DISCONTINUED OPERATIONS
On April 28, 2012, the Company entered into an asset purchase agreement (“APA”) to sell certain assets of its blood collection, filtration and processing product line (the “Product Line”) to Haemonetics Corporation (“Haemonetics”) for approximately $550,000. The transaction involved the transfer of manufacturing facilities and equipment in Covina, California; Tijuana, Mexico; Ascoli, Italy and a portion of the Company’s operations in Fajardo, Puerto Rico. In addition to the manufacturing facilities and related equipment, the Company transferred Product Line related inventory and intangible assets. Haemonetics also assumed certain employee-related liabilities. The sale closed on August 1, 2012, and approximately 1,400 employees transitioned to Haemonetics at that time.
Separate from these manufacturing facilities, the Company also agreed to transfer related blood media manufacturing capabilities and assets to Haemonetics. The transfer of the related media lines is expected to be completed by calendar year 2016. Until that time, the Company is providing these media products to Haemonetics under a supply agreement. Under the terms of the APA, approximately $535,000 was paid upon closing, with the balance of the purchase price payable upon the Company’s delivery of the aforementioned blood media manufacturing capability and related assets.
The Product Line, which was a component of the Company’s Life Sciences segment, met the criteria for discontinued operations and held for sale presentation during the third quarter of fiscal year 2012 and has been reported as a discontinued operation in the Company’s consolidated financial statements. The Company did not allocate any portion of the Company’s interest expense to discontinued operations.
The key components of discontinued operations for the three years ended July 31, 2013, 2012 and 2011 were as follows:
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| | | | | | | | | | | | |
| | 2013 | | 2012 | | 2011 |
Net sales | | $ | 8,975 |
| | $ | 230,826 |
| | $ | 223,721 |
|
| | | | | | |
Earnings from discontinued operations before income taxes | | $ | 390,058 |
| | $ | 55,684 |
| | $ | 50,803 |
|
Provision for income taxes | | 145,085 |
| | 17,322 |
| | 14,504 |
|
Earnings from discontinued operations, net of income taxes | | $ | 244,973 |
| | $ | 38,362 |
| | $ | 36,299 |
|
Included in earnings from discontinued operations before income taxes above are a gain/(loss) on the sale of the Product Line of $395,893 for the year ended July 31, 2013, and $9,150 of external costs related to the planned sale of the Product Line for the year ended July 31, 2012.
As of July 31, 2012 the aggregate components of assets and liabilities classified as held for sale in the consolidated balance sheet as of July 31, 2012 consisted of the following:
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| | | | |
| | Jul 31, 2012 |
Inventory | | $ | 40,090 |
|
Prepaid expenses and other current assets | | 1,883 |
|
Total current assets | | $ | 41,973 |
|
| | |
Property, plant and equipment | | $ | 75,506 |
|
Goodwill | | 18,514 |
|
Intangible assets | | 524 |
|
Other non-current assets | | — |
|
Total non-current assets | | $ | 94,544 |
|
Total assets | | $ | 136,517 |
|
| | |
Total liabilities | | $ | 2,643 |
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