The Company’s Board of Directors previously approved the plan to sell certain non-core business units including Eclipse Electronic Systems, Inc. (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; a small distribution business; and a small manufacturing business. The Company incurred an after-tax gain (loss) of $2.1 million, $(2.1) million and $(8.4) million in fiscal 2018, 2017 and 2016, respectively, on the assets held for sale and sale of discontinued operations.

On May 4, 2016, the Company sold certain assets of Wallop for 2.5 million British pounds and deferred compensation up to a maximum payment of 9 million British pounds. The deferred compensation is payable based upon receipt of acceptable orders during a three-year period ending May 3, 2019, and is equal to the amount of the acceptable order times a specified percentage ranging from 26.5% to 31%. The Company has been paid $0.9 million in deferred compensation since the sale of these assets. As of September 28, 2018, there are no further earn-out payments expected. In the definitive purchase and sale agreement for the sale of these assets, the Company provided standard representations and warranties as well as indemnification to the buyer of the Wallop operation. The Company is obligated to indemnify the buyer for certain losses of up to 5.0 million British pounds, if, among other things, the Company breaches the representations and warranties. In fiscal 2018 the Company received notification of a claim from the buyer of the Wallop operation alleging breaches of representations and warranties primarily associated with defective products and late product deliveries. Although a loss is possible, the amount of any loss related to this claim cannot be estimated at this time. The Company does not expect the possible loss to have a material effect on the Company’s financial position. On September 28, 2018, the Company sold the land and building of Wallop for 1.8 million British pounds.

On March 28, 2017, the Company sold a small manufacturing business for $0.6 million and a note receivable of $2.4 million, resulting in a gain on sale of the business of $0.8 million. The note receivable is due March 28, 2021, with an interest rate of 2.05%.

At September 28, 2018, the only remaining asset held for sale was a building formerly used by Eclipse. The building was sold on October 31, 2018 for $4.3 million.

The Company recorded an expense related to environmental remediation at a previously sold business for which the Company provided indemnification of $0.1 million in fiscal 2018, $0.9 million in fiscal 2017, and $0.8 million in fiscal 2016. The liability for this environmental obligation was $0.1 million at both September 28, 2018, and September 29, 2017.

The results of discontinued operations for the last three years were as follows:

	Avionics &			Sensors &		Advanced
In Thousands	Controls			Systems		Materials			Other			Total

2018
Net Sales	$	-		$	-	$	-		$	-		$	-

Operating earnings (loss)		(396	)		-		(632	)		(142	)		(1,170	)
Tax expense (benefit)		286			-		(2,084	)		(37	)		(1,835	)
Income (loss) from discontinued operations	$	(682	)	$	-	$	1,452		$	(105	)	$	665

Included in Operating Earnings (Loss):
Gain (loss) on net assets held for sale	$	(287	)	$	-	$	-		$	-		$	(287	)
Gain (loss) on sale of discontinued operations		-			-		2,404			-			2,404

	Avionics &			Sensors &		Advanced
In Thousands	Controls			Systems		Materials			Other			Total

2017
Net Sales	$	4,964		$	-	$	-		$	-		$	4,964

Operating earnings (loss)		(447	)		894		(8,259	)		(895	)		(8,707	)
Tax expense (benefit)		(470	)		-		(614	)		(312	)		(1,396	)
Income (loss) from discontinued operations	$	23		$	894	$	(7,645	)	$	(583	)	$	(7,311	)

Included in Operating Earnings (Loss):
Gain (loss) on net assets held for sale	$	320		$	-	$	(3,226	)	$	-		$	(2,906	)
Gain (loss) on sale of discontinued operations		793			-		-			-			793

	Avionics &			Sensors &			Advanced
In Thousands	Controls			Systems			Materials			Other			Total

2016
Net Sales	$	17,572		$	-		$	5,222		$	-		$	22,794

Operating earnings (loss)		1,350			(379	)		(15,761	)		(788	)		(15,578	)
Tax expense (benefit)		1,487			(83	)		(1,448	)		(268	)		(312	)
Income (loss) from discontinued operations	$	(137	)	$	(296	)	$	(14,313	)	$	(520	)	$	(15,266	)

Included in Operating Earnings (Loss):
Gain (loss) on net assets held for sale	$	(2,457	)	$	-		$	(5,991	)	$	-		$	(8,448	)