Discontinued Operations

6 Months Ended

Jan. 31, 2016

Discontinued Operations

3. Discontinued Operations

On July 31, 2013, the Company entered into a Stock Purchase Agreement (“ASV SPA”) to sell its bus business to Allied Specialty Vehicles, Inc. (“ASV”) for cash of $100,000, subject to closing adjustments for changes in the net assets sold from April 30, 2013, to the closing date. The Company’s bus business manufactured and sold transit and shuttle buses.

The sale was completed as of October 20, 2013, and the Company received the $100,000 on October 21, 2013, and an additional $5,043 in February 2014, representing the increase in bus net assets since April 30, 2013.

The results of operations for the bus business have been reported as discontinued operations in the Condensed Consolidated Statements of Income and Comprehensive Income for all periods presented.

The following table summarizes the results of discontinued operations:

	Three Months Ended January  31,						Six Months Ended January 31,
	2016			2015			2016			2015
Operating loss of discontinued operations before income taxes	$	(918	)	$	(2,564	)	$	(1,296	)	$	(2,999	)
Income tax benefit		(339	)		(945	)		(478	)		(1,104	)
Loss from discontinued operations, net of taxes	$	(579	)	$	(1,619	)	$	(818	)	$	(1,895	)

The operating loss of discontinued operations before income taxes for the three and six months ended January 31, 2016 and January 31, 2015 reflects expenses incurred directly related to the former bus operations, including ongoing costs related to liabilities retained by the Company under the ASV SPA for bus product liability and worker’s compensation claims occurring prior to the closing date of the sale.

As a result of the sale of the bus business, and in accordance with the ASV SPA, the Company is no longer the primary obligor to the taxing authorities for bus operations in certain states. Under the terms of the sale, the Company has agreed to indemnify ASV for any claims made by the taxing authorities after the date of sale for uncertain tax positions, but does not expect future losses under this guarantee to be material.