Discontinued Operations

6 Months Ended

Jun. 28, 2019

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

4. DISCONTINUED OPERATIONS

In the second quarter of 2019, the Company announced that it had entered into a definitive agreement to sell its Distribution segment to affiliates of Littlejohn & Co., LLC for total cash consideration of $700.0 million subject to customary closing conditions and working capital adjustments. The agreement to sell the Distribution segment was a result of the Company's shift in strategy to be a highly focused, technologically differentiated aerospace and engineered products company. The transaction is expected to close in the third quarter of 2019, subject to customary closing conditions and the receipt of certain required consents and approvals. Upon closing, the Company anticipates entering into a transition services agreement with affiliates of Littlejohn & Co., LLC to support information technology, human resources and benefits, tax and treasury functions for six to twelve months, with the option to extend an additional year for certain services. As a result of the definitive agreement, the Distribution segment met the criteria set forth in ASC 205-20, Presentation of Financial Statements - Discontinued Operations for assets held for sale and discontinued operations.

4. DISCONTINUED OPERATIONS (CONTINUED)

The related assets and liabilities of the Distribution segment to be sold were reclassified to assets held for sale and liabilities held for sale, respectively, as of June 28, 2019 and December 31, 2018 on the Company's Condensed Consolidated Balance Sheets. The following table is a summary of the assets and liabilities held for sale:



	June 28, 2019		December 31, 2018
In thousands
Assets
Cash and cash equivalents	$	1,957	$	1,816
Accounts receivable, net	166,395		151,756
Contract assets	7,402		9,600
Inventories	168,467		163,343
Other current assets	21,043		24,746
Total assets held for sale, current portion	365,264		351,261
Property, plant and equipment, net of accumulated depreciation of $73,799 and $70,021, respectively	46,184		47,112
Operating right-of-use assets, net	67,949		—
Goodwill	149,204		149,204
Other intangible assets, net	29,321		32,440
Deferred income taxes	56		146
Other assets	243		336
Total assets held for sale	$	658,221	$	580,499

Liabilities
Accounts payable – trade	$	83,468	$	101,801
Accrued salaries and wages	13,985		13,839
Contract liabilities	32		—
Operating lease liabilities, current portion	19,877		—
Other current liabilities	18,930		15,407
Total liabilities held for sale, current portion	136,292		131,047
Deferred income taxes	15,320		13,630
Operating lease liabilities, noncurrent portion	48,351		—
Other long-term liabilities	221		1,972
Total liabilities held for sale	$	200,184	$	146,649

4. DISCONTINUED OPERATIONS (CONTINUED)

The results of operations for the Distribution segment were included in discontinued operations on the Company's Condensed Consolidated Statement of Operations. The following table provides information regarding the results of discontinued operations:



	For the Three Months Ended						For the Six Months Ended
	June 28, 2019			June 29, 2018			June 28, 2019			June 29, 2018
In thousands
Net sales of discontinued operations	$	289,863		$	289,523		$	580,817		$	573,455
Cost of sales from discontinued operations	207,574			207,321			416,264			410,326
Gross profit from discontinued operations	82,289			82,202			164,553			163,129
Selling, general and administrative expenses from discontinued operations	73,231			68,400			144,496			137,221
Restructuring costs from discontinued operations	—			150			—			150
Net loss on sale of assets from discontinued operations	4			3			8			1
Operating income from discontinued operations	$	9,054		$	13,649		$	20,049		$	25,757
Interest expense, net from discontinued operations	8			2			20			31
Other (income) expense from discontinued operations	(10		)	(3		)	(12		)	(3		)
Earnings from discontinued operations before income taxes	9,056			13,650			20,041			25,729
Income tax expense	1,979			3,334			4,661			6,317
Earnings from discontinued operations	$	7,077		$	10,316		$	15,380		$	19,412