Disposal of CXR Larus Corporation

12 Months Ended

Dec. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Disposal of CXR Larus Corporation

NOTE 3 - DISPOSAL OF CXR LARUS CORPORATION

During the three months ended September 30, 2014, management determined that CXR Larus Corporation (“CXR Larus”), a wholly-owned subsidiary of the Company, no longer represented a major component of the group, either strategically or in terms of its contribution to the group’s performance, and accordingly took the decision to divest of this business. In September 2014, management committed to the sale of certain assets and liabilities relating to the CXR Larus Network Access and Synchronization and Timing product lines. Following the sale of the test product line in 2012, this constituted the remaining business activities of CXR Larus. The sale of these assets was completed on October 8, 2014. The activities of CXR Larus were previously included in the Company’s communications equipment segment. The sale agreement also allows for a small royalty on sales made by the purchaser in the ensuing twelve months, however, the Company does not expect to have any significant continuing involvement with the business following the disposal. The Company closed the business in the final three months of 2014 and has continued to collect the remaining receivables. A loss on disposal of $9,000 has been recognized in the consolidated statements of comprehensive income/(loss). As this was not a major component of the group nor determined to be a strategic shift, the disposal was not classified as discontinued operations in the consolidated statements of comprehensive income/(loss).

The table below reflects the major classes of assets and liabilities at December 31, 2013 (in thousands).

$	December 31, 2013
Inventory		456
Property, plant and equipment		13
Total assets  sold		469

In preparation for the sale of the assets the Company incurred an impairment charge of $202,000 against the carrying value of the inventory. At the date of sale, the Company incurred severance costs of $103,000 and professional fees of $25,000 in connection with the sale.

The following tables summarize certain components of the statements of operations generated by CXR Larus, which is included as part of income/(loss) from operations, as the disposal did not meet the discontinued operations criteria, for the year ended December 31, 2014 and 2013 (in thousands):

	Year ended December 31, 2014		Year ended December 31, 2013
Net Sales	1,206		1,465
Pre-tax loss	(465	)	(425	)