Aclara Divestiture

12 Months Ended

Sep. 30, 2014

Discontinued Operations and Disposal Groups [Abstract]

Aclara Divestiture

2. Aclara Divestiture

On March 28, 2014, the Company completed the sale of Aclara to an affiliate of Sun Capital Partners, Inc. The divestiture generated approximately $135 million of gross cash proceeds. As of March 28, 2014, the Company expected to receive an additional $10 million related to specific Aclara receivables retained by ESCO. As of September 30, 2014, the Company has received approximately $8.5 million of collections related to these specific Aclara receivables and the remaining outstanding receivables totaling $1.5 million were included in Other Current Assets on the Company’s Consolidated Balance Sheet as of September 30, 2014. In addition, as of March 28, 2014, the Company expected to receive an estimated working capital adjustment of approximately $5 million, however, the parties have not reached agreement on the calculation of the final working capital adjustment. The risk in negotiation has been considered in the Company’s consolidated financial statements. Aclara is reflected as discontinued operations and/or assets/liabilities held for sale in the consolidated financial statements and related notes for all periods presented.

Aclara’s pretax (loss) earnings recorded in discontinued operations was $(48.2) million, $(62.1) million and $19.5 million for the years ended September 30, 2014, 2013 and 2012, respectively. The 2014 pretax loss consisted of Aclara’s pretax earnings from its results of operations of $15.6 million and a pretax loss of $63.8 million on the sale of Aclara. The 2013 pretax loss was due to the $48 million goodwill impairment charge recorded in the fourth quarter of 2013; lower sales volumes; and changes in product mix (higher shipments of lower margin gas products). Aclara’s net sales were $129.6 million, $184.5 million and $209.7 million for the years ended September 30, 2014, 2013 and 2012, respectively. Aclara’s operations were included within the Company’s USG segment prior to the classification as discontinued operations.

The major classes of Aclara assets and liabilities held for sale included in the Consolidated Balance Sheets at September 30, 2013 are shown below:

(Dollars in millions)	2013
Assets:
Accounts receivable, net	$	55.5
Inventories		34.9
Other current assets		18.5
Current assets		108.9
Net property, plant & equipment		14.5
Intangible assets, net		66.0
Goodwill		57.9
Other assets		11.8
Total assets		259.1
Liabilities:
Accounts payable		22.2
Accrued expenses and other current liabilities		41.4
Current liabilities		63.6
Other liabilities		16.0
Total liabilities	$	79.6