DISCONTINUED OPERATIONS

6 Months Ended

Jan. 31, 2013

DISCONTINUED OPERATIONS

(5) DISCONTINUED OPERATIONS

On January 11, 2013, the Company sold substantially all of the assets of the TFL business to Encore Holdings, LLC (“Encore”). The consideration paid by Encore for the assets was $1.6 million, which consisted of a gross purchase price of $1.9 million less certain adjustments. As of January 31, 2013, the Company has received $1.4 million of the purchase price, with the remaining $0.2 million to be received upon settlement of certain post-closing adjustments. In conjunction with the asset sale agreement, the Company entered into a transition support agreement with Encore to provide certain administrative services for a period of 90 days from the closing date of the transaction. The Company does not expect to generate significant continuing cash flows from the transition support agreement. In addition, the Company will not have significant continuing involvement in the disposed business upon completion of the transition support agreement.

The Company’s other discontinued operations relate to an ongoing lease obligation associated with a previously vacated facility. During both the three and six month periods ended January 31, 2013, the Company recorded a loss of $0.2 million associated with the net present value accretion on future lease payments. The Company recorded $0.7 million of income in both the three and six month period ended January 31, 2012 primarily due to the execution of a sublease for the vacated facility, which resulted in an adjustment to the Company’s estimated future minimum lease payments recoverable through sublease receipts.

The following table reflects the components of “Loss from discontinued operations”:

	Three Months Ended January 31,						Six Months Ended January 31,
	2013			2012			2013			2012
	(in thousands)
Income (loss) from the operations of TFL	$	(656	)	$	(1,205	)	$	(1,487	)	$	(2,603	)
Gain on the disposition of the TFL business		709			—			709			—
Income (loss) from other discontinued operations		(186	)		670			(182	)		670
	$	(133	)	$	(535	)	$	(960	)	$	(1,933	)