Quarterly report pursuant to sections 13 or 15(d)

Discontinued Operations and Divestitures

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Discontinued Operations and Divestitures
 9 Months Ended
Sep. 30, 2013
Discontinued Operations and Divestitures [Abstract]  
Discontinued Operations and Divestitures
9.
Discontinued Operations and Divestitures

Our discontinued operations consist of our Perma-Fix of South Georgia, Inc. (“PFSG”) facility which met the held for sale criteria under ASC 360, “Property, Plant, and Equipment” on October 6, 2010.  Our discontinued operations also encompass our Perma-Fix of Fort Lauderdale, Inc. (“PFFL”), Perma-Fix of Orlando, Inc. (“PFO”), Perma-Fix of Maryland, Inc. (“PFMD”), Perma-Fix of Dayton, Inc. (“PFD”), and Perma-Fix Treatment Services, Inc. (“PFTS”) facilities, which were divested on August 12, 2011, October 14, 2011,  January 8, 2008, March 14, 2008, and May 30, 2008, respectively.  Our discontinued operations also include two previously shut down locations, Perma-Fix of Michigan, Inc. (“PFMI”), and Perma-Fix of Memphis, Inc. (“PFM”).

On August 14, 2013, our PFSG facility incurred fire damage which has left it currently non-operational.  Certain equipment and portions of the building structures were damaged requiring further assessment which is currently underway. We carry general liability, pollution, property and business interruption, and workers compensation insurance with a maximum deductible of approximately $300,000 (consisting of $100,000 deductible for each workers compensation, pollution, and property insurance policy), which was accrued and included within our “loss from discontinued operations” during the three months ended September 30, 2013.  As of September 30, 2013, we have recorded $123,000 for impairment of fixed assets related to the fire, and have incurred approximately $3,608,000 of other costs related to the fire.  As of September 30, 2013, we have determined that the receipt of reimbursement of these expenses from our insurer is probable in accordance with our insurance policies and have therefore, recorded a receivable for these items.  The table below details the nature of expense as well as insurance receivables related to the fire:
Clean up costs
  
$
3,472,000
  
Impairment of fixed assets
    
123,000
  
Incremental payroll costs
    
56,000
  
Other incremental costs
    
80,000
  
Total incurred costs through September 30, 2013
  
$
3,731,000
  
 
        
Insurance recovery receivable
  
$
3,531,000
  
Insurance recoveries already received
  
$
¾
  

The insurance receivable recorded is net of $200,000 of deductible on our property and pollution insurance policies.  The receivables and the related payables in connection with this claim are included within our current assets and current liabilities related to discontinued operations in our consolidated condensed balance sheet.

Subsequent to September 30, 2013, during October 2013, we received approximately $1,800,000 of insurance recoveries from our insurer related to this fire.  We continue to gather information related to insurance claims on this fire.

We are currently evaluating options regarding the future operation of this facility. We continue to market our PFSG facility for sale.  As required by ASC 360, based on our internal financial valuations, we concluded that no tangible asset impairments existed for PFSG as of September 30, 2013, other than the write-off of the equipment damaged in the fire as discussed above.  No intangible assets exist at PFSG.

The following table summarizes the results of discontinued operations for the three and nine months ended September 30, 2013 and 2012. The operating results of discontinued operations are included in our Consolidated Statements of Operations as part of our “Loss from discontinued operations, net of taxes.”

 
  
Three Months Ended
    
Nine Months Ended
  
 
  
September 30,
    
September 30,
  
(Amounts in Thousands)
  
2013
    
2012
    
2013
    
2012
  
 
  
   
   
   
 
Net revenues
  
$
311
    
$
533
    
$
1,784
    
$
1,749
  
Interest expense
  
$
(7
)
  
$
(8
)
  
$
(20
)
  
$
(26
)
Operating loss from discontinued operations
  
$
(369
)
  
$
(98
)
  
$
(342
)
  
$
(392
)
Income tax benefit
  
$
(129
)
  
$
(37
)
  
$
(118
)
  
$
(133
)
Loss from discontinued operations
  
$
(240
)
  
$
(61
)
  
$
(224
)
  
$
(259
)