Discontinued Operations

12 Months Ended

Dec. 31, 2012

Discontinued Operations

Discontinued Operations

16. Discontinued Operations

On August 31, 2010, the Company sold substantially all of the assets and liabilities of Simpson Dura-Vent to M&G Holding B.V. and M&G Dura-Vent, Inc. (collectively (“M&G”) pursuant to an agreement dated June 30, 2010. The Company decided to sell the assets of Simpson Dura-Vent to focus exclusively on the development of its other businesses. Simpson Dura-Vent represented the Company’s entire venting operations. The sale price was $28.3 million, of which $27.7 million was received on closing. The Company recorded a loss on sale of $0.7 million.

The results from discontinued operations, including the impairment charges described below, for the year ended December 31, 2010, were as follows:

(in thousands)

	Year Ended
	December 31
	2010 *
Net sales	$	33,372
Cost of sales	28,073
Gross profit	5,299
Operating expenses	6,683
Impairment charge	21,350
Loss on sale	657
Other expenses	28
Loss from discontinued operations	(23,419		)
Benefit from income taxes from discontinued operations	(7,207		)
Loss from discontinued operations, net of tax	$	(16,212	)

* The Company sold the discontinued operation on August 31, 2010.

The Company sold the following Simpson Dura-Vent net assets and liabilities, valued at their book value:

(in thousands)

Accounts receivable	$	11,925
Inventory	18,164
Other current assets	30
Accounts payable	(436		)
Other accrued liabilities	(680		)
Total net assets sold	$	29,003

The net loss of $0.7 million recorded on the sale of the Simpson Dura-Vent net assets and liabilities is calculated as follows:

(in thousands)

Net proceeds received	$	28,346
Carrying value of net assets sold	29,003
Loss on sale	$	657

In the second quarter of 2010, as a result of the entry into the agreement to sell assets of Simpson Dura-Vent, the Company recorded a pre-tax impairment charge of $21.4 million based on Level 2 fair value inputs, which included professional fees of $0.7 million, in discontinued operations. The assets impaired consisted of goodwill in the amount of $4.4 million, intangible assets of $1.6 million, fixed assets of $10.7 million, inventory of $3.8 million and other non-current assets of $0.2 million. The Company retained its real estate in Vacaville, California, all Simpson Dura-Vent balances related to cash, employee-related liabilities and specified long-term liabilities. On completion of the sale of the assets, the Company leased its facilities in Vacaville, California, to M&G for approximately $0.9 million per year for ten years.