Discontinued Operations and Assets Held for Sale (Tables)

3 Months Ended

Apr. 30, 2013

Discontinued Operations and Assets Held for Sale [Abstract]

Schedule of financial information of discontinued operation

The following is selected financial information included in net (loss) earnings from discontinued operations for two divisions classified within the printing segment and reflects interest on estimated debt required to be repaid as a result of these disposal transactions and excludes any general corporate overhead allocations. The interest expense allocated to discontinued operations for the three months ended April 30, 2013 and 2012, was $4,000 and $68,000 and for the six months ended April 30, 2013 and 2012 was $12,000 and $136,000.

	Three Months Ended April 30,
		2013						2012
		CGC		Donihe		Total			CGC		Donihe			Total
Net sales	$	-	$	(5,032	) $	(5,032	)	$	4,139,848	$	1,955,120		$	6,094,968
(Loss) earnings from discontinued operations		-		(101,427	)	(101,427	)		75,932		(29,552	)		46,380
Income tax benefit (expense)		-		-		-			(31,011	)	9,859			(21,152	)
Gain on sale of discontinued operations		-		-		-			-		-			-
Income tax (expense) on sale		-		-		-			-		-			-
Net (loss) earnings from discontinued operations	$	-	$	(101,427	) $	(101,427	)	$	44,921	$	(19,693	)	$	25,228

	Six Months Ended April 30,
		2013					2012
		CGC		Donihe		Total		CGC		Donihe		Total
Net sales	$	-	$	637,176	$	637,176	$	7,911,661	$	3,259,007	$	11,170,668
(Loss) earnings from discontinued operations		-		(397,780)		(397,780)		119,101		(72,410)		46,691
Income tax benefit (expense)		-		-		-		(48,641)		24,156		(24,485)
Gain on sale of discontinued operations		-		-		-		-		-		-
Income tax (expense) on sale		-		-		-		-		-		-
Net (loss) earnings from discontinued operations	$	-	$	(397,780)	$	(397,780)	$	70,460	$	(48,254)	$	22,206

The major classes of assets and liabilities held for sale and of discontinued operations included in the Consolidated Balance Sheets are as follows (see Note 5 for discussion of debt allocated to liabilities held for sale/discontinued operations):

		Held for sale		Discontinued Operations		Total		Held for sale		Discontinued Operations		Total
		April 30, 2013						October 31, 2012
Assets:
Accounts Receivable	$	-	$	188,001	$	188,001	$	-	$	777,740	$	777,740
Inventories		-		-		-		-		283,467		283,467
Other current assets		-		14,317		14,317		-		-		-
Property and equipment, net		369,073		-		369,073		1,219,073		425,000		1,644,073
Total current assets		369,073		202,318		571,391		1,219,073		1,486,207		2,705,280
Property and equipment, net		-		-		-		-		-		-
Other assets		-		-		-		-		-		-
Total noncurrent assets		-		-		-		-		-		-
Total assets held for sale/discontinued operations	$	369,073	$	202,318	$	571,391	$	1,219,073	$	1,486,207	$	2,705,280

Liabilities:
Accounts payable	$	-	$	35,864	$	35,864	$	-	$	278,266	$	278,266
Deferred revenue		-		-		-		-		4,726		4,726
Accrued payroll and commissions		-		-		-		-		55,310		55,310
Taxes accrued and withheld		-		40,988		40,988		-		138,148		138,148
Accrued expenses		-		-		-		-		43,103		43,103
Debt (see Note 5)		369,073		125,466		494,539		1,219,073		966,654		2,185,727
Total current liabilities		369,073		202,318		571,391		1,219,073		1,486,207		2,705,280
Total noncurrent liabilities		-		-		-		-		-		-
Total liabilities held for sale/discontinued operations	$	369,073	$	202,318	$	571,391	$	1,219,073	$	1,486,207	$	2,705,280

The Company is currently evaluating the sale or potential sale of either segments or divisions or operations within segments for each of the Company's three operating segments. Except as disclosed herein these evaluations have not met the applicable GAAP requirements for classification as assets held for sale at the balance sheet date of April 30, 2013, however as further discussed below there is a higher probability that these divisions/segments may meet the criteria as held for sale after the balance sheet date of April 30, 2013 and the Company has provided the applicable disclosure.

Assets held for sale

As a result of the provisions of the May 2013 Forbearance Agreement the Company has agreed to pursue the sale of certain assets. In addition, the Company notified the secured lenders of an additional division it is pursuing a sale of that is not required pursuant to the terms of the May 2013 Forbearance Agreement. As a result of this process the Company has identified two operating divisions and one segment which it is actively working to sell as defined below. The Company began actively soliciting letters of interest for one of the transactions prior to quarter end and has received letters of interest subsequent to April 30, 2013 for all three assets sales identified below. The Company has received a letter of interest for the newspaper segment but as of the date of filing this quarterly report has not executed this letter. The Company has agreed in principle to a letter of interest regarding the printing division and is actively engaged in discussions regarding an asset purchase agreement for the printing division. The letter of interest for the office furniture division did not meet the Company or May 2013 Forbearance Agreement requirements. If the Company is able to successfully negotiate applicable asset purchase agreements and attain lender approval, it is possible some of these transactions may close in the third or fourth quarter of 2013. The following is a summary of the assets which are currently being classified as held and used but which subsequent to quarter end have been determined to have a higher degree of probability of meeting the classification of held for sale:

		April 30, 2013
		Printing Division		Office Furniture Division		Newspaper Segment		Total
Assets (excludes certain divisional assets):
Accounts receivable, net	$	211,958	$	1,783,010	$	1,170,011	$	3,164,979
Inventory		106,526		186,877		321,501		614,904
Prepaid expenses and other current assets		29,550		56,548		172,514		258,612
Total current assets		348,034		2,026,435		1,664,026		4,038,495
Long-term assets :
Property, plant and equipment, net		977,243		83,064		3,462,044		4,522,351
Intangible assets		-		-		5,054,635		5,054,635
Total long-term assets		977,243		83,064		8,516,679		9,576,986
Total assets	$	1,325,277	$	2,109,499	$	10,180,705	$	13,615,481

Liabilities (excludes debt allocation):
Accounts payable	$	180,314	$	565,930	$	178,421	$	924,665
Deferred revenue		-		-		765,548		765,548
Accrued payroll and commissions		15,564		210,906		318,773		545,243
Taxes accrued and withheld		49,625		92,805		145,466		287,896
Accrued expenses		39,594		14,256		-		53,850
Total liabilities	$	285,097	$	883,897	$	1,408,208	$	2,577,202

- Definition

Tabular disclosure of long lived assets held for sale. Disclosure may include the description of the facts and circumstances leading to the expected disposal, manner and timing of disposal, the carrying value of the assets held for sale, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss).

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- Definition

Tabular disclosure of disposal groups, which may include the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the classification and carrying value of the assets and liabilities comprising the disposal group, and the segment in which the disposal group was reported. Also may include the amount of adjustments to amounts previously reported in discontinued operations such as resolution of contingencies arising from the disposal transaction or the operations of the component prior to disposal.

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