Discontinued Operations - DNI

6 Months Ended

Dec. 31, 2019

22. Discontinued operation - DNI

The Company determined that the disposal of its controlling interest in DNI is a discontinued operation because it represented a strategic shift that will have a major effect on the Company’s operations and financial results as a result of the sale of a significant portion of its investment in DNI. Refer to Note 3 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2019, for additional information regarding the deconsolidation of DNI. The table below presents certain major captions to the Company’s unaudited condensed consolidated statement of operations and unaudited condensed consolidated statement of cash flows for three and six months ended December 31, 2018, that have not been separately presented on those statements:

DNI
		December 31, 2018
		Three months ended		Six months ended
Unaudited condensed consolidated statement of operations
Discontinued:
Revenue	$	19 708	$	38 495
Cost of goods sold, IT processing, servicing and support		9 954		20 166
Selling, general and administration		1 266		1 722
Depreciation and amortization		2 662		5 599
Operating income		5 826		11 008
Interest income		224		499
Interest expense		215		416
Net income before tax		5 835		11 091
Income tax expense		2 100		3 615
Net income before earnings from equity-accounted investments		3 735		7 476
Earnings from equity-accounted investments (1)		44		(58)
Net income from discontinued operations	$	3 779	$	7 418

Unaudited condensed consolidated statement of cash flows
Discontinued:
Total net cash (used in) provided by operating activities	$	10 546	$	7 028
Total net cash (used in) provided by investing activities		(172)		(197)
(1) Earnings from equity-accounted investments for the three and six months ended December 31, 2018, represents earnings attributed to equity-accounted investments owned by DNI and included in the Company’s results as a result of the consolidation of DNI.

The Company retained a continuing involvement in DNI through its 30% interest in DNI (refer to Note 7). The Company expects to retain an interest in DNI for less than 12 months. The Company recorded earnings under the equity method related to its retained investment in DNI during the three and six months ended December 31, 2019, refer to Note 7. The table below presents revenues and expenses between the Company and DNI, after the DNI disposal transaction, during the three and six months ended December 31, 2019:

DNI
		December 31, 2019
		Three months ended		Six months ended
Revenue generated from transactions with DNI	$	-	$	-
Expenses incurred related to transactions with DNI	$	333	$	2 607

Refer to Note 7 for the dividends received from DNI and accounted for under the equity method during the six months ended December 31, 2019.