DISCONTINUED OPERATIONS

The Company entered into an Asset Purchase Agreement on October 2, 2009, a First Amendment to the Asset Purchase Agreement on November 30, 2009, a Side Letter to the Asset Purchase Agreement on January 8, 2010, and a second Side Letter to the Asset Purchase Agreement on February 15, 2010 (collectively, the “APA”) to sell Altec Lansing, its AEG segment ("AEG"), which was completed effective December 1, 2009. AEG was engaged in the design, manufacture, sales and marketing of audio solutions and related technologies. All of the revenues in the AEG segment were derived from sales of Altec Lansing products. All operations of AEG have been classified as discontinued operations in the Consolidated statement of operations for all periods presented.

Pursuant to the APA, the Company received approximately $11.1 million upon closing of the transaction. In addition, the Company originally recorded $5.1 million in contingent escrow assets, which consisted primarily of amounts for (1) potential customer short payments on accounts receivable for sales related reserves that were sold to the Purchaser, (2) potential indemnification obligations, and (3) potential adjustments related to the final valuation of net assets sold in comparison to the target net asset value. In the fourth quarter of fiscal 2010, the Company received $2.1 million of the escrow and released $1.4 million of the escrow for potential customer short payments as this was not utilized. In the third quarter of fiscal 2011, the Company received the remaining escrow amounts totaling $1.6 million.

Under the terms of the APA, the Company sold the following net assets, valued at their book value (in thousands):



Inventory, net	$	17,702
Sales related reserves included in Accounts receivable, net	(4,724		)
Property, plant and equipment, net	1,012
Warranty obligation accrual	(383		)
Accrual for inventory claims at manufacturers	(657		)
Adjustment for final assets transferred	(1,893		)
Total net assets sold	$	11,057

The Company retained all existing AEG related accounts receivable, accounts payable and certain other liabilities as of the close date.

The Company recorded a loss of $0.6 million in fiscal 2010 on the sale of Altec Lansing which was calculated as follows (in thousands):



Proceeds received upon close	$	11,075
Escrow payments received to date	2,065
Remaining escrow payments to be received (subsequently received in fiscal 2011)	1,625
Payment to purchaser for adjustment for final value of net assets under APA	(3,956		)
Total estimated proceeds	10,809
Book value of net assets sold	(11,057		)
Costs incurred upon closing	(363		)
Loss on sale of AEG	$	(611	)

There was no income or loss from discontinued operations for the year ended March 31, 2011. The results from discontinued operations for the years ended March 31, 2010 and 2009 were as follows:



(in thousands)	Years Ended March 31,
	2010			2009
Net revenues	$	64,916		$	91,029
Cost of revenues	(53,127		)	(86,932		)
Operating expenses	(16,433		)	(28,144		)
Impairment of goodwill and long-lived assets	(25,194		)	(117,464		)
Restructuring and other related charges	(19		)	(1,122		)
Loss on sale of AEG	(611		)	—
Loss from operations of discontinued AEG segment (including loss on sale of AEG)	(30,468		)	(142,633		)
Tax benefit from discontinued operations	(11,393		)	(32,392		)
Loss on discontinued operations, net of tax	$	(19,075	)	$	(110,241	)