| Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] |
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18. |
Discontinued Operations |
On December 29, 2011 the Company entered into an agreement to sell certain assets of our Pharmakon business unit to Informed Medical Communications, Inc. (“Informed”) in exchange for potential future royalty payments and an ownership interest in Informed. The decision to take this action resulted from an extensive evaluation of the Pharmakon business in the context of the Company’s strategy, which is to focus on outsourced promotional services targeted to healthcare providers, as well as provide other promotional services, including clinical educator services, digital communications, teledetailing and full-service product commercialization solutions. The Company believes that this transaction will allow it to focus on the core businesses mentioned above while having the ability to offer stronger peer to peer services, and a broader commercial offering, including sales and leadership training, through integrated offers with Informed. In consideration for the Pharmakon assets, the Company received of royalty stream with a fair value of $0.4 million and a 1% ownership interest in Informed valued at $0.1 million. The royalty is earned annually through 2016 and not considered to be a direct cash flow to the Company since they are not significant. Net of the aforementioned consideration, the Company recorded a charge of approximately $7.5 million. The consolidated statement of operations reflects the presentation of Pharmakon as a discontinued operation in all periods presented.
On July 19, 2010, the Board approved closing the TVG business unit. The Company notified employees and issued a press release announcing this decision on July 20, 2010. The decision to take this action resulted from an extensive evaluation of the TVG business in the context of the Company’s strategy, which is to focus on outsourced promotional services targeted to healthcare providers, as well as TVG’s consistently declining revenues over recent years and the shrinking market in which TVG operated. The Company completed the closure of the TVG operations during the quarter ended September 30, 2010, including the completion of all active customer contracts. The consolidated statement of operations reflects the presentation of TVG as a discontinued operation in all periods presented.
A summary of the exit and disposal costs recognized within Loss from Discontinued Operations in the consolidated statements of operations for the year ended December 31, 2011 and 2010 are as follows:
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For the Years Ended December 31, |
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2011 |
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2010 |
Non-cash charges |
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Asset impairments (1) |
$ |
6,913 |
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$ |
575 |
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Cash charges |
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Lease-related charges |
392 |
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327 |
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Severance charges |
1,120 |
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879 |
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Other charges |
(12 |
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6 |
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Total charges |
$ |
8,413 |
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$ |
1,787 |
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(1) |
Asset impairments for the year ended December 31, 2011 represent the write-off of Pharmakon's goodwill and other intangible assets. Asset impairments for the year ended December 31, 2010 represent the write-off of unamortized leasehold improvements and furniture. |
A rollforward of the liabilities recognized in the consolidated balance sheet as of December 31, 2011 and December 31, 2010 is as follows:
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Accrued liability as of January 1, 2010 |
$ |
— |
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Add: Costs incurred, excluding non-cash charges |
1,462 |
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Less: Cash payments |
(1,446 |
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Accrued liability as of December 31, 2010 (1) |
$ |
16 |
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Add: Costs incurred, excluding non-cash charges |
1,120 |
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Less: Cash payments |
(16 |
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Accrued liability as of December 31, 2011 (2) |
$ |
1,120 |
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(1) |
Accrued liability at December 31, 2010 consists of TVG employee related costs. |
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(2) |
Accrued liability at December 31, 2011 consists of Pharmakon employee severance costs. |
The table below presents the significant components of Pharmakon's and TVG’s results included in Loss from Discontinued Operations in the consolidated statements of operations for the years ended December 31, 2011 and 2010.
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For the Years Ended December 31, |
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2011 |
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2010 |
Revenue, net |
$ |
5,880 |
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$ |
13,284 |
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Loss from discontinued operations, before income tax |
(8,374 |
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387 |
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Income tax expense |
(237 |
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26 |
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Loss from discontinued operations, net of tax |
$ |
(8,137 |
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$ |
361 |
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The major classes of assets and liabilities included in the consolidated balance sheets for Pharmakon and TVG as of December 31, 2011 and December 31, 2010 are as follows:
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December 31, |
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2011 |
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2010 |
Current assets |
$ |
1,013 |
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$ |
7,841 |
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Non-current assets |
625 |
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7,590 |
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Total assets |
$ |
1,638 |
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$ |
15,431 |
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Current liabilities |
$ |
1,865 |
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$ |
1,300 |
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Non-current liabilities |
1,526 |
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1,560 |
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Total liabilities |
$ |
3,391 |
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$ |
2,860 |
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