Discontinued Operations

6 Months Ended

Jun. 30, 2012

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

Kasco-France

During the third quarter of 2011, the Company sold the stock of Eurokasco, S.A.S. (“Kasco-France”), a part of its Kasco segment, to Kasco-France’s former management team for one Euro plus 25% of any pretax earnings over the next three years. Additionally, Kasco-France signed a five year supply agreement to purchase certain products from Kasco.   Kasco-France has been included as a discontinued operation on a retrospective basis and had a loss of $0.1 million and $0.2 million for the three and six months ended June 30, 2011, respectively. 

Arlon CM

On February 4, 2011, Arlon LLC, an indirect wholly-owned subsidiary of HNH, sold substantially all of its assets and existing operations located primarily in the State of California related to its Adhesive Film Division for an aggregate sale price of $27.0 million.  Net proceeds of approximately $24.2 million from this sale were used to repay indebtedness under the Company’s revolving credit facility.  A pretax gain on the sale of these assets of $11.5 million was recorded in 2011.

On March 25, 2011, Arlon LLC and its subsidiaries sold substantially all of their assets and existing operations located primarily in the State of Texas related to Arlon LLC’s Engineered Coated Products Division and SignTech subsidiary for an aggregate sale price of $2.5 million.  In addition, Arlon LLC sold a coater machine to the same purchaser for a price of $0.5 million.  The Company recorded a pretax loss of $5.0 million on the sale of these assets in 2011.  The net proceeds from these asset sales were used to repay indebtedness under the Company’s revolving credit facility.

Amounts held in escrow in connection with the asset sales, totaling $3.0 million, were recorded in “Trade and other receivables” on the consolidated balance sheet as of December 31, 2011, and were received by the Company in the second quarter of 2012.

The total gain of $6.4 million, net of tax, as a result of the sales of the California and Texas operations of Arlon CM is reported in discontinued operations on the consolidated statement of operations for the six months ended June 30, 2011. The discontinued operations had an aggregate loss of $0.1 million and $0.7 million from their operations for the three and six months ended June 30, 2011, respectively.

The income (loss) from discontinued operations consists of the following:

	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands)	2012		2011			2012		2011
Net sales	$	—	$	3,769		$	—	$	15,796
Operating loss	$	—	$	(123	)	—		(672		)
Loss from discontinued operations, net	$	—	$	(127	)	—		(709		)
Gain on sale of assets, net of tax	$	—	$	(154	)	—		6,431