XML 51 R11.htm IDEA: XBRL DOCUMENT v2.4.0.6
DISCONTINUED OPERATIONS
 6 Months Ended
Dec. 01, 2012
DISCONTINUED OPERATIONS

4. DISCONTINUED OPERATIONS

Arrow Transaction

On March 1, 2011, we completed the sale of the assets primarily used or held for use in, and certain liabilities of, our RF, Wireless and Power Division (“RFPD”), as well as certain other Company assets, including our information technology assets, to Arrow Electronics, Inc. (“Arrow”) in exchange for $238.8 million, which included an estimated pre-closing working capital adjustment of approximately $27.0 million (“the Transaction.”) During the fourth quarter of fiscal 2011, we recorded a working capital adjustment of $4.2 million in our results from discontinued operations. During the second quarter of fiscal 2012, we paid Arrow $3.9 million to settle the working capital adjustment.

Financial Summary – Discontinued Operations

Summary financial results for the three and six months ended December 1, 2012, and December 3, 2011, are presented in the following table (in thousands):

 

     Three Months     Six Months  
     Dec 1, 2012     Dec 3, 2011     Dec 1, 2012     Dec 3, 2011  

Net sales

    $ 278      $ 816      $ 499      $ 1,691   

Gross profit (loss)

      (128 )      (105 )      (221 )      (374 ) 

Selling, general, and administrative expenses

      201        29        266        (448 ) 

Other (income) expense

      1        —          1        —     

Additonal gain on sale

      —          —          —          (266 ) 

Income tax provision (benefit)

      (127 )      665        (198 )      (1,463 ) 

Income (loss) from discontinued operations, net of tax

    $ (203 )    $ (799 )    $ (290 )    $ 1,803   

Net sales and gross profit (loss) for the three and six months ended December 1, 2012, reflect our financial results relating to the Manufacturing Agreement with Arrow that we entered into in connection with the Transaction. Pursuant to the three-year agreement, we agreed to continue to manufacture certain RFPD products for Arrow. During the first quarter ended September 3, 2011, in connection with an examination by the Internal Revenue Service, we reduced our deferred tax liability by $2.1 million related to our un-repatriated foreign earnings based on a determination of the earnings and profits that would remain in certain foreign subsidiaries after the Arrow transaction.

 

Assets and liabilities classified as discontinued operations on our unaudited consolidated balance sheets as of December 1, 2012, and June 2, 2012, include the following (in thousands):

 

     Dec 1, 2012      Jun 2, 2012  

Inventories

    $ 248       $ 503   

Prepaid expenses and other assets

      —           11   
  

 

 

     

 

 

  

Discontinued operations—Assets

    $ 248       $ 514   
  

 

 

     

 

 

  

Accrued liabilities—current (1)

    $ 418       $ 253   

Long-term income tax liabilities (2)

      1,380         1,361   
  

 

 

     

 

 

  

Discontinued operations—Liabilities

    $ 1,798       $ 1,614   
  

 

 

     

 

 

  

 

(1) Included in accrued liabilities as of December 1, 2012, is a payable to Arrow for transition services of $ 1.8 million, offset by a receivable due to us from Arrow for transition services of $1.4 million.
(2) Included in long-term income tax liabilites as of December 1, 2012, is the reserve for uncertain tax positions.

In accordance with ASC 230, Statement of Cash Flows, entities are permitted but not required to separately disclose, either in the statement of cash flows or footnotes to the financial statements, cash flows pertaining to discontinued operations. Entities that do not present separate operating cash flows information related to discontinued operations must do so consistently for all periods presented, which may include periods long after the sale or liquidation of the operation. Cash flows related to our discontinued operations are not material.