Commitments and Contingencies

9 Months Ended

Feb. 28, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

We are subject to legal proceedings and business disputes involving ordinary routine legal proceedings and claims incidental to our business. The ultimate legal and financial liability with respect to such matters generally cannot be estimated with certainty and requires the use of estimates in recording liabilities for potential litigation settlements or awards against us. Estimates for losses from litigation are made after consultation with outside counsel. If estimates of potential losses increase or the related facts and circumstances change in the future, we may be required to record either more or less litigation expense. We are not involved in any pending or threatened legal proceedings that we believe would reasonably be expected to have a material adverse effect on our financial condition, results of operations or cash flows.

Agreement with Keysight Technologies, Inc.

In fiscal 2010, we became a reseller of Agilent Technologies, Inc.’s ("Agilent") new T&M equipment in the U.S. and Canada. As of November 1, 2014, Agilent spun off Keysight Technologies, Inc., its wholly-owned subsidiary that manufactures T&M equipment, into a separate publicly traded company. Sales of new T&M equipment represent approximately 66.8% and 63.1% of our sales of equipment and other revenues for the nine months ended February 28, 2015 and 2014, respectively. Nearly all of our sales of new T&M equipment are in connection with our reseller agreement with Keysight. On March 3, 2015, we announced that our reseller agreement with Keysight will not be renewed after its May 31, 2015 expiration date. The expiration of the Keysight reseller agreement has negatively impacted our stock price, and is expected to significantly and negatively impact our revenue and net profits.