Discontinued Operations

3 Months Ended

Mar. 29, 2013

Discontinued Operations

2. 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 during the fiscal year ended December 31, 2012. 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 carrying value of this facility was $5.7 million and $5.7 million as of March 29, 2013 and December 31, 2012, respectively. The Company expects to sell the Laser Systems facility by the end of the fourth quarter of 2013.

In April 2013, the Company entered into an agreement for the sale of certain assets and liabilities of the Semiconductor Systems business for $8.0 million in cash, subject to customary closing conditions. The sale of the Semiconductor Systems business was consummated on May 3, 2013.

The Company includes all current and historical results of these businesses in income 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 March 29, 2013 and December 31, 2012 are as follows (in thousands):

	March 29, 2013		December 31, 2012
Accounts receivable, net	$	4,457	$	2,981
Inventories		7,670		8,231
Other assets		451		694
Property, plant and equipment		5,705		5,712
Assets of discontinued operations	$	18,283	$	17,618
Accounts payable, accrued expenses and other current liabilities	$	3,640	$	3,474
Deferred revenue		561		1,570
Other liabilities		515		561
Liabilities of discontinued operations	$	4,716	$	5,605

The following table presents the operating results which are reported as discontinued operations in the Company’s consolidated statements of operations (in thousands):

	Three Months Ended
	March 29, 2013		March 30, 2012
Sales from discontinued operations	$	7,086	$	13,621
Income from discontinued operations before income taxes	$	738	$	335
Income from discontinued operations, net of tax	$	649	$	322

Operating results for discontinued operations during the three months ended March 30, 2012 were historically included in the Semiconductor Systems and Laser Products segments. The Company restated prior period segment information in the Notes to consolidated financial statements to conform to the current period presentation.