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Discontinued Operations | 12 Months Ended
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Apr. 30, 2014
Discontinued Operations | 3. Discontinued Operations On June 12, 2012, the Company acquired PowerReviews, Inc. (“PowerReviews”) for a total consideration of $150.8 million (See Note 6). On January 10, 2013, the U.S. Department of Justice (the “DOJ”) filed a complaint against the Company with the U.S. District Court for the Northern District of California, San Francisco Division (the “Court”), alleging that the Company’s acquisition of PowerReviews violated Section 7 of the Clayton Act, 15 U.S.C. Section 18 and seeking the Company’s divestiture of assets sufficient to create a competing business that can replace the competitive significance of PowerReviews in the marketplace. On January 8, 2014, the Court ruled that the Company’s acquisition of PowerReviews violated section 7 of the Clayton Act, 15 U.S.C. Section 18. On April 24, 2014, the Company entered into a Joint Stipulation with the DOJ to resolve the DOJ’s claims in the antitrust action challenging the acquisition of PowerReviews and, together with the DOJ, the Company submitted a proposed order to the Court. Under the terms of the Joint Stipulation and the proposed order, the Company is required to divest all of the net assets of the PowerReviews business. As a result of this, in accordance with accounting guidance, the Company has reported the results of operations and financial position of PowerReviews as discontinued operations within the consolidated statements of operations and balance sheets for all periods presented. Accordingly, PowerReviews revenues, related expenses and an estimated loss on disposal, net of tax, are components of “loss from discontinued operations” in the Consolidated Statement of Operations. On the Consolidated Balance Sheets, the assets and liabilities of the discontinued operations of PowerReviews have been presented as ‘Assets held for sale’ and ‘Liabilities held for sale,’ respectively. The statement of cash flows is reported on a combined basis without separately presenting cash flows from discontinued operations. On June 4, 2014, the Company entered into a definitive agreement with Wavetable, LLC, to divest the PowerReviews business for $30.0 million in cash. This transaction remains subject to closing conditions set forth in the definitive agreement (See Note 21). Summarized results from discontinued operations were as follows (in thousands):
|  | Year Ended April 30, |
|  | 2014 |  |  | 2013 |  |  | 2012 |
Revenues from discontinued operations |  | $ | 17,011 |  |  | $ | 13,484 |  |  | $ | — |
Loss from discontinued operations before income taxes |  | $ | (1,106 | ) |  | $ | (16,224 | ) |  | $ | — |
Income tax expense |  |  | 22 |  |  |  | 25 |  |  |  | — |
Net loss from discontinued operations |  |  | (1,128 | ) |  |  | (16,249 | ) |  |  | — |
Estimated loss on disposal of discontinued operations, net of tax |  |  | (9,192 | ) |  |  | — |  |  |  | — |
Net loss from discontinued operations, net of tax |  | $ | (10,320 | ) |  | $ | (16,249 | ) |  | $ | — |
The carrying amounts of the major classes of assets and liabilities of discontinued operations were as follows (in thousands):
|  | April 30, |
|  | 2014 |  |  | 2013 |
ASSETS: |  |  |  |  |  |  |  |
Accounts receivable, net |  | $ | 1,036 |  |  | $ | 1,679 |
Prepaid expenses and other current assets |  |  | 49 |  |  |  | 69 |
Total current assets |  |  | 1,085 |  |  |  | 1,748 |
Property and equipment, net |  |  | 37 |  |  |  | 132 |
Goodwill |  |  | 9,002 |  |  |  | 9,002 |
Acquired intangible assets, net |  |  | 32,813 |  |  |  | 41,173 |
Total assets |  | $ | 42,937 |  |  | $ | 52,055 |
LIABILITIES: |  |  |  |  |  |  |  |
Accounts payable |  | $ | 221 |  |  | $ | 275 |
Accrued expenses and other current liabilities |  |  | 895 |  |  |  | 2,431 |
Deferred revenue |  |  | 2,505 |  |  |  | 3,944 |
Total Liabilities |  | $ | 3,621 |  |  | $ | 6,650 |
The Company recorded an estimated loss on the disposal of discontinued operations of $9.2 million, net of tax, in fiscal year 2014 which was calculated as follows (in thousands):
Estimated cash proceeds |  | $ | 30,500 |
Less: |  |  |  |
Basis in net assets sold as of April 30, 2014 |  |  | 39,316 |
Estimated costs incurred directly attributable to the transaction |  |  | 658 |
Estimated loss before income taxes |  |  | (9,474 | )
Estimated income tax benefit |  |  | (282 | )
Estimated loss on disposal of discontinued operations, net of taxes |  | $ | (9,192 | )
The $9.2 million estimated loss on disposal of discontinued operations is preliminary and based estimated cash proceeds, estimated transaction costs, estimated income tax benefit and assets and liabilities as of the assumed date of consummation of April 30, 2014. It does not represent the actual loss based on the consideration of $30.0 million as per the definitive agreement executed on June 4, 2014 that will be recognized in the Company’s financial statements for the fiscal year ended April 30, 2015 (See Note 21). The carrying amount of assets held for sale in the consolidated balances sheet were calculated as follows (in thousands):
|  | April 30, |
|  | 2014 |  |  | 2013 |
Total assets of discontinued operations |  | $ | 42,937 |  |  | $ | 52,055 |
Estimated loss on disposal of discontinued operations, net of tax |  |  | (9,192 | ) |  |  | — |
Assets held for sale |  | $ | 33,745 |  |  | $ | 52,055 |

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- Definition The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6391110&loc=d3e2941-110230 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1361-107760 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e957-107759 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1012-107759 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1510-107760 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1020-107759 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 45 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=8077374&loc=d3e2443-110228 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1474-107760 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1436-107760 + Details
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