The Company has either sold or discontinued certain operations that are accounted for as "Discontinued Operations" under applicable accounting guidance. Discontinued operations are summarized as follows:


	Three Months Ended				Nine Months Ended
	September 25, 2021		September 26, 2020		September 25, 2021		September 26, 2020
Workers' compensation costs from former textile operations	$	(33)	$	(24)	$	(101)	$	(89)
Environmental remediation costs from former textile operations	(27)		(22)		(81)		(114)
Costs related to divestiture of the commercial operations	2,394		1,028		(254)		1,729

Income (Loss) from discontinued operations, before taxes	$	2,334	$	982	$	(436)	$	1,526
Income tax expense	1,498		297		912		748
Income (Loss) from discontinued operations, net of tax	$	836	$	685	$	(1,348)	$	778

Undiscounted reserves are maintained for the self-insured workers' compensation obligations related to the Company's former textile operations. These reserves are administered by a third-party workers' compensation service provider under the supervision of Company personnel. Such reserves are reassessed on a quarterly basis. Pre-tax cost incurred for workers' compensation as a component of discontinued operations primarily represents a change in estimate for each period from unanticipated medical costs associated with the Company's obligations.

Reserves for environmental remediation obligations are established on an undiscounted basis. The Company has an accrual for environmental remediation obligations related to discontinued operations of $1,894 as of September 25, 2021 and $1,924 as of December 26, 2020. The liability established represents the Company's best estimate of possible loss and is the reasonable amount to which there is any meaningful degree of certainty given the periods of estimated remediation and the dollars applicable to such remediation for those periods. The actual timeline to remediate, and thus, the ultimate cost to complete such remediation through these remediation efforts, may differ significantly from the Company's estimates. Pre-tax cost for environmental remediation obligations classified as discontinued operations were primarily a result of specific events requiring action and additional expense in each period.

On September 13, 2021, the Company acting by and through its wholly owned operating subsidiary, TDG Operations, LLC, sold its Atlas|Masland commercial business (the “Commercial Business”) to Mannington Mills, Inc. (the “Purchaser”).

In accordance with the Asset Purchase Agreement dated September 13, 2021, the Company sold assets that include certain inventory, certain items of machinery and equipment used exclusively in the Commercial Business, and related intellectual property for a purchase price of $20,500. The Purchaser also assumed the liability to fulfill the orders represented by advance customer deposit liabilities of $3,127.

At closing, $2,100 of the proceeds were withheld and deposited in escrow to cover any claims arising with respect to the Commercial business for which the Company may be liable. The $2,100 will be released to the Company (net of claims paid, if any) in two installments with 50% of the escrow paid in 90 days from closing and the remaining amount paid 18 months from the closing date. Based upon the repayment terms, the Company has recognized $1,025 within both other current asset and non-current assets, respectively. As of September 25, 2021, the Company has not recognized amounts for potential indemnification settlements as those amounts cannot be reasonably estimated.

In order to release liens on certain fixed assets included in the Asset Purchase Agreement, the Company placed $2,100 in cash collateral in an account with the lender (Greater Nevada Credit Union). The remaining proceeds were applied to the Company's debt with its senior credit facility (Fifth Third Bank).

The gain on the sale of assets is summarized as follows:



Net Proceeds, including escrowed funds		20,500

	Inventory	(11,500)
	LIFO	2,305
	Fixed Assets	(2,278)
	Contract Liabilities	3,127
Net tangible assets sold		(8,346)
Gain on sale of assets sold, prior to other transaction related costs		12,154

Other transaction related costs
	Adjustments to Accruals, Reserves and Allowances	(8,462)	1
	Transaction Costs	(1,032)	2
Total other transaction related costs		(9,494)

Gain on sale of discontinued operations, before tax		2,660

1) For the remaining retained commercial inventory and fixed assets, the Company recognized adjustment to recognize the effects of the transaction. For inventory, the Company recognized lower of cost or market adjustments of approximately $6,600. The Company’s remaining fixed assets will be disposed of by sale and the Company recognized an adjustment of approximately $1,800 to reflect the lower of its carrying value or estimated fair value less cost to sell. For these assets, the Company has suspended the associated depreciation and will recognize changes in the fair value less cost to sell as gains or losses in future periods until the date of sale.


	As of
	September 25, 2021		December 26, 2020
Current Assets of Discontinued Operations:
Receivables, net	$	7,486	$	5,648
Inventories, net	$	2,785	$	17,499
Prepaid expenses	$	133	$	317
Current Assets Held for Discontinued Operations	$	10,404	$	23,464

Long Term Assets of Discontinued Operations:
Property, plant and equipment, net	$	380	$	4,999
Operating lease right of use assets	$	760	$	923
Other assets	$	2,439	$	2,584
Long Term Assets Held for Discontinued Operations	$	3,579	$	8,506

Current Liabilities of Discontinued Operations:
Accounts payable	$	6,898	$	3,952
Accrued expenses	$	6,559	$	7,316
Current portion of operating lease liabilities	$	257	$	234
Current Liabilities Held for Discontinued Operations	$	13,714	$	11,502

Long Term Liabilities of Discontinued Operations
Operating lease liabilities	$	578	$	774
Other long term liabilities	$	5,124	$	5,534
Long Term Liabilities Held for Discontinued Operations	$	5,702	$	6,308

For the three months and nine months ended September 26, 2020 and September 25, 2021, the Company reclassified the following for the costs related to the divestiture of the Commercial business included in discontinued operations in the accompanying consolidated statements of operations:


	Three Months Ended		Nine Months Ended
	September 25, 2021	September 26, 2020	September 25, 2021	September 26, 2020

Net Sales	15,065	15,885	43,470	51,967
Cost of sales	12,086	10,769	34,679	36,258
Gross Profit	2,979	5,116	8,791	15,709

Selling and administrative expenses	3,245	4,088	11,705	13,980
Discontinued Income (Loss), related to the divestiture of the Commercial business	(266)	1,028	(2,914)	1,729
Gain on sale of business	(2,660)	—	(2,660)	—
Income (Loss) from Discontinued Commercial Operations before Taxes	2,394	1,028	(254)	1,729

For the three and nine months ended September 25, 2021, as a result of the liquidation of inventory sold as part of the divestiture of its Commercial operations, the company recognized a liquidation of LIFO inventories carried at prevailing costs established in prior years and decreased the cost within Discontinued Operations in the amount of $2,391.