Sale of Vehicle Sensors

3 Months Ended

Jun. 30, 2016

Sale of Vehicle Sensors

Sale of Vehicle Sensors

3.Sale of Vehicle Sensors

On July 29, 2011, we completed the sale (the “Asset Sale”) of substantially all of our assets used in connection with our prior Vehicle Sensors segment to Bendix Commercial Vehicle Systems LLC (“Bendix”), a member of Knorr Bremse Group. In connection with the asset sale, we are entitled to additional consideration in the form of the following performance and royalty related earn-outs: Bendix is obligated to pay us an amount in cash equal to 85% of revenue associated with royalties received under our license and distribution agreements with Audiovox Electronics Corporation and Valeo Schalter and Sensoren GmbH through December 31, 2017, subject to certain reductions and limitations set forth in the asset purchase agreement. From the date of the asset sale through June 30, 2016, we received approximately $1.7 million in connection with the royalty related earn-out provisions for a total of $15.4 million in cash from the asset sale.

In accordance with applicable accounting guidance, we determined that the Vehicle Sensors segment, which constituted one of our operating segments at the time of the Asset Sale, qualified as a discontinued operation. For the three months ended June 30, 2016 and 2015, we recorded a gain on sale of discontinued operation of approximately $56,000 and $52,000, respectively, net of tax, related to the earn-out provisions of the asset purchase agreement for the Asset Sale.