RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2015

Related Party Transactions [Abstract]

Related Party Transactions

RELATED PARTY TRANSACTIONS

During the three month period ended March 31, 2015, we were involved in various transactions with related parties, including an affiliated company, K&R, LLC ("K&R"), which is wholly-owned by Kletter Holdings LLC, the sole member of which was Harry Kletter, our founder and former Chief Executive Officer. After Mr. Kletter's passing in January 2014, our Chairman of the Board and interim Chief Executive Officer, Orson Oliver, assumed the role of executor of Mr. Kletter’s estate and President of Kletter Holdings LLC. As of March 31, 2015, Mr. Kletter’s estate remains our primary shareholder.

A summary of the Company's transactions involving K&R, in thousands, as of March 31, 2015 is as follows:

	2015
Balance sheet accounts:
Accounts receivable	$	32.2
Deposit payable to related party	$	500.0
Deposits (included in other long-term assets)	$	42.1
Accrued rent payable	$	770.6
Income statement activity:
Rent expense (property)	$	161.5
Lease expense (equipment)	$	31.5

See Note 5 - Lease Commitments for additional information relating to the rent and lease agreements with K&R.

On September 13, 2013, K&R made a $500.0 thousand refundable, non-interest bearing deposit with the Company related to K&R's potential purchase of a piece of the Company's real property located at 1565 East 4th Street in Seymour, Indiana. The Company was permitted and has used the deposited funds for general corporate purposes. The Company has been informed by K&R that K&R is no longer interested in acquiring the property, however the Company may repay K&R at a later date to be determined. For the period ended March 31, 2015 this deposit is recorded as a current liability entitled "Payable to related party"for $500.0 thousand.

Other related party transactions are as follows:

Management Services payments to Algar, Inc.:

On December 2, 2013, we entered into a Management Services Agreement (the "Management Agreement") with Algar, Inc. ("Algar").  Under the Management Agreement, Algar provides us with day-to-day senior executive level services. Algar will also provide business, financial, and organizational strategy and consulting services, as our board of directors may reasonably request from time to time.

On December 2, 2013, in connection with the Management Agreement, our board of directors appointed Sean Garber as President. Under the Management Agreement, we will reimburse Algar for the portion of Mr. Garber’s salary that is attributable to Algar’s services under the Management Agreement in an amount not to exceed $20.8 thousand per month, or $250.0 thousand per year plus other expenses. During the three month periods ended March 31, 2015 and March 31, 2014, we expensed for both periods, management fees of $62.5 thousand to Algar for the portion of Mr. Garber's salary. Other management fees paid to Algar in connection with the Management Agreement were $14.4 thousand and $32.4 thousand, respectively for the three month periods ended March 31, 2015 and March 31, 2014. Per the Management Agreement, Algar earned a bonus in an amount equal to 10.0% of any year-over-year increase in the Company’s adjusted pre-tax income for the year ending December 31, 2014. This bonus amount of $428.0 thousand is recorded as a current liability entitled "Payable to related party" as of March 31, 2015.

During the three month period ended March 31, 2015, we sold scrap material in the amount of $12.0 thousand to Algar. As of March 31, 2015, we had $40.7 thousand in accounts payable to Algar and $67.8 thousand in accounts receivable from Algar.

Scrap material sales to Metal X, LLC:

During the three month period ended March 31, 2015, we sold scrap material in the amount of $257.5 thousand to MetalX, LLC. As of March 31, 2015, we had $182.5 thousand in accounts receivable from MetalX, LLC. For additional information regarding MetalX, LLC, see Note 10 - "Financing and Related Matters" to the Condensed Consolidated Financial Statements.