v3.4.0.3
Discontinued Operations
 6 Months Ended
Apr. 01, 2016
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations

3. DISCONTINUED OPERATIONS

In August 2015, we sold our Automotive business to Autoliv ASP Inc. (“Autoliv”) as the Automotive business was not consistent with our long-term strategic vision from both a growth and profitability perspective. The agreed consideration included $82.1 million in cash paid at closing and $18.0 million payable in eighteen months pending resolution of any contingencies as part of an indemnification agreement, plus the opportunity to receive up to an additional $30.0 million in cash based on achievement of revenue-based earnout targets through 2019. Additionally, we entered into a Consulting Agreement pursuant to which we may provide Autoliv with certain non-design advisory services for a period of two years following the closing of the transaction for up to $15.0 million in cash.

During fiscal year 2015, we recorded a pre-tax gain on the sale of the Automotive business of $61.8 million based on the $82.1 million received at closing on August 17, 2015 as described above. The remainder of the consideration to be received from Autoliv, if any, including any amounts related to the consulting agreement, will be accounted for in discontinued operations when the contingencies are finalized and the proceeds, if any, become realizable over the next several years.

 

The accompanying consolidated statement of operations includes the following operating results related to this divested business (in thousands):

 

     Three Months Ended      Six Months Ended  
     April 1,
2016		      April 3,
2015		      April 1,
2016		      April 3,
2015		  

Revenue

    $ —         $ 22,454       $ —         $ 40,762   

Cost of revenue

      —           15,161         —           26,687   
  

 

 

     

 

 

     

 

 

     

 

 

  

Gross profit

      —           7,293         —           14,075   

Operating expenses:

            

Research and development

      —           622         —           1,314   

Selling, general and administrative

      —           980         —           1,351   

Restructuring charges

      —           —           —           —     
  

 

 

     

 

 

     

 

 

     

 

 

  

Total operating expenses

      —           1,602         —           2,665   
  

 

 

     

 

 

     

 

 

     

 

 

  

Income from discontinued operations

      —           5,691         —           11,410   

Other income

      1,875         —           3,750         —     

Gain on sale

      308         —           308         —     
  

 

 

     

 

 

     

 

 

     

 

 

  

Income before income taxes

      2,183         5,691         4,058         11,410   

Income tax provision

      787         2,052         1,463         4,113   
  

 

 

     

 

 

     

 

 

     

 

 

  

Income from discontinued operations

    $ 1,396       $ 3,639       $ 2,595       $ 7,297   
  

 

 

     

 

 

     

 

 

     

 

 

  

Above includes depreciation & amortization of

    $ —         $ 57       $ —         $ 123   

Cashflow from Operating Activities

      —           2,227         —           3,744   

Cashflow from Investing Activities

      3,750         (250 )       3,750       $ (250 ) 

Other income of $3.8 million was recorded during the three and six months ended April 1, 2016 related to the consulting agreement. The gain on sale of $0.3 million recorded during the three months ended April 1, 2016 related to the adjustment of accruals established at the time of the sale of the Automotive business. Amounts recorded during the three and six months ended April 3, 2015 were from ongoing operating activities prior to the sale.