Discontinued Operations

9 Months Ended

Sep. 30, 2013

Discontinued Operations And Disposal Groups [Abstract]

Discontinued Operations

12. Discontinued Operations

During the first quarter of 2013, we completed the sale of the stock of our pharmaceuticals business, Ferro Pfanstiehl Laboratories, Inc. (“FPL”), which was previously reported within the Pharmaceuticals reportable segment. Consideration was comprised of a $16.9 million cash payment, and the transaction also included an earn-out incentive of up to $8.0 million based on achieving certain earnings targets over a two-year period. In March 2013, prior to the sale, an impairment loss of $8.7 million associated with the long lived assets of FPL was recorded under ASC Topic 360 Property, Plant and Equipment. The write down was determined by estimating the fair value of the assets less cost to sell of $14.8 million using the market approach considering a bona fide purchase offer, a level three measurement within the fair value hierarchy.

The operations of FPL have been segregated from continuing operations and are included in discontinued operations in our condensed consolidated statements of operations. Interest expense has been allocated to the discontinued operation based on the ratio of net assets of FPL to consolidated net assets excluding debt.

	Three months ended September 30,
	2012
Net sales	$	5,975
Cost of sales		4,346
Gross profit		1,629
Selling, general and administrative expenses		1,246
Restructuring charges		95
Interest expense		385
Miscellaneous income, net		(5	)
Loss from discontinued operations before income taxes		(92	)
Income tax expense		26
Loss from discontinued operations, net of income taxes	$	(118	)

	Nine months ended September 30,
	2013			2012
	(Dollars in thousands)
Net sales	$	4,791		$	17,899
Cost of sales		2,762			11,641
Gross profit		2,029			6,258
Selling, general and administrative expenses		1,181			3,631
Restructuring and impairment charges		8,682			95
Interest expense		589			1,123
Miscellaneous income, net		(2	)		(11	)
(Loss) income from discontinued operations before income taxes		(8,421	)		1,420
Income tax expense		—			503
(Loss) income from discontinued operations, net of income taxes	$	(8,421	)	$	917

The following is a summary of the assets and liabilities of FPL at December 31, 2012, which are presented separately on the condensed consolidated balance sheet:

	(Dollars in thousands)
Inventories	$	6,267
Other current assets		22
Current assets of discontinued operations		6,289
Property, plant and equipment, net		15,346
Other assets of discontinued operations		15,346
Accounts payable		880
Accrued payrolls		47
Accrued expenses and other current liabilities		373
Current liabilities of discontinued operations	$	1,300