Note 2 - Discontinued Operations

9 Months Ended

Sep. 24, 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 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. The periodic fair value of the contingent consideration is determined through the use of the Monte Carlo simulation model. We adjusted the value of the contingent consideration receivable to $0.5 million at September 24, 2016

, based on updated revenue forecasts received from BMS. The change in the fair value was recognized in discontinued operations below.

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					Nine Months Ended
	September 24,		September 26,			September 24,			September 26,
	2016		2015			2016			2015
Net sales	$	-	$	-		$	-		$	6,965
Operating loss before income taxes		-		-			-			(1,963	)
Gain (loss) from sale of BMS		51		(222	)		(4	)		(3,232	)
Income (loss) before taxes		51		(222	)		(4	)		(5,195	)
Income tax provision		-		-			-			6
Income (loss), net of tax	$	51	$	(222	)	$	(4	)	$	(5,201	)