Discontinued Operations

6 Months Ended

Jul. 03, 2021

Discontinued Operations

Discontinued Operations

2. Discontinued Operations

On April 22, 2021, the Company entered into an Asset Purchase Agreement pursuant to which Skyworks Solutions, Inc. agreed to acquire certain assets, rights, and properties, and assume certain liabilities, comprising the Company’s infrastructure and automotive business for $2.75 billion in cash. The transaction closed on July 26, 2021. The financial results of the infrastructure and automotive business, which are readily distinguishable from other components of the Company, have been presented as discontinued operations in the Condensed Consolidated Financial Statements.

The following table presents the financial results of the infrastructure and automotive business (the “discontinued operations”) in the Company’s condensed consolidated statements of operations (in thousands):

	Three Months Ended				Six Months Ended
	July 3,		July 4,		July 3,		July 4,
	2021		2020		2021		2020
Revenues	$	108,064	$	93,183	$	205,712	$	190,042
Costs of revenues and operating expenses		70,143		54,352		130,917		113,948
Income from discontinued operations before income taxes		37,921		38,831		74,795		76,094
Provision (benefit) for income taxes		(502)		4,609		(2,293)		8,237
Income from discontinued operations	$	38,423	$	34,222	$	77,088	$	67,857
Income from discontinued operations per share:
Basic	$	0.86	$	0.78	$	1.73	$	1.55
Diluted	$	0.84	$	0.78	$	1.68	$	1.53

2. Discontinued Operations (Continued)

The following table summarizes the assets and liabilities of the infrastructure and automotive business held for sale (in thousands):

	July 3,		January 2,
	2021		2021
Assets
Inventories	$	30,176	$	18,801
Prepaid expenses and other current assets		1,876		2,204
Goodwill		255,543		255,543
Other assets		9,947		9,772
Total assets held for sale	$	297,543	$	286,321
Liabilities
Other current liabilities	$	699	$	433
Other non-current liabilities		—		451
Total liabilities held for sale	$	699	$	884

Continuing Involvement

In connection with the closing of the sale, the Company entered into certain ancillary agreements with Skyworks, including a Transition Services Agreement ("TSA"). Through the TSA, the Company will sublease certain premises to Skyworks and provide various temporary support services for three to eighteen months, depending on the service provided. Although the services provided under the TSA will generate continuing cash flows between the Company and Skyworks for the duration of the TSA, the amounts are not expected to be material to the ongoing operations of either entity. In addition, the Company has no contractual ability through the TSA or any other agreement to significantly influence the operating or financial policies of Skyworks.