Discontinued Operations

9 Months Ended

Sep. 30, 2020

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

In July 2020, as part of the Company’s overall strategy to focus on its core business, the Company entered into a definitive agreement (the “Purchase Agreement”) to sell its 100% interest (the “Transaction”) in ALG to J.D. Power. The Purchase Agreement provides for J.D. Power to pay the Company (i) $112.5 million in cash consideration at the closing of the Transaction, subject to certain customary post-closing adjustments, (ii) a potential cash earnout of up to $7.5 million based upon ALG’s achievement of certain revenue metrics in 2020 and (iii) a potential cash earnout of up to $15 million based upon ALG’s achievement of certain revenue metrics in 2022. The Transaction is expected to close by the end of 2020. This divestiture represents a strategic shift in the Company’s business and meets the criteria of discontinued operations. As a result, the operating results and cash flows from ALG have been reflected as discontinued operations in the Condensed Consolidated Statements of Comprehensive Income (Loss) and Condensed Consolidated Statements of Cash Flows for all periods presented, while the assets and liabilities have been reflected as assets and liabilities of discontinued operations in the Condensed Consolidated Balance Sheets included herein.

The following table presents the balance sheet information for assets and liabilities of discontinued operations as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Assets
Current assets
Accounts receivable, net of allowances	$	6,635	$	6,649
Prepaid expenses and other current assets	82		128
Total current assets of discontinued operations	6,717		6,777
Property and equipment, net	2,593		2,016
Goodwill	11,919		13,842
Intangible assets, net	6,051		8,260
Total noncurrent assets of discontinued operations	20,563		24,118
Total assets of discontinued operations (1)	$	27,280	$	30,895
Liabilities
Current liabilities
Accounts payable	$	34	$	17
Accrued expenses and other current liabilities	720		738
Total current liabilities of discontinued operations (1)	$	754	$	755

(1)    The total assets and liabilities of discontinued operations are classified in current assets and current liabilities, respectively, in the Company’s condensed consolidated balance sheet as of September 30, 2020, as its planned divestiture of the discontinued operation is expected to occur within twelve months of that date.

The following table presents the detail of “Income from discontinued operations, net of taxes” within the Condensed Consolidated Statements of Comprehensive Income (Loss) (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Revenues	$	5,221	$	4,770	$	13,961	$	14,050
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization presented separately below)	1,379		1,409		3,720		4,101
Sales and marketing	304		531		1,243		1,810
Technology and development	373		245		993		827
General and administrative	725		176		1,620		566
Depreciation and amortization	418		1,194		2,910		3,704
Goodwill impairment	—		—		1,923		—
Total costs and operating expenses	3,199		3,555		12,409		11,008
Income from operations	2,022		1,215		1,552		3,042
Interest income	3		261		169		819
Income from discontinued operations before income taxes	2,025		1,476		1,721		3,861
Provision for (benefit from) income taxes	25		319		(132)		1,306
Income from discontinued operations, net of taxes	$	2,000	$	1,157	$	1,853	$	2,555