Discontinued Operations

9 Months Ended

Sep. 30, 2013

Discontinued Operations

Discontinued Operations

Note L — Discontinued Operations

We sold the assets of our Florida Shoppers operations to Coda Media Corp. on December 31, 2012.We sold the assets of our California Shoppers operations to affiliates of OpenGate Capital Management, LLC (“OpenGate”) on September 27, 2013 for gross proceeds of approximately $22.5 million in cash. In addition, OpenGate agreed to assume certain liabilities associated with the Shoppers division. This transaction resulted in a loss on the sale of $12.4 million, net of $9.0 million of income tax benefit. This loss on sale includes transaction costs of approximately $2.6 million.  Because Shoppers represented a distinct business unit with operations and cash flows that can clearly be distinguished, both operationally and for financial purposes, from the rest of Harte-Hanks, the results of the Shoppers operations are reported as discontinued operations for all periods presented.

Results of the remaining Harte-Hanks marketing services business are reported as continuing operations.

Summarized operating results for the Shoppers discontinued operations are as follows:

	Three Months Ended September 30,
In thousands	2013			2012
Revenues	$	46,703		$	54,806
Income from discontinued operations before income taxes	76			609
Loss on sale before income taxes	(21,402		)	0
Income tax benefit (expense)	8,702			(615		)
Loss from discontinued operations	$	(12,624	)	$	(6	)

	Nine Months Ended September 30,
In thousands	2013			2012
Revenues	$	140,834		$	166,865
Income from discontinued operations before impairment charges and income taxes	2,767			168
Impairment of goodwill and other intangible assets before income taxes	0			(165,336		)
Loss on sale before income taxes	(21,402		)	0
Income tax benefit	7,732			47,820
Loss from discontinued operations	$	(10,903	)	$	(117,348	)

Summarized balance sheet data for the Shoppers discontinued operations are as follows;

	September 30,		December 31,
In thousands	2013		2012
Current assets	$	0	$	20,486
Property, plant and equipment	0		17,880
Other intangible assets	0		10,551
Other assets	0		84
Total assets	$	0	$	49,001
Current liabilities	$	0	$	10,292
Other liabilities	0		272
Total liabilities	$	0	$	10,564
Net assets of discontinued operations	$	0	$	38,438

The major components of cash flows for the Shoppers discontinued operations are as follows;

	Nine Months Ended September 30,
In thousands	2013			2012
Loss from discontinued operations	$	(10,903	)	$	(117,348	)
Loss on the sale of discontinued operations	12,355			0
Impairment of Intangible Assets	0			165,336
Deferred Income Taxes	(5,094		)	(45,054		)
Depreciation and software amortization	2,592			4,087
Intangible asset amortization	0			428
Other, net	990			(1,209		)
Net cash provided by discontinued operations	$	(60	)	$	6,240