Discontinued Operations

9 Months Ended

Sep. 30, 2014

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

Barnes Distribution North America

In April 2013, the Company completed the sale of BDNA to MSC pursuant to the terms of an Asset Purchase Agreement between the Company and MSC. The total cash consideration received for BDNA through September 30, 2014 was $537,761, net of transaction costs and closing adjustments paid. The net after-tax proceeds were $420,466 after consideration of certain post closing adjustments, transaction costs and income taxes. The Company made estimated income tax payments of $130,004 related to the gain on sale during 2013 and recorded an income tax receivable of $12,608 in the Consolidated Balance Sheet as of December 31, 2013. The Company has since elected to apply the income tax receivable to future tax filings. The losses from discontinued operations for the three- and nine-months ended September 30, 2014 include a tax benefit for deductions related to the sale of BDNA.

Barnes Distribution Europe

In December 2011, the Company sold substantially all of the assets of its Barnes Distribution Europe ("BDE") business to Berner SE (the "Purchaser") in a cash transaction pursuant to the terms of a Share and Asset Purchase Agreement ("SPA") among the Company, the Purchaser, and their respective relevant subsidiaries dated November 17, 2011. The Company received gross proceeds of $33,358, which represents the initial stated purchase price, and yielded net cash proceeds of $22,492 after consideration of cash sold, transaction costs paid and closing adjustments. The final amount of proceeds from the sale of the BDE business was subject to post-closing adjustments that were reflected in discontinued operations in periods subsequent to the disposition. The income from operations of discontinued businesses for 2013 includes a final settlement of a retained liability related to BDE.

As required by the terms of the SPA, the Company was required to place €9,000 of the proceeds in escrow to be used for any settlement of general representation and warranty claims. Absent a breach of warranty claim, the funds would be released from escrow on August 31, 2012 unless there were any then pending claims. Cash related to a pending claim would remain in escrow until a final determination of the claim had been made. On August 17, 2012, the Purchaser provided a notice of breach of various warranties to the Company.  The Company rejected the Purchaser's notice and demanded release of the full escrow effective August 31, 2012.  The Purchaser refused to release the full escrow, and only €3,900 plus interest was released whereas €5,100 plus interest remained in escrow. The Company settled the pending claim on September 24, 2014 and entered into an agreement to pay the Purchaser €1,250 of the proceeds that were held in escrow. The losses from discontinued operations for the three- and nine-months ended September 30, 2014 include this €1,250 ($1,586) reduction in proceeds from the sale of the business. The remaining funds of €3,850 ($4,886 at September 30, 2014) were no longer restricted within escrow effective September 24, 2014, therefore the balance of the escrow account was recorded as cash at September 30, 2014. The cash was restricted and recorded in other assets at December 31, 2013.

The below amounts related to the BDE business and BDNA were derived from historical financial information. The amounts have been segregated from continuing operations and reported as discontinued operations within the consolidated financial statements.

	Three months ended September 30,						Nine months ended September 30,
	2014			2013			2014			2013
Net sales	$	—		$	—		$	—		$	93,173
Income before income taxes	—			10			—			4,967
Income tax expense	—			463			—			1,688
(Loss) income from operations of discontinued businesses, net of income taxes	—			(453		)	—			3,279
(Loss) gain on transaction	(1,586		)	(7		)	(1,586		)	313,471
Income tax benefit (expense) on sale	1,161			(16		)	1,161			(119,054		)
(Loss) gain on the sale of businesses	(425		)	(23		)	(425		)	194,417
(Loss) income from discontinued operations, net of income taxes	$	(425	)	$	(476	)	$	(425	)	$	197,696