Discontinued Operations

9 Months Ended

Sep. 27, 2013

Discontinued Operations

2. Discontinued Operations

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. The Company included all current and historical results of these businesses in 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 included the cash flows from both continuing and discontinued operations.

As discussed below, the Company settled final net working capital adjustments with the buyers of both the Laser Systems and Semiconductor Systems businesses, resulting in a loss on sale, net of tax, of $0.3 million during the three months ended September 27, 2013.

Laser Systems

In October 2012, the Company sold certain assets and liabilities of the Laser Systems business for $7.0 million to Hans Laser, subject to closing working capital adjustments, and recorded a $2.3 million gain in the consolidated statements of operations during the fiscal year ended December 31, 2012. In September 2013, we paid $0.4 million to Hans Laser as the final net working capital adjustment.

The Company retained the Orlando facility which was used to manufacture Laser Systems products and is currently leasing the facility to Hans Laser under an operating agreement which was extended through October 2014. As of the end of the second quarter of 2013, it was determined that it was no longer probable that the facility would be sold within the next twelve months and, as a result, the facility was reclassified from assets of discontinued operations to property, plant and equipment.

Semiconductor Systems

In May 2013, the Company consummated the sale of certain assets and liabilities of the Semiconductor Systems business to Electro Scientific Industries, Inc. (“ESI”) for $8.0 million in cash, subject to closing working capital adjustments. The Company recognized a $0.3 million loss on the sale, net of tax, in the consolidated statements of operations during the six months ended June 28, 2013. In September 2013, the Company settled final net working capital adjustments with ESI for $1.7 million in favor of the Company, resulting in an adjusted selling price of $9.7 million for the sale.

The major components of the assets and liabilities of discontinued operations as of September 27, 2013 and December 31, 2012 are as follows (in thousands):

	September 27, 2013		December 31, 2012
Accounts receivable, net	$	—	$	2,981
Inventories		—		8,231
Other assets		—		694
Property, plant and equipment		—		5,712
Assets of discontinued operations	$	—	$	17,618
Accounts payable, accrued expenses and other current liabilities	$	—	$	3,474
Deferred revenue		—		1,570
Other liabilities		624		561
Liabilities of discontinued operations	$	624	$	5,605

Other liabilities of discontinued operations as of September 27, 2013 primarily relate to accrued severance owed to former Semiconductor Systems employees and cash owed ESI for trade receivables collected by the Company on behalf of ESI.

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						Nine Months Ended
	September 27, 2013			September 28, 2012			September 27, 2013			September 28, 2012
Sales from discontinued operations	$	—		$	9,618		$	9,090		$	38,342
Loss from discontinued operations before income taxes	$	(152	)	$	(4,825	)	$	(1,294	)	$	(3,973	)
Loss from discontinued operations, net of tax	$	(113	)	$	(4,570	)	$	(848	)	$	(3,834	)
Loss on disposal of discontinued operations, net of tax	$	(281	)	$	—		$	(592	)	$	—