Acquisition (Tables)

12 Months Ended

Feb. 27, 2016

Preliminary purchase price
Cash consideration	$	1,882,211
Stock consideration		240,907

Total	$	2,123,118


Preliminary purchase price allocation
Cash and cash equivalents	$	103,834
Accounts receivable		896,473
Inventories		7,276
Prepaid expenses and other current assets		13,386

Total current assets		1,020,969
Property and equipment		13,196
Intangible assets(1)		646,600
Goodwill		1,637,351
Other assets		7,219

Total assets acquired		3,325,335

Accounts payable		491,672
Reinsurance funds held		381,225
Other current liabilities(2)		216,937

Total current liabilities		1,089,834
Other long term liabilities(3)		112,383

Total liabilities assumed		1,202,217

Net assets acquired	$	2,123,118


(1)	Intangible assets are recorded at estimated fair value, as determined by management based on available information which includes a preliminary valuation prepared by an independent third party. The fair values assigned to identifiable intangible assets were determined through the use of the income approach, specifically the relief from royalty and the multi-period excess earnings methods. The major assumptions used in arriving at the estimated identifiable intangible asset values included management's preliminary estimates of future cash flows, discounted at an appropriate rate of return which are based on the weighted average cost of capital for both the Company and other market participants, projected customer attrition rates, as well as applicable royalty rates for comparable assets. The useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flows. The estimated fair value of intangible assets and related useful lives as included in the preliminary purchase price allocation include:

		Estimated Fair Value		Estimated Useful Life (In Years)
Customer relationships		$	465,000		17
CMS license			57,500		25
Claims adjudication and other developed software			59,000		7
Trademarks			20,100		10
Backlog			11,500		3
Trademarks			33,500		Indefinite

Total		$	646,600



(2)	Other current liabilities includes $116,500 due to TPG under the terms of the Agreement, representing the amounts due to EnvisionRx from CMS, less corresponding amounts due to various reinsurance providers under certain reinsurance programs, for CMS activities that relate to the year ended December 31, 2014. This liability was satisfied with a payment to TPG on November 5, 2015.
(3)	Primarily relates to deferred tax liabilities.

	Estimated Fair Value		Estimated Useful Life (In Years)
Customer relationships	$	465,000		17
CMS license		57,500		25
Claims adjudication and other developed software		59,000		7
Trademarks		20,100		10
Backlog		11,500		3
Trademarks		33,500		Indefinite

Total	$	646,600

	Year Ended
	February 27, 2016 (52 weeks)			February 28, 2015 (52 weeks)
	Pro forma			Pro forma
Net revenues as reported	$	30,736,657		$	26,528,377
EnvisionRx revenue, prior to the acquisition		1,735,635			4,273,016
Less pre-acquisition intercompany revenue		(103,363	)		(272,530	)

Pro forma combined revenues	$	32,368,929		$	30,528,863
Net income as reported	$	165,465		$	2,109,173
EnvisionRx net (loss) income before income taxes, prior to the acquisition		(45,307	)		14,031
Incremental interest expense on the 6.125% Notes issued on April 2, 2015		(11,097	)		(115,407	)
Incremental amortization resulting from fair value adjustments of the identifiable intangible assets		(14,297	)		(48,586	)
Transaction costs incurred by both the Company and EnvisionRx		56,194			16,199
Interest expense incurred by EnvisionRx		21,984			56,884
Debt extinguishment charges incurred by EnvisionRx		31,601			—
Income tax expense relating to pro forma adjustments		(15,866	)		—

Pro forma net income	$	188,677		$	2,032,294


Basic income per share	$	0.18		$	2.03
Diluted income per share	$	0.18		$	1.95