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Discontinued operations | 12 Months Ended
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Oct. 31, 2018
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued operations | Note 2 - Discontinued operations During 2013, the Company sold its RF Neulink and RadioMobile divisions, which together had comprised the Company’s RF Wireless segment. The divisions were sold pursuant to asset purchase agreements, whereby no purchase price was paid at the closing. Rather, the agreements stipulated royalty payments from each of the purchasers over a three-year period. For the years ended October 31, 2018 and 2017, the Company recognized approximately $0 and $174,000, respectively, of aggregate royalty income for RF Neulink and RadioMobile, which amounts have been included within discontinued operations. During March 2016, the Company announced the shutdown of its Bioconnect division, which comprised the entire operations of the Medical Cabling and Interconnect segment. The closure is part of the Company’s ongoing plan to close or dispose of underperforming divisions that are not part of the Company’s core operations. For the fiscal year ended October 31, 2018, no income was recognized related to the Bioconnect division. For the year ended October 31, 2017, the Company recognized approximately $10,000 of income related to the sale of equipment for the Bioconnect division, which amounts have been included within discontinued operations. The following summarized financial information related to the RF Neulink, RadioMobile and Bioconnect divisions is segregated from continuing operations and reported as discontinued operations for the year ended October 31, 2017 (in thousands):
|  | 2017 |
Royalties |  | $ | 174 |
Bioconnect |  |  | 10 |
Provision for income taxes |  |  | (68 | )
Income from discontinued operations, net of tax |  | $ | 116 |
On October 31, 2018, the Company sold all of the assets and liabilities of its subsidiary, Comnet Telecom Supply (“Comnet Telecom”). The Company and RAP Acquisition Inc. (“RAP Acquisition”), a New Jersey corporation, entered into a stock purchase agreement under which RAP Acquisition agreed to purchase 100% of the issued and outstanding shares of Comnet Telecom for a purchase price of $4,200,000 in cash. Comnet Telecom is a New Jersey-based manufacturer and supplier of telecommunications and data products, including fiber optics cables, cabling technologies, custom patch cord assemblies, data center consoles and other data center equipment. This division was one of the three subsidiaries of the “Custom Cabling Manufacturing and Assembly” segment. Comnet Telecom was acquired by the Company in January 2015 from Robert Portera, and has been a wholly-owned subsidiary of the Company since that time. Mr. Portera served as the President of Comnet Telecom during the period that Comnet Telecom was owned by the Company, and is the founder and principal of RAP Acquisition. For the years ended October 31, 2018 and 2017, the Company recognized pretax loss of $221,000 and pretax income of $168,000, respectively, from the discontinued operations of the Comnet Telecom division, and an income tax benefit of $41,000 and expense of $72,000, respectively. The major line items constituting the income (loss) of discontinued operations of Comnet are as follows (in thousands):
|  | Years Ended October 31, |
|  | 2018 |  |  | 2017 |
Major line items constituting pretax income from discontinued operations: |  |  |  |  |  |  |  |
Net sales |  | $ | 8,343 |  |  | $ | 7,981 |
Cost of sales |  |  | (6,199 | ) |  |  | (6,246 | )
Gross profit |  |  | 2,144 |  |  |  | 1,735 |
Selling, general and administrative expense |  |  | (1,569 | ) |  |  | (1,567 | )
Pretax income from discontinued operations |  |  | 575 |  |  |  | 168 |
Pretax loss on sale of Comnet |  |  | (796 | ) |  |  | - |
Total pretax income (loss) from discontinued operations |  |  | (221 | ) |  |  | 168 |
Provision (benefit) for income taxes |  |  | (41 | ) |  |  | 72 |
Income (loss) from discontinued operations |  | $ | (180 | ) |  | $ | 96 |
For the prior 2017 period presented on the consolidated balance sheet, the major classes of assets and liabilities of assets held for sale are as follows (in thousands):
|  | October 31, |
|  | 2017 |
Carrying amounts of major classes of assets included as part of discontinued operations: |  |  |  |
Cash and cash equivalents |  | $ | 831 |
Trade accounts receivable, net of allowance for doubtful accounts |  |  | 998 |
Inventories |  |  | 566 |
Other current assets |  |  | 239 |
Fixed assets, net |  |  | 146 |
Non-amortizable intangibles |  |  | 580 |
Intangibles, net of accumulated amortization |  |  | 1,387 |
Goodwill |  |  | 1,879 |
Total assets included in Comnet sale |  | $ | 6,626 |
Carrying amounts of major classes of liabilities included as part of discontinued operations: |  |  |  |
Accounts payable |  | $ | 320 |
Other liabilities |  |  | 451 |
Total liabilities included in Comnet sale |  | $ | 771 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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