Quarterly report pursuant to sections 13 or 15(d)

Discontinued Operations and Divestitures

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Discontinued Operations and Divestitures
 3 Months Ended
Mar. 31, 2014
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 non-operational.  Certain equipment and portions of the building structures were damaged. 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” as of December 31, 2013.  As of March 31, 2014, we have recorded $130,000 for impairment of fixed assets related to the fire, and have incurred approximately $7,985,000 of other costs related to the fire.  As of March 31, 2014, approximately $7,287,000 in insurance proceed reimbursements have been paid by our insurers, of which $3,750,000 was paid to us, with the remaining paid directly to the vendor performing the clean-up of the facility.  We have recorded a receivable of approximately $628,000 as of March 31, 2014 as we have determined that the receipt of reimbursement of these expenses from our insurer is probable in accordance with its insurance policies.  The table below details the nature of expense as well as insurance receivables and insurance recoveries related to the fire:

Clean up costs
  
$
7,188,000
  
Impairment of fixed assets
    
130,000
  
Incremental payroll costs
    
405,000
  
Other incremental costs
    
392,000
  
Total incurred costs through March 31, 2014
  
$
8,115,000
  
 
        
Insurance recovery receivable
  
$
628,000
  
Insurance recoveries already received
  
$
7,287,000
  

The insurance receivable recorded is net of $200,000 of deductible on our property and pollution insurance policies and the insurance recoveries already received.  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 balance sheet.

Subsequent to March 31, 2014, our insurers paid us approximately $900,000 of insurance recoveries. We continue to gather information related to insurance claims on this fire.
We are currently evaluating options regarding the future operation of this facility as we undergo the rebuilding process on the part of the facility damaged by the fire. 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 March 31, 2014, 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 months ended March 31, 2014 and 2013. 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 March 31,
  
Amount in Thousands
  
2014
    
2013
  
 
  
   
 
Net revenue
    
¾
    
$
663
  
Interest Expense
    
(1
)
    
(5
)
Operating loss from discontinued operations
    
(266
)
    
(40
)
Income tax benefit
    
¾
      
(13
)
Loss from discontinued operations
    
(266
)
    
(27
)