Discontinued Operations

3 Months Ended

Jun. 29, 2014

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

High-Speed Converter (“HSC”) Business

In the third quarter of fiscal 2014, the Company initiated a project to divest its HSC business. The Company believes that this divestiture would allow it to strengthen its focus on its analog-intensive mixed-signal, timing and synchronization, and interface and connectivity solutions. The Company envisions fully divesting its HSC business within the twelve months from the initiation date of the plan and has classified these assets as held for sale and accordingly these assets are no longer being depreciated or amortized.

The HSC business includes the assets of NXP B.V.’s Data Converter Business and Alvand Technologies, Inc., which were acquired by the Company during fiscal 2013. The total purchase consideration paid by the Company to acquire Alvand Technologies, Inc. included a liability representing the fair value of contingent cash consideration which is paid based upon the achievement of future product development milestones to be completed within 3 years following the acquisition date. As of March 30, 2014, the remaining estimated fair value of the unpaid contingent consideration was $2.1 million, of which the Company paid $1.6 million and released the remaining contingent consideration of $0.5 million to discontinued operations in the Condensed Consolidated Statement of Operations for the three months ended June 29, 2014, as the remaining future milestones will not be achieved as a result of the asset sale discussed below.

On May 30, 2014, the Company completed the sale of certain assets related to the Alvand portion of the HSC business to a buyer pursuant to an Asset Purchase Agreement. Upon the closing of the transaction, the buyer paid the Company $18.0 million in cash consideration, of which $2.7 million will be held in an escrow account for a period of 18 months. For the three months ended June 29, 2014, the Company recorded a gain of $16.8 million related to this divestiture. The following table summarizes the components of the gain (in thousands):

	Amount
Cash proceeds from sale (including amounts held in escrow)	$	18,000
Less book value of assets sold and direct costs related to the sale:
Intangible assets	(990		)
Transaction and other costs	(170		)
Gain on divestiture	$	16,840

Following the sale of assets related to the Alvand portion of the HSC business, the business had remaining long-lived assets classified as held for sale amounting to $8.5 million, which consisted of $2.9 million in fixed assets and $5.6 million in intangible assets. The Company evaluated the carrying value of these assets and determined that it exceeded its estimated fair value based on estimated selling price less cost to sell. Accordingly, total impairment charge of $8.5 million was recorded to loss from discontinued operations in the Condensed Consolidated Statement of Operations for the three months ended June 29, 2014.

The HSC business was included in the Company’s Communications reportable segment. For financial statements purposes, the results of operations for the HSC business have been segregated from those of the continuing operations and are presented in the Company's condensed consolidated financial statements as discontinued operations.

The results of discontinued operations of the HSC business for the three months ended June 29, 2014 and June 30, 2013 were as follows (in thousands):

	Three Months Ended
	June 29, 2014			June 30, 2013
Revenues	$	1,006		$	518
Cost of revenues	(605		)	(467		)
Long-lived assets impairment	(8,471		)	—
Operating expenses	(4,083		)	(3,915		)
Gain on divestiture	16,840			—
Income tax benefit	45			99
Net income (loss) from discontinued operations	$	4,732		$	(3,765	)