Hypercom Corporation Annual Report - CiteSeer

Of the $2.9 million of costs incurred during 2007, $1.6 million was recorded in costs of revenue and $1.3 million was recorded
in operating expenses. Of the $2.9 million, $0.6 million was reported in the Americas, $0.4 million in SEMEA, $0.8 million in Asia-
Pacific, and $1.1 million in Shared cost centers.
During the second quarter of 2008, the Company accrued the remaining lease termination and severance costs related to the exit
out of its manufacturing facility in China. The total costs of the lease termination and severance costs of $0.5 million were recorded in
costs of revenue in Asia-Pacific. The Company paid the cost during the third quarter of 2008.
The following table summarizes these charges and activities during 2008 and 2007 (dollars in thousands):
Severance
2008 2007
Transition to Contract
Manufacturing Total Severance
- 65 -
Transition to
Contract
Manufacturing Total
Beginning Balance
Accrual $ 1,100 $ — $ 1,100 $ — $ — $ —
Charges 500 — 500 1,737 1,183 2,920
Amounts utilized (1,600 ) — (1,600 ) (637 ) (1,183 ) (1,820 )
Ending Balance Accrual $ — $ — $ — $ 1,100 $ — $ 1,100
6. Discontinued Operations and Assets Held for Sale
European Lease and Service Operation
During the fourth quarter of 2009, the Company made the decision to sell a European lease and service operation, which
qualifies as discontinued operations. Accordingly, the lease and service business operating results have been classified as discontinued
operations in the statements of operations and cash flows for all periods presented. General corporate overhead costs have not been
allocated to discontinued operations. A summary of the operating results for the years ended December 31, 2009 and 2008 included in
discontinued operations in the accompanying consolidated statements of operations is as follows (dollars in thousands):
2009 2008
European lease and service operation
Net revenue $ 4,644 $ 3,068
Costs of revenue 4,294 2,065
Gross profit 350 1,003
Selling, general and administrative expenses (1,439 ) (1,016 )
Loss from discontinued operations $ (1,089 ) $ (13 )
A summary of the assets and liabilities held for sale related to this European lease and service operation is as follows (dollars in
thousands):
December 31, December 31,
2009 2008
ASSETS
Cash and cash equivalents $ 56 $ 396
Accounts receivable, net 688 488
Net investment in sales-type leases 2,298 2,644
Inventories 326 391
Prepaid expenses and other current assets 5 —
Total assets $ 3,373 $ 3,919
LIABILITIES
Accounts payable $ 1,172 $ 2,384
Accrued payroll and related expenses 72 26
Total liabilities $ 1,244 $ 2,410