Discontinued Operations

3 Months Ended

Mar. 28, 2014

Discontinued Operations

2. Discontinued Operations

On January 31, 2014, the Company signed a letter of intent to sell certain assets and liabilities of its Scientific Lasers business, sold under the Continuum brand name, for $7.5 million in cash, subject to successful completion of confirmatory due diligence by the potential acquirer, entry into a definitive agreement and customary closing conditions. In addition, the agreement includes contingent consideration of up to $3.0 million based on the achievement of certain 2014 revenue targets. In the first quarter of 2014, the Company’s Board of Directors committed to a plan to sell the Scientific Lasers business. The Company determined that the asset held-for-sale criteria were satisfied and began to account for the Scientific Lasers business as discontinued operations in the first quarter of 2014, which was previously included in our Laser Products segment.

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 $8.6 million in cash, net of selling costs.

The major components of the assets and liabilities of discontinued operations as of March 28, 2014 and December 31, 2013, respectively, are as follows (in thousands):

	March 28, 2014		December 31, 2013
Accounts receivable, net	$	4,927	$	5,361
Inventories		7,441		8,454
Prepaid and other current assets		2,012		247
Other assets		1,755		2,026
Assets of discontinued operations	$	16,135	$	16,088
Accounts payable	$	2,303	$	2,393
Accrued expenses and other current liabilities		2,991		2,295
Other liabilities		2,042		1,710
Liabilities of discontinued operations	$	7,336	$	6,398

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 28, 2014			March 29, 2013
Sales from discontinued operations	$	4,016		$	15,130
Income (loss) from discontinued operations before income taxes	$	(2,851	)	$	204
Income (loss) from discontinued operations, net of tax	$	(1,866	)	$	369

The income (loss) from discontinued operations includes a $1.6 million fair value write-down of the Scientific Lasers business to its estimated fair value less costs to sell.