Discontinued Operations

3 Months Ended

Sep. 30, 2018

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

3. Discontinued Operations

Content Delivery Business

As noted above, on December 31, 2017, we completed the sale of the Content Delivery business and other related assets to Vecima pursuant to an Asset Purchase Agreement, dated as of October 13, 2017, between the Company and Vecima for a purchase price of $29,000 (subject to an adjustment for net working capital). The sale included our Content Delivery business assets and related liabilities in the United States, United Kingdom, and Germany, as well as the sale of all equity in our Japanese subsidiary.

Gross proceeds of $29,812 from the sale were paid to us as follows: (1) $28,362 net cash payment during our fiscal year ended June 30, 2018 (including an $812 adjustment for surplus net working capital transferred to Vecima as defined in the CDN APA) and (2) $1,450 placed in escrow as security for the Company’s indemnification obligations to Vecima under the CDN APA, which amount will be released to the Company on or around December 31, 2018 (less any portion used to make indemnification payments to Vecima).

Results associated with the Content Delivery business are classified within income from discontinued operations, net of income taxes, in the accompanying consolidated statements of operations. Operating expenses recorded in discontinued operations include costs incurred directly in support of the Content Delivery business.

For the three months ended September 30, 2017, income from discontinued operations, net of income taxes related to the Content Delivery business was comprised of the following:

	Three Months Ended September 30, 2017
Revenue	$	7,870
Cost of sales		3,220
Gross margin		4,650
Operating expenses:
Sales and marketing		2,144
Research and development		1,678
General and administrative		478
Total operating expenses		4,300
Operating income		350
Other expense, net		(110	)
Income from discontinued operations before income taxes		240
Benefit for income taxes		(128	)
Income from discontinued operations	$	368

Cash flow information relating to the Content Delivery business for the three months ended September 30, 2017 is as follows:

Operating cash flow data:
Depreciation and amortization	$	329
Share-based compensation		72
Recovery of provision for excess and obsolete inventories		(23	)
Foreign currency exchange losses		110
Investing cash flow data:
Capital expenditures		(222	)