v2.4.0.6
Discontinued Operations
 12 Months Ended
Dec. 31, 2011
Discontinued Operations [Abstract]  
Discontinued Operations

NOTE 2—DISCONTINUED OPERATIONS

During the quarter ended June 30, 2008, the Company assessed its business in the United States and Mexico. Due to the changing environment and consolidation in the United States of the smaller regional cellular carriers (one of the Company's then target markets) into larger national carriers, along with the Company's inability to penetrate the Mexico market due to challenges of fostering sales relations with the dominant cellular carriers there, management determined that it was necessary to take decisive actions to mitigate further losses. The Company implemented actions necessary to close operations related to sales operations in both of those countries, which actions were substantially completed by the end of 2009. The results of the discontinued operations are as follows (in thousands):

 

     Year Ended December 31,  
     2011     2010      2009  

Net sales

    $ —      $ 64       $ 492   

Gross profit (loss)

      (53 )      64         (1,372 ) 

Operating income (loss)

      1        1         (2,008 ) 

Net income (loss)

      —        44         (2,011 ) 

Depreciation and amortization

      —        —         —   

The operating loss from discontinued operations for 2009 included expenses associated with an arbitration proceeding. In December 2009, the Company became subject to a final arbitral award following completion of an arbitration proceeding held in October 2009 in Mexico City, Mexico, before the International Court of Arbitration of the International Chamber of Commerce. The arbitration arose from a payment dispute with a former supplier of wireless handsets to the Company. As a result of the arbitral award, the Company was required to pay the former supplier the disputed amount of $538,840, plus interest accrued from the date of the demand for the disputed payment, for a total of $662,669 in damages. The Company also incurred legal costs associated with the arbitration. The settlement amount was paid in full in the quarter ended March 31, 2010.

Liabilities of discontinued operations consisted primarily of accounts payable. Assets of discontinued operations were as follows (in thousands):

 

     December 31,
2011		      December 31,
2010		  

Cash

    $ —       $ 70   

Accounts receivable

      —         28   

Inventory

      —         —   

Refundable VAT tax

      —         669   
  

 

 

     

 

 

  

Total

    $ —       $ 767   
  

 

 

     

 

 

  

As of December 31, 2011, the discontinuance of the domestic and Mexican businesses was complete.