Discontinued Operations

9 Months Ended

Sep. 30, 2023

Discontinued Operations

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, which process was completed with the sale of the Company’s Argo EMS business (“Argo”) on October 19, 2022. Argo supplied 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. We believe that the sale of the Diversified Products segment has allowed 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 qualified for discontinued operations. As such, the financial results of the Diversified Products segment are reflected in our unaudited condensed consolidated statements of income as discontinued operations for the prior periods presented. The results of the former Diversified Products segment are not reflected in the unaudited condensed consolidated statements of income for the three and nine months ended September 30, 2023 because dispositions of the businesses that comprised that segment were completed prior to the start of the period.

Summarized Financial Information of Discontinued Operations

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

	Three Months Ended					Nine Months Ended
	September 30, 2023		October 1, 2022			September 30, 2023		October 1, 2022
	(unaudited)		(unaudited)			(unaudited)		(unaudited)
Net sales	$	-	$	2,516,064		$	-	$	7,356,491
Cost of products sold		-		(1,656,694	)		-		(4,943,751	)
Gross margin		-		859,370			-		2,412,740
Selling, general and administrative expenses		-		(311,190	)		-		(857,747	)
Operating income		-		548,180			-		1,554,993
Interest expense		-		(52,360	)		-		(128,424	)
Gain from discontinued operations before income taxes		-		495,820			-		1,426,569
Income tax expense		-		(133,500	)		-		(384,104	)
Income from discontinued operations, net of tax	$	-	$	362,320		$	-	$	1,042,465