Discontinued Operations

6 Months Ended

May 27, 2012

Discontinued Operations

Discontinued Operations

Note 12: Discontinued Operations

        In the fourth quarter of fiscal 2010, management divested the assets of its European manufacturing operations in France and Italy and ceased manufacturing operations in Brazil. These businesses have been accounted for as discontinued operations. During the three and six months ended May 27, 2012, the Company continued the liquidation of certain of its assets related to its Brazil operations. The charges related to these activities were recorded as a component of discontinued operations. The remaining current assets and liabilities of the Brazilian operations reflected within the Consolidated Balance Sheet at May 27, 2012 and November 27, 2011 were immaterial. The Company also recognized additional expenses related to the settlement of certain outstanding contingencies related to the sale of the European business unit which resulted in the recognition of an additional $0.9 million of expense relating to the disposition of its European manufacturing operations.

        The operating results of the discontinued operations in total are summarized below (in thousands):

	Three months ended						Six months ended
	May 27, 2012			May 29, 2011			May 27, 2012			May 29, 2011
Net sales	$	—		$	—		$	—		$	—
Loss before income taxes		(219	)		(746	)		(492	)		(1,164	)
Income tax provision (benefit)		—			—			—			—
Loss from operations of discontinued operations		(219	)		(746	)		(492	)		(1,164	)
Loss on disposition of business		(918	)		(381	)		(1,015	)		(995	)
Loss from discontinued operations	$	(1,137	)	$	(1,127	)	$	(1,507	)	$	(2,159	)

        In connection with the sale of the Company's European manufacturing operations, the Company made certain guarantees with respect to the existence of liabilities and deficiencies related to assets as of the closing date that were not reflected in the European business' financial statements as of the closing date. Further, certain guarantees were made with respect to losses or damages incurred by the purchaser related to any misrepresentations or warranties made by the Company, outstanding disputes or judicial proceedings. Such guarantees are limited to an aggregate amount of €3.5 million under the terms of the contract. As of May 27, 2012, the Company has settled several outstanding contingencies that would be covered by this guarantee and has recorded a liability of approximately €1.8 million ($2.2 million) related to the settlement of these claims.