Lease Financing Obligation

12 Months Ended

Apr. 01, 2012

Lease Financing Obligation [Abstract]

Lease Financing Obligation

NOTE 15.    LEASE FINANCING OBLIGATION

In connection with the Sipex acquisition, we assumed a lease financing obligation related to the Hillview facility located in Milpitas, California. The lease term expired on March 31, 2011 and had average lease payments of approximately $1.4 million per year.

The fair value of the Hillview Facility was estimated at $13.4 million at the time of the acquisition and was included in the property, plant and equipment, net line in the consolidated balance sheet. In accordance with purchase accounting, we have accounted for this sale and leaseback transaction as a financing transaction which was included in the long-term lease financing obligations line in our consolidated balance sheet as of March 27, 2011. The effective interest rate is 8.2%.

At the end of the lease term, March 31, 2011, the terminal value of $12.2 million was settled in a noncash transaction with the expiration of the lease. As a result, during the first quarter of fiscal year 2012, the property, plant and equipment, net balance and the terminal value of $12.2 million included in the long-term lease financing obligation lines were removed from our condensed consolidated balance sheet.

Depreciation for the Hillview Facility recorded over the straight-line method for the remaining useful life for the periods indicated were as follows (in thousands):

	Fiscal Years Ended
	April 1, 2012		March 27, 2011		March 28, 2010
Depreciation expense	$	—	$	323	$	352

The sublease income recorded in the interest income and other, net line in our consolidated statements of operations for the periods indicated were as follows (in thousands):

	Fiscal Years Ended
	April 1, 2012		March 27, 2011		March 28, 2010
Sublease income	$	—	$	1,427	$	1,396

We have acquired engineering design tools (“design tools”) under capital leases. We acquired design tools of $1.1 million in July 2009 under a three-year license, $1.3 million in December 2009 under a 28-month license, $1.0 million in June 2010 under a three-year license, $5.8 million in October 2011 under a three-year license and $4.5 million in December 2011 under a three-year license, all of which were accounted for as capital leases and recorded in the property, plant and equipment, net line item in the consolidated balance sheets. The related design tool obligations were included in other current liabilities in our consolidated balance sheets as of April 1, 2012 and March 27, 2011, respectively. The effective interest rates for the design tools range from 2.0% to 7.25%.

Amortization of the design tools recorded using the straight-line method over the remaining useful life for the periods indicated were as follows (in thousands):

	Fiscal Years Ended
	April 1, 2012		March 27, 2011		March 28, 2010
Amortization expense	$	3,706	$	3,526	$	2,541

Future minimum lease payments for the lease financing obligations as of April 1, 2012 were as follows (in thousands):

Lease financing

Fiscal Years	Design tools
2013	$	3,548
2014		2,946
2015		814
2016 thereafter		—
Total minimum lease payments		7,308
Less: amount representing interest		321
Present value of minimum lease payments		6,987
Less: short-term lease financing obligation		3,216
Long-term lease financing obligations	$	3,771

Interest expense for the Hillview Facility lease financing obligation and design tools for the periods indicated were as follow (in thousands):

	Fiscal Years Ended
	April 1, 2012		March 27, 2011		March 28, 2010
Interest expense	$	210	$	1,252	$	1,285

In the course of our business, we enter into arrangements accounted for as operating leases. Our current arrangements relate to engineering design software licenses and office space. Rent expense for all facility leases for the periods indicated below were as follow (in thousands):

	Fiscal Years Ended
	April 1, 2012		March 27, 2011		March 28, 2010
Rent expense	$	2,121	$	1,889	$	1,816

Our future minimum lease payments for the lease operating obligations as of April 1, 2012 are as follow:

Operating lease

Fiscal Years	Facilities
2013	$	865
2014		449
2015		373
2016		72
2017 thereafter		91
Total minimum lease payments	$	1,850