Discontinued Operations

12 Months Ended

Dec. 31, 2012

Discontinued Operations and Assets Held for Sale [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Discontinued Operations

The accompanying audited condensed consolidated balance sheets, statements of operations and cash flows present the results of operations and assets and liabilities of the Semiconductor Business Unit and the results of operations and liabilities of the Medical Products Business Unit as discontinued operations.

Sale of Medical Products Business Unit

During the second quarter of 2009, the Company began pursuing an exclusive sales process of the Medical Products Business Unit. The Company (i) determined that the Medical Products Business Unit was a separate component of the Company's business as, historically, management reviewed separately the Medical Products Business Unit's financial results apart from the Company's ongoing continuing operations, (ii) eliminated the Medical Products Business Unit's financial results from ongoing operations and (iii) determined that the Company will have no further continuing involvement in the operations of the Medical Products Business Unit or cash flows from the Medical Products Business Unit after the sale.

On December 14, 2009, the Company completed the sale of the Medical Products Business Unit to Bard. The purchase price for the Medical Products Business Unit was $12.4 million, including (i) $9.4 million that was paid in cash to the Company at closing, (ii) $100 thousand that was paid in cash at closing to two of the Company's employees, including Mark Little, Chief Executive Officer of Spire Biomedical, as consideration for their execution of non‑competition agreements, and (iii) $2.9 million that was paid in cash to the Company in the second quarter of 2010 based on the achievement of certain milestones.

During the fourth quarter of 2011, the Company received a cash payment of $2.5 million in settlement of a breach of contract dispute with a contract manufacturer and recorded a net gain on legal settlement of $2.3 million in the same quarter. This amount has been recorded as a component of net income from discontinued operations.

The company recorded a loss from discontinued operations before the sale of the Medical Product Business Unit of $150 thousand and zero for the twelve months ended December 31, 2012 and 2011, respectively.

Sale of Semiconductor Business Unit

During the first quarter of 2012, the Company began pursuing an exclusive sales process of the Company's Semiconductor Business Unit. The Company (i) determined that the Semiconductor Business Unit was a separate component of the Company's business as, historically, management reviewed separately the Semiconductor Business Unit's financial results apart from the Company's ongoing continuing operations, (ii) eliminated the Semiconductor Business Unit's financial results from ongoing operations and (iii) determined that the Company will have no further continuing involvement in the operations of the Semiconductor Business Unit or cash flows from the Semiconductor Business Unit after the sale.

On March 9, 2012, the Company completed the sale of the Semiconductor Business Unit to Masimo. The asset purchase agreement provided that the aggregate purchase price for the Semiconductor Business Unit was $8.0 million plus the assumption of $500 thousand in liabilities, with the cash portion of the purchase price being reduced by retained cash, accounts receivable and liabilities assumed by Masimo in excess of the agreed upon assumed liabilities. As a result, in the first quarter of 2012 the Company received approximately $7.3 million in cash (less the escrow described below) and incurred legal and transaction related fees of $425 thousand and Masimo assumed approximately $1.2 million in liabilities. Of the purchase price, approximately $718 thousand was deposited into an indemnity escrow account for fifteen months (or until June, 2013) to partially secure the Company's obligations for any indemnity claims under the asset purchase agreement. In connection with this transaction, the lease for the premises in Hudson, New Hampshire where the Semiconductor Business Unit was located, was terminated on March 9, 2012, and the Company was released from all future obligations under the lease as of such date.

The company recorded a loss from discontinued operations before the sale of the Semiconductor Business Unit of $430 thousand and $2.8 million for the twelve months ended December 31, 2012 and 2011, respectively.

Summarized Financial Information of the Discontinued Operations

The assets and liabilities of the Semiconductor Business Unit and the liabilities of the Medical Products Business Unit as of December 31, 2012 and the assets and liabilities of the Semiconductor Business Unit and liabilities of the Medical Products Business Unit as of December 31, 2011 are as follows:

(in thousands)	December 31, 2012		December 31, 2011
Assets
Current Assets
Restricted cash	$	718	$	—
Accounts receivable - trade, net	—		307
Inventories, net	—		337
Prepaid expenses and other current assets	—		50
Total current assets of discontinued operations	718		694
Net property and equipment	—		1,927
Intangibles & other assets, net	—		66
Total Assets of discontinued operations	$	718	$	2,687
Liabilities of Discontinued Operations
Current liabilities of discontinued operations
Accounts payable	$	—	$	1,206
Accrued liabilities	171		253
Current portion of advances on contracts in progress	—		195
Total current liabilities of discontinued operations	171		1,654
Other long-term liabilities	—		215
Total liabilities of discontinued operations	$	171	$	1,869

Condensed results of operations relating to the Medical Products Business Unit and the Semiconductor Business Unit for the year ended December 31, 2012 and 2011 are as follows:

	Year Ended December 31,
(in thousands)	2012			2011
Net sales and revenues	$	425		$	2,816
Gross margin	$	(296	)	$	(1,502	)
Loss from discontinued operations before sale of business unit	$	(580	)	$	(2,769	)
Gain on sale of business unit, net of transaction expenses	5,449			—
Gain on legal settlement, net of transaction expenses	—			2,286
Income tax provision	(1,948		)	(914		)
Net income (loss) from discontinued operations, net of tax	$	2,921		$	(1,397	)