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