Discontinued Operations (Tables)

9 Months Ended

Jun. 30, 2016

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations

Income (loss) from discontinued operations, after income taxes, as presented in the Condensed Consolidated Statements of Operations for the three and nine months ended June 30, 2016 and 2015 is as follows (in thousands):

	Three months ended June 30,					Nine months ended June 30,
	2016		2015			2016			2015
Service revenue	$	—	$	2,483		$	891		$	6,738
Cost of service	—		2,158			713			6,205
Gross profit	—		325			178			533
Operating expenses:
Sales and marketing	—		452			148			1,433
Research and development	—		589			103			1,567
General and administrative	—		246			43			850
Restructuring	—		—			—			106
Total operating expenses	—		1,287			294			3,956
Loss from discontinued operations, before income taxes	—		(962		)	(116		)	(3,423		)
Gain on sale of discontinued operations, before income taxes	—		—			2,870			—
Total income (loss) from discontinued operations, before income taxes	—		(962		)	2,754			(3,423		)
Income tax benefit on discontinued operations	—		(373		)	(476		)	(1,261		)
Income (loss) from discontinued operations, after income taxes	$	—	$	(589	)	$	3,230		$	(2,162	)

The following table presents amortization, depreciation and purchases of property, equipment, improvements and certain other intangible assets of the discontinued operations related to Etherios (in thousands):

	Nine months ended June 30,
	2016		2015
Amortization of identifiable intangible assets	$	30	$	362
Depreciation of property, equipment and improvements	$	—	$	21
Purchases of property, equipment, improvements and certain other intangible assets	$	—	$	(11	)

At September 30, 2015, the carrying amounts of major classes of assets and liabilities of discontinued operations included in the Consolidated Balance Sheet was as follows (in thousands):

	September 30, 2015
Current assets:
Accounts receivable, net	$	1,417
Deferred tax assets	127
Other current assets	80
Total current assets	1,624
Property, equipment and improvements, net	18
Identifiable intangible assets, net	1,531
Goodwill	1,914
Deferred tax assets (1)	(589		)
Total assets of discontinued operations	$	4,498
Current liabilities:
Accounts payable	$	50
Accrued compensation	1,346
Other current liabilities	85
Total current liabilities	1,481
Other non-current liabilities	95
Total liabilities of discontinued operations	$	1,576

(1) As of September 30, 2015, we had a consolidated net deferred income tax asset related to the United States federal jurisdiction. That net deferred income tax asset position included a deferred income tax liability of $589 thousand related to Etherios which was entirely in the United States federal tax jurisdiction.

Below is a summary of the gain on sale (in thousands):

Gross proceeds	$	4,096
Less:
Employee related liabilities	(1,134		)
Working capital adjustment	(113		)
Net cash proceeds	2,849
Present value of receivable due on October 23, 2016	2,941
Present value of receivable due on October 23, 2017	1,922
Total fair value of consideration received	7,712
Less:
Net assets of Etherios	(3,383		)
Facility abandonment costs	(725		)
Transaction costs, primarily professional fees	(734		)
Gain on sale of discontinued operations, before income taxes	$	2,870