Discontinued Operations and Assets Held for Sale

3 Months Ended

Jan. 31, 2014

Discontinued Operations and Assets Held for Sale [Abstract]

Discontinued Operations and Assets Held for Sale

11. Discontinued Operations and Assets Held for Sale

As part of the Company’s revised restructuring plan submitted to the Company’s secured lenders in July 2012 the Company determined that a division within the printing segment met the criteria of an asset held for sale at July 31, 2012 (Donihe). Therefore, in accordance with applicable accounting guidance the Company has determined the associated assets and liabilities of this division should be classified as assets and liabilities held for sale/discontinued operations at January 31, 2014 and October 31, 2013. In accordance with the applicable accounting guidance for the disposal of long-lived assets, the results of Donihe are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented.

The Company has also identified certain long-lived assets that are being included as a component of assets held for sale for the Merten division ("Merten") which currently retains a sales presence in Cincinnati, Ohio. As part of the Company’s revised restructuring plan submitted to the Company’s secured lenders in July 2012 the Company determined that certain printing segment assets met the criteria of an asset held for sale of Merten. Therefore, in accordance with applicable accounting guidance the Company has determined certain long-lived assets of this division should be classified as assets held for sale at October 31, 2012 (These assets were sold in December 2012).

In December 2012, the Company completed the sale of substantially all of the property and equipment at Donihe and Merten for $1,050,000, net of commissions, and in December 2012, the Company completed the sale of Donihe real estate for $175,000.

The Company identified two Company owned facilities within the printing segment that the Company intended to sell as a result of the Company’s Revised Restructuring Plan. These facilities were carried at their carrying amount which the Company believes to currently be lower than the estimated fair value less cost to sell.

The Company sold substantially all of the assets of its Blue Ridge Printing, Co., Inc. ("Blue Ridge") subsidiary on June 25, 2013 to BRP Company, Inc. pursuant to an Asset Purchase Agreement. The Company received approximately $942,000 net of commissions at closing subsequently reduced by net liquidity adjustments approximating $22,000. Blue Ridge has historically been accounted for in the Company's printing segment. In accordance with the applicable accounting guidance for the disposal of long-lived assets, the results of Blue Ridge are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented.

On July 12, 2013, the Company’s wholly owned subsidiary Champion Publishing, Inc. sold substantially all the assets of its newspaper operations (The “Herald-Dispatch”) headquartered in Huntington, West Virginia to HD Media Company, LLC pursuant to an Asset Purchase Agreement. The Company received approximately $9,700,000 net of selling commissions, and pro-rated taxes.  The Herald-Dispatch has historically been accounted for in the Company’s former newspaper segment representing this segments only operating entity. In accordance with the applicable accounting guidance for the disposal of long-lived assets, the results of The Herald Dispatch are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented.

The following is selected financial information included in net earnings (loss) from discontinued operations for two divisions classified within the printing segment and the Herald-Dispatch previously classified within the newspaper segment until the sale of this segment and reflects interest on estimated debt required to be repaid as a result of these disposal transactions and excludes any general corporate overhead allocations. The interest expense allocated to discontinued operations for the three months ended January 31, 2013, was approximately $0.2 million.

	Three Months Ended January 31,
		2013
		Printing		Herald-Dispatch		Total
Net sales	$	1,282,794	$	3,552,242	$	4,835,036
Income (loss) from discontinued operations		(351,217	)	378,718		27,501
Income tax benefit (expense)		118,761		(142,284	)	(23,523	)
Gain on sale of discontinued operations		-		-		-
Income tax (expense) on sale		-		-		-
Net earnings (loss) from discontinued operations		(232,456	)	236,434		3,978

The major classes of assets and liabilities held for sale and of discontinued operations included in the Consolidated Balance Sheets are as follows (see Note 5 for discussion of debt allocated to liabilities held for sale/discontinued operations):

		Held for sale		Discontinued Operations		Total		Held for sale		Discontinued Operations		Total
		January 31, 2014						October 31, 2013
Assets:
Accounts Receivable	$	-	$	92,370	$	92,370	$	-	$	124,231	$	124,231
Inventories		-		-		-		-		-		-
Other current assets		-		-		-		-		-		-
Property and equipment, net		369,073		-		369,073		369,073		-		369,073
Other assets		-		-		-		-		-		-
Total current assets		369,073		92,370		461,443		369,073		124,231		493,304
Property and equipment, net		-		-		-		-		-		-
Other assets		-		-		-		-		-		-
Total noncurrent assets		-		-		-		-		-		-
Total assets held for sale/discontinued operations	$	369,073	$	92,370	$	461,443	$	369,073	$	124,231	$	493,304
Liabilities:
Accounts payable	$	-	$	-	$	-	$	-	$	-	$	-
Deferred revenue		-		-		-		-		-		-
Accrued payroll and commissions		-		-		-		-		-		-
Taxes accrued and withheld		-		-		-		-		315		315
Accrued expenses		-		-		-		-		-		-
Debt (see Note 5)		-		-		-		-		-		-
Total current liabilities		-		-		-		-		315		315
Total noncurrent liabilities - debt		369,073		92,370		461,443		369,073		123,916		492,989
Total liabilities held for sale/discontinued operations	$	369,073	$	92,370	$	461,443	$	369,073	$	124,231	$	493,304