Discontinued Operations-Held for Sale

12 Months Ended

Dec. 31, 2021

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations-Held for Sale

16. Discontinued Operations-Held for Sale

As described in Note 1, the Company entered into the nonbinding LOI with the Buyer regarding the potential Sale of MTI Instruments business segment. As of December 31, 2021, our Instrumentation business segment met the held for sale criteria and is reflected as discontinued operations in our financial statements for all periods presented. Our consolidated balance sheets and consolidated statements of operations report discontinued operations separate from continuing operations. Our consolidated statements of equity and statements of cash flows combine continuing and discontinuing operations. As discussed in Footnote 9, MTI Instruments potential sale will need approval of the holders of the Notes prior to the sale of MTII.

Set forth below are the results of the discontinued operations:

(Dollars in thousands)	2021		2020(*)
Product revenue	$	7,147	$	9,004
Cost of sales		2,358		2,669
Research and development		1,525		1,491
Selling, general, and administrative		2,198		1,752
Other income, net		21		4
Income tax benefit		40		60
Net income from discontinued operations	$	1,127	$	3,156

(*) Reclassified to conform with the current period presentation

The following table summarizes information about assets and liabilities from discontinued operations held for sale as of December 31, 2021 and 2020:

(Dollars in thousands)
	December 31,		December 31,
	2021		2020
Assets held for sale from discontinued operations:
Accounts receivable	$	1,189	$	916
Inventories		964		828
Prepaid expenses and other current assets		54		45
Property, plant and equipment, net		92		125
Deferred tax assets, net		101		60
Operating lease right-of-use assets		628		776
Total Assets held for sale from discontinued operations	$	3,028	$	2,750
Liabilities held for sale from discontinued operations:
Accounts payable	$	136	$	108
Accrued liabilities		479		356
Operating lease liability-current		628		182
Operating lease liability-noncurrent		-		594
Total Liabilities held for sale from discontinued operations	$	1,243	$	1,240

MTI Instruments sells its products on a worldwide basis with its principal markets listed in the table below where information on product revenue is summarized by geographic area for the Company as a whole for each of the years ended December 31:

(Dollars in thousands)	2021		2020
Product revenue:
United States	$	4,582	$	6,670
Association of South East Asian Nations (ASEAN)		1,864		1,510
Europe, the Middle East and Africa (EMEA)		576		713
Americas (Canada, Mexico, South America)		125		111
Total product revenue	$	7,147	$	9,004

Product revenues are attributed to regions based on the location of customers. In 2021 and 2020, approximately 35.9% and 25.9%, respectively, of our product revenues was from customers outside of the United States.

At MTI Instruments, the largest commercial customer in 2021 was a Singapore manufacturer and distributer of industrial and technology product and services of support solutions to the aerospace and energy markets, which accounted for 13.0% of total product revenue. At MTI Instruments, the largest commercial customer in 2020 was a U.S. supplier that builds and executes custom solutions for industry and government markets, which accounted for 9.1% of total product revenue. The U.S. Air Force continues to be the largest government customer, accounting for 18.5% and 42.9% of total product revenue in 2021 and 2020, respectively.