Disposal of Video Camera Segment

9 Months Ended

Sep. 27, 2014

Discontinued Operations and Disposal Groups [Abstract]

Disposal of Video Camera Segment

2. Disposal of Video Camera Segment

On June 6, 2014, Cohu announced the sale of substantially all the assets of our video camera segment, Cohu Electronics. Our decision to sell Cohu Electronics resulted from management’s determination that this industry segment was no longer a strategic fit within our organization. The sales price was $9.5 million in cash plus up to $0.5 million in contingent consideration. The sales price is subject to a working capital adjustment and, as a result, adjustments to the gain on disposal noted below are possible.

Balance sheet information of our discontinued video camera segment is summarized as follows (in thousands):

	September 27,		December 28,
	2014		2013
Assets:
Accounts receivable, net	$	—	$	2,597
Inventories		—		3,568
Other current assets		—		107
Total current assets		—		6,272
Property, plant and equipment, net		—		431
Total assets	$	—	$	6,703
Liabilities:
Accounts payable	$	—	$	730
Other accrued current liabilities		—		1,017
Total liabilities	$	—	$	1,747

Operating results of our discontinued video camera segment is summarized as follows (in thousands):

	Three Months Ended					Nine Months Ended
	September 27,			September 28,		September 27,			September 28,
	2014			2013		2014			2013
Net sales	$	—		$	3,985	$	5,460		$	12,191
Operating income (loss) before income taxes	$	—		$	458	$	(242	)	$	1,115
Gain on disposal of video camera segment		—			—		4,133			—
Income tax provision		(598	)		165		55			401
Income from discontinued operations, net of taxes	$	598		$	293	$	3,836		$	714

In connection with the sale of the assets of our video camera segment we incurred divestiture-related costs that would not have been incurred otherwise. These costs consist of legal advisory services, success based compensation arrangements and certain other items that are incremental to normal operating charges and were expensed as incurred. In the first six months of 2014 we incurred $0.8 million of divestiture related costs; no costs were incurred in the third quarter of 2014. These costs have been netted against the gain on disposal presented above.