Acquisition (Tables)

12 Months Ended

Mar. 03, 2018

Acquisition

Schedule of purchase price allocation

Final purchase price
Cash consideration	$	1,882,211
Stock consideration		240,907
Total	$	2,123,118
Final purchase price allocation
Cash and cash equivalents	$	103,834
Accounts receivable		892,678
Inventories		7,276
Prepaid expenses and other current assets		13,386
Total current assets		1,017,174
Property and equipment		13,196
Intangible assets(1)		646,600
Goodwill		1,639,355
Other assets		7,219
Total assets acquired		3,323,544
Accounts payable		491,672
Reinsurance funds held		381,225
Other current liabilities(2)		215,770
Total current liabilities		1,088,667
Other long term liabilities(3)		111,759
Total liabilities assumed		1,200,426
Net assets acquired	$	2,123,118

(1)           Intangible assets are recorded at estimated fair value, as determined by management based on available information which includes a final valuation prepared by an independent third party. The fair values assigned to identifiable intangible assets were determined through the use of the income approach, specifically the relief from royalty and the multi-period excess earnings methods. The major assumptions used in arriving at the estimated identifiable intangible asset values included management's estimates of future cash flows, discounted at an appropriate rate of return which are based on the weighted average cost of capital for both the Company and other market participants, projected customer attrition rates, as well as applicable royalty rates for comparable assets. The useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flows. The estimated fair value of intangible assets and related useful lives as included in the final purchase price allocation include:

	Estimated Fair Value		Estimated Useful Life (In Years)
Customer relationships	$	465,000		17
CMS license		57,500		25
Claims adjudication and other developed software		59,000		7
Trademarks		20,100		10
Backlog		11,500		3
Trademarks		33,500		Indefinite
Total	$	646,600

(2)	Other current liabilities includes $116,057 due to TPG under the terms of the Agreement, representing the amounts due to EnvisionRx from CMS, less corresponding amounts due to various reinsurance providers under certain reinsurance programs, for CMS activities that relate to the year ended December 31, 2014. This liability was satisfied with a payment to TPG on November 5, 2015.
(3)	Primarily relates to deferred tax liabilities.

Schedule of estimated fair value of intangible assets and related useful lives as included in the final purchase price allocation

	Estimated Fair Value		Estimated Useful Life (In Years)
Customer relationships	$	465,000		17
CMS license		57,500		25
Claims adjudication and other developed software		59,000		7
Trademarks		20,100		10
Backlog		11,500		3
Trademarks		33,500		Indefinite
Total	$	646,600

Schedule of unaudited pro forma combined financial data

	Year Ended
	March 3, 2018 (52 weeks)			March 4, 2017 (53 weeks)			February 27, 2016 (52 weeks)
	Pro forma			Pro forma			Pro forma
Net revenues as reported	$	21,528,968		$	22,927,540		$	20,770,237
EnvisionRx revenue, prior to the acquisition		—			—			1,735,635
Less pre-acquisition intercompany revenue		—			—			(103,363	)
Pro forma combined revenues	$	21,528,968		$	22,927,540		$	22,402,509
Net income as reported	$	943,470		$	4,053		$	165,465
EnvisionRx net (loss) income before income taxes, prior to the acquisition		—			—			(45,307	)
Incremental interest expense on the 6.125% Notes issued on April 2, 2015		—			—			(11,097	)
Incremental amortization resulting from fair value adjustments of the identifiable intangible assets		—			—			(14,297	)
Transaction costs incurred by both the Company and EnvisionRx		—			—			56,194
Interest expense incurred by EnvisionRx		—			—			21,984
Debt extinguishment charges incurred by EnvisionRx		—			—			31,601
Income tax expense relating to pro forma adjustments		—			—			(15,866	)
Pro forma net income	$	943,470		$	4,053		$	188,677
Net income (loss) from discontinued operations		1,293,002			(27	)		63,377
Pro forma net (loss) income from continuing operations	$	(349,532	)	$	4,080		$	125,300
Basic (loss) income per share:
Continuing operations	$	(0.33	)	$	0.00		$	0.12
Discontinued operations		1.23			(0.00	)		0.06
Net basic income per share	$	0.90		$	0.00		$	0.18
Diluted (loss) income per share:
Continuing operations	$	(0.33	)	$	0.00		$	0.12
Discontinued operations		1.23			(0.00	)		0.06
Net diluted income per share	$	0.90		$	0.00		$	0.18