Divestitures

12 Months Ended

Apr. 30, 2024

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

On September 18, 2023, the Company disposed of its 100% equity interest in its information technology staffing firm, The Proven Method, Inc., ("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 Consolidated Balance Sheet as of April 30, 2024. 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-based 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 Consolidated Statements of Operations and Consolidated Statements of Cash Flows and in the Notes to Consolidated Financial Statements. TPM was previously reported in the former IT Consulting segment.

In the Company's most recently filed Form 10-Q's for the quarterly periods ended October 31, 2023 and January 31, 2023, current assets and current liabilities of TPM as of April 30, 2023 were incorrectly presented as discontinued operations in the Condensed Consolidated Balance Sheets. These assets and liabilities were not included within the disposal group and therefore have been reclassified to be correctly presented as current assets and current liabilities in the accompanying Consolidated Balance Sheets. Also, during fiscal 2024, the Company identified two errors impacting TPM, both of which originated during or prior to 2018, were determined to be immaterial to all prior periods impacted, and have been corrected in the impacted periods presented herein or by adjusting opening balances as of the beginning of the earliest period presented. The first error resulted in an understatement of professional services and other cost of revenue and an understatement of other current liabilities. Subsequent to presenting the results of TPM as discontinued operations, the amounts related to the error resulted in an adjustment to (decrease) increase earnings from operations of discontinued operations by ($111,000), and $23,000 for the years ended April 30, 2023 and 2022, respectively. The error also resulted in an increase to retained deficit and other current liabilities of approximately $1.0 million as of the beginning of the year ended April 30, 2022. The second error resulted in a $752,000 increase to retained deficit and corresponding decrease in accounts receivable as of the beginning of the year ended April 30, 2022.

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


	Year ended April 30,
	2024		2023		2022
Revenue	$	4,932	$	15,407	$	21,032
Cost of revenue	3,959		12,466		16,454
Total operating expenses	$	718	$	2,387	$	2,954
Gain on disposal of discontinued operations	$	2,124	$	—	$	—
Earnings before income taxes	$	2,379	$	554	$	1,624
Income tax expense	700		227		493
Earnings from discontinued operations, net of taxes	$	1,679	$	327	$	1,131

Other Divestitures

On November 15 2023, we signed an asset purchase agreement for the sale of our Transportation Rating Solutions ("TRS") business which consists of on-premise freight shipping solutions for LTL, truckload and rail shipments within North America to FOG Software Group ("FOG") a division of Vela Software for approximately $1.1 million in cash, of which, $440,000 is subject to various holdback provisions, which expired 120 days following the date of the agreement. The divestiture of TRS will allow us to focus on our core supply chain planning business allowing Logility to continue to expand its AI-based supply chain management platform. The purchase price is subject to a working capital adjustment. We recognized a pre-tax gain of approximately $1.4 million which is recorded within Other Income in the accompanying Consolidated Statement of Operations for the year ended 2024. Earnings from the business were not material and the results of the business through the date of sale were reflected in continuing operations within the SCM segment.