Divestiture and Discontinued Operations

3 Months Ended

Mar. 31, 2017

Divestiture and Discontinued Operations [Abstract]

Divestiture and Discontinued Operations

Note 2 — Divestiture and Discontinued Operations

On November 4, 2015, ParTech, Inc. (“PTI”), a wholly owned subsidiary of PAR Technology Corporation, PAR Springer-Miller Systems, Inc. (“PSMS”), Springer-Miller International, LLC (“SMI”), and Springer-Miller Canada, ULC (“SMC”) (PTI, PSMS, SMI and SMC are collectively referred to herein as the “Group”), entered into an asset purchase agreement (the “APA”)  with Gary Jonas Computing Ltd., SMS Software Holdings LLC, and Jonas Computing (UK) Ltd. (the “Purchasers”), for the sale of substantially all of the assets of PSMS. Accordingly, the results of operations of PSMS have been classified as discontinued operations in the Consolidated Statements of Operations (unaudited) and Consolidated Statements of Cash Flows (unaudited) in accordance with Accounting Standards Codification (“ASC”) ASC 205-20 (Presentation of Financial Statements – Discontinued Operations). Additionally, the assets and associated liabilities have been classified as discontinued operations in the Consolidated Balance Sheets (unaudited).  Total consideration to be received from the sale is $16.6 million in cash (the “Base Purchase Price”), with $12.1 million received at the time of closing and $4.5 million receivable eighteen months after the closing date, a portion of such amount to be available  for the payment of certain indemnification obligations of the Group and/or adjusted based on the net tangible asset calculation, as defined in the APA  The estimated fair value of the remaining portion of the note receivable, less any estimated working capital adjustments, due on May 5, 2017 was approximately $3.8 million and is included in current assets in the Company’s Consolidated Balance Sheets (unaudited).  During 2017, the Company increased the receivable by $284,000 based on the terms of the net tangible asset calculation as the working capital shortfall was less than previously estimated.

In addition to the Base Purchase Price, contingent consideration of up to $1.5 million could be received by the Company based on the achievement of certain agreed-upon revenue and earnings targets for calendar years 2016 through 2018, as set forth in the APA. As of March 31, 2017, the Company had not recorded any amount associated with this contingent consideration as we do not believe achievement of the related targets is probable.

Summarized financial information for the Company’s discontinued operations is as follows (in thousands):

	March 31,		December, 31
	(in thousands)
	2017			2016
Assets
Other current assets	$	462		$	462
Assets of discontinued operation	$	462		$	462
Liabilities
Accrued salaries and benefits	$	-		$	-
Liabilities of discontinued operation	$	-		$	-

Summarized financial information for the Company’s discontinued operations is as follows (in thousands):

	March 31, (in thousands)
	2017			2016
Total revenues	$	-		$	-
Income from discontinued operations before income taxes	$	284		$	-
Income taxes		(101	)		-
Income from discontinued operations, net of taxes	$	183		$	-

During the three months ended March 31, 2017, the Company recognized income on discontinued operations of $0.2 million (net of tax) mainly due to an increase of the note receivable. The increase of the note receivable is reflected in the Company’s earnings for 2017 and will be increased by the amount the Company received on May 5, 2017.