Disposition

6 Months Ended

Jan. 31, 2024

Discontinued Operations and Disposal Groups [Abstract]

Business Divestiture

On November 7, 2023, we completed the divestiture of our solid-state RF microwave high power amplifiers and control components product line, which was included in our Satellite and Space Communications segment, pursuant to a stock sale agreement entered into on October 11, 2023 (the "PST Divestiture"). The preliminary sales price for this divestiture was $35,659,000 in cash (including adjustments for estimated closing date net working capital and cash on hand), plus contingent consideration of up to $5,000,000 based on the achievement of a revenue target or the receipt of an anticipated contract award as specified in the stock sale agreement. The sales price is subject to adjustment based on the final closing date net working capital of the divested business. We received cash proceeds of $32,477,000 at closing, net of $2,182,000 of transaction costs and $1,000,000 held in escrow until finalization of the closing date net working capital. We recognized an estimated pre-tax gain of $2,213,000 which is presented as "Gain on business divestiture, net" in our Condensed Consolidated Statements of Operations for the three and six months ended January 31, 2024. The estimated pre-tax gain reflects the recognition of a $3,300,000 receivable for the estimated fair value of the contingent consideration and a $1,000,000 receivable for the amount held in escrow. These receivables are presented within “Prepaid expenses and other current assets” on the Condensed Consolidated Balance Sheet as of January 31, 2024. We will subsequently measure the contingent consideration receivable as a gain contingency in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 450, "Contingencies," and subsequent changes in the carrying value of the contingent consideration receivable will be recorded as an adjustment to “Gain on business divestiture, net.”

The carrying amount of the major classes of assets and liabilities related to the PST Divestiture ("PST Disposal Group") as of November 7, 2023 are as follows:


Cash and cash equivalents	$	(71,000)
Accounts receivable, net	4,168,000
Inventories, net	17,822,000
Prepaid expenses and other current assets	201,000
Property, plant and equipment, net	2,790,000
Operating lease right-of-use assets, net	5,379,000
Goodwill	14,587,000
Other assets, net	35,000
Total assets of disposal group held for sale	$	44,911,000

Accounts payable	$	3,081,000
Accrued expenses and other current liabilities	1,622,000
Operating lease liabilities, current	545,000
Contract liabilities	656,000
Operating lease liabilities, non-current	4,894,000
Deferred tax liability, net	(451,000)
Total liabilities of disposal group held for sale	$	10,347,000