Discontinued Operations

9 Months Ended

Mar. 31, 2013

Discontinued Operations [Abstract]

Discontinued Operations

11.Discontinued Operations

On August 30, 2012, the Company sold substantially all of the assets of CBU for approximately $838,000 in cash. The purchaser also assumed certain liabilities and obligations of CBU.  The Company retained the CBU accounts receivable balance at August 30, 2012 of approximately $608,000.  The disposal of CBU resulted in an after-tax gain of approximately $124,000 in the first quarter of fiscal 2013.  In the third quarter of fiscal 2013, the Company recorded an after-tax gain of $31,000 related to settlement of certain liabilities.  In the fourth quarter of fiscal 2012, the Company recorded a $1.6 million charge, or $1.1 million net of taxes based on management’s estimates and assumptions of the pending sale and retained liabilities.

Accordingly, financial results of CBU have been reported as discontinued operations in the accompanying consolidated statements of income for all periods presented. Information regarding revenue and operating results of CBU included in discontinued operations is as follows (in thousands):

	Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended
	3/31/2013		3/31/2012		3/31/2013		3/31/2012
Net Sales	$	-	$	1,076	$	595	$	4,414
Operating Loss	$	-	$	(699)	$	(148)	$	(1,297)

The operating loss reported for CBU above does not include corporate costs previously allocated between the Company’s operating segments, which remain with the Company.

Information regarding CBU’s assets and liabilities included in the accompanying consolidated balance sheets is as follows (in thousands):

	March 31, 2013		June 30, 2012
Accounts receivable	$	-	$	779
Inventory	$	-	$	192
Fixed assets	$	-	$	308
Other assets	$	-	$	86
Accounts payable and accrued liabilities	$	30	$	1,443

In the first quarter of fiscal 2012, the Company recorded a $957,000 loss from discontinued operations, net of $493,000 in taxes, that related to a settlement of a lawsuit filed in November 2002 by Industries GDS, Inc., Bois Granval GDS Inc., and Centre de Preparation GDS, Inc. (collectively, “GDS”) in the Superior Court of the Judicial District of Quebec, Canada against the Company, Carbotech, Inc. (“Carbotech”), and U.S. Natural Resources, Inc. (“USNR”), among others.  The suit alleged that the Company breached its contractual and warranty obligations as a manufacturer in connection with the sale and installation of three systems for trimming and edging wood products involving the Company’s discontinued Forest Product Business Unit.    The Company agreed to settle the suit for $2.0 million Canadian dollars (approximately $1.9 million using a September 30, 2011 exchange rate).  The Company also had accruals related to this matter of approximately $500,000.  The Company paid the litigation settlement in full for $2.0 million on October 28, 2011 and the Company incurred a foreign currency loss on the transaction of $52,000, net of $27,000 in taxes in the second quarter of fiscal 2012.