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Discontinued Operations
 6 Months Ended
Oct. 31, 2012
Discontinued Operations [Abstract]  
Discontinued Operations

(3) Discontinued Operations:

Based on a combination of factors occurring since our July 2009 acquisition of SWSS, including federal and corporate budgetary constraints, increased price competition, and a fundamental change in our strategic direction, on October 5, 2011, we committed to a plan to divest the assets, liabilities, and ongoing operations of our security solutions division. On July 10, 2012, we entered into an Asset Purchase Agreement with FutureNet Group, Inc. (“FutureNet”) providing for FutureNet to acquire substantially all of the assets and assume certain of the liabilities of SWSS for a purchase price of $8.3 million, including an $824,000 working capital adjustment. On July 26, 2012, we completed the disposition of SWSS and received $5.5 million in cash and recorded a receivable equal to $2.8 million for the remaining portion of the purchase price. During the three months ended October 31, 2012, we received $2.0 million related to this receivable. We expect to receive the additional working capital adjustment included in prepaid expenses and other current assets of $824,000, which is subject to further adjustment, prior to the end of fiscal 2013. Prior to the disposition, we presented the assets and liabilities on separate lines as held for sale on our consolidated balance sheets. The operating results of SWSS are classified as discontinued operations and are presented in a separate line in the consolidated statements of income/(loss) and comprehensive income/(loss) for all periods presented. In connection with the divestiture of SWSS, we sold net assets of $13.0 million and incurred $1.6 million in closing-related costs, including $655,000 of legal, professional, and investment banking fees and $918,000 of severance and employee-related costs. During the prior fiscal year, we recognized a loss on sale of $5.8 million relating to the disposal group and we recorded an additional $798,000 loss during the six months ended October 31, 2012, which is included in the loss from discontinued operations. The loss before income taxes for the three months ended October 31, 2012 primarily related to professional fees associated with retained liabilities as well as interest expense.

The following is a summary of the operating results of the discontinued operations (in thousands):

 

                                 
    For the Three Months Ended October 31,     For the Six Months Ended October 31,  
    2012     2011     2012     2011  

Net sales from discontinued operations

   $ —       $ 5,987     $ 6,732     $ 13,448  

Loss before income taxes

   $ (867 )    $ (4,004 )    $ (2,550 )    $ (6,706 ) 

Income tax benefit (a)

   $ (5,651 )    $ (1,465 )    $ (6,249 )    $ (2,681 ) 

Net loss from discontinued operations

   $ 4,784     $ (2,539 )    $ 3,699     $ (4,025 ) 

 

 

(a) Income tax benefit for the three and six months ended October 31, 2012 primarily related to the future tax benefit we recorded resulting from the sale of SWSS.