Discontinued Operations and Assets Held For Sale

3 Months Ended

Sep. 30, 2012

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations and Assets Held For Sale

Discontinued Operations and Assets Held For Sale

On September 26, 2011, the Company completed the transfer of certain assets related to IDT’s Hollywood Quality Video (HQV) and Frame Rate Conversion (FRC) video processing product lines to Qualcomm pursuant to an Asset Purchase Agreement. The sale of these HQV and FRC video processing assets is intended to allow the Company to intensify focus on its analog-intensive mixed-signal, timing, and interface solutions. Upon the closing of the transaction, Qualcomm paid the Company $58.7 million in cash consideration, of which $6.0 million will be withheld in an escrow account for a period of two years and is included in the Company’s balance sheet as other current assets. In the second quarter of fiscal 2012, the Company recorded a gain of $45.9 million related to this divestiture. The Company’s HQV and FRC product lines represented a significant portion of the Company’s video business assets. As of the end of the first quarter of fiscal 2013, the remaining video business assets classified as held for sale consisted of $1.0 million in fixed assets and $0.7 million in intangible assets.

On August 1, 2012, the Company completed the transfer of the remaining assets of its video business to Synaptics for $5.0 million in cash pursuant to an Asset Purchase Agreement. In connection with the divestiture, 47 employees were transferred to Synaptics. In the second quarter of fiscal 2013, the Company recorded a gain of $0.9 million related to this divestiture. The following table summarizes the components of the gain (in thousands):

Cash proceeds from sale	$	5,000
Less book value of assets sold and direct costs related to the sale:
Fixed assets	(1,963		)
Goodwill	(700		)
Inventories	(1,288		)
Transaction and other costs	(163		)
Gain on divestiture	$	886

Prior to second quarter of fiscal 2012, the video business was part of the Company’s Computing and Consumer reportable segment. For financial statement purposes, the results of operations for the video business are presented in the Company's condensed consolidated financial statements as discontinued operations.

The results from discontinued operations for the three months ended September 30, 2012 and October 2, 2011 are as follows (in thousands):

	Three Months Ended					Six Months Ended
	September 30, 2012		October 2, 2011			September 30, 2012			October 2, 2011
Revenues	$	1,451	$	2,902		$	2,429		$	5,103
Cost of revenue	1,112		4,038			3,006			6,564
Operating expenses	612		6,216			4,554			13,535
Gain on divestiture	886		45,939			886			45,939
Provision (benefit) for income taxes	3		(60		)	3			(89		)
Net income (loss) from discontinued operations	$	610	$	38,647		$	(4,248	)	$	31,032