DISCONTINUED OPERATIONS

12 Months Ended

Mar. 31, 2017

DISCONTINUED OPERATIONS [Abstract]

DISCONTINUED OPERATIONS

NOTE 3. DISCONTINUED OPERATIONS

On March 18, 2015, we entered into an asset purchase agreement (“APA”) with Antech pursuant to which we sold substantially all of the assets of our AVRL business. The sale transaction closed on March 31, 2015. The total purchase price under the APA was $21.0 million in cash. During the fourth quarter of fiscal 2015, we received $20.1 million in cash proceeds and we recorded a gain on sale of discontinued operations, net of tax of $7.7 million. During the fourth quarter of fiscal 2016, we recorded $0.6 million, net of tax, as a gain on sale of discontinued operations, upon meeting certain conditions by the first anniversary of the closing date in March 2016.

In accordance with ASC 205, “Presentation of Financial Statements – Discontinued Operations,” a business is classified as a discontinued operation when: (i) the operations and cash flows of the business can be clearly distinguished and have been or will be eliminated from our ongoing operations; (ii) the business has either been disposed of or is classified as held for sale; and (iii) the Company will not have any significant continuing involvement in the operations of the business after the disposal transactions. In accordance with the accounting guidance, the AVRL business represents a separate asset group and the sale of assets in this business qualifies as a discontinued operation.

In connection with the sale of our AVRL business, we recognized a pre-tax gain of $12.3 million ($7.7 million after-tax) on the sale of discontinued operations during fiscal 2015, and a pre-tax gain of $0.9 million ($0.6 million after-tax) on the sale of discontinued operations during fiscal 2016. The pre-tax gain on this sale reflects the excess of the sum of the cash proceeds received over the costs incurred in connection with the sale of AVRL. During the fourth quarter of fiscal 2015, we recorded costs of $7.8 million related to cash payments for employee-related costs, including severance, contract termination and other associated costs. In connection with the transaction, we recorded disposal of and an impairment charge on long-lived assets of $1.9 million during fiscal 2015. These items partially offset the cash proceeds that we received in accordance with the terms of the APA. The following table summarizes the components of the gain recognized in fiscal 2016 and 2015 (in thousands):

	Year Ended March 31,
	2016		2015
Cash proceeds received or realized	$	900	$	20,100
Less: Book value of net assets sold		—		(618	)
Less: Costs incurred directly attributable to the transaction		—		(5,211	)
Net proceeds from sale of discontinued operations		900		14,271
Less: Disposal and impairment of long-lived assets		—		(1,941	)
Gain on sale of discontinued operations		900		12,330
Income tax expense		341		4,648
Net gain on sale of discontinued operations	$	559	$	7,682

The results from discontinued operations were as follows (in thousands):

	Year Ended March 31,
	2017			2016			2015
Discontinued operations:
Revenues	$	713		$	760		$	14,202
Cost of revenues		713			985			12,614
Gross profit (loss)		—			(225	)		1,588
Operating expenses		101			(91	)		3,442
Other income (expense), net		—			127			—
Loss before income tax provision		(101	)		(7	)		(1,854	)
Income tax benefit		(38	)		(4	)		(700	)
Net loss of discontinued operations	$	(63	)	$	(3	)	$	(1,154	)
Gain on sale of discontinued operations, net of tax	$	—		$	559		$	7,682

The current and non-current assets and liabilities of discontinued operations were as follows (in thousands):

	March 31,
	2017		2016
Receivables, net	$	66	$	949
Prepaid expenses and other current assets		—		12
Total current assets of discontinued operations	$	66	$	961
Other current liabilities	$	85	$	112
Total current liabilities of discontinued operations	$	85	$	112