Note N - Sale of Direct Mail Assets and Equipment

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Sale of Direct Mail Equipment [Text Block]

Note N — Sale of Direct Mail Assets and Equipment

On

April 24, 2020,

we sold the majority of the production equipment from our Jacksonville facility to Summit Direct Mail Inc. (“Summit”) for

$1.5

million.  Subsequent to

April 2020,

the Company sold or scrapped the remaining supplies and equipment in Jacksonville for additional proceeds of 

$0.5

million.  In addition to the asset sale, the Company entered into a strategic partnership with Summit, pursuant to which the Company continues to manage client relationships, and

may

at its discretion and direction, use Summit to perform direct mail campaigns.  We act as principal in these transactions, and will account for the associated revenue on a gross basis.

The Company is well positioned to provide the full suite of marketing solutions to Summit customers and will leverage the expanded print and direct mail capabilities provided by the partnership with Summit to grow our business. 

As a result of this sale, we booked a

$1.9

 million impairment charge on our Jacksonville facility and recognized a

$1.4

 million

capital loss and impairment expense from the fixed asset disposal and impairment associated with the Summit deal.  These expenses were 

included in our restructuring expense for the

nine

months ended

September 30, 2020

.