DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2014

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

NOTE T - DISCONTINUED OPERATIONS

On November 5, 2014, the Audit Committee of the Board of Directors approved a plan to sell and/or otherwise dispose of the Company’s Dosteon distribution product group (“Dosteon”), a component of its Patient Care segment.  This action was taken following the conclusion of the Company’s strategic evaluation of this business in the fourth quarter of 2014.  In accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations, ASC 360-10 Property, Plant and Equipment - Overall, and ASC 350-20, Intangibles - Goodwill and Other - Goodwill, the operating results and cash flows of Dosteon have been presented separately as discontinued operations on the consolidated statements of operations and comprehensive (loss) income and the consolidated statements of cash flows, respectively, for the year ended December 31, 2014 and all comparable periods.  As discussed in further detail below, assets of these businesses that were expected to be disposed of by sale are reported as “Assets held for sale” on the Company’s consolidated balance sheets as of December 31, 2014.

On November 6, 2014, the Company entered into a definitive agreement to sell one of its Dosteon businesses primarily located in California for cash at closing of approximately $2.7 million.  The remaining portions of Dosteon were sold in 2015 for aggregate proceeds of approximately $4.9 million.  See Note V - “Subsequent Events” for additional information.

Assets held for sale on the Company’s consolidated balance sheets have been recorded at their lower of carrying amount at designation and expected fair value less costs to sell as of December 31, 2014.  These assets relate to businesses primarily located in Arizona, Colorado, and Washington state and are comprised of the following:

(in thousands)	As of  December 31,  2014
Inventory	$	5,428
Property and equipment, net	199
Goodwill	2,588
Total assets held for sale	$	8,215

Associated with the Company’s strategic evaluation and disposal of these businesses, $8.2 million of pre-tax impairment expenses have been recognized within “Loss from discontinued operations, net of income taxes” for the year ended December 31, 2014 on the Company’s consolidated statements of operations and comprehensive (loss) income.  The pre-tax impairment charges comprise of $4.2 million related to allocated goodwill, $2.4 million related to definite-lived intangibles assets, and $1.6 million related to property, plant and equipment.

The following is a summary of the Company’s operating results for discontinued operations:

	Year Ended December 31,
				(As Restated)			(As Restated)
(in thousands)	2014			2013			2012
Net revenue	$	37,856		$	42,693		$	39,279
Loss before income taxes from discontinued operations	(24,860		)	(8,725		)	(315		)
Income tax benefit	8,914			3,357			80
Loss from discontinued operations, net of tax	$	(15,946	)	$	(5,368	)	$	(235	)

The accounts receivable of Dosteon were not included within the sale and accordingly are not presented within “Assets held for sale,” through 2015.  The cash flows related to Dosteon discontinued operations are disclosed separately on the consolidated statements of cash flows for all periods presented.