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:


	Fiscal Year
	2021		2020 (As Adjusted)
Workers' compensation costs from former textile operations	$	(172)	$	(60)
Environmental remediation costs from former textile operations	(146)		(60)
Commercial business operations	(3,308)		1,569

Income (Loss) from discontinued operations, before taxes	$	(3,626)	$	1,449
Income tax expense	(89)		834
Income (Loss) from discontinued operations, net of tax	$	(3,537)	$	615

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 $1,913 as of December 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.

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.

The Company retained the Commercial Business’ cash deposits, all accounts receivable, and certain inventory and equipment. Additionally, the Company agrees not to compete with the specified commercial business and the Atlas|Masland markets for a period of five years following September 13, 2021. The agreement allows for the Company to sell the commercial inventory retained by the company after the divestiture.

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 was agreed to 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. The Company has received payment of the first installment and, at year end 2021, the remaining unpaid portion of $1,025 is recognized within non-current assets. As of December 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).



Net Proceeds, including escrowed funds		$	20,500

	Inventory, net	(9,195)
	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
	December 25, 2021		December 26, 2020
Current Assets of Discontinued Operations:
Receivables, net	$	3,406	$	5,648
Inventories, net	1,927		17,499
Prepaid expenses	658		317
Current Assets Held for Discontinued Operations	5,991		23,464

Long Term Assets of Discontinued Operations:
Property, plant and equipment, net	292		4,999
Operating lease right of use assets	242		923
Other assets	2,218		2,584
Long Term Assets Held for Discontinued Operations	2,752		8,506

Current Liabilities of Discontinued Operations:
Accounts payable	2,133		3,952


Accrued expenses	3,062		7,316
Current portion of operating lease liabilities	167		234
Current Liabilities Held for Discontinued Operations	5,362		11,502

Long Term Liabilities of Discontinued Operations
Operating lease liabilities	75		774
Other long term liabilities	4,413		5,534
Long Term Liabilities Held for Discontinued Operations	$	4,488	$	6,308

For the twelve months ended December 25, 2021 and December 26, 2020, the Company reclassified the following operations of the Commercial business included in discontinued operations in the accompanying consolidated statements of operations:


	Twelve Months Ended
	December 25, 2021		December 26, 2020

Net Sales	$	48,070	$	65,070
Cost of sales	40,904		45,945
Gross Profit	7,166		19,125

Selling and administrative expenses	13,134		17,556
Discontinued Income (Loss), related to the divestiture of the Commercial business	(5,968)		1,569
Gain on sale of business	(2,660)		—
Income (Loss) from Discontinued Commercial Operations before Taxes	(3,308)		1,569

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 $3,174.