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Note 5 - Assets and Liabilities Held for Sale

6 Months Ended

Jun. 30, 2020

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

5.	ASSETS AND LIABILITIES HELD FOR SALE

During 2018 and 2019, the Company initiated plans to divest certain of its international CIPP contracting businesses: Insituform Australia, Insituform Spain and Environmental Techniques. Also during 2019, the Company’s board of directors approved the action to sell several parcels of land located near its corporate headquarters.

During the first quarter of 2020, the Company completed sale transactions for Insituform Australia and Insituform Spain. See Note 1. Before the COVID-19 pandemic, the Company was in various stages of discussions with third parties for Environmental Techniques. Although the sale process has been suspended, the Company expects to recommence the process as soon as reasonably practicable. The Company believes it is probable that a sale of the land parcels will occur in 2020 or early 2021. In the event the Company is unable to liquidate the assets and liabilities at a price that is less than favorable, the Company could incur a loss on disposal.

The relevant asset and liability balances at June 30, 2020 and December 31, 2019 are accounted for as held for sale and measured at the lower of carrying value or fair value less cost to sell. Based on management’s expectation of fair value less cost to sell, the Company recorded an impairment of assets held for sale of $2.9 million in the Consolidated Statement of Operations during 2019 related to the land parcels. In the event the Company is unable to sell the assets and liabilities or sells them at a price or on terms that are less favorable, or at a higher cost than currently anticipated, the Company could incur additional impairment charges or a loss on disposal.

The following table provides the components of assets and liabilities held for sale (in thousands):

	*June 30, 2020(1)*			*December 31, 2019(2)*
Assets held for sale:
Current assets
Receivables, net	$	266		$	4,136
Retainage		463			518
Contract assets		698			5,350
Inventories		141			2,097
Prepaid expenses and other current assets		194			799
Total current assets		1,762			12,900
Property, plant & equipment, less accumulated depreciation		7,233			10,962
Goodwill		2,640			4,224
Intangible assets, less accumulated amortization		1,429			1,528
Operating lease assets		42			326
Other non-current assets		122			130
Impairment of assets held for sale		(2,861	)		(13,978	)
Total assets held for sale	$	10,367		$	16,092

Liabilities held for sale:
Current liabilities
Accounts payable	$	280		$	2,174
Accrued expenses		1,072			3,961
Contract liabilities		43			122
Total current liabilities		1,395			6,257
Operating lease liabilities		6			174
Other non-current liabilities		47			54
Total liabilities held for sale	$	1,448		$	6,485

⁽¹⁾

Includes Environmental Techniques and land held at Corporate.

⁽²⁾

Includes Insituform Australia, Insituform Spain, Environmental Techniques and land held at Corporate.