Disposition of Discontinued Operations

6 Months Ended

Jul. 31, 2011

Disposition of Discontinued Operations [Abstract]

DISPOSITION OF DISCONTINUED OPERATIONS

NOTE 2 — DISPOSITION OF DISCONTINUED OPERATIONS

VLI, a wholly owned subsidiary representing the Company’s nutritional products business segment, completed the sale of substantially all of its assets (the “Asset Sale”) to NBTY Florida, Inc. (“NBTY”) in March 2011. The Asset Sale was consummated for an aggregate cash purchase price of up to $3,100,000 and the assumption by NBTY of certain trade payables and accrued expenses of VLI. NBTY also assumed the remaining minimum lease obligations related to VLI’s office, warehouse and manufacturing facilities which totaled approximately $400,000 as of the sale date. Of the cash purchase price, $800,000 was paid at closing and the remaining $2,300,000 was placed into escrow. VLI is being paid from the escrow amount (i) the cost of all pre-closing inventory sold, used or consumed within nine months of the closing, and (ii) the amounts of all pre-closing accounts receivable of VLI that are collected by September 30, 2011. After September 30, 2011, all uncollected accounts receivable will be transferred back to VLI at no cost. At the end of nine months of the closing, all money still held in the escrow account will be returned to NBTY. During the three and six months ended July 31, 2011, VLI received cash proceeds from the escrow account in the amounts of $1,076,000 and $1,678,000, respectively, relating primarily to the collection of accounts receivable. Amounts received from the escrow account are recorded as proceeds of the Asset Sale upon receipt.

The financial results of this business have been presented as discontinued operations in the accompanying condensed consolidated financial statements. The amount of net revenues of the discontinued operations for the six months ended July 31, 2011 was $1.5 million. The net revenues of the discontinued operations for the three and six months ended July 31, 2010 were $2.2 million and $4.9 million, respectively. Assets and liabilities of the discontinued operations classified as held for sale as of July 31 and January 31, 2011 included the following amounts:

	July 31,		January 31,
	2011		2011
Accounts receivable, net	$	—	$	1,197,000
Inventories, net		—		1,086,000
Deferred tax and other current assets		695,000		4,071,000
Total current assets		695,000		6,354,000
Deferred tax and other noncurrent assets		204,000		625,000
Total assets held for sale	$	899,000	$	6,979,000
Accounts payable	$	25,000	$	906,000
Accrued expenses		19,000		456,000
Total liabilities related to assets held for sale	$	44,000	$	1,362,000

Assets held for sale at July 31, 2011 primarily included deferred tax assets relating to the additional tax loss expected to be recognized on the disposition and certain inventory items that remain available for sale and that are fully reserved.