Note 9 - Discontinued Operations

9 Months Ended

Sep. 30, 2013

Discontinued Operations and Disposal Groups [Abstract]

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

DISCONTINUED OPERATIONS

During the second quarter of 2013, the Company’s Board of Directors approved a plan of liquidation for its BWW business in an effort to improve the Company’s overall financial performance and align the operations with its long-term strategic initiatives. BWW provided specialty welding and fabrication services from its facility in New Iberia, Louisiana. Financial results for BWW were part of the Company’s Energy and Mining segment for financial reporting purposes.

BWW ceased bidding new work and substantially completed all ongoing projects during the second quarter of 2013. As a result of the closure of BWW, Aegion recognized a pre-tax, non-cash charge of approximately $3.9 million ($2.4 million after-tax, or $0.06 per diluted share) to reflect the impairment of goodwill and intangible assets. The Company also recognized additional non-cash impairment charges for equipment and other assets of approximately $1.1 million on a pre-tax basis ($0.7 million on an after-tax basis, or $0.02 per diluted share), which also was recorded in the second quarter of 2013. The Company expects the cash liquidation value to approximate net asset value as shown in the table below. Net asset value is determined using recorded amounts for assets and liabilities, which are based on Level 3 inputs as defined in Note 10 of this report. The Company also incurred cash charges to exit the business of approximately $0.1 million on a pre-tax and post-tax basis, which included property, equipment and vehicle lease termination and buyout costs, employee termination benefits and retention incentives, among other ancillary shut-down expenses.

The discontinuation of BWW signified a triggering event for the Bayou reporting unit goodwill. The Company updated its analysis of the Bayou reporting unit as of the date of discontinuation. In its previous Bayou reporting unit analysis on October 1, 2012, the Company tested the Bayou reporting unit as a whole, which included the carrying value and future cash flows associated with the BWW business. In the updated analysis associated with this triggering event, the Company removed any carrying value associated with BWW (as it was tested separately) and updated its income projections to reflect the removal of BWW and the current future cash flows of the Bayou reporting unit. Additionally, the Company updated the data points associated with the market approach. In this analysis, it was determined that the Bayou reporting unit did not result in an impairment at the date of discontinuation.

Operating results for discontinued operations are summarized as follows (in thousands):

	Quarters Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Revenues	$	744		$	2,288		$	8,864		$	8,045
Gross profit (loss)	(837		)	(157		)	(4,077		)	164
Operating expenses	210			556			1,828			1,466
Closure charges of welding business	—			—			5,019			—
Operating loss	(1,047		)	(723		)	(10,924		)	(1,302		)
Loss before tax benefits	(1,047		)	(741		)	(10,742		)	(1,500		)
Tax benefits	489			306			4,286			620
Net loss	(558		)	(435		)	(6,456		)	(880		)

Balance sheet data for discontinued operations was as follows (in thousands):

	September 30, 2013		December 31, 2012
Restricted cash	$	1,193	$	1,192
Receivables, net	9,552		4,380
Costs and estimated earnings in excess of billings	1,543		2,775
Inventories	—		386
Prepaid expenses and other current assets	77		253
Property, plant and equipment, less accumulated depreciation	1,242		2,803
Other assets	—		4,021
Total assets	$	13,607	$	15,810
Accounts payable	$	1,644	$	3,225
Accrued expenses	757		1,660
Total liabilities	$	2,401	$	4,885