Discontinued Operations

3 Months Ended

Mar. 25, 2012

Discontinued Operations [Abstract]

Discontinued Operations

Note 14. DISCONTINUED OPERATIONS

We evaluate our businesses and product lines periodically for their strategic fit within our operations. Beginning in December of 2011, we began to actively market our Banking Security Systems Integration business unit included in our Shrink Management Solutions segment. As a result of this divestiture decision, we are accounting for this business as discontinued operations.  The classification of this business as discontinued operations was determined to be a triggering event for testing impairment.  As a result of this impairment test, we determined that there was a $3.4 million impairment charge in the goodwill reporting unit of our Shrink Management Solutions segment and a $2.8 million impairment of customer relationship intangible assets.  These impairment charges were included in discontinued operations on the Consolidated Statement of Operations during the fourth quarter ended December 25, 2011.

The Company's discontinued operations reflect the operating results for the disposal group.  The results for the three months ended March 25, 2012 and March 27, 2011 have been reclassified to show the results of operations for the Banking Security Systems Integration business unit as discontinued operations, net of tax, on the Consolidated Statement of Operations. Below is a summary of these results:

(amounts in thousands)	March 25, 2012		March 27, 2011
Net revenue	$ 3,700		$ 2,787
Gross profit	567		289
Selling, general, and administrative expense	887		1,016
Operating loss	(320)		(727)
Loss from discontinued operations before income taxes	(320)		(727)
Loss from discontinued operations, net of tax	$ (320)	(1)	$ (473)

(1)   As this business is located in the U.S. and a full valuation allowance is recorded in the U.S., there is no tax impact on the loss from discontinued operations.

The assets and liabilities associated with this business have been adjusted to fair value, less costs to sell, and reclassified into assets of discontinued operations held for sale and liabilities of discontinued operations held for sale, as appropriate, on the Consolidated Balance Sheet. As of March 25, 2012 and December 25, 2011 the classification was as follows:

(amounts in thousands)	March 25, 2012	December 25, 2011
Accounts receivable, net	$ 1,527	$ 1,519
Inventories	1,137	1,087
Property, plant, and equipment , net	18	11
Goodwill	370	370
Other intangibles, net	1,754	1,754
Other assets	1,396	1,579
Assets of discontinued operations held for sale	$ 6,202	$ 6,320
Accounts payable	$    515	$    551
Accrued compensation and related taxes	51	40
Other accrued expenses	827	599
Unearned revenues	537	169
Restructuring reserve	7	78
Other liabilities	3	3
Liabilities of discontinued operations held for sale	$ 1,940	$ 1,440

Net cash flows of our discontinued operations from each of the categories of operating, investing and financing activities were not significant.