3. Discontinued Operations and Acquisitions

9 Months Ended

Sep. 30, 2013

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS AND ACQUISITIONS

Discontinued Operations – Waste Segment

On November 15, 2012, the Company completed a stock sale of Choice Environmental Services, Inc. (“Choice”), and other acquired businesses, including Lawson Sanitation, LLC, Central Carting Disposal, Inc. and FSR Transporting and Crane Services, Inc., that comprised the Waste segment to Waste Services of Florida, Inc. for $123.3 million resulting in a gain of $13.8 million net of tax that was recognized in the fourth quarter of 2012. The stock purchase agreement stipulated customary purchase price adjustments related to closing balance sheet working capital targets and, in addition, that $12.5 million of the purchase price consideration would be reserved and held back in escrow by the purchaser (the “holdback amount”) and paid subject to certain financial adjustments.  Management recorded the holdback amount in the calculation of the gain on sale of the Waste segment and the amount was classified on the balance sheet as “Receivable due from sale of discontinued operations” at December 31, 2012.  This receivable as well as proceeds from a favorable working capital adjustment were fully collected during the second quarter of 2013.

 During the three months ended September 30, 2013, the Company accrued $0.2 million for the settlement of Choice related litigation.  During the nine months ended September 30, 2013, the net loss includes the third quarter litigation accrual and a $0.5 million adjustment to retained workers' compensation liabilities.  Net cash used in connection with discontinued operations for the nine months ended September 30, 2013 principally represent the payment of certain liabilities for severance and professional fees, previously accrued as a part of the sale, as well as cash payments related to retained liabilities.

 Revenue for the three months and nine months ended September 30, 2012, related to the Waste segment were $17.0 million and $52.4 million, respectively. Income, net of tax, related to the Waste segment was $2.7 million and $1.9 million, respectively, for the three and nine months ended September 30, 2012.

Assets Held For Sale

 During the second quarter of 2013, the Company commenced an active program to sell certain linen and dust operations that were determined to be under-performing, non-core businesses or routes.  Additionally, one of the Company’s owned chemical manufacturing plants was closed in connection with our plant consolidation effort.  In accordance with ASC 360, Property, Plant and Equipment, these assets have been classified as assets held for sale in the Condensed Consolidated Balance Sheet and the assets were adjusted to the lower of historical carrying amount or fair value. 

During the third quarter of 2013, the Company furthered its discussions with interested parties regarding potential sales terms and values related to the assets held for sale.  Based on the progression of the individual sales negotiations, the Company identified additional dust control operations and linen routes to be classified as assets held for sale and revised its fair value estimates.  The revision of these estimates resulted in a decrease in estimated selling prices for certain operations including one business that had experienced declines in operating performance during the third quarter.  These adjustments resulted in the recording of an additional impairment of goodwill of $1.1 million and intangibles of $0.6 million.  Additionally, during the quarter, the Company consummated the sale of certain linen customers for $0.3 million in net proceeds. The resulting $0.3 million gain is included in “Other income (expense), net” in the condensed consolidated statement of operations and comprehensive loss.

None of the disposal groups that could be classified as discontinued operations were material, individually or combined, to the Company’s consolidated financial statements, and thus these results of operations were not separately classified in discontinued operations.

The Company expects that the individual sales transactions related to the remainder of the assets held for sale will be primarily complete within the next nine months.   The major classes of the assets held for sale are as follows:

	September 30, 2013
Property and equipment, net	$	5,362
Goodwill		2,268
Customer relationships, net		1,103
Other		15
Assets held for sale	$	8,748

  See Note 15, "Subsequent Events" for a discussion of the Company's plan to divest additional linen and dust operations.

Acquisitions

During the three months ended September 30, 2013, the Company acquired its franchise located in Ottawa, Canada for $0.2 million.