Discontinued Operations

9 Months Ended

Sep. 30, 2011

Discontinued Operations

Discontinued Operations

Note 3 — Discontinued Operations

Copper, Indium, Gallium, Selenide (“CIGS”) Solar Systems Business

On July 28, 2011, we announced a plan to discontinue our CIGS solar systems business. The action, which was completed on September 27, 2011 and impacted approximately 80 employees, was in response to the dramatically reduced cost of mainstream solar technologies driven by significant reductions in prices, large industry investment, a lower than expected end market acceptance for CIGS technology and technical barriers in scaling CIGS. This business was previously included as part of our LED & Solar segment.

Accordingly, the results of operations for the CIGS solar systems business have been recorded as discontinued operations in the accompanying Condensed Consolidated Statements of Income for all periods presented. During the nine months ended September 30, 2011, total discontinued operations include charges totaling $69.8 million. These charges include an asset impairment charge totaling $6.2 million, a goodwill write-off of $10.8 million, an inventory write-off totaling $27.0 million, charges to settle contracts totaling $22.1 million, lease related charges totaling $1.4 million and personnel severance charges totaling $2.3 million. During the three months ended September 30, 2011, total discontinued operations include charges totaling $19.0 million. These charges include a goodwill write-off totaling $10.8 million, a charge to settle contracts totaling $11.0 million, lease related charges totaling $1.4 million and personnel severance charges totaling $2.3 million, partially offset by a $6.5 million recovery of cost relating to inventory written-off during the second quarter.

Metrology Divestiture

On August 15, 2010, we signed a definitive agreement to sell our Metrology business to Bruker Corporation (“Bruker”) comprising our entire Metrology reporting segment for $229.4 million. Accordingly, Metrology’s operating results were accounted for as discontinued operations and the related assets and liabilities were classified as held for sale. The sales transaction closed on October 7, 2010, except for assets located in China due to local restrictions. Total proceeds, which included a working capital adjustment of $1 million, totaled $230.4 million of which $7.2 million relates to the assets in China. The Company recorded a liability to defer the gain of $5.4 million on disposal related to the assets in China. As part of our agreement with Bruker, $22.9 million of proceeds is held in escrow and is restricted from use for one year from the closing date of the transaction to secure potential specified losses, if any, arising out of breaches of representations, warranties and covenants we made in the stock purchase agreement and related documents. As of October 6, 2011 the restriction relating to the escrowed proceeds of $22.9 million was released.

Summary information related to discontinued operations is as follows (in thousands):

	Three months ended
	September 30, 2011									September 30, 2010
	Solar Systems			Metrology			Total			Solar Systems			Metrology			Total
Net sales	$	—		$	—		$	—		$	—		$	31,880		$	31,880
Cost of sales	(6,449		)	—			(6,449		)	1,901			16,257			18,158
Gross profit	6,449			—			6,449			(1,901		)	15,623			13,722
Total operating expenses	29,736			552			30,288			4,619			19,934			24,553
Operating loss	$	(23,287	)	$	(552	)	$	(23,839	)	$	(6,520	)	$	(4,311	)	$	(10,831	)
Net loss from discontinued operations, net of tax	$	(16,366	)	$	(388	)	$	(16,754	)	$	(2,583	)	$	(4,941	)	$	(7,524	)

	Nine months ended
	September 30, 2011									September 30, 2010
	Solar Systems			Metrology			Total			Solar Systems			Metrology		Total
Net sales	$	—		$	—		$	—		$	2,103		$	92,011	$	94,114
Cost of sales	30,904			—			30,904			5,383			47,822		53,205
Gross profit	(30,904		)	—			(30,904		)	(3,280		)	44,189		40,909
Total operating expenses	59,224			1,446			60,670			13,081			40,643		53,724
Operating (loss) income	$	(90,128	)	$	(1,446	)	$	(91,574	)	$	(16,361	)	$	3,546	$	(12,815	)
Net (loss) income from discontinued operations, net of tax	$	(58,268	)	$	(935	)	$	(59,203	)	$	(9,894	)	$	741	$	(9,153	)

Liabilities of discontinued segment held for sale, totaling $5.4 million, as of September 30, 2011 and December 31, 2010, consist of the deferred gain related to the assets in China.