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Discontinued Operations & Gain on the Sale of the ASO Business Unit
 12 Months Ended
Jun. 30, 2016
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations & Gain on the Sale of the ASO Business Unit
Discontinued Operations & Gain on the Sale of the ASO Business Unit
 
In August 2014 the Company completed the previously announced sale of substantially all of its assets used in the Company’s former ASO business unit (the “Asset Sale”) to Lockheed Martin Corporation (the “Buyer”) for an agreed upon sales price of $61.0 million, less a working capital adjustment. The net sales price was $59.3 million, which included a working capital adjustment of $1.7 million and an indemnity holdback of $6.1 million. As of June 30, 2016, the Company had received the full net sales prices of $59.3 million. The indemnity holdback was being held in an escrow account under the terms of an escrow agreement until February 2016, (the 18-month anniversary of the consummation of the transaction). 100% of the indemnity holdback was released on February 25, 2016 and no further claims may be made. The ASO business unit consisted of: (i) ownership, operation and maintenance of spacecraft processing facilities in Titusville, Florida and Vandenberg Air Force Base, California; (ii) supporting government and commercial customers processing complex communication, earth observation and deep space satellite launches; (iii) designing and building spacecraft processing equipment and facilities; and (iv) providing propellant services including designing, building, and testing propellant service equipment for fueling spacecraft.
 
Additionally, as part of the Asset Sale, the Company used a portion of the proceeds to pay off the outstanding balance of its term loan of $5.7 million, which was secured by assets of the ASO business unit. As such, 100% of the interest expense on the debt was allocated to discontinued operations in the amount $63 thousand for the year ended 2015.
 
The sale of the former ASO business unit, which was previously reported within the Company’s former ASO business unit segment, resulted in a pre-tax gain of $25.4 million ($20.6 million after-tax) for the year ended June 30, 2015. The pre-tax gain on this sale reflects the excess of the sum of the cash proceeds received over the net book value of the net assets of the Company’s former ASO business unit.

The total pre-tax gain on the sale for the year ended June 30, 2015, includes the following (in thousands):
 
Cash proceeds from the sale of the ASO business
 
$
53,189

Receivable for indemnity holdback
 
6,100

Liabilities assumed by the Buyer
 
2,478

Net book value of assets sold
 
(36,175
)
Other
 
(156
)
Gain on sale of the former ASO business
 
$
25,436


   
Even though the Company was party to a transition services agreement that expired on August 22, 2015, it has been determined that the continuing cash flows generated by this agreement did not constitute significant continuing involvement in the operations of the former ASO business unit. As such, the operating results and cash flows related to the former ASO business unit have been separately reflected as discontinued operations for the year ended June 30, 2015.

The following table provides a reconciliation of the major components of income of the former ASO business unit to the amounts reported in the consolidated statements of operations (in thousands): 
 
 
 
 
Year Ended 
 June 30,
 
 
 
 
 
 
2016
 
2015
Major line items constituting income of discontinued operations
 
 
 
 
 
 

 
 

Revenue
 
 
 
 
 
$
—

 
$
2,807

Cost of revenue
 
 
 
 
 
—

 
(1,313
)
Selling, general and administrative
 
 
 
 
 
—

 
(128
)
Other expense, net
 
 
 
 
 
—

 
(63
)
Gain on sale of discontinued operations
 
 
 
 
 
—

 
25,436

Income tax expense
 
 
 
 
 
—

 
(6,138
)
Income on discontinued operations
 
 
 
 
 
$
—

 
$
20,601