Discontinued Operations

9 Months Ended

Mar. 31, 2015

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

During the fourth quarter of fiscal 2014, the Company conducted a strategic review of the Mercury Intelligence Systems (“MIS”) operating segment which encompassed an assessment of MIS' financial performance and contemporaneous future financial projections. The Company, with Board of Director's approval, concluded that a plan to divest the MIS operating segment would be in the best interests of the Company and its shareholders.

As of June 30, 2014, the Company's MIS operating segment met the "held for sale" criteria in accordance with FASB ASC 205. The MIS operating results have been reported as a discontinued operation for all periods presented. On January 23, 2015, the Company completed the sale of MIS for approximately $1,600. The sale resulted in net proceeds of $885 and a loss on disposal of $892, which is reflected within discontinued operations of the Company's accompanying consolidated financial statements. The Company does not have continuing involvement in the operations of MIS after its divestiture.

During the three months ended December 31, 2014, the Company determined that the MIS reporting unit’s carrying value of goodwill exceeded its implied fair value, resulting in a goodwill impairment charge of $2,283. The impairment charge is reflected within discontinued operations of the Company’s accompanying consolidated financial statements.

The amounts reported in loss from discontinued operations, net of income taxes were as follows:

	Three Months Ended March 31,						Nine Months Ended March 31,
	2015			2014			2015			2014
Net revenues of discontinued operations	$	333		$	2,107		$	3,493		$	7,479
Costs of discontinued operations:
Cost of revenues	209			1,356			2,385			5,092
Selling, general and administrative	715			738			1,961			2,327
Research and development	29			211			305			332
Amortization of intangible assets	32			124			279			371
Restructuring and other charges	—			25			—			25
Acquisition costs and other related expenses	(109		)	—			—			—
Impairment of goodwill	—			—			2,283			—
Loss from discontinued operations before income taxes	(543		)	(347		)	(3,720		)	(668		)
Loss on disposal of discontinued operations before income taxes	(892		)	—			(892		)	—
Tax benefit	(416		)	(39		)	(754		)	(150		)
Loss from discontinued operations, net of income taxes	$	(1,019	)	$	(308	)	$	(3,858	)	$	(518	)

The amounts reported as assets and liabilities of the discontinued operations were as follows:

	June 30, 2014
Accounts receivable, net	$	925
Unbilled receivables and costs in excess of billings	248
Deferred income taxes	77
Prepaid income taxes	—
Prepaid expenses and other current assets	124
Property and equipment, net	475
Goodwill	2,283
Intangible assets, net	2,062
Other non-current assets	39
Assets of discontinued operations	$	6,233
Accounts payable	$	127
Accrued expenses	802
Accrued compensation	689
Deferred income taxes	818
Liabilities of discontinued operations	$	2,436

The depreciation, amortization and significant operating and investing non-cash items of the discontinued operations were as follows:

	Three Months Ended March 31,					Nine Months Ended March 31,
	2015			2014		2015		2014
Depreciation	$	11		$	40	$	100	$	117
Amortization of intangible assets	$	32		$	124	$	279	$	371
Capital expenditures	$	—		$	44	$	—	$	62
Restructuring and other charges	$	—		$	25	$	—	$	25
Impairment of goodwill	$	—		$	—	$	2,283	$	—
Stock-based compensation expense	$	(38	)	$	48	$	89	$	196