Discontinued operations

6 Months Ended

Aug. 31, 2011

Discontinued operations [Abstract]

Discontinued operations

Note 15. — Discontinued operations

          On March 1, 2011, the Company sold its Fox International Ltd., Inc. subsidiary to FI Acquisitions, a company majority owned by the Company’s Chief Executive Officer. The Company put its Fox International Ltd. subsidiary up for auction on January 15, 2011, and gave all interested parties a thirty-day due diligence period that was later extended until March 23, 2011, to give any potential bidders more time. FI Acquisitions was the only bidder and paid the net book value, approximately $3.5 million, for Fox International Ltd. in a stock sale, satisfied by the Company’s Chief Executive Officer exchanging 800,000 shares of the Company’s stock valued at approximately $3.3 million, approximately $50 thousand in cash and a reduction in notes payable to officers and directors of approximately $200 thousand. As the sale was at net book value, no gain or loss was recorded by the Company. The Company accounted for this entire business segment as discontinued operations, and, accordingly, has reclassified the consolidated financial results for all periods presented to reflect this operating segment as discontinued operations.

          The Company sold its Fox International Ltd., Inc. subsidiary on March 1, 2011; therefore, there is no discontinued financial information for the six months ended August 31, 2011. Summarized financial information for discontinued operations for the three months and six months ended August 31, 2010, is as follows:

	Three Months Ended			Six Months Ended
	August 31, 2010			August 31, 2010
Net sales	$	4,988		$	11,044
Cost of goods sold		2,277			5,914
Gross profit		2,711			5,130
Operating expenses
Selling and delivery		806			1,719
General and administrative		1,713			3,398
		2,519			5,117
Operating loss from discontinued operations		192			13
Other income (expense)
Interest expense		(45	)		(92	)
Other, net		8			18
		(37	)		(74	)
Income(Loss) from discontinued operations before income taxes		155			(61	)
Income tax expense/benefit		(52	)		21
Income(Loss) from discontinued operations	$	103			(40	)

            For the three months and six months ended August 31, 2010, there was no interest allocated from corporate. The subsidiary had its own line of credit and interest expense.