DISCONTINUED AND HELD-FOR-SALE OPERATIONS

6 Months Ended

Jul. 03, 2011

Discontinued and Held-For-Sale Operations [Abstract]

DISCONTINUED AND HELD-FOR-SALE OPERATIONS

NOTE C — DISCONTINUED AND HELD-FOR-SALE OPERATIONS

Construction and Engineering Services Business

In December 2009, the Company announced its plan to sell its CES business, consisting of its Martell Electric and Ideal subsidiaries, inorder to raise operating capital and focus on its core industrial services operations. On February 3, 2010, the Company completed the sale of 100 percent of the equity of Martell Electric and Ideal to the Company’s Chairman and formerPresident and Chief Executive Officer, John A. Martell, and his wife, Bonnie M. Martell, for $3,500, consisting of $750 in cash and a $2,750 reduction in the amount owed under a previously issued $3,000 note held by Mr. 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 the Martell Note.

The sale agreement set forth a target working capital range of $2,900-$3,200 at closing.Immediately post-closing, the actual combined working 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 capitaladjustment by increasing the outstanding principal 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 cashpayment 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 theCompany’s Condensed Consolidated Statement of Operations within Income from Discontinued Operations.

Mr. Martelldisputes the settlement of the working capital adjustment and has requested that our disinterested director negotiate to satisfy the working capital adjustment other than through an increase in the outstanding principal balance of the Martell Note.A letter from Mr. 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 not been obtained. (See Note H, Related Party Transactions and Note K, Commitments and Contingencies).

Thefollowing table provides revenue and pretax income (loss) from the CES disposal group discontinued operations:

	Three Months Ended July 4,2010			Six Months Ended July 4, 2010
Revenue from discontinued operations	$	—		$	1,721
Pretax loss from discontinued operations		—			(171	)
Pretax gain (loss) on disposal of discontinued operations		(80	)		136

The assets and liabilities of the CES disposal group classified as held-for-sale operations atFebruary 3, 2010 (date of sale) are summarized as follows:

	February 3, 2010
ASSETS
Accounts receivable, net of allowance for doubtful accounts of $210 and $209, respectively	$	5,116
Inventories		171
Other current assets		2,208
Total current assets		7,495
PROPERTY AND EQUIPMENT, net		500
Total assets	$	7,995
LIABILITIES
Accounts payable	$	5,252
Accrued expense and other liabilities		1,033
Total liabilities		6,285
Net assets	$	1,710

American Motive Power

In December 2009, the Company announced its plan to sell its domestic AMP subsidiary in order to focus on its core industrial servicesoperations. On March 8, 2010, the Company completed the sale of 100 percent of the outstanding capital stock of AMP to LMC, an unrelated party, in exchange for the assumption of AMP liabilities.

The following table provides revenue and pretax loss from the AMP discontinued operations:

	Three Months Ended July 4, 2010		Six Months Ended July 4, 2010
Revenue from discontinued operations	$	—	$	709
Pretax loss from discontinued operations		—		(241	)
Pretax gain on disposal of discontinued operations		—		178

The assets and liabilities of AMP classified as held-for-sale operations at March 8, 2010 (date ofsale) are summarized as follows:

	March 8, 2010
ASSETS
Accounts receivable, net of allowance for doubtful accounts of $56	$	564
Inventories		1,153
Other current assets		479
Total current assets		2,196
Other assets		—
Total assets	$	2,196
LIABILITIES
Accounts payable	$	683
Accrued expense and other liabilities		1,691
Total liabilities		2,374
Net assets	$	(178	)

HK Engine Components

In December 2009, the Company announced its plan to sell its HKEC subsidiary in order to focus on its core industrial servicesoperations. As a result, the Company has reported HKEC as held-for-sale as of July 3, 2011 and December 31, 2010. The carrying value of the long-lived assets of HKEC was adjusted to their fair market values at December 31,2009 based on the expected selling price of HKEC. The Company re-evaluated the value of these long-lived assets as of December 31, 2010 and deemed no adjustment to these values was necessary. The Company continues to try to sell HKEC.

The following table provides revenue and pretax income from the HKEC discontinued operations:

	Three Months Ended					Six Months Ended
	July 3, 2011		July 4, 2010			July 3, 2011		July 4, 2010
Revenue from discontinued operations	$	2,839	$	1,849		$	5,620	$	4,044
Pretax income (loss) from discontinued operations		506		(143	)		1,007		260

The assets and liabilities of HKEC classified as held-for-sale operations at July 3,2011 and December 31, 2010 are summarized as follows:

	July 3, 2011		December 31, 2010
ASSETS
Accounts receivable, net of allowance for doubtful accounts of $33 and $81, respectively	$	1,114	$	602
Inventories		1,808		1,571
Other current assets		81		66
Total current assets		3,003		2,239
PROPERTY AND EQUIPMENT, net		1,260		1,254
Total assets	$	4,263	$	3,493
LIABILITIES
Accounts payable	$	1,050	$	819
Accrued expense and other liabilities		279		257
Total liabilities		1,329		1,076
Net assets	$	2,934	$	2,417