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Note 13 - Discontinued Operations
3 Months Ended
Mar. 31, 2017
Notes to Financial Statements  
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]
13.
 Discontinued Operations
 
On
November
1,
2015,
the Company completed the sale of the Human Services segment. During the
three
months ended
March
31,
2017,
the Company recorded additional expenses related to the Human Services segment, principally related to legal proceedings as described in Note
11,
Commitment and Contingences
, related to an indemnified legal matter.
 
Effective
October
19,
2016,
the Company completed the Matrix Transaction. Prior to the closing of the Matrix Transaction, the financial results of Matrix were included in the Company’s HA Services segment, which have been reflected as a discontinued operation for the
three
months ended
March
31,
2016
. Following the Matrix Transaction, the Company has a continuing involvement with Matrix through its
46.8%
ownership interest in Matrix, which is accounted for as an equity method investment.
Matrix’s pretax loss for the
three
months ended
March
31,
2017
totaled
$2,599.
There have been no cash inflows or outflows from or to Matrix subsequent to the closing of the Matrix Transaction, other than the payment of working capital adjustments, and management fees associated with its ongoing relationship with Matrix, of which
$185
was received during the
three
months ended
March
31,
2017.
$235
and
$185
is included in “Other receivables” in the condensed consolidated balance sheets at
March
31,
2017
and
December
31,
2016,
respectively, related to management fees receivable.
 
Results of Operations
 
The following table summarizes the results of operations classified as discontinued operations, net of tax, for the
three
months ended
March
31,
2017
and
2016.
 
 
 
Three months ended March 31, 2017
 
 
 
Human Services Segment
 
 
HA Services Segment
 
 
Total Discontinued Operations
 
                         
Operating expenses:
                       
General and administrative expense
 
9,406
   
-
   
9,406
 
Total operating expenses
   
9,406
     
-
     
9,406
 
Loss from discontinued operations before
income taxes
   
(9,406
)    
-
     
(9,406
)
Income tax benefit
   
3,540
     
-
     
3,540
 
Discontinued operations, net of tax
  $
(5,866
)   $
-
    $
(5,866
)
 
General and administrative expenses for the
three
months ended
March
31,
2017
includes an accrual of
$9,000
for an estimated settlement of indemnified claims related to the sale of the Human Services segment, as well as related legal expenses of
$406.
See Note
11,
Commitments and Contingencies
, for additional information.
 
 
 
Three months ended March 31, 2016
 
 
 
Human Services Segment
 
 
HA Services Segment
 
 
Total Discontinued Operations
 
                         
Service revenue, net
  $
-
    $
50,592
    $
50,592
 
                         
Operating expenses:
                       
Service expense
   
-
     
37,790
     
37,790
 
General and administrative expense
   
-
     
656
     
656
 
Depreciation and amortization
   
-
     
7,796
     
7,796
 
Total operating expenses
   
-
     
46,242
     
46,242
 
Operating income
   
-
     
4,350
     
4,350
 
                         
Other expenses:
                       
Interest expense, net
   
-
     
3,141
     
3,141
 
Income from discontinued operations before
income taxes
   
-
     
1,209
     
1,209
 
Provision for income taxes
   
-
     
(456
)    
(456
)
Discontinued operations, net of tax
  $
-
    $
753
    $
753
 
 
Interest expense, net
 
The Company allocated interest expense, including amortization of deferred financing fees, to discontinued operations based on the portion of debt that was required to be paid with the proceeds from the sale of the Matrix Transaction. The total allocated interest expense was
$3,143
for the
three
months ended
March
31,
2016
and is included in “Interest expense, net” in the table above.
 
Cash Flow Information
 
The following table presents depreciation, amortization and capital expenditures of the discontinued operations for the
three
months ended
March
31,
2016:
 
 
 
Three months ended
March 31, 2016
 
         
Cash flows from discontinued operating activities:
       
Depreciation
  $
1,248
 
Amortization
   
6,548
 
         
Cash flows from discontinued investing activities:
       
Purchase of property and equipment
  $
3,317