Discontinued Operations
 9 Months Ended
Jan. 30, 2016
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations
Discontinued Operations
On July 1, 2015, we entered into a definitive agreement to sell all of the outstanding shares of common stock of Patterson Medical Holdings, Inc., our wholly owned subsidiary responsible for our rehabilitation supply business known as Patterson Medical (“Patterson Medical”), for $715,000 in cash to Madison Dearborn Partners. The definitive agreement included a working capital adjustment provision that impacted the final sale price. On August 28, 2015, we completed the sale of Patterson Medical for $718,078, with such sales price including the above-described working capital adjustment. During the third quarter of fiscal 2016, working capital adjustments reduced the sales price to $716,886. As additional consideration for the shares of Patterson Medical, we obtained a number of common units of the parent company of the buyer equal to 10% of the common units outstanding at closing. Unlike the other common units, these units will only become entitled to begin participating in distributions to the common unit holders at such time, if any, as the Madison Dearborn Partners’ investor cash inflows equal or exceed 2.5 times the Madison Dearborn Partners’ investor cash outflows. These units are non-transferrable. We recorded a pre-tax gain of $24,328 on the sale of Patterson Medical during the nine months ended January 30, 2016 within discontinued operations in the condensed consolidated statements of income.
In connection with the above described transaction, we also entered into a transition services agreement with our former subsidiary, pursuant to which Patterson Medical Holdings, Inc., as owned by Madison Dearborn Partners, is paying us to provide, among other things, certain information technology, distribution, facilities, finance, tax and treasury, and human resources services for up to 24 months after closing.
As of January 30, 2016, we classified Patterson Medical’s results of operations as discontinued operations for all periods presented in the condensed consolidated statements of income. The assets and liabilities of Patterson Medical were reflected as held for sale in the condensed consolidated balance sheets as of April 25, 2015. The operations and cash flows of Patterson Medical have been eliminated from our continuing operations, which were previously recorded as the rehabilitation supply reportable segment.
The following summarizes the assets and liabilities of Patterson Medical as of April 25, 2015:
 
April 25, 2015
Assets held for sale
 
Receivables, net of allowance for doubtful accounts
$
57,876

Inventory
48,265

Prepaid expenses and other current assets
12,206

Property and equipment, net
22,672

Goodwill
537,175

Identifiable intangibles, net
74,804

Other long-term assets
1,143

Total assets held for sale
$
754,141

Liabilities held for sale
 
Accounts payable
$
26,341

Accrued liabilities and other current liabilities
12,975

Long-term liabilities
49,414

Total liabilities held for sale
$
88,730

The following summarizes the results of operations of our discontinued Patterson Medical operations for the periods presented:
 
Three Months Ended
 
Nine Months Ended
 
January 30,
2016
 
January 24,
2015
 
January 30,
2016 (a)
 
January 24,
2015
Net sales
$
—

 
$
104,684

 
$
168,504

 
$
350,362

Cost of sales
—

 
64,567

 
107,359

 
218,102

Operating expenses
—

 
26,738

 
54,954

 
81,042

Loss (gain) on sale
1,192

 
—

 
(24,328
)
 
—

Other expense (income)
—

 
224

 
150

 
109

Income (loss) before taxes
(1,192
)
 
13,155

 
30,369

 
51,109

Income taxes
(442
)
 
4,913

 
28,869

 
18,990

Net (loss) income from discontinued operations
$
(750
)
 
$
8,242

 
$
1,500

 
$
32,119


(a) 
Includes activity up until the sale date of August 28, 2015.

The net loss for the three months ended January 30, 2016, was due to working capital adjustments related to the sales price which reduced the overall gain recognized. Operating expenses for the nine months ended January 30, 2016 include professional fees of $13,692 incurred in connection with the sale of Patterson Medical. Depreciation and amortization were ceased during the nine months ended January 30, 2016 in accordance with accounting for discontinued operations. Income taxes have been allocated to Patterson Medical based on the accounting requirements for presenting discontinued operations. Income taxes as a percent of income before taxes for the nine months ended January 30, 2016 are higher than in the prior period as a result of the requirement to calculate the tax due on the sale of Patterson Medical including certain basis differences that were appropriately not previously recognized for financial reporting purposes.