Discontinued Operations

3 Months Ended

Mar. 31, 2015

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

The following business is classified as a discontinued operation in the consolidated financial statements.

Arlon, LLC

On December 18, 2014, H&H Group and Bairnco entered into a stock purchase agreement to sell all of the issued and outstanding equity interests of Arlon, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Bairnco, and its subsidiaries (other than Arlon India (Pvt) Limited) for $157.0 million in cash, less transaction fees, subject to a working capital adjustment and certain potential reductions as provided in the stock purchase agreement. The closing of the sale occurred in January 2015. The operations of Arlon, LLC comprised substantially all of the Company's former Arlon Electronic Materials segment, which manufactured high performance materials for the printed circuit board industry and silicone rubber-based materials.

The assets and liabilities of discontinued operations were segregated on the consolidated balance sheet as of December 31, 2014. No balances from discontinued operations remain at March 31, 2015.

	December 31,
(in thousands)	2014
Assets of Discontinued Operations:
Trade and other receivables, net	$	16,044
Inventories, net	8,294
Prepaid and other current assets	811
Property, plant and equipment, net	24,754
Goodwill	9,298
Other intangibles, net	10,472
Total assets of discontinued operations	$	69,673
Liabilities of Discontinued Operations:
Trade payables	$	6,252
Accrued liabilities	3,986
Accrued pension liability	1,794
Other liabilities	1,666
Total liabilities of discontinued operations	$	13,698

The net income from discontinued operations includes the following:

	Three Months Ended
	March 31,
(in thousands)	2015			2014
Net sales	$	5,952		$	26,360
Operating income	920			4,337
Interest expense and other income	(10		)	(13		)
Tax provision	365			1,536
Income from discontinued operations, net of tax	565			2,814
Gain on disposal of assets	93,455			42
Tax provision	3,934			—
Gain on disposal of assets, net of tax	89,521			42
Net income from discontinued operations	$	90,086		$	2,856

Based on a tax reorganization completed in anticipation of the sale of Arlon, LLC, as well as the write-off of Arlon, LLC’s net deferred tax liabilities totaling $7.6 million, the effective tax rate on the gain on disposal of Arlon, LLC was 4.2%.