Discontinued Operations

3 Months Ended

Jan. 30, 2015

Discontinued Operations And Disposal Groups [Abstract]

Discontinued Operations

Note 14 – Discontinued Operations

On September 3, 2014, the Company approved a plan to sell certain non-core business units including Eclipse, a manufacturer of embedded communication intercept receivers for signal intelligence applications; Wallop Defence Systems, Ltd. (Wallop), a manufacturer of flare countermeasure devices; Pacific Aerospace and Electronics Inc. (PA&E), a manufacturer of hermetically sealed electrical connectors; and an small distribution business.  These businesses were not separate reporting units as defined under U.S. GAAP and no indicator of impairment existed at August 1, 2014, requiring an impairment test of their corresponding reporting units’ goodwill or these businesses’ long-lived assets.  Based upon the estimated fair values, the Company incurred an estimated after-tax loss of $49.5 million in the fourth fiscal quarter of 2014 on assets held for sale in discontinued operations.  Principle assumptions used in measuring the estimated after-tax loss included estimated selling price of the discontinued business, discount rates, industry growth rates, and pricing of comparable transactions in the market.  Eclipse and the distribution business are included in the Avionics & Controls segment, Wallop is included in the Advanced Materials segment, and PA&E is included in the Sensors & Systems segment.

During the first fiscal quarter of 2015, the Company incurred a loss on discontinued operations of $16.7 million, including a $14.1 million loss on assets held for sale.  The $11.5 million loss on assets held for sale at Avionics & Controls was principally was due the reduction of Eclipse’s estimated selling price based upon lower expectations of earnings for the business and continuing negotiations with the buyer.  The $2.6 million write-off in Advanced Materials was due to the effects of valuing Wallop’s balance sheet at the current exchange rate.  In the first fiscal quarter of 2015, the Company recorded a $1.2 million increase in a liability related to environmental remediation at a previously sold business for which the Company provided indemnification.  A loss of $0.8 million, net of tax, is reflected in discontinued operations.

The operating results of the discontinued operations for the three month period ended January 30, 2015, consisted of the following:

	Avionics &			Sensors &		Advanced
In Thousands	Controls			Systems		Materials			Other			Total
Net Sales	$	6,802		$	5,633	$	2,801		$	-		$	15,236
Operating earnings (loss)		(782	)		550		(2,069	)		(1,185	)		(3,486	)
Loss on net assets held for sale		(11,514	)		-		(2,563	)		-			(14,077	)
Tax expense (benefit)		(256	)		195		(352	)		(411	)		(824	)
Income (loss) from discontinued    operations	$	(12,040	)	$	355	$	(4,280	)	$	(774	)	$	(16,739	)

The operating results of the discontinued operations for the three month period ended January 31, 2014, consisted of the following:

	Avionics &			Sensors &			Advanced
In Thousands	Controls			Systems			Materials			Other		Total
Net Sales	$	6,549		$	5,315		$	7,176		$	-	$	19,040
Operating earnings (loss)		(2,976	)		(394	)		(2,008	)		-		(5,378	)
Loss on net assets held for sale		-			-			-			-		-
Tax expense (benefit)		(967	)		(130	)		(416	)		-		(1,513	)
Income (loss) from discontinued    operations	$	(2,009	)	$	(264	)	$	(1,592	)	$	-	$	(3,865	)

Assets and Liabilities Held for Sale within the Consolidated Balance Sheet at January 30, 2015, are comprised of the following:

	Avionics &		Sensors &		Advanced
In Thousands	Controls		Systems		Materials		Total
Accounts receivable, net	$	3,880	$	3,063	$	1,331	$	8,274
Inventories		13,190		8,580		4,995		26,765
Prepaid expenses		467		296		395		1,158
Deferred income tax benefits		694		686		-		1,380
Income tax refundable		780		-		-		780
Current Assets of Businesses Held for Sale	$	19,011	$	12,625	$	6,721	$	38,357
Net property, plant and equipment	$	1,669	$	4,122	$	18,896	$	24,687
Intangibles, net		14,692		10,660		7,834		33,186
Deferred income tax benefits		-		-		-		-
Other assets		-		-		1,506		1,506
Non-Current Assets of Businesses Held for Sale	$	16,361	$	14,782	$	28,236	$	59,379
Accounts payable	$	2,788	$	1,168	$	6,163	$	10,119
Accrued liabilities		1,450		876		989		3,315
Current Liabilities of Businesses Held for Sale	$	4,238	$	2,044	$	7,152	$	13,434
Deferred income tax liabilities	$	11,117	$	6,338	$	1,596	$	19,051
Other liabilities		259		484		-		743
Non-Current Liabilities of Businesses Held for Sale	$	11,376	$	6,822	$	1,596	$	19,794
Net Assets of Businesses Held for Sale	$	19,758	$	18,541	$	26,209	$	64,508

Assets and Liabilities Held for Sale within the Consolidated Balance Sheet at October 31, 2014, were comprised of the following:

	Avionics &		Sensors &			Advanced
In Thousands	Controls		Systems			Materials		Total
Accounts receivable, net	$	5,154	$	3,752		$	2,106	$	11,012
Inventories		12,646		7,972			5,258		25,876
Prepaid expenses		408		86			335		829
Deferred income tax benefits		671		680			-		1,351
Income tax refundable		-		-			2,378		2,378
Current Assets of Businesses Held for Sale	$	18,879	$	12,490		$	10,077	$	41,446
Net property, plant and equipment	$	4,949	$	4,105		$	19,839	$	28,893
Intangibles, net		22,228		10,659			8,327		41,214
Deferred income tax benefits		-		(30	)		-		(30	)
Other assets		-		-			1,600		1,600
Non-Current Assets of Businesses Held for Sale	$	27,177	$	14,734		$	29,766	$	71,677
Accounts payable	$	2,194	$	873		$	6,326	$	9,393
Accrued liabilities		1,765		1,008			2,025		4,798
Current Liabilities of Businesses Held for Sale	$	3,959	$	1,881		$	8,351	$	14,191
Deferred income tax liabilities	$	11,084	$	6,243		$	1,537	$	18,864
Other liabilities		-		-			12		12
Non-Current Liabilities of Businesses Held for Sale	$	11,084	$	6,243		$	1,549	$	18,876
Net Assets of Businesses Held for Sale	$	31,013	$	19,100		$	29,943	$	80,056