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Discontinued Operations
 12 Months Ended
Dec. 31, 2022
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations DISCONTINUED OPERATIONS
The Company has either sold or discontinued certain operations that are accounted for as "Discontinued Operations" under applicable accounting guidance. Discontinued operations are summarized as follows:
 20222021
Workers' compensation costs from former textile operations$(29)$(172)
Environmental remediation costs from former textile operations(346)(146)
Commercial business operations(1,289)(3,308)
Loss from discontinued operations, before taxes$(1,664)$(3,626)
Income tax benefit— (89)
Loss from discontinued operations, net of tax$(1,664)$(3,537)

Workers' compensation costs from former textile operations

Undiscounted reserves are maintained for the self-insured workers' compensation obligations related to the Company's former textile operations. These reserves are administered by a third-party workers' compensation service provider under the supervision of Company personnel. Such reserves are reassessed on a quarterly basis. Pre-tax cost incurred for workers' compensation as a component of discontinued operations primarily represents a change in estimate for each period from unanticipated medical costs associated with the Company's obligations.

Environmental remediation costs from former textile operations

Reserves for environmental remediation obligations are established on an undiscounted basis. The Company has an accrual for environmental remediation obligations related to discontinued operations of $2,205 as of December 31, 2022 and $1,913 as of December 25, 2021. The liability established represents the Company's best estimate of possible loss and is the reasonable amount to which there is any meaningful degree of certainty given the periods of estimated remediation and the dollars applicable to such remediation for those periods. The actual timeline to remediate, and thus, the ultimate cost to complete such remediation through these remediation efforts, may differ significantly from the Company's estimates. Pre-tax cost for environmental remediation obligations classified as discontinued operations were primarily a result of specific events requiring action and additional expense in each period.

Commercial business operations

In accordance with the Asset Purchase Agreement dated September 13, 2021, the Company sold assets that include certain inventory, certain items of machinery and equipment used exclusively in the Commercial Business, and related intellectual property for a purchase price of $20,500. The Purchaser also assumed the liability to fulfill the orders represented by advance customer deposit liabilities of $3,127.

The Company retained the Commercial Business’ cash deposits, all accounts receivable, and certain inventory and equipment. Additionally, the Company agreed not to compete with the specified commercial business and the Atlas|Masland markets for a period of five years following September 13, 2021. The agreement allowed for the Company to sell the commercial inventory retained by the company after the divestiture.
At closing, $2,100 of the proceeds were withheld and deposited in escrow to cover any claims arising with respect to the Commercial business for which the Company may be liable. The $2,100 was agreed to be released to the Company (net of claims paid, if any) in two installments with 50% of the escrow paid in 90 days from closing and the remaining amount paid 18 months from the closing date. The Company has received payment of the first installment and, as of December 31, 2022, the remaining unpaid portion of $1,025 is recognized within current assets. As of December 31, 2022, the Company has not recognized amounts for potential indemnification settlements as those amounts cannot be reasonably estimated.

In order to release liens on certain fixed assets included in the Asset Purchase Agreement, the Company placed $2,100 in cash collateral in an account with the lender (Greater Nevada Credit Union). The remaining proceeds were applied to the Company's debt with its senior credit facility (Fifth Third Bank). In January 2023, the lender released the funds to the Company.
The gain on the sale of assets recorded in 2021 is summarized as follows:

Net proceeds, including escrow funds$20,500 
Inventory, net(9,195)
Fixed assets(2,278)
Contract liabilities3,127 
Net tangible assets sold(8,346)
Gain on sale of assets sold, prior to other transaction related costs$12,154 
Other transaction related costs
Adjustments to accruals, reserves and allowances$(8,462)
1
Transaction costs(1,032)
2
Total other transaction related costs$(9,494)
Gain on sale of discontinued operations, before tax$2,660 

1) For the remaining retained commercial inventory and fixed assets, the Company recorded an adjustment to recognize the effects of the transaction. For inventory, the Company recognized lower of cost or market adjustments of approximately $6,600. The Company’s remaining fixed assets will be disposed of by sale and the Company recognized an adjustment of approximately $1,800 to reflect the lower of its carrying value or estimated fair value less cost to sell. For these assets, the Company suspended the associated depreciation and will recognize changes in the fair value less cost to sell as gains or losses in future periods until the date of sale.

2) Transaction costs were legal expenses and involuntary employee termination costs related to one-time benefit arrangements.


The Company reclassified the following assets and liabilities for discontinued operations in the accompanying Consolidated Balance Sheets:

20222021
Current Assets of Discontinued Operations:
 Receivables, net$385 $3,406 
 Inventories, net255 1,927 
 Prepaid expenses1 658 
Current Assets Held for Discontinued Operations$641 $5,991 
Long Term Assets of Discontinued Operations:
 Property, plant and equipment, net$185 $292 
 Operating lease right of use assets63 242 
 Other assets1,304 2,218 
Long Term Assets Held for Discontinued Operations$1,552 $2,752 
Current Liabilities of Discontinued Operations:
 Accounts payable$127 $2,133 
 Accrued expenses2,245 3,062 
 Current portion of operating lease liabilities75 167 
Current Liabilities Held for Discontinued Operations$2,447 $5,362 
Long Term Liabilities of Discontinued Operations:
 Operating lease liabilities$— $75 
 Other long term liabilities3,759 4,413 
Long Term Liabilities Held for Discontinued Operations$3,759 $4,488 
For the twelve months ended December 31, 2022 and December 25, 2021, the Company reclassified the following operations of the Commercial business included in discontinued operations in the accompanying Consolidated Statements of Operations:

20222021
Net sales$7,790 $48,070 
Cost of sales8,159 40,904 
Gross profit (loss)(369)7,166 
Selling and administrative expenses1,395 13,134 
Other operating income, net(475)— 
Discontinued loss related to the divestiture of the Commercial business(1,289)(5,968)
Gain on sale of business— (2,660)
Loss from discontinued Commercial business before taxes$(1,289)$(3,308)
The Company and the Purchaser simultaneously entered into a transition services agreement pursuant to which the Company assisted Mannington in transitioning the AtlasMasland business to Mannington, by, among other things, assisting in filling open orders and completing the manufacture of work in progress that resulted in a temporary continued involvement in the Commercial Business until approximately December 31, 2021. The Company has shown the results of these operations as a component of discontinued operations.