DISCONTINUED OPERATIONS

9 Months Ended

Sep. 30, 2016

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

On September 8, 2015, we entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Edge BioSystems, Inc. (“Edge Bio”), pursuant to which we sold our manufacturing, marketing and selling of high quality polymer and silica based beads and resin and chromatography columns business (collectively, the “Columns Business”). The Columns Business was part of our former segment, Genetic Assays and Platforms. Pursuant to the Asset Purchase Agreement, Edge Bio acquired substantially all of the assets used solely in connection with the Columns Business and assumed certain liabilities of the Columns Business for a total cash purchase price of approximately $2.1 million (the “Asset Sale”), which was paid on September 8, 2015 upon the closing of the Asset Sale. During the year ended December 31, 2015, we recorded a gain on the sale of the Columns Business of $1.5 million.

On November 25, 2015, we entered into an Asset Purchase Agreement (the “Purchase Agreement”) with ADSTEC Corporation (“ADSTEC”) and ADS Biotec Inc., a wholly-owned subsidiary of ADSTEC (“Buyer”), pursuant to which we sold (1) to ADSTEC our facilities located in Glasgow, Scotland and on Irvington Road in Omaha, Nebraska (together, the “Facilities”) and all of our stock, inventory and raw materials located at the Facilities (collectively, the “Inventory”), and (2) to Buyer (a) all of the remaining assets relating to our Genetic Assays and Platforms business segment (the “Business”), other than the Inventory (the “Purchased Assets”), and (b) all of the ordinary shares of Transgenomic Limited, a wholly-owned subsidiary of ours (the “Shares”).

Pursuant to the Purchase Agreement, ADSTEC and Buyer acquired the Facilities, the Inventory, the Purchased Assets and the Shares for an aggregate purchase price of approximately $300,000, and Buyer assumed our financial and human resources commitments related to the Business (the “Transaction”). During the year ended December 31, 2015, we recorded a loss on the Transaction of $1.7 million.

Together, the Asset Sale and the Transaction represent the divestiture of our Genetic Assays and Platforms business, resulting in a strategic shift that had a major effect on our operations and financial results. Therefore, the divested operations of our Genetic Assays and Platforms business meet the criteria to be reported as discontinued operations.

During the fourth quarter of 2015, our Board of Directors took actions to begin the process of divesting our Patient Testing business in New Haven, Connecticut. In March 2016, we announced that we had suspended testing services in our Patient Testing laboratory as we review and evaluate various strategic alternatives for that business. As a result of these actions, as of December 31, 2015, our Patient Testing business met the criteria to be reported as discontinued operations. We anticipate that we will complete the divestiture of the Patient Testing business during 2016.

The related assets, liabilities, results of operations and cash flows for both the Genetic Assays and Platforms business and Patient Testing business are classified as assets held for sale, liabilities held for sale and discontinued operations for all periods presented.

Results of the discontinued operations consisted of the following:

	Three months ended September 30,						Nine months ended September 30,
(Dollars in thousands)	2016			2015			2016			2015
Net sales	$	283		$	5,507		$	1,960		$	17,868
Cost of goods sold	57			3,203			1,251			9,980
Gross profit	226			2,304			709			7,888
Selling, general and administrative expense	252			1,910			1,621			8,325
Research and development expense	98			106			166			330
Impairment of long-lived assets	—			7,024			—			7,024
Operating income (loss) from discontinued operations	(124		)	(6,736		)	(1,078		)	(7,791		)
Gain on sale of business/assets	90			1,532			1,053			1,532
Income (loss) from discontinued operations before income taxes	(34		)	(5,204		)	(25		)	(6,259		)
Income tax expense	—			44			—			133
Income (loss) from discontinued operations, net of taxes	$	(34	)	$	(5,248	)	$	(25	)	$	(6,392	)

The loss from discontinued operations for the nine month period ended September 30, 2016, includes approximately $1.1 million in proceeds received from the sale of assets of our discontinued Patient Testing business.

Assets and liabilities of the discontinued operations are classified as assets held for sale and liabilities held for sale in the condensed consolidated balance sheets and consisted of the following:

	Dollars in Thousands
	September 30, 2016		December 31, 2015
ASSETS
Accounts receivable, net	$	244	$	1,905
Other current assets	21		82
Total Assets	$	265	$	1,987
LIABILITIES
Accrued compensation	$	—	$	264
Total Liabilities	$	—	$	264

The following is a summary of activity for the allowance for doubtful accounts from discontinued operations during the three and nine months ended September 30, 2016 and 2015. The allowance for doubtful accounts from discontinued operations is included in the assets held for sale in the condensed consolidated balance sheets.

	Dollars in Thousands
	Beginning Balance		Additions		Deductions			Ending Balance
Three Months Ended September 30, 2016	$	10,462	$	—	$	(5,192	)	$	5,270
Three Months Ended September 30, 2015	$	8,406	$	1,052	$	(168	)	$	9,290
Nine Months Ended September 30, 2016	$	14,664	$	—	$	(9,394	)	$	5,270
Nine Months Ended September 30, 2015	$	7,927	$	3,782	$	(2,419	)	$	9,290