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DISCONTINUED OPERATIONS
 3 Months Ended
Aug. 31, 2013
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS
Financial Summary – Discontinued Operations
Summary financial results for the three months ended August 31, 2013, and September 1, 2012, are presented in the following table (in thousands):

Three Months Ended

August 31, 2013
 
September 1, 2012
Net sales
$
86

 
$
221

Gross profit (loss) (1)
(49
)
 
(93
)
Selling, general, and administrative expenses (2)
32

 
65

Income tax provision (benefit)
(70
)
 
(71
)
Loss from discontinued operations, net of tax
$
(11
)
 
$
(87
)

Notes:
(1) Gross profit (loss) for fiscal year 2014 and 2013 includes unabsorbed manufacturing labor and overhead expenses related to the Manufacturing Agreement with RFPD.
(2) Selling, General, and Administrative expenses relates primarily to tax audits resulting from the Transaction.
Net sales and gross profit (loss) for the three months ended August 31, 2013, reflect our financial results relating to the Manufacturing Agreement with Arrow that we entered into in connection with the Transaction. Pursuant to the three-year agreement, we agreed to continue to manufacture certain RFPD products.
Assets and liabilities classified as discontinued operations on our consolidated balance sheets as of August 31, 2013, and June 1, 2013, include the following (in thousands):

August 31, 2013
 
June 1, 2013
Inventories
$
338

 
$
303

Discontinued operations - Assets
$
338

 
$
303

 
 
 
 
Accrued liabilities - current (1)
$
541

 
$
245

Discontinued operations - Liabilities
$
541

 
$
245


(1) Included in accrued liabilities as of August 31, 2013, is $0.5 million of other accrued liabilities primarily related to transition services.

In accordance with ASC 230, Statement of Cash Flows, entities are permitted but not required to separately disclose, either in the statement of cash flows or footnotes to the financial statements, cash flows pertaining to discontinued operations. Entities that do not present separate operating cash flow information related to discontinued operations must do so consistently for all periods presented, which may include periods long after the sale or liquidation of the operation. We did not have cash balances that were specific to RFPD and elected not to present separate cash flows from discontinued operations on our statement of cash flows.