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Discontinued Operations
 6 Months Ended
Jun. 30, 2024
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations Discontinued Operations
On June 7, 2024 (the “Closing Date”), the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Booz Allen Hamilton Inc. ("Booz Allen Hamilton") for the sale of PAR Government Systems Corporation ("PGSC"), a wholly owned subsidiary of the Company. Pursuant to the Purchase Agreement, on the Closing Date, Booz Allen Hamilton acquired 100% of the issued and outstanding shares of common stock of PGSC for a cash purchase price of $95.0 million, before customary post-closing adjustments based on PGSC’s indebtedness, working capital, cash, and transaction expenses at closing. At closing we entered into a transition services agreement with Booz Allen Hamilton ("TSA") pursuant to which the Company and Booz Allen Hamilton provide certain transitional services to each other as contemplated by and subject to the Purchase Agreement. The service period for the transitional services generally ends during the third quarter of 2025.

Additionally, on June 10, 2024, the Company announced that it had entered into an acquisition agreement for the sale of 100% of the issued and outstanding equity interests of Rome Research Corporation (“RRC”), a wholly-owned subsidiary of the Company. The sale was completed on July 1, 2024. Refer to “Note 15 – Subsequent Events” for additional information on the sale of RRC. The sale of PGSC and RRC comprise the sale of 100% of the Company's Government segment.
The Company recognized a pre-tax gain on sale of $76.8 million from the sale of PGSC for the three months ended June 30, 2024. Pursuant to the Purchase Agreement, within 120 days following the Closing Date Booz Allen Hamilton is required to deliver to the Company a closing statement setting forth its determination of net working capital and any resulting net working capital surplus or deficit. To the extent there is an adjustment to net working capital, as agreed to by the Company and Booz Allen Hamilton pursuant to the Purchase Agreement, any such change will be recorded as an adjustment to the gain on sale of discontinued operations for the period such change occurs.

As of June 30, 2024, the Company estimated the federal taxable gain on sale to be $73.9 million, however, we expect to offset the taxable gain through the utilization of several tax benefits including $41.4 million of our net operating loss carryforwards, $22.2 million of our Section 163(j) interest expense limitation carryforwards, and $1.6 million of our research and development tax credits. Additionally, the income tax associated with the gain will be impacted by the final allocation of the sales price, which may be materially different from the Company’s estimates. The impact of changes in estimated income tax (if any) will be recorded as an adjustment to discontinued operations in the period such change in estimate occurs.

The Company incurred expenses related to its disposition of PGSC of approximately $6.6 million which are included in net income from discontinued operations in the condensed consolidated statements of operations.

The accounting requirements for reporting the disposition of PGSC and RRC as discontinued operations were met when the disposition of PGSC was completed and the sale of RRC was deemed probable. Accordingly, the historical results of PGSC and RRC have been presented as discontinued operations and, as such, have been excluded from continuing operations for all periods presented.

The following table presents the major classes of assets and liabilities of discontinued operations for PGSC and RRC as of December 31, 2023 and RRC as of June 30, 2024:

(in thousands)June 30, 2024December 31, 2023
Accounts receivable – net$5,262 $20,703 
Other current assets1,120 987 
Total current assets6,382 21,690 
Noncurrent assets839 2,785 
Total assets of discontinued operations$7,221 $24,475 
Accounts payable— 4,209 
Accrued salaries and benefits1,284 5,013 
Accrued expenses724 6,910 
Other current liabilities25 246 
Total current liabilities2,033 16,378 
Noncurrent liabilities— 1,710 
Total liabilities of discontinued operations$2,033 $18,088 
The following table presents the major categories of income from discontinued operations:

Three Months Ended June 30,Six Months Ended
June 30,
(in thousands)2024202320242023
Contract revenue$31,116 $31,015 $66,540 $62,868 
Contract cost of sales(28,185)(28,778)(60,218)(57,464)
Operating income from discontinued operations2,931 2,237 6,322 5,404 
General and administrative expense449 (14)(870)(13)
Other expense, net(6)(60)— (110)
Gain on sale of discontinued operations76,754 — 76,754 — 
Income from discontinued operations before provision for income taxes80,128 2,163 82,206 5,281 
Provision for income taxes(2,351)(26)(2,351)(26)
Net income from discontinued operations$77,777 $2,137 $79,855 $5,255 

In accordance with ASC Topic 205, Presentation of Financial Statements, the Company adjusted contract cost of sales to exclude corporate overhead allocated to discontinued operations for all periods presented.

The following table presents selected non-cash operating and investing activities related to cash flows from discontinued operations:

Three Months Ended June 30,Six Months Ended
June 30,
(in thousands)2024202320242023
Depreciation and amortization$84 $116 $200 $231 
Capital expenditures106 84 233 214 
Stock-based compensation906 14 954 61