Discontinued Operations and Assets Held for Sale

12 Months Ended

Dec. 31, 2011

Discontinued Operations and Disposal Groups [Abstract]

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

4. Discontinued Operations and Assets Held for Sale

The Company reviews the carrying value of its long-lived assets held and used, and its assets to be disposed of, for possible impairment when events and circumstances warrant such a review. We also follow the applicable guidance in determining when to reclass assets to be disposed of to assets and related liabilities held for sale as well as when an operation disposed of or to be disposed of is classified as a discontinued operation in the statements of operations and the statements of cash flows.

As of December 31, 2011, the assets of the Company’s former Car Wash Segment consisted of three car washes. The sale of a Lubbock, Texas car wash that was under an agreement of sale at December 31, 2010 was completed on March 8, 2011. On November 22, 2010, the Company sold the e-commerce division of its Digital Media Marketing Segment, Linkstar Corporation.

Additionally, during the quarter ended September 30, 2010, the Company made a decision to sell its warehouse located in Farmers Branch, Texas (the “Texas warehouse”) and had listed the Texas warehouse with a real estate broker. On August 31, 2011 the Company entered into a Commercial Contract, which was subsequently amended on October 19, 2011 and November 7, 2011, to sell the warehouse for $1,830,000. The sale of the warehouse was completed on December 16, 2011. The cash proceeds of the sale were $1.17 million, net of paying off existing debt of $494,574 and closing costs. Costs at closing were $120,000, including $109,800 of broker commissions. The sale of the warehouse resulted in a gain of $9,300. Of the $1.17 million of cash proceeds, $439,000 was deposited into a restricted cash account as security against our JPMorgan Chase Bank, N.A. (“Chase”) revolving credit facility and certain letters of credit provided by Chase as collateral relating to workers’ compensation insurance policies.

The results for the car wash operations and the discontinued Digital Media Marketing Segment’s operations have been classified as discontinued operations in the statements of operations and the statements of cash flows. The classifications of the remaining car washes as discontinued operations is based on these operations being marketed and ready for sale or under an agreement of sale. The Company’s Board of Directors is committed to a plan to dispose of the remaining car washes, within the next twelve months. The statement of operations and the statement of cash flows for the prior year have been restated to reflect the discontinued operations in accordance with GAAP.

Revenues from discontinued operations were $3.0 million and $11.0 million for the years ended December 31, 2011 and 2010, respectively. Operating loss from discontinued operations was $714,000 and $8.4 million for the years ended December 31, 2011 and 2010, respectively, including asset impairment charges of $511,000, and $7.2 million for the years ended December 31, 2011 and 2010, respectively.

 Assets and liabilities held for sale were comprised of the following (in thousands):

	As of December 31, 2011
			Digital Media		Security
	Car Washes		Marketing		Segment		Total
Assets held for sale:
Inventory	$	98	$	-	$	-	$	98
Other current assets		-		28		-		28
Property, plant and equipment, net		2,313		3		22		2,338
Intangible assets		5		-		-		5
Total assets	$	2,416	$	31	$	22	$	2,469
Liabilities related to assets held for sale:
Other current liabilities	$	-	$	24	$	-	$	24
Current portion of long-term debt		463		-		-		463
Long-term debt, net of current portion		79		-		-		79
Total liabilities	$	542	$	24	$	-	$	566

	As of December 31, 2010
	Car Washes
							Security
	Dallas and						Segment
	Fort Worth,		Lubbock,		Digital Media		Texas
	Texas		Texas		Marketing		Warehouse		Total
Assets held for sale:
Inventory	$	117	$	5	$	-	$	-	$	122
Other current assets		-		-		58		-		58
Property, plant and equipment, net		2,820		1,707		3		1,615		6,145
Intangible assets		5		-		-		-		5
Total assets	$	2,942	$	1,712	$	61	$	1,615	$	6,330
Liabilities related to assets held for sale:
Other current liabilities	$	-	$	-	$	103	$	-	$	103
Current portion of long-term debt		615		172		-		58		845
Long-term debt, net of current portion		114		524		-		495		1,133
Total liabilities	$	729	$	696	$	103	$	553	$	2,081