Note 2 - Discontinued Operations

3 Months Ended

Mar. 26, 2016

Notes to Financial Statements

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

2. Discontinued Operations

In June 2015, we sold all of the outstanding stock of BMS for $4.9 million in cash and up to $2.5 million of contingent cash consideration. Our decision to sell this non-core business resulted from management’s determination that it was no longer a strategic fit within our organization.

As part of the divestiture of BMS at June 27, 2015 we recorded a $0.2 million, long-term contingent consideration receivable that has been classified as Level 3 in the fair value hierarchy. See Note 4, “Financial Instruments Measured at Fair Value” for additional information on the three-tier fair value hierarchy.

The contingent consideration represents the estimated fair value of future payments we are due based on BMS achieving annual revenue targets in certain years as specified in the sale agreement. We determined the initial value of the contingent consideration by using the Monte Carlo simulation model with subsequent changes to the fair value of the contingent consideration recognized in discontinued operations. The fair value of the receivable totaled $0.5 million at March 26, 2016

.

In connection with the disposal of BMS we incurred divestiture-related costs in the first quarter of 2015 that would not have been incurred otherwise. These costs consist of legal and investment banking advisory services, success based compensation arrangements and certain other items that are incremental to normal operating charges and were expensed as incurred. These costs are included in the loss from sale amount presented below.

Operating results of our discontinued segment are summarized as follows

(in thousands)

:

	Three Months Ended
	March 26,		March 28,
	2016		2015
Net sales	$	-	$	4,621
Operating loss before income taxes	$	-	$	(914	)
Loss from sale of BMS		-		(100	)
Loss before taxes		-		(1,014	)
Income tax provision		-		6
Loss, net of tax	$	-	$	(1,020	)