BASIS OF PRESENTATION

6 Months Ended

Jul. 31, 2013

Basis of Presentation [Abstract]

Basis of Presentation

1. Basis of Presentation

The consolidated financial statements include the accounts of National Technical Systems, Inc. ("NTS" or the "Company") and its majority-owned or otherwise controlled subsidiaries. All significant intercompany accounts and transactions have been eliminated. Investments in entities in which the Company can exercise significant influence, but does not own a majority equity interest or otherwise control, are accounted for using the equity method and are included as investments in equity interests on the consolidated balance sheets.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission for Form 10-Q. Accordingly, certain information and footnote disclosures, normally included in financial statements prepared in accordance with generally accepted accounting principles, have been condensed or omitted pursuant to such rules and regulations.

The statements presented as of July 31, 2013 and for the three and six months ended July 31, 2013 and 2012 are unaudited. In the opinion of management, these financial statements reflect all normal recurring and other adjustments necessary for a fair presentation, and to make the financial statements not misleading. These financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended January 31, 2013.

On June 26, 2013, the Company sold its interest in XXCAL Japan, a previously 50% owned subsidiary for $240,000. The loss of $14,000 related to the sale is included in other expense.

Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year or any other future periods.