DISCONTINUED OPERATIONS

On September 9, 2011, the Company sold the Cleo Christmas gift wrap business and certain of its assets to Impact. Impact acquired the Christmas gift wrap portion of Cleo’s business and certain of its assets relating to such business, including certain equipment, contract rights, customer lists, intellectual property and other intangible assets. Cleo’s remaining assets, including accounts receivable and inventory, were excluded from the sale. The purchase price was $7,500,000, of which $2,000,000 was paid in cash at closing. The remainder of the purchase price was paid through the issuance by Impact of an unsecured subordinated promissory note, which provided for quarterly payments of interest at 7% and principal payments as follows: $500,000 on March 1, 2012; $2,500,000 on March 1, 2013; and all remaining principal and interest on March 1, 2014. In the fourth quarter of fiscal 2013, the Company received a $2,000,000 principal payment in advance of the March 1, 2014 due date. All interest payments were paid timely and the final principal payment of $500,000 was received in March 2014. Liabilities of discontinued operations of $110,000, $233,000 and $389,000 were recorded in other current liabilities in the condensed consolidated balance sheet as of September 30, 2014, March 31, 2014 and September 30, 2013, respectively.

As a result of the sale of its Christmas gift wrap business, the Company has reported these operations as discontinued operations, as shown in the following table (in thousands):



	Three Months Ended September 30,				Six Months Ended September 30,
	2014		2013		2014		2013
Operating income	$	—	$	172	$	—	$	172
Discontinued operations, before income taxes	—		172		—		172
Income tax expense	—		60		—		60
Discontinued operations, net of tax	$	—	$	112	$	—	$	112