Discontinued Operations

9 Months Ended

Oct. 02, 2011

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

As part of the Company’s continuing efforts to focus on higher growth opportunities, the Company has discontinued certain businesses. The Company has accounted for these businesses as discontinued operations and, accordingly, has presented the results of operations and related cash flows as discontinued operations for all periods presented. The assets and liabilities of these businesses have been presented separately, and are reflected within the assets and liabilities from discontinued operations in the accompanying condensed consolidated balance sheets as of October 2, 2011 and January 2, 2011.

The Company recorded the following gains and losses, which have been reported as net gain (loss) on disposition of discontinued operations:

	Three Months Ended						Nine Months Ended
	October 2, 2011			October 3, 2010			October 2, 2011			October 3, 2010
	(In thousands)
Loss on disposition of Illumination and Detection Solutions business	$	(125	)	$	—		$	(1,784	)	$	—
(Loss) gain on disposition of Photoflash business	(55		)	(199		)	(64		)	4,418
Net gain (loss) on disposition of other discontinued operations	3,993			(296		)	3,920			(1,845		)
Net gain (loss) on disposition of discontinued operations before income taxes	$	3,813		$	(495	)	$	2,072		$	2,573

In November 2010, the Company sold its Illumination and Detection Solutions (“IDS”) business, which was included in the Company’s Environmental Health segment, for $510.3 million, including an adjustment for net working capital. The Company expects the divestiture of its IDS business to reduce the complexity of its product offerings and organizational structure, and to provide capital to reinvest in other Human Health and Environmental Health end markets. The buyer acquired the Company’s IDS business through the purchase of all outstanding stock of certain of the Company’s subsidiaries located in Germany, Canada, China, Indonesia, the Philippines, the United Kingdom and the United States as well as the purchase of related assets and the assumption of liabilities held by the Company and certain of its subsidiaries located in Singapore and Germany. The Company recognized a pre-tax gain of $315.3 million, inclusive of the net working capital adjustment, in the fourth quarter of fiscal year 2010 as a result of the sale of its IDS business. During the first nine months of fiscal year 2011, the Company updated the net working capital adjustment associated with the sale of this business and other potential contingencies, which resulted in the recognition of a pre-tax loss of $1.8 million. These gains and losses were recognized as gain (loss) on the disposition of discontinued operations.

As part of the Company’s strategic business alignment into the Human Health and Environmental Health segments, completed at the beginning of fiscal year 2009, and the Company’s continuing efforts to focus on higher growth opportunities, in December 2008, the Company’s management approved a plan to divest its Photoflash business within the Environmental Health segment. In June 2010, the Company sold the Photoflash business for $13.5 million, including an adjustment for net working capital, plus potential additional contingent consideration. The Company recognized a pre-tax gain of $4.6 million, inclusive of the net working capital adjustment, in the second quarter of fiscal year 2010 as a result of the sale. This gain was recognized as a gain on the disposition of discontinued operations.

During the first nine months of both fiscal years 2011 and 2010, the Company settled various commitments related to the divestiture of other discontinued operations. The Company recognized a pre-tax gain of $3.9 million in the first nine months of fiscal year 2011, which included a pre-tax gain of $4.0 million for contingent consideration related to the sale of its semiconductor business in fiscal year 2006. The Company recognized a pre-tax loss of $1.8 million in the first nine months of fiscal year 2010 in connection with the settlement of various commitments.

Summary operating results of the discontinued operations for the periods prior to disposition were as follows:

	Three Months Ended				Nine Months Ended
	October 2, 2011		October 3, 2010		October 2, 2011		October 3, 2010
	(In thousands)
Sales	$	—	$	78,047	$	—	$	243,114
Costs and expenses	—		73,663		—		220,722
Operating income from discontinued operations	—		4,384		—		22,392
Other expense, net	—		167		—		716
Income from discontinued operations before income taxes	$	—	$	4,217	$	—	$	21,676

The Company recognized a tax benefit of $4.8 million on discontinued operations for both the three and nine months ended October 2, 2011, respectively. This tax benefit is primarily the net result of a change in estimate related to the federal income tax liability associated with the repatriation of the unremitted earnings of the IDS and Photoflash businesses, as further described in Note 7 to the condensed consolidated financial statements in this quarterly report on Form 10-Q, offset by a tax provision on the contingent consideration received in the three months ended October 2, 2011 related to the sale of the Company's semiconductor business in fiscal year 2006. The Company recorded a tax provision of $16.9 million and $22.2 million on discontinued operations for the three and nine months ended October 3, 2010, respectively. The tax provision in fiscal year 2010 is associated with unremitted earnings of directly-owned foreign subsidiaries that no longer qualified as permanently reinvested once the subsidiary is held for sale.