Discontinued Operations (Notes)

12 Months Ended

Nov. 02, 2014

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

On December 1, 2014, the Company completed the sale of its Computer Systems segment to NewNet Communication Technologies, LLC ("NewNet"), a Skyview Capital, LLC, portfolio company. The Company met all of the criteria to classify that segment's assets and liabilities as held for sale in the fourth quarter of fiscal year 2014. The results of the Computer Systems segment are presented as discontinued operations and excluded from continuing operations and from segment results for all periods presented. 

The proceeds of the transaction are a $10.0 million note bearing interest at one half percent (0.5 percent) per year due in 4 years and convertible into a capital interest of up to 20% in NewNet. The Company may convert the note at any time and is entitled to receive early repayment in the event of certain events such as a change in control of NewNet. The proceeds are in exchange for the ownership of Volt Delta Resources, LLC and its operating subsidiaries, which comprise the Company's Computer Systems segment, and payment of $4.0 million by the Company during the first 45 days following the transaction. An additional payment will be made between the parties based on the comparison of the actual transaction date working capital amount to an expected working capital amount of $6.0 million.

The Company will record the sale transaction in the first quarter of fiscal 2015.  The related costs associated with this transaction will approximate $1.6 million including severance and legal fees.

The following table reconciles the major classes of assets and liabilities classified as held for sale in our consolidated balance sheets (in thousands):

	November 2, 2014		November 3, 2013
Assets included as part of discontinued operations
Cash and cash equivalents	$	282	$	1,268
Trade accounts receivable, net	10,535		10,734
Recoverable income taxes	921		2,120
Prepaid insurance and other assets	9,251		11,698
Property, equipment and software, net	3,231		4,798
Total assets of the disposal group classified as held for sale in the consolidated balance sheets	$	24,220	$	30,618
Liabilities included as part of discontinued operations
Accrued compensation	$	2,272	$	2,036
Accounts payable	992		2,027
Accrued taxes other than income taxes	649		678
Accrued insurance and other	5,794		10,026
Deferred revenue	9,419		11,923
Total liabilities of the disposal group classified as held for sale in the consolidated balance sheets	$	19,126	$	26,690

Deferred tax assets of $6,842 and $7,012 are included in prepaid insurance and other assets as of November 2, 2014 and November 3, 2013, respectively. Deferred tax liabilities of $3,834 and $4,301 are included in accrued insurance and other as of November 2, 2014 and November 3, 2013, respectively.

The following table reconciles the major line items in the Company’s consolidated statements of operations for discontinued operations (in thousands):

	Year Ended
	November 2, 2014			November 3, 2013			October 28, 2012
Pretax income (loss) of discontinued operations
Net revenue	$	59,369		$	73,465		$	99,679
Cost of revenue	(54,358		)	(65,680		)	(68,281		)
Selling, administrative and other operating costs	(19,290		)	(24,314		)	(26,897		)
Other income (expense)	(1,533		)	(4,056		)	(1,390		)
Pretax income (loss) of discontinued operations	(15,812		)	(20,585		)	3,111
Income tax provision (benefit)	(211		)	(2,453		)	679
Total income (loss) from discontinued operations that is presented in the consolidated statements of operations	$	(15,601	)	$	(18,132	)	$	2,432