462  
Environmental liabilities
     87       728  
Total current liabilities
     1,491       2,137  
Long-term liabilities
 
 
 
 
 
 
 
 
Closure liabilities
     295       302  
Environmental liabilities
     889       288  
Total long-term liabilities
     1,184       590  
Total liabilities not held for sale
   $ 2,675     $ 2,727  
 
(1)
net of accumulated depreciation of $10,000 for
each period presented.