Discontinued Operations

12 Months Ended

Dec. 31, 2012

Discontinued Operations

4. Discontinued Operations

Beginning in 2011, the Company initiated a strategic review of its businesses to focus its growth priorities and simplify its business model. In June 2012, the Company committed to a plan for the sale of the Semiconductor Systems operating segment, sold under the GSI brand name, and Laser Systems product lines, sold under the Control Laser and Baublys brand names. The Company began accounting for these businesses as discontinued operations beginning in the second quarter of 2012.

In October 2012, the Company sold certain assets and liabilities of the Laser Systems business for $7.0 million, subject to working capital adjustments, and recorded a $2.3 million gain in the consolidated statement of operations. The Lasers Systems facility in Orlando, Florida was not sold as part of the sale of the business and will be sold as a separate asset. The Company expects to sell the Semiconductor Systems business by the end of the second quarter of 2013 and the Laser Systems facility by the end of the fourth quarter of 2013.

The Company includes all current and historical results of these businesses in income (loss) from discontinued operations, net of tax, in the accompanying consolidated statements of operations. The Company classified the assets and liabilities of discontinued operations for both the current and prior year in the consolidated balance sheets as current assets and current liabilities, respectively. The Company’s consolidated statements of cash flows include the cash flows from both continuing and discontinued operations.

The major components of the assets and liabilities of discontinued operations as of December 31, 2012 and 2011, respectively, are as follows (in thousands):

	2012		2011
Accounts receivable, net.	$	2,981	$	11,320
Inventories.		8,231		14,271
Other assets.		694		2,616
Property, plant and equipment, net.		5,712		7,456
Assets of discontinued operations.	$	17,618	$	35,663
Accounts payable	$	1,358	$	2,146
Accrued expenses and other current liabilities		2,116		6,715
Deferred revenue		1,453		5,061
Other liabilities		678		884
Liabilities of discontinued operations.	$	5,605	$	14,806

The following table presents the Semiconductor Systems and Laser Systems operating results which are reported as discontinued operations in the Company’s consolidated statements of operations and were historically included in the Semiconductor Systems and Laser Products segments, respectively (in thousands):

	Year Ended December 31,
	2012			2011		2010
Sales from discontinued operations.	$	44,655		$	61,984	$	97,624
Income (loss) from discontinued operations before income taxes.	$	(5,041	)	$	7,837	$	18,073
Income (loss) from discontinued operations, net of tax.	$	(5,151	)	$	7,325	$	19,286
Gain on disposal of discontinued operations, net of tax.	$	2,255		$	—	$	—

In 2012, the Company recorded an inventory provision of $1.9 million related to our Semiconductor Systems business. This provision was included in the consolidated statement of operations in income (loss) from discontinued operations, net of tax. The increase in the inventory provision was caused by recent industry trends in the memory repair market, which resulted in lower expected future demand for the Company’s memory repair products.