Discontinued Operations

12 Months Ended

Dec. 31, 2013

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

On September 30, 2013, the Company completed the sale of certain assets comprising the Portamedic service line to Piston Acquisition, Inc., a subsidiary of American Para Professional Systems, Inc., (“Piston”). Pursuant to the terms of the Asset Purchase Agreement, the Company sold assets associated with the Portamedic service line to Piston, including, among other things, fixed assets, inventory and intellectual property, and Piston assumed certain specified liabilities. The adjusted purchase price (the "Purchase Price") was approximately $8.1 million in cash, adjusted from $8.4 million at announcement due to changes in working capital. Approximately $2.0 million of the Purchase Price was held back (the "Holdback Amount") by Piston as security for the obligations under the Asset Purchase Agreement and certain other agreements between the Company and Piston.

The Holdback Amount includes two components. The first holdback is $1.0 million, subject to adjustments, and will be released in total as follows: within three business days after the date on which final closing adjustments for inventory and other current assets are determined and paid (the “Closeout Date”). The remaining $1.0 million of the Holdback Amount, less any deductions or adjustments with respect to fixed assets, indemnification claims and any amounts in respect of any indemnification claims then in dispute, will be paid on the first anniversary of the Closeout Date. In the third quarter of 2013, the Company recorded receivables of $1.0 million in other current assets and $1.0 million in other long-term assets related to the Holdback Amount, totaling $2.0 million. As of December 31, 2013, the Company has recorded the receivable at the amount it believes will be collected. Subsequent to December 31, 2013, the Company received $0.8 million of the first Holdback Amount but the final amount to be collected has not yet been finalized as of the date of this Report. There cannot be any assurance that the remaining the Holdback Amounts will be collected by the Company. The Company anticipates finalization and collection on the second Holdback Amount in the second quarter of 2015.

The Company decided to sell its under-performing Portamedic service line and shift its focus towards the growth of its remaining health care segments. In connection with the sale, the Company received $6.1 million of cash proceeds in connection with the sale and incurred $1.0 million of financial advisory, legal and accounting fees during the year ended December 31, 2013, of which $0.8 million was paid during the year ended December 31, 2013.

The following summarizes the operating results of Portamedic and the gain on sale of Portamedic which are reported in discontinued operations in the accompanying consolidated statements of operations for the years ended December 31, 2013, 2012 and 2011:

	2013			2012			2011
Revenue	$	66,467		$	100,400		$	111,417
(Loss) income from discontinued operations	$	(4,450	)	$	(10,586	)	$	4,216
Gain on sale of Portamedic	$	3,355		$	—		$	—

Income taxes relating to the operations of Portamedic were less than $0.1 million for each period

presented and there were no income taxes on the gain on the sale due to the availability of net operating loss carry forwards with full valuation allowance.

The assets and liabilities of the discontinued Portamedic operations are presented separately under the captions “Assets held for sale” and “Liabilities held for sale,” respectively, in the accompanying consolidated balance sheet as of December 31, 2012 and consist of the following:

(in thousands)	December 31, 2012
Assets held for sale:
Inventories	$	941
Other current assets	400
Property, plant and equipment, net	2,080
Other assets	225
Total assets	$		3,646
Liabilities held for sale:
Deferred rent	104
Capital leases	116
Total liabilities	$		220

In connection with the 2008 sale of the Claims Evaluation Division ("CED"), the Company was released as the primary obligor for certain lease obligations acquired but remains secondarily liable in the event the buyer defaults through the lease term which expires in July 2015. At December 31, 2013, the Company maintained a liability of $0.05 million for this lease obligation, which has a maximum exposure of $0.2 million. During the years ended December 31, 2013, 2012 and 2011, the Company reduced liabilities related to CED by $0.08 million, $0.07 million and $0.06 million, respectively. The corresponding gains are reported in the accompanying consolidated statement of operations in discontinued operations for the years ended December 31, 2013, 2012 and 2011.