Discontinued Operations

6 Months Ended

Oct. 31, 2023

Discontinued Operations and Disposal Groups [Abstract]

On September 18, 2023, the Company disposed of its 100% equity interest in its information technology consulting firm, TPM to Marathon TS, Inc., an IT professional services firm for approximately $2.1 million in cash, of which $300,000 is held in escrow. The amounts held in escrow are limited to claims arising out of or relating to any pre-closing taxes. Any escrow amounts that are not subject to then outstanding indemnification claims shall be released to the Company in equal $100,000 increments on the 12, 24 and 36 month anniversary of the transaction closing date and are included in prepaid expenses and other current assets and other assets in the Condensed Consolidated Balance Sheet as of October 31, 2023. There have not been any submitted, or expected, indemnification claims against these escrowed funds. This transaction enables us to focus on our core supply chain planning business allowing Logility to continue to expand its AI-first supply chain management platform.

In accordance with applicable accounting guidance for the disposal of long-lived assets, the results of TPM are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results in the accompanying Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows. TPM was previously reported in the former IT Consulting segment. During the second quarter of fiscal 2024, the Company identified an error, originating in 2017, resulting in an understatement of professional services and other cost of revenue and other current liabilities. The error was determined to be immaterial to all impacted periods and has been corrected in the previously issued condensed consolidated financial statements presented herein. Subsequent to presenting the results of TPM as discontinued operations, the amounts related to the error resulted in an adjustment to increase earnings from operations of discontinued operations by $24,000 in the three months ended October 31, 2022 and decrease earnings from operations of discontinued operations by $45,000 in the six months ended October 31, 2022. The error resulted in an increase to retained deficit and an increase to other current liabilities of approximately $1.0 million in prior periods presented.

The following is selected financial information included in Earnings from discontinued operations for TPM:


	Three Months Ended October 31,				Six Months Ended October 31,
	2023		2022		2023		2022
Revenue	$	1,666	$	4,159	$	4,932	$	8,674
Cost of revenue	$	1,411	$	3,333	$	3,959	$	7,012
Total operating expenses	$	176	$	585	$	718	$	1,275
Gain on disposal of discontinued operations	$	2,124	$	—	$	2,124	$	—
Earnings before income taxes	$	2,203	$	241	$	2,379	$	387
Income tax expense	$	461	$	52	$	503	$	109
Earnings from discontinued operations, net of taxes	$	1,742	$	189	$	1,876	$	278

The following is selected financial information included in current assets and current liabilities from discontinued operations for TPM:


	October 31,		April 30,
	2023		2023
Cash and cash equivalents	$	—	$	637
Trade accounts receivable, less allowance for doubtful accounts	$	—	$	2,964
Prepaid expenses and other current assets	$	—	$	2
Current assets of discontinued operations	$	—	$	3,603

Current liabilities of discontinued operations	$	—	$	318