Discontinued Operations

12 Months Ended

Jan. 31, 2013

Discontinued Operations [Abstract]

Discontinued Operations

Note 17—Discontinued Operations

On January 31, 2013, the Company completed the sale of substantially all of the assets of its Grass Technologies Product Group (Grass) which manufactured polysomnography and electroencephalography systems and related accessories and propriety electrodes for use in both research and clinical settings. The assets sold consisted primarily of working capital (exclusive of inventory and accounts payable related to manufacturing), the engineering, sales and support workforce, intellectual property and certain other related assets. The proceeds from the sale consisted of $18.6 million in cash, of which $1.8 million which is being held in escrow for twelve months following the closing date of the transaction in order to provide indemnity to the purchaser in the event of any breach in the representation, warranties and covenants of Astro-Med and is fully reserved for in Other Accrued Expenses in the accompanying consolidated balance sheet for the period ended January 31, 2013.

As part of this transaction, Astro-Med entered into a Transition Service Agreement with the purchaser in which the Company will provide transition services and continue to manufacture Grass products for the purchaser for a period of between nine and twelve months following the closing date, after which the purchaser will acquire any remaining inventory. The Company has determined that cash flows from this activity will not be significant and therefore Grass has been presented as a discontinued operation for all periods presented.

As a result of the above, the Company has classified the results of operations of the Grass Technologies Product Group as a discontinued operation for all periods presented.

Results for discontinued operations are as follows:

	2013		2012
(In thousands)
Net Sales	$	19,195	$	18,469
Cost of Sales	$	9,072	$	8,758
Gross Profit	$	10,123	$	9,711
Operating Expenses	$	6,205	$	6,122
Income from Discontinued Operations	$	3,918	$	3,589
Gain on Sale of Assets of Discontinued Operations	$	10,162	$	—
Income Tax Expense	$	5,351	$	1,198
Income from Discontinued Operations	$	8,729	$	2,391

Included in the above calculation of the Gain on Sale of Assets of Discontinued Operations is a charge of $779,000 related to the impairment of the Grass Technologies Product Group facility located in Rockland, Massachusetts. The impairment charge was based on the fair value of the facility, less costs to sell, using market values for similar properties which is a Level 2 measurement in the fair value hierarchy discussed in Note 15. This property is being actively marketed and sale of this property is considered probable within the next twelve months and as such, the property is classified as an asset held for sale in the accompanying balance sheets for the period ended January 31, 2013.