Discontinued Operations

The operating results for the Legacy Businesses and the Nexsan Business are presented in our Condensed Consolidated Statements of Operations as discontinued operations for all periods presented and reflect revenues and expenses that are directly attributable to these businesses that were eliminated from our ongoing operations.

The key components of the results of discontinued operations were as follows:



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In millions)	2018			2017			2018			2017
Net revenue	$	5.1		$	9.6		$	23.9		$	28.0
Cost of goods sold	3.1			5.5			13.0			15.4
Gross profit	2.0			4.1			10.9			12.6
Selling, general and administrative	0.9			6.0			8.3			20.6
Research and development	0.5			1.8			2.4			6.5
Restructuring and other	(2.2		)	(14.1		)	(2.5		)	(18.0		)
Other (income) expense	—			0.8			(0.8		)	1.7
Gain from discontinued operations, before income taxes	2.8			9.6			3.5			1.8
Gain on sale of discontinued businesses, before income taxes	6.1			—			6.1			—
Income tax benefit (provision)	0.1			(3.5		)	0.2			(3.3		)
Gain (loss) from discontinued operations, net of income taxes	$	9.0		$	6.1		$	9.8		$	(1.5	)

Net income of discontinued operations for the three and nine months ended September 30, 2018 increased by $2.9 million and $11.3 million, respectively, compared to the same periods last year mainly due to the gain on sale of the Nexsan Business of $6.1 million in the three months ended September 30, 2018, lower selling, general and administrative, research and development and tax expenses, offset by restructuring and other gains for the three months ended September 30, 2017 related to the settlement of the CMC and IOENGINE lawsuits and other customer and vendor balances. Restructuring and other also includes the net loss attributable to noncontrolling interest of $0.3 million and $0.6 million or the three and nine months ended September 30, 2018 and $2.0 million and $5.5 million or the three and nine months ended September 30, 2017. These amounts were reclassified to discontinued operations due to the sale of the Nexsan Business in the period ending September 30, 2018.

Current assets of discontinued operations of $1.1 million as of September 30, 2018 included $0.5 million of accounts receivable and $0.6 million of other current assets. Current assets of discontinued operations as of December 31, 2017 of $11.5 million included $5.8 million of accounts receivable, $3.5 million of inventory, $2.2 million of other current assets. The decrease of the current assets in 2018 was primarily due to the divestiture of the Nexsan Business.

Current liabilities of discontinued operations of $4.9 million as of September 30, 2018 included $1.6 million of accounts payable, $0.5 million of customer credit and rebate accruals, and $2.8 million of other current liability amounts. Current liabilities of discontinued operations of $20.2 million as of December 31, 2017 included $7.2 million of deferred revenue, accounts payable of $6.7 million, $0.7 million of customer credit and rebate accruals and $5.6 million of other current liabilities. The decrease of the current liabilities in 2018 was primarily due to the divestiture of the Nexsan Business.

Other liabilities of discontinued operations of $4.8 million as of September 30, 2018 included $1.0 million due to CMC, $1.0 million of withholding tax, $0.7 million of tax contingencies, and $2.1 million of other liabilities. Other liabilities of discontinued operations of $13.6 million as of December 31, 2017 included $4.1 million due to IOENGINE, $1.0 million due to CMC, $1.0 million of withholding tax, $0.9 million of tax contingencies and $6.6 million of other liabilities, which is mostly related to the Nexsan Business. See Note 15 - Litigation, Commitments and Contingencies for additional information on the CMC and IOENGINE settlements.