Quarterly report pursuant to Section 13 or 15(d)

Note 3 - Discontinued Operations

v3.6.0.2
Note 3 - Discontinued Operations
9 Months Ended
Jan. 01, 2017
Notes to Financial Statements  
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]
NOTE
3.
DISCONTINUED OPERATIONS
 
On
November
9,
2016,
we completed the sale of
100%
of the issued and outstanding shares of our wholly-owned subsidiary iML. We received total cash proceeds of
$127.9
million net of iML’s cash at closing and other adjustments for fluctuations in working capital. This resulted in the recognition of a total gain of
$45.4
million. In addition to the proceeds,
$5.0
million of purchase price consideration is held in escrow (the “Holdback Amount”) and will be paid to us subject to the satisfaction of certain conditions. The amount was recorded in other non-current assets line in the condensed consolidated balance sheet.
 
The following table summarizes certain statements of operations information for discontinued operations for the
three
months and
nine
months ended
January
1,
2017
and
December
27,
2015,
respectively (in thousands):
 
 
 
Three Months Ended
 
 
Nine Months Ended
 
 
 
January 1,
 
 
December 27,
 
 
January 1,
 
 
December 27,
 
 
 
2017
 
 
2015
 
 
2017
 
 
2015
 
Net sales
  $
4,628
    $
12,129
    $
30,936
    $
36,354
 
                                 
Cost of sales:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of sales
   
2,863
     
6,546
     
17,935
     
18,388
 
Amortization of purchased intangible assets
   
-
     
1,867
     
1,245
     
5,589
 
Total cost of sales
   
2,863
     
8,413
     
19,180
     
23,977
 
Gross profit
   
1,765
     
3,716
     
11,756
     
12,377
 
Operating expenses:
                               
Research and development
   
974
     
4,036
     
5,634
     
7,571
 
Selling, general and administrative
   
655
     
3,355
     
3,459
     
7,569
 
Total operating expenses, net
   
1,629
     
7,391
     
9,093
     
15,140
 
                                 
Gain on sale of iML
   
45,382
     
-
     
45,382
     
-
 
Interest income and other, net
   
(10
)    
2
     
69
     
9
 
Income (loss) before income taxes
   
45,508
     
(3,673
)    
48,114
     
(2,754
)
Provision for (benefit from) income taxes
   
(152
)    
1,419
     
132
     
4,601
 
Net income (loss) from discontinued operations
  $
45,660
    $
(5,092
)   $
47,982
    $
(7,355
)
 
The gain on sale was calculated as the cash proceeds, less iML assets of
$90.4
million, including inventories, intangibles, goodwill, and fixed assets, plus (i) the transfer of liabilities of
$2.8
million including accounts payables and other accrued liabilities, and (ii) the
$5.0
million of purchase price held in escrow. The following table summarizes the calculation of the gain on sale of iML (in thousands):
 
Net proceeds
  $
127,933
 
Assets sold
   
(90,394
)
Liabilities transferred
   
2,843
 
Holdback amount
   
5,000
 
Gain on sale of iML
  $
45,382
 
 
 
After the completion of the sale, all of iML's assets were sold and all liabilities were transferred. As of
March
27,
2016,
the aggregate components of assets and liabilities classified as held for sale and included in assets and liabilities consisted of the following (in thousands):
 
 
 
March 27,
 
 
 
2016
 
Accounts receivable, net
  $
13,427
 
Inventories
   
7,944
 
Deferred income taxes and other assets
   
248
 
Property, plant and equipment, net
   
88
 
Goodwill
   
13,258
 
Identifiable intangible assets, net
   
58,946
 
Total assets
  $
93,911
 
         
Accounts payable
  $
2,024
 
Accrued liabilities
   
1,422
 
Deferred income taxes and other liabilities
   
24
 
Total liabilities
  $
3,470