Discontinued Operations

3 Months Ended

Mar. 31, 2012

Text Block [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 pre-tax 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 for the first quarter of 2011. 

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 pre-tax gain on the sale of these assets of $11.8 million was recorded in the first quarter of 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 pre-tax loss of $5.0 million on the sale of these assets in the first quarter of 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, are recorded in “Trade and other receivables” on the consolidated balance sheets as of December 31, 2011 and March 31, 2012, and are expected to be received by the Company in the second quarter of 2012.

The total gain of $6.6 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 three months ended March 31, 2011. The discontinued operations had an aggregate loss of $0.6 million from their operations for the three months ended March 31, 2011.

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

	Three Months Ended March 31,
(in thousands)	2012		2011
Net sales	$	—	$	12,027
Operating income (loss)	$	—	$	(549	)
Income (loss) from discontinued operations, net	$	—	$	(584	)
Gain (loss) on sale of assets, net of tax	$	—	$	6,585