CASUALTY LOSS

6 Months Ended

Jun. 30, 2011

CASUALTY LOSS

CASUALTY LOSS

NOTE 11 — CASUALTY LOSS

On September 27, 2010, the Company’s French subsidiary, CXR AJ, sustained significant damage to a portion of the building comprising its Abondant, France facility as a result of a fire.  The portion of the building damaged, which was fully depreciated at the time of the fire, was primarily used for component parts storage.  Virtually all of the component parts that were on-site were destroyed in the fire.  CXR AJ’s main operating facility, which includes administration, finance, sales and engineering, was not damaged by the fire.  Immediately after the fire, CXR AJ’s insurer was on-site evaluating the damage.  CXR AJ maintains adequate insurance coverage for such events and it anticipates that any business interruption impact will be recoverable under the insurance policy.

Subsequent to the fire, the Company recorded an impairment for the component parts inventory destroyed by the fire of €0.8 million (approximately $1.1 million).  As the CXR AJ insurance policy covers this inventory amount and the insurance company has confirmed that this inventory is covered under at least net value, the Company recorded a receivable for the same amount as the impairment loss.  The insurance company provided an advance of funds in December 2010 for €0.5 million (approximately $0.7 million using the average December 2010 exchange rate) and an additional advance of funds in April 2011 for €0.4 million, both of which were applied towards replacement of the component parts that were destroyed by the fire.  The advances received from the insurance company in December 2010 and April 2011 were applied to the receivable.  We continue to work with our local insurance company to finalize valuation and settlement of our claims related to inventory replacement, business interruption and building construction.