Note 2 - Sale of Subsidiary; Discontinued Operations

3 Months Ended

Mar. 31, 2015

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

2. Sale of Subsidiary; Discontinued Operations – On March 31, 2015, we and CRC Industries, Inc., a Pennsylvania corporation (“CRC”), entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) whereby we sold all of the issued and outstanding stock of our wholly owned subsidiary, ChemFree Corporation (“ChemFree”), to CRC (the “ChemFree Sale”). The purchase price for the all-cash sale was $21,600,000, subject to customary post-closing adjustments, including a working capital adjustment. The company retained all net cash of ChemFree as of the closing date. In the quarter ended March 31, 2015, the company recorded a gain on the sale of ChemFree of $18,746,000 and has retroactively classified the ChemFree operations as discontinued operations in all periods presented. The company intends to apply operating loss and capital loss carryforwards against the gain of sale and presently expects to incur an alternative minimum tax liability of approximately $181,000 on the transaction, which amount is included in liabilities of discontinued operations as of March 31, 2015. At the closing, a total of $3,300,000 of the purchase price was placed in escrow for purposes of securing our obligations to indemnify CRC and to refund a portion of the purchase price if ChemFree’s actual working capital amount on the closing date is less than the agreed upon target set forth in the Stock Purchase Agreement. Based on the initial post-closing working capital determination, we have accrued $200,000 for a working capital adjustment, which amount is reflected in the gain on sale calculation at March 31, 2015. We anticipate that once the working capital adjustment becomes final and binding, an amount equal to $1,100,000 less the final working capital adjustment will be released from escrow to the company in May 2015, assuming the absence of any outstanding claims for indemnification under the Stock Purchase Agreement. As of March 31, 2015, $900,000 of the escrow funds is shown as Restricted Cash – Current Portion (reflecting the escrow of $1,100,000 less the estimated $200,000 working capital adjustment) and the remaining escrow balance of $2,200,000, which will remain in escrow until September 30, 2016, is shown as Restricted Cash – Noncurrent Portion.

The following condensed financial information is provided for the ChemFree discontinued operations for the periods shown:

	Three Months Ended March 31,
(unaudited, in thousands)	2015			2014
Net sales	$	2,902		$	2,564
Operating loss		(3	)		(179	)
Net income (loss) before income taxes		6			(169	)
Income taxes		9			12
Net loss from discontinued operations	$	(3	)	$	(181	)

  The major components of the assets and liabilities of discontinued operations presented separately on the balance sheet are as follows:

(in thousands, unaudited)	March 31, 2015		December 31, 2014
Major classes of assets included as part of discontinued operations:
Accounts receivable	$	--	$	1,276
Inventories		--		1,042
Property, plant & equipment		--		488
Other assets		--		206
Total assets of discontinued operations	$	--	$	3,012
Major classes of liabilities included as part of discontinued operations:
Accounts payable	$	88	$	190
Accrued payroll		--		152
Other current liabilities		712		284
Other liabilities		--		212
Total liabilities of discontinued operations	$	800	$	838