Discontinued Operations

3 Months Ended

Apr. 01, 2023

Basis of Presentation

2. Discontinued Operations

Note B – Discontinued Operations

In the second quarter of 2021, the Company determined that the companies included in our former Diversified Products segment no longer fit with our long-term strategy and the Company initiated the process of selling the companies within the Diversified Products segment. We believe that selling the companies within this segment will allow management to focus on our core capabilities and offerings.

The former Diversified Products segment met the criteria to be held for sale and furthermore, we determined that the assets held for sale qualify for discontinued operations. As such, the financial results of the Diversified Products segment are reflected in our unaudited condensed consolidated statement of operations as discontinued operations for the prior period presented. The results of the former Diversified Products segment are not reflected in the unaudited condensed consolidated statement of operations for the three months ended April 1, 2023 because dispositions of the businesses that comprised that segment were completed prior to the start of the period.

On October 19, 2022, the Company sold its Argo EMS business (“Argo”). Argo supplies printed circuit boards and other electronic assemblies to original equipment manufacturers in various industries, including measurement systems, semiconductor equipment manufacturing, and industrial control, medical, and military products.

Summarized Financial Information of Discontinued Operations

The following table represents income from discontinued operations, net of tax:

	Three Months Ended
	April 1, 2023		April 2, 2022
	(unaudited)		(unaudited)
Net sales	$	-	$	2,367,226
Cost of products sold		-		(1,603,762	)
Gross margin		-		763,464
Selling and administrative expenses		-		(257,060	)
Operating income		-		506,404
Interest expense		-		(35,217	)
Gain from discontinued operations before income taxes		-		471,187
Income tax expense		-		(126,867	)
Income from discontinued operations, net of tax	$	-	$	344,320