18)      Divestiture

On March 5, 2026, the Company closed on the sale of and divested Federal Industries ("Federal"), its display merchandising business to a third party for cash proceeds of $68.3 million, net of cash retained and subject to customary adjustments for net working capital, cash and indebtedness. The divestiture does not represent a strategic shift that has a major effect on the Company’s operations and financial results and, therefore, its results are included in continuing operations on the Company's Consolidated Statements of Operations. The net income of the disposal group through the completion date is included in the Company's Consolidated Statements of Operations. The pre-tax income for Federal was $2.0 million for the three months ended  September 30, 2025.

During the three months ended  September 30, 2026, the Company finalized the post-closing purchase price adjustment provided for under the purchase agreement. Pursuant to a settlement agreement with the buyer, the Company agreed to pay $0.9 million in settlement of the final closing statement and related purchase price adjustment. Accordingly, during the three months ended  September 30, 2026, the Company recorded a $0.9 million reduction to the previously recognized pre-tax gain on divestiture.

The table below summarizes the components of the transaction and the resulting gain on divestiture (in thousands):

In connection with the divestiture, the Company entered into a Transaction Services Agreement (TSA) to facilitate smooth operational transition. Under the agreement, following the divestiture date, the Company is providing payroll processing, travel and expense booking, finance, treasury and information technology support services for a period of six months unless earlier terminated or extended by the buyer. These services are to be provided at cost to the Company.