Discontinued Operations

6 Months Ended

Jun. 30, 2020

Discontinued Operations and Disposal Groups [Abstract]

During 2019, management completed the sale of our Government Solutions (“GS”) segment as a result of the Firm’s decision to focus solely on the commercial technical and professional staffing services and solutions space. The GS segment consisted of Kforce Government Solutions, Inc. (“KGS”), our federal government solutions business, and TraumaFX® Solutions, Inc. (“TFX”), our federal government product business. The results of operations for both KGS and TFX have been reported as discontinued operations in our consolidated financial statements for all prior periods presented.

The following table summarizes the line items of pretax profit of the GS segment (in thousands):


	Three Months Ended June 30, 2019					Six Months Ended June 30, 2019
Revenue		$	1,311	$	27,737
Direct costs		479		19,494
Gross profit		832		8,243
Selling, general and administrative expenses		1,424		6,842
Depreciation and amortization		58		307
(Loss) income from discontinued operations		(650)		1,094
Gain on sale of discontinued operations		80,004		80,004
Other income (expense), net		428		(436)
Income from discontinued operations, before income taxes		79,782		80,662
Income tax expense (1)		20,999		2,998
Income from discontinued operations, net of tax		$	58,783	$	77,664

⁽¹⁾ During the three months ended March 31, 2019, we entered into a definitive agreement to sell KGS and recorded $18.5 million to deferred tax assets and income tax benefit since it became apparent that the temporary difference for the excess of the outside tax basis in the equity of KGS over the amount of the inside basis in the assets of KGS would reverse in the foreseeable future. This deferred tax asset of $18.5 million was utilized and recorded as income tax expense during the three months ended June 30, 2019 when the divestiture was completed.

For the six months ended June 30, 2019, the accompanying Unaudited Condensed Consolidated Statements of Cash Flows are presented on a combined basis (continuing operations and discontinued operations) and cash provided by operating activities and cash provided by investing activities for discontinued operations were $5.1 million and $118.9 million, respectively.