Note 4. Discontinued Operations

In November 2017, we concluded that the sale of CRM represented a strategic shift in our business that would have a major effect on future operations and financial results. As a result, we classified the operating results of CRM as discontinued operations in our condensed consolidated statements of income for all the periods presented in this Quarterly Report on Form 10-Q. The assets and liabilities of CRM are presented as assets or liabilities of discontinued operations in the condensed consolidated balance sheets at December 31, 2017.

We completed the CRM Sale on April 30, 2018 for total cash proceeds of $195.9 million, less cash transferred of $9.2 million, subject to certain customary closing adjustments. In conjunction with the sale, we entered into transition services agreements to provide certain support services for generally up to twelve months from the closing date of the sale. The services include, among others, accounting, information technology, human resources, quality assurance, regulatory affairs, supply chain, clinical affairs and customer support. During the six months ended June 30, 2018, we recognized income of $0.9 million for providing these services. Income recognized related to the transition services agreements is recorded as a reduction to the related expenses in the associated expense line items in the condensed consolidated statements of income.

The following table represents assets and liabilities of CRM presented as assets and liabilities of discontinued operations in the condensed consolidated balance sheet:



	December 31, 2017
Accounts receivable, net	$	64,684
Inventories	54,097
Prepaid taxes	14,725
Prepaid and other assets	3,498
Property, plant and equipment, net	12,104
Deferred tax assets, net	2,517
Investments	6,098
Intangible assets, net	92,966
Assets of discontinued operations	$	250,689

Accounts payable	26,501
Accrued liabilities and other	7,669
Taxes payable	5,084
Accrued employee compensation and benefits	30,753
Deferred income taxes liability	8,068
Liabilities of discontinued operations	$	78,075

The following table represents the financial results of CRM presented as net (loss) income from discontinued operations in the condensed consolidated statements of income:



	Three Months Ended June 30,						Six Months Ended June 30,
	2018 ⁽¹⁾			2017			2018 ⁽¹⁾			2017
Revenues	$	27,206		$	65,544		$	87,313		$	123,824
Cost of sales	10,391			24,800			32,529			46,285
Gross profit	16,815			40,744			54,784			77,539
Selling, general and administrative expenses	15,073			25,960			46,899			50,997
Research and development	5,929			9,118			17,210			18,377
Merger and integration expenses	—			10			—			32
Restructuring expenses	—			(1,479		)	651			(1,359		)
Amortization of intangibles	—			3,565			—			7,019
Revaluation gain on assets and liabilities held for sale	—			—			(1,213		)	—
Loss on sale of CRM	214			—			214			—
Total operating expenses	21,216			37,174			63,761			75,066
Operating (loss) income from discontinued operations	(4,401		)	3,570			(8,977		)	2,473
Foreign exchange and other (losses) gains	(67		)	(402		)	12			(172		)
(Loss) income from discontinued operations, before tax	(4,468		)	3,168			(8,965		)	2,301
Income tax (benefit) expense	(6		)	54			(1,165		)	54
Losses from equity method investments	—			(1,295		)	(1,211		)	(2,384		)
Net (loss) income from discontinued operations ⁽¹⁾	$	(4,462	)	$	1,819		$	(9,011	)	$	(137	)


(1)	CRM financial results for the three and six month periods ended June 30, 2018 include activity through the close of the sale on April 30, 2018.

Cash flows attributable to our discontinued operations are included in our condensed consolidated statements of cash flows. For the six months ended June 30, 2018 and 2017, CRM’s capital expenditures were $0.9 million and $2.4 million, respectively and stock-based compensation expense was $2.1 million and $0.3 million, respectively. For the six months ended June 30, 2017 depreciation and amortization was $9.9 million.