RELATED PARTY TRANSACTIONS

6 Months Ended

Jul. 03, 2011

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE H — RELATED PARTY TRANSACTIONS

Trade accounts receivable and accounts payable

As of July 3, 2011, the Company has trade accounts receivable of $323 and $56 due from Martell Electric, LLC and Ideal Consolidated,Inc., respectively.

As of July 3, 2011, the Company has trade accounts payable of $73 due to Martell Electric, LLC.

Long-term debt, officers

In December 2009, the Company announced its plan to sell its Construction and Engineering Services business (“CES business”), consisting of its Martell Electric, LLC (“MartellElectric”) and Ideal Consolidated, Inc. (“Ideal”) subsidiaries, in order to raise operating capital and focus on its core industrial services operations. As a result, the Company has reported Martell Electric and Ideal asheld-for-sale, and adjusted the carrying value of Martell Electric’s and Ideal’s long-lived assets based on the sale agreement. On February 3, 2010, the Company completed the sale of 100 percent of the equity of Martell Electric andIdeal to the Company’s Chairman and former President and CEO, John A. Martell, and his wife, Bonnie M. Martell, for $3,500, consisting of $750 in cash and a $2,750 reduction in the amounts owed under a previously issued $3,000 note, held byMr. Martell (the “Martell Note”). Under the sale agreement, the purchase price was subject to a working capital adjustment which the Company could satisfy either with cash or by increasing the outstanding principal amount of theMartell Note. Interest expense on the note was $27 and $54 for the three and six months ended July 3, 2011 and $20 and $37 for the three and six months ended July 4, 2010.

The sale agreement set forth a target working capital range of $2,900-$3,200 at closing. Immediately post-closing, the actual combinedworking capital for Martell Electric/Ideal was approximately $1,226. During the first half of 2010, the Company recorded working capital adjustments of $(1,654), choosing to satisfy the working capital adjustment by increasing the outstandingprincipal amount of the Martell Note. These adjustments brought the final sale price to $1,846, comprised of $527 for Ideal and $1,319 for Martell Electric, with the final sale proceeds consisting of a cash payment of $750 and a net reduction of$1,096 in amounts owed under the Martell Note. During the six months ended July 4, 2010, the Company recognized a pretax gain on sale of $136 from the sale of its CES business, which was included in the Company’s Condensed ConsolidatedStatements of Operations within Income from Discontinued Operations.

Mr. Martell disputes the settlement of the workingcapital adjustment, and has requested that the disinterested directors of the Company negotiate to satisfy the working capital adjustment other than through an increase in the outstanding principal balance of the Martell Note. A letter fromMr. Martell to the Company, dated September 3, 2010, purports to accelerate payment of the amount due under the Martell Note. The subordination agreement prohibits payment without Wells Fargo’s prior written consent, which has notbeen obtained.

The Company is indebted to the former members of 3-D, Bernie DeWees, whom served as President of MIS throughNovember 20, 2009, for two notes payable (“Seller Notes”) each with a balance of $2,000 at July 3, 2011 and December 31, 2010 (See Note H, Senior Credit Facility and Note I, Long Term Debt). These notes wererenegotiated and their maturity dates were extended by one year, on November 30, 2010. Interest is payable monthly at 12%. The loans mature on November 30, 2011. Interest expense on these notes was $120 and $240 for the three and sixmonths ended July 3, 2011 and $16 and $32 for the three and six months ended July 4, 2010.

Leases

The Company leases its South Bend, Indiana, Hammond, Indiana, and Boardman, Ohio facilities from its Chairman of the Board andstockholder. Total rent expense under these agreements was approximately $73 for the three month periods ended July 3, 2011 and July 4, 2010, respectively. The lease for the Hammond, Indiana facility will expire on August 3, 2011. TheCompany leases a facility in South Bend for its former corporate offices from its Chairman of the Board and stockholder. This lease is set to expire in May 2012. As a result of closure and relocation of the corporate office to Massillon in June2010, the Company no longer uses this office space. The Company is still obligated to pay rent on the South Bend facility. As of July 3, 2011 and December 31, 2010, approximately $122 and $172, respectively, was included in accruedexpenses and other current liabilities on the Company’s Condensed Consolidated Balance Sheets for the abandoned lease.

The Company leases its Hagerstown, Maryland facility from a partnership of which an officer of the Company’s subsidiary, HK EngineComponents, LLC, is a partner. Rent expense under this agreement was $41 and $80 for the three and six months ended July 3, 2011 and $73 and $146 for the three and six months ended July 4, 2010.

The Company leases a facility in Massillon, Ohio from a partnership, one partner of which is a former officer of MIS, under an agreementexpiring in November 2017. Rent expense under the lease was $135 and $270 for the three and six months ended July 3, 2011 and July 4, 2010.