Note 12 - Discontinued Operations

12 Months Ended

Feb. 26, 2023

Notes to Financial Statements

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

12.         DISCONTINUED OPERATIONS

On July 25, 2018, the Company entered into a definitive agreement to sell its Electronics Business to AGC Inc. for $145,000 in cash, subject to post-closing adjustments for changes in working capital compared to target net working capital, excluding cash in certain acquired subsidiaries and certain accrued and unpaid taxes of certain acquired subsidiaries. The net cash proceeds from the sale were approximately $124,156, net of transaction costs of approximately $7,657 and taxes of approximately $13,187. The net gain on the Sale was estimated to be $102,145. The net gain on the sale was calculated as the sum of the gains on the sale of each of the Electronics Business subsidiaries as determined by the total consideration allocation between the subsidiaries, less the respective tax bases and deductible transaction costs for each of the subsidiaries. The total consideration allocation for Nelco Products Pte. Ltd. (Singapore), Neltec, Inc. (US), and Neltec SA (France), was 82%, 16%, and 2%, respectively, as agreed upon by the Company and AGC Inc. The Company completed this transaction on December 4, 2018.

The Company has classified the operating results of its former Electronics Business, together with certain costs related to the transaction, as discontinued operations, net of tax, in the Consolidated Statements of Operations. The Company has income in the U.S., Singapore and France, the blended tax rates for discontinued operations for the 2021 and 2020 fiscal years were negative 24.7% and negative 26.4%, respectively. The Company had no income from discontinued operations in the 2023 fiscal year.

The following table shows the summary operating results of the discontinued operations:

	Fiscal Year Ended
	February 26,		February 27,		February 28,
	2023		2022		2021
Net sales	$	-	$	-	$	-
Cost of sales		-		-		-
Gross profit		-		-		-
Selling, general and administrative expenses		-		-		8
Restructuring charges		-		-		427
(Loss) earnings from discontinued operations		-		-		(435	)
Other income		-		-		-
(Loss) earnings from discontinued operations before income taxes		-		-		(435	)
Income tax (benefit) provision		-		-		(107	)
Net (loss) earnings from discontinued operations	$	-	$	-	$	(328	)