Assets held-for-sale and discontinued operations

As discussed in Note 1, on June 27, 2018, CSPi entered into an agreement to sell its Germany operations (Modcomp GmbH, Technology Solutions) to Reply AG, a German stock corporation ("Reply AG") and an affiliate of European IT service provider and media conglomerate Reply SpA (MTA, STAR: REY) (the "Reply Group") for €10.0 million in cash, subject to certain closing and post-closing adjustments. Accordingly, CSPi GmbH, met the criteria for "Assets Held-for-Sale" in accordance with Accounting Standard Codification 360 ("ASC 360") as of June 30, 2018. Pursuant to the terms of a Share Purchase and Assignment Agreement, Reply AG will acquire all of the outstanding stock of Modcomp GmbH, CSPi’s German subsidiary, which includes all of the assets and liabilities of such entity. The Germany assets and liabilities are reflected as "held-for-sale" on the consolidated balance sheets in accordance with ASC 360, at June 30, 2018 and September 30, 2017. In addition, the results of operations for the Germany business have been presented as discontinued operations in accordance with ASC 205-20 for all periods presented.

Summarized Discontinued Operations Financial Information

The following table provides a reconciliation of the carrying amounts of major classes of assets and liabilities which are included in assets and liabilities held for sale in the accompanying consolidated balance sheets for each of the periods presented:



			June 30, 2018		September 30, 2017
			(Amounts in thousands)
Currents assets:
	Cash and cash equivalents		$	2,535	$	3,464
	Accounts receivable, net		7,936		9,957
	Unbilled accounts receivable		553		69
	Inventories, net		446		404
	Deferred costs		2,978		910
	Deferred income taxes		854		—
	Other current assets		373		63
	Property, equipment and improvements, net		588		—
		Total current assets held-for-sale	$	16,263	$	14,867

Property, equipment and improvements, net			$	—	$	589
Deferred costs			—		609
Deferred income taxes			—		864
Other noncurrent assets, net			—		126
		Total noncurrent assets held-for-sale	$	—	$	2,188

Current liabilities:
	Accounts payable and accrued expenses		$	4,667	$	3,950
	Deferred revenue		6,409		5,264
	Pension and retirement plans		5,319		209
	Other current liabilities		121		304
		Total current liabilities held-for-sale	$	16,516	$	9,727

Pension and retirement plans			$	—	$	5,165
Other noncurrent liabilities			—		57
		Total noncurrent liabilities held-for-sale	$	—	$	5,222

The following table summarizes the results of discontinued operations for the three and nine months ended June 30, 2018, and June 30, 2017.



	For the three months ended						For the nine months ended
	June 30, 2018			June 30, 2017			June 30, 2018			June 30, 2017
	(Amounts in thousands)
Sales	$	5,681		$	4,103		$	16,428		$	15,630
Cost of sales	5,150			3,452			14,180			13,043
Gross profit	531			651			2,248			2,587
Selling, general and administrative expenses	922			933			2,656			2,711
Operating loss	(391		)	(282		)	(408		)	(124		)
Other expenses	(36		)	(10		)	(95		)	(23		)
Loss before income taxes	(427		)	(292		)	(503		)	(147		)
Income tax expense (benefit)	1			(55		)	—			(6		)
Loss from discontinued operations, net of tax	$	(428	)	$	(237	)	$	(503	)	$	(141	)