Discontinued Operations

9 Months Ended

Oct. 31, 2013

Discontinued Operations

11. Discontinued Operations

On July 31, 2013, the Company completed the sale of its SolmeteX operations to a third party. The Company had previously announced its plans to sell substantially all of the assets of SolmeteX as part of its One Layne strategy. SolmeteX was previously reported as part of the Water Resources division. Pursuant to the sale agreement, the Company received $750,000 in preferred units of SolmeteX, LLC and received $10.6 million of cash on August 1, 2013. The preferred units have a 4% yield accruing daily, compounded quarterly on the unreturned capital and unpaid preferred yield. The Company valued the units at $0.4 million based on the redemption timeline and the stated yield. The Company has recorded these preferred units at their valuation amount on the balance sheet as part of Other Assets. The gain on the sale of the assets was $8.3 million. This gain was included on the income statement as income from discontinued operations.

During the second quarter of fiscal year 2013, the Company authorized the sale of its Energy division and considered it a discontinued operation. The sale of the division was complete on October 1, 2012. On October 2, 2013, the Company received the final escrow proceeds of $1.5 million related to this sale.

The financial results of the two discontinued operations are as follows:

	Three Months			Nine Months
	Ended October 31,			Ended October 31,
(in thousands)	2012			2013			2012
Revenues	$	4,054		$	3,552		$	13,384
(Loss) income before income taxes		(137	)		9,505			(35,214	)
Income tax benefit (expense)		145			(3,707	)		13,679
Net income (loss) from discontinued operations		8			5,798			(21,535	)