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Note 3 - Discontinued Operations | 9 Months Ended
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Sep. 30, 2020
Notes to Financial Statements |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] |
Note 3. | Discontinued Operations
As of June 30, 2020, our Factoring reportable segment was classified as discontinued operations as it: (i) was a component of the entity, (ii) met the criteria as held for sale, and (iii) had a material effect on the Company's operations and financial results. On July 8, 2020, we closed on the disposition of substantially all of the operations and assets of TFS, which included substantially all of the assets and operations of our Factoring reportable segment. The sale consisted primarily of $103.3 million of net accounts receivable, which included $108.7 million of gross accounts receivable, less advances and rebates of $5.4 million. We have reflected the former Factoring reportable segment as discontinued operations in the condensed consolidated statements of operations for all periods presented. Prior periods have been adjusted to conform to the current presentation. The following table summarizes the results of our discontinued operations for the three and nine months ended September 30, 2020 and 2019:
(in thousands) |  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
Total revenue |  | $ | 142 |  |  | $ | 2,455 |  |  | $ | 5,397 |  |  | $ | 6,561 |
Operating expenses |  |  | (3,601 | ) |  |  | 515 |  |  |  | (2,571 | ) |  |  | 1,327 |
Operating income |  |  | 3,743 |  |  |  | 1,940 |  |  |  | 7,968 |  |  |  | 5,234 |
Interest expense |  |  | - |  |  |  | 794 |  |  |  | 1,948 |  |  |  | 2,073 |
Income before income taxes |  |  | 3,743 |  |  |  | 1,146 |  |  |  | 6,020 |  |  |  | 3,161 |
Income tax expense |  |  | 955 |  |  |  | 293 |  |  |  | 1,535 |  |  |  | 807 |
Net income from discontinued operations, net of tax |  | $ | 2,788 |  |  | $ | 853 |  |  | $ | 4,485 |  |  | $ | 2,354 |
Operating expenses for the three and nine months ended September 30, 2020 include the $3.7 million gain on disposition of the Factoring segment Portfolio. Interest expense not directly attributable to or related to other operations has been allocated to discontinued operations in a manner consistent with debt needed to finance the net average funds employed by the Factoring reportable segment, multiplied by the Company’s weighted average interest rate. The following table summarizes the major classes of assets and liabilities included as discontinued operations as of September 30, 2020 and December 31, 2019:
(in thousands) |  | September 30, 2020 |  |  | December 31, 2019 |
Current assets: |  |  |  |  |  |  |  |
Accounts receivable, net of allowance of $0 in 2020 and $408 in 2019 |  | $ | - |  |  | $ | 86,620 |
Other short-term assets |  |  | 21,094 |  |  |  | - |
Current assets of discontinued operations |  |  | 21,094 |  |  |  | 86,620 |
Current liabilities: |  |  |  |  |  |  |  |
Accounts payable |  |  | 20,226 |  |  |  | 6,245 |
Current liabilities of discontinued operations |  | $ | 20,226 |  |  | $ | 6,245 |
In accordance with the amended purchase agreement, $19.6 million was recorded as an asset and liability for the fair market value of the Triumph stock received that is payable to Triumph. In October 2020, the Company sold the Triumph stock acquired as part of the amended purchase agreement for $28.1 million and remitted the proceeds to Triumph upon settlement. The net cash flows for operating activities related to discontinued operations provided $10.0 million and used $25.9 million for the nine months ended September 30, 2020 and 2019, respectively. There were $108.4 million investing and no financing cash flows related to discontinued operations for the nine months September 30, 2020 and no investing or financing cash flows related to discontinued operations for the same period in 2019. The following unaudited summary information is presented on a consolidated pro forma basis as if the Factoring assets were sold as of January 1, 2019.
(in thousands) |  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
Total revenue |  | $ | 210,830 |  |  | $ | 220,459 |  |  | $ | 613,333 |  |  | $ | 654,832 |
Income (loss) from continuing operations |  |  | 4,713 |  |  |  | (4,042 | ) |  |  | (21,540 | ) |  |  | 4,961 |
Income (loss) per basic share from continuing operations |  | $ | 0.28 |  |  | $ | (0.22 | ) |  | $ | (1.24 | ) |  | $ | 0.27 |
Income (loss) per diluted share from continuing operations |  | $ | 0.27 |  |  | $ | (0.22 | ) |  | $ | (1.24 | ) |  | $ | 0.27 |
Refer to Note 1, “Significant Accounting Policies” of the accompanying condensed consolidated financial statements for further information about the amended TFS purchase agreement.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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