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Discontinued Operations
 12 Months Ended
Feb. 28, 2018
Discontinued Operations  
Discontinued Operations

Note 4 – Discontinued Operations

On December 20, 2017, we completed the divestiture of the Nutritional Supplements segment through the sale of Healthy Directions LLC and its subsidiaries to Direct Digital, LLC. The Nutritional Supplements segment sold premium branded doctor formulated nutritional supplements, skincare and pain relief products through highly targeted catalog and other printed collateral mailings, online and direct response print, radio and television media.

The purchase price from the sale is comprised of $46.0 million in cash, paid at closing, and a supplemental payment with a target value of $25.0 million, payable on or before August 1, 2019. The final amount of the supplemental payment may be adjusted up or down based on the performance of Healthy Directions through February 28, 2018. In conjunction with the sale of the business, we have agreed to provide certain transition services for up to an eighteen-month period following the closing of the transaction.

The balance sheets associated with discontinued operations are presented below:

   

 

 

 

 

 

 

 

 

February 28,

 

 

February 28,

(in thousands)

 

2018

 

 

2017

Assets

 

 

 

 

 

Receivables

$

 -

 

$
512

Inventory

 

 -

 

 
8,245

Prepaid expenses and other current assets

 

 -

 

 
2,031

Property and equipment, net

 

 -

 

 
8,433

Goodwill

 

 -

 

 
96,609

Other intangible assets, net

 

 -

 

 
83,485

Other assets, net

 

 -

 

 
599

Assets of discontinued operations

$

 -

 

$
199,914

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Accounts payable, principally trade

 

 -

 

 

6,111

Accrued expenses and other current liabilities(1)

 

 -

 

 

5,862

Other liabilities, noncurrent

 

 -

 

 

4,319

Liabilities of discontinued operations

$

 -

 

$
16,292

 

 

The results of operations associated with discontinued operations are presented in the following table:

 

 

 

 

 

 

 

 

 

Fiscal Years Ended the Last Day of February,

(in thousands)

 

2018 (2)

 

2017

 

2016

Sales revenue, net

$

99,013

$

130,543

$

153,126

Cost of goods sold

 

28,744

 

37,632

 

42,855

Gross profit

 

70,269

 

92,911

 

110,271

 

 

 

 

 

 

 

Selling, general and administrative expense ("SG&A")

 

72,419

 

88,742

 

95,950

Asset impairment charges (3)

 

132,297

 

9,500

 

 -

Restructuring charges

 

621

 

 -

 

 -

Operating income (loss)

 

(135,068)

 

(5,331)

 

14,321

 

 

 

 

 

 

 

Gain on sale before income tax

 

1,624

 

 -

 

 -

Interest expense

 

(367)

 

(497)

 

(515)

Income (loss) before income tax

 

(133,811)

 

(5,828)

 

13,806

 

 

 

 

 

 

 

Income tax benefit (expense)

 

49,375

 

2,207

 

(5,569)

Income (loss) from discontinued operations

$

(84,436)

$

(3,621)

$

8,237

 

 

 

 

 

 

 

(1)

Includes cash overdrafts.

 

(2)

Includes approximately 9.6 months of operating results prior to the divestiture on December 20, 2017.

 

(3)

Includes goodwill impairment charges of $96.6 million and trademark impairment charges of $35.7 million during fiscal 2018 and trademark impairment charges of $9.5 million during fiscal 2017. Total after tax asset impairment charges were $83.5 million for fiscal 2018 and $5.9 million for fiscal 2017.