Discontinued Operations

9 Months Ended

Sep. 28, 2014

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

DISCONTINUED OPERATIONS

Banking Security Systems Integration

On October 1, 2012, we completed the sale of the Banking Security Systems Integration business unit for $3.5 million subject to closing adjustments related to a non-compete agreement and third-party consents. On October 1, 2012, we received cash proceeds of $1.2 million (net of selling costs) and a promissory note of $1.4 million from the purchaser. The note receivable is due in consecutive monthly installments beginning on November 1, 2012, with the last scheduled payment due on October 1, 2017. The promissory note bears interest at the 30 day LIBOR rate plus 5.5%. We received $0.2 million of principal on the note receivable for the nine months ended September 28, 2014. The proceeds are included in cash proceeds from the sale of discontinued operations on the Consolidated Statement of Cash Flows.

U.S. and Canada CheckView^®

In December of 2012, our U.S. and Canada based CheckView^® business included in our Merchandise Availability Solutions segment met the criteria for classification as discontinued operations. On March 19, 2013, we entered into an asset purchase agreement for the sale of our U.S. and Canada based CheckView^® business for $5.4 million in cash, subject to a working capital adjustment to the extent that the net working capital of the business deviates from targeted working capital of $17.9 million.

On April 28, 2013, we completed the sale of our U.S. and Canada based CheckView^® business unit for $5.4 million less a working capital adjustment of $4.1 million to arrive at cash proceeds of $1.3 million received on April 29, 2013. We initially recorded a receivable from the buyer of $0.2 million as a working capital adjustment based on the closing balance sheet. In the fourth quarter of 2013, the buyer disputed some amounts on the closing balance sheet. As a result, we recorded a payable to the buyer of $0.9 million as a working capital adjustment based on the buyer's preliminary review of the final closing balance sheet. This amount was paid to the buyer during the three months ended March 30, 2014. We incurred selling costs of $1.1 million in connection with the transaction. We also issued a guarantee to the lessor of the related facilities and executed a transition services agreement with the buyer to provide services including but not limited to standalone information technology environment setup access, systems modifications, human resources and payroll processing support. The transition services have various contract periods, ranging from 60 days to one year. The leases on the facilities for which we issued a guarantee terminate in 2018. Our maximum potential future payments under the guarantee are $3.6 million as of September 28, 2014. We have a total lease guarantee liability of $0.1 million recorded in both other current liabilities and other long term liabilities on the Consolidated Balance Sheet as of September 28, 2014. Direct costs incurred by us in connection with this agreement will be billed to the buyer on a monthly basis. Transition services expense, net of transition services income, was $0 and $13 thousand for the three and nine months ended September 28, 2014. This amount is included within other gain (loss), net on the Consolidated Statement of Operations for the three and nine months ended September 28, 2014. Costs incurred to carve-out the CheckView^® business from our enterprise resource planning system for the buyer totaled $0.4 million and were recorded through discontinued operations on the Consolidated Statement of Operations for the year ended December 29, 2013. The loss on our sale of the U.S. and Canada based CheckView^® business of $13.6 million was recorded through discontinued operations on the Consolidated Statement of Operations for the year ended December 29, 2013.

The results for the three and nine months ended September 28, 2014 and September 29, 2013 have been presented to show the results of operations for the U.S. and Canada based CheckView^® business as discontinued operations, net of tax, on the Consolidated Statement of Operations. Below is a summary of these results:

	Quarter					Nine months
	(13 weeks) Ended					(39 weeks) Ended
(amounts in thousands)	September 28, 2014		September 29, 2013			September 28, 2014		September 29, 2013
Net revenue	$	—	$	2		$	—	$	16,086
Gross profit	—		(81		)	—		201
Selling, general, and administrative expenses	—		—			—		3,970
Research and development	—		—			—		105
Operating loss	—		(81		)	—		(3,874		)
Loss on disposal	—		(19		)	—		(13,043		)
Loss from discontinued operations before income taxes	—		(100		)	—		(16,917		)
Loss from discontinued operations, net of tax	$	—	$	(100	)	$	—	$	(16,985	)

Net cash flows of our discontinued operations from each of the categories of operating, investing, and financing activities were not significant.