DISCONTINUED OPERATIONS

On March 31, 2018, the Company completed the sale of its RTM businesses in Belgium, Europe (excluding Belgium) and Asia Pacific ("APAC") in separate transactions to Value Plus NV, Morgan Philips Group S.A., and Apache Group Holdings Pty Limited, respectively. The gross proceeds from the sale were $38,960. In addition, $17,626 of debt was assumed by the buyers.

The following is a reconciliation of the gross proceeds to the net proceeds as presented in the statement of cash flows for the nine months ended September 30, 2018.



Gross proceeds	$	38,960
Add: purchase price adjustments	149
Less: cash and restricted cash sold	(9,547		)
Less: transaction costs	(1,661		)
Net cash proceeds as presented in the statement of cash flows	$	27,901

The divestiture generated a pre-tax gain of $13,985 for the nine months ended September 30, 2018, which includes a benefit of $10,819 reclassification adjustment relating to the net foreign currency translation gains previously included in accumulated other comprehensive income.

The RTM businesses met the criteria for discontinued operations set forth in ASC 205 on March 31, 2018 subsequent to approval of the sale by our stockholders. The Company reclassified its discontinued operations for all periods presented and has excluded the results of its discontinued operations from continuing operations and from segment results for all periods presented.

The carrying amounts of the classes of assets and liabilities from the RTM businesses included in discontinued operations were as follows:



	September 30, 2019		December 31, 2018
	Total		Total
Prepaid and other current assets	$	—	$	941
Total current assets	—		941
Total assets	$	—	$	941

Accrued expenses and other current liabilities	$	—	$	115
Total current liabilities	—		115
Total liabilities	$	—	$	115

Reported results for the discontinued operations by period were as follows:



	Three Months Ended September 30,					Nine Months Ended September 30,
	2019		2018			2019			2018
Revenue	$	—	$	—		$	—		$	108,463
Gross profit	—		—			—			38,663
Operating expenses:
Salaries and related	—		—			—			29,032
Other selling, general and administrative	—		—			—			8,355
Depreciation and amortization	—		—			—			680
Business reorganization	—		—			—			50
Operating income	—		—			—			546
Non-operating income (expense):
Interest expense, net	—		—			—			(88		)
Other non-operating income	—		—			—			216
Income from discontinued operations before taxes and gain on sale	—		—			—			674
Gain (loss) gain from sale of discontinued operations	18		(47		)	(113		)	13,985
Income (loss) from discontinued operations before income taxes	18		(47		)	(113		)	14,659
Provision for income taxes	—		—			—			1,099
Income (loss) from discontinued operations	$	18	$	(47	)	$	(113	)	$	13,560

Depreciation, capital expenditures, and significant operating and investment non cash items of the discontinued operations by period were as follows:



	Nine Months Ended September 30, 2018
Depreciation and amortization	$	680
Stock-based compensation expense	$	233
Capital expenditures	$	284

Disaggregation of Revenue

The following table presents our disaggregated revenues from discontinued operations by revenue source.



	Nine Months Ended September 30, 2018
	Permanent Recruitment		Contracting		Talent Management		Other		Total
Revenue	$	20,700	$	76,615	$	10,694	$	454	$	108,463
Direct costs (1)	190		67,980		1,225		405		69,800
Gross profit	$	20,510	$	8,635	$	9,469	$	49	$	38,663

(1)

Direct costs include the direct staffing costs of salaries, payroll taxes, employee benefits, travel expenses, and insurance costs for the Company’s contractors and reimbursed out-of-pocket expenses and other direct costs. Other than reimbursed out-of-pocket expenses, there are no other direct costs associated with the Permanent Recruitment and Other categories. Gross profit represents revenue less direct costs. The region where services are provided, the mix of contracting, and permanent recruitment, and the functional nature of the staffing services provided can affect gross profit.