Annual report pursuant to Section 13 and 15(d)

Note 9 - Discontinued Operations

v3.6.0.2
Note 9 - Discontinued Operations
 12 Months Ended
Dec. 31, 2016
Notes to Financial Statements  
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]
NOTE
9
DISCONTINUED OPERATIONS
 
The Company’s discontinued operations consist of all our subsidiaries included in our Industrial Segment:
(1)
subsidiaries divested in
2011
and prior,
(2)
two
previously closed locations, and
(3)
our PFSG facility which is currently undergoing closure, subject to regulatory approval.
 
The following table presents the major class of assets of discontinued operations as of
December
31,
2016
and
2015.
On
May
2,
2016,
Perma-Fix of Michigan, Inc. (“PFMI” – a closed location) entered into an Agreement for the sale of the property (which was held for sale as of
December
31,
2015)
for a price of
$450,000.
The Agreement provides for a down payment of approximately
$75,000.
After certain closing and settlement costs, PFMI received approximately
$46,000.
The Agreement also provides for, among other things, the balance of the purchase price of
$375,000
to be paid by the buyer in
60
equal monthly installments of approximately
$7,250,
with the
first
payment due
June
15,
2016.
As of
December
31,
2016,
receivables related to this transaction totaled approximately
$337,000,
of which approximately
$69,000
is included in “Current assets related to discontinued operations” and approximately
$268,000
is included in “Other assets related to discontinued operations” in the accompanying Consolidated Balance Sheets. No assets and liabilities are held for sale as of
December
31,
2016.
 
 
(Amounts in Thousands)
  
December 31,
2016
    
December 31,
2015
  
Current assets
 
 
 
 
 
 
 
 
Other assets
   $
85
    $
34
 
Total current assets
    
85
     
34
 
Long-term assets
 
 
 
 
 
 
 
 
Property, plant and equipment, net
(1)
    
81
     
531
 
Other assets
    
268
     
—
 
Total long-term assets
    
349
     
531
 
Total assets
  $
434
    $
565
 
Current liabilities
 
 
 
 
 
 
 
 
Accounts payable
   $
13
    $
85
 
Accrued expenses and other liabilities
    
268
     
437
 
Environmental liabilities
    
677
     
9
 
Total current liabilities
    
958
     
531
 
Long-term liabilities
 
 
 
 
 
 
 
 
Closure liabilities
    
113
     
173
 
Environmental liabilities
    
248
     
891
 
Total long-term liabilities
    
361
     
1,064
 
Total liabilities
  $
1,319
    $
1,595
 
 
(1)
net of accumulated depreciation of
$10,000
for each period presented.
 
The following table summarizes the results of discontinued operations for the years ended
December
31,
2016
and
2015.
 
   
For The Year Ended December 31,
 
Amount in Thousands
  
2016
    
2015
  
                 
Interest expense
   $
—
    $
(401
 )
Operating loss from discontinued operations
    
(730
 )    
(1,915
 )
Income tax benefit
    
—
     
(51
 )
Loss from discontinued operations
    
(730
 )    
(1,864
 )
 
Our loss for the
twelve
months ended
December
31,
2015
included a penalty in the amount of approximately
$201,000
recorded for PFSG in connection with a Consent Order from the Georgia Department of Natural Resources Environmental Protection Division and an asset impairment charge of
$150,000
recorded for PFMI in connection with the sale of property as discussed above. In addition, our net loss for the
twelve
months ended
December
31,
2015
included
$407,000
in expenses (with
$400,000
recorded as interest expenses) recorded in the
fourth
quarter of
2015
in connection with an arbitration award that PFSG was required to pay to a contractor hired to perform emergency response services at our PFSG subsidiary resulting from the fire which occurred at the facility in
2013.
Remaining losses for the periods discussed above were primarily due to costs incurred in the administration and continued monitoring of our discontinued operations.
 
Environmental Liabilities
The Company has
three
remediation projects, which are currently in progress at our Perma-Fix of Dayton, Inc. (“PFD”), Perma-Fix of Memphis, Inc. (“PFM” – closed location), and PFSG (in closure status) subsidiaries. The Company divested PFD in
2008;
however, the environmental liability of PFD was retained by the Company upon the divestiture of PFD. These remediation projects principally entail the removal/remediation of contaminated soil and, in most cases, the remediation of surrounding ground water. The remediation activities are closely reviewed and monitored by the applicable state regulators.
 
At
December
31,
2016,
we had total accrued environmental remediation liabilities of
$925,000,
of which
$677,000
are recorded as a current liability, an increase of
$25,000
from the
December
31,
2015
balance of
$900,000.
The net increase of
$25,000
represents payments on remediation projects at PFSG and an increase to the reserve of approximately
$66,000
at PFD due to reassessment of the remediation reserve.
 
The current and long-term accrued environmental liability at
December
31,
2016
is summarized as follows (in thousands). 
 
   
Current
Accrual
    
Long-term
Accrual
    
Total
  
PFD
   $
75
    $
60
    $
135
 
PFM
    
—
     
15
     
15
 
PFSG
    
602
     
173
     
775
 
Total liability
   $
677
    $
248
    $
925