Disposals of Subsidiaries
|3 Months Ended|
Mar. 31, 2017
|Disposals of Subsidiaries [Abstract]|
|DISPOSALS OF SUBSIDIARIES||
3. DISPOSALS OF SUBSIDIARIES
On January 31, 2017, the Company sold the Highwire division of ADEX. This division accounted for approximately $365 and $1,605 in revenues for the three months ended March 31, 2017 and 2016, respectively. Under the terms of the sale, the Company received $4,000 in total proceeds and is expected to receive an additional working capital adjustment of approximately $500 to be paid in August 2017. The Company used proceeds from the sale to make payments on term loans (refer to Note 8, Term Loans, for further detail). In connection with the sale, the Company completed an ASC 350-20 goodwill fair value assignment, which allocated $3,003 from the reporting unit to Highwire.
Per ASC 350-20-40-7, when a portion of goodwill is allocated to a business to be disposed of, the goodwill remaining in the portion of the reporting unit to be retained shall be tested for impairment in accordance with paragraphs 350-20-35-3A through 35-19 using its adjusted carrying amount. As a result of the sale, the Company identified indicators of potential impairment of goodwill and intangible assets.
Based on the Company’s analysis, the Company recorded goodwill impairment for ADEX and SDNE of $2,885 and $261, respectively, and intangible asset impairment for ADEX and SDNE of $637 and $160, respectively, in the unaudited condensed consolidated statement of operations for the three months ended March 31, 2017.
As a result of the disposal, the Company recorded a gain on disposal of subsidiaries of $695 to the unaudited condensed consolidated statement of operations for the three months ended March 31, 2017.
The Company completed the below pro forma data for the three months ended March 31 2017 and 2016 to reflect the impact of the sale on the Company’s financial results as though the transaction occurred at the beginning of the reported periods: