Note 2 - Discontinued Operations

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

2. DISCONTINUED OPERATIONS

As of June 30, 2020, our previously identified Factoring reportable segment was classified as discontinued operations as it: (i) was a component of the entity, (ii) met the criteria as held for sale, and (iii) had a material effect on the Company's operations and financial results. On July 8, 2020, we closed on the disposition of substantially all of the operations and assets of TFS, which included substantially all of the assets and operations of our Factoring reportable segment. The sale consisted primarily of $103.3 million of net accounts receivable, which included $108.7 million of gross accounts receivable, less advances and rebates of $5.4 million.

We have reflected the former Factoring reportable segment as discontinued operations in the consolidated statements of operations for all periods presented. Prior periods have been adjusted to confirm to the current presentation.

The following table summarizes the results of our discontinued operations for the twelve months ended December 31, 2021 and 2020:

(in thousands)	Twelve months ended December 31
	2021			2020
Total revenue	$	-		$	5,397
Operating expenses		25			1,149
Gain on disposal		-			(3,720	)
(Reversal of) loss contingency		(3,412	)		44,151
Operating income (loss)		3,387			(36,183	)
Interest expense		-			1,950
Income (loss) before income taxes		3,387			(38,133	)
Income tax expense (benefit)		847			(9,535	)
Net income (loss) from discontinued operations, net of tax	$	2,540		$	(28,598	)

Operating income for the year ended December 31, 2021 relates to the gain on the reversal of our contingent loss liability in the amount of $3.4 million. Reversal of contingent loss liability relates to the reduced exposure of future indemnification by the Company to Triumph as a result of the collection of covered receivables identified in the amended purchase agreement, as described in Note 1.

Interest expense not directly attributable to or related to other operations has been allocated to discontinued operations in a manner consistent with debt needed to finance the net average funds employed by the Factoring reportable segment, multiplied by the Company's weighted average interest rate.

The following table summarizes the major classes of assets and liabilities included as discontinued operations as of December 31, 2021 and 2020:

(in thousands)	December 31, 2021		December 31, 2020
Noncurrent deferred tax asset		1,275		9,535
Noncurrent assets from discontinued operations		1,275		9,535
Total assets from discontinued operations	$	1,275	$	9,535
Current liabilities:
Accounts payable	$	-	$	816
Current liabilities of discontinued operations		-		816
Contingent liabilities		5,100		44,151
Total liabilities from discontinued operations	$	5,100	$	44,967

There were no net cash flows related to discontinued operations for the year ended December 31, 2021. The net cash flows for operating activities related to discontinued operations provided $11.7 million for the year ended December 31, 2020, and there were no related investing or financing cash flows related to discontinued operations for the year ended December 31, 2020.

The following unaudited summary information is presented on a consolidated pro forma basis as if the Factoring assets were sold as of January 1, 2020:

(in thousands)	Twelve months ended December 31,
	2021		2020
Total revenue	$	1,046,003	$	838,561
Income (loss) from continuing operations		58,191		(14,120	)
Income (loss) per basic share from continuing operations	$	3.46	$	(0.81	)
Income (loss) per diluted share from continuing operations	$	3.42	$	(0.81	)

Refer to Note 1, "Significant Accounting Policies" of the accompanying consolidated financial statements for further information about the amended TFS purchase agreement.