Discontinued Operations | DISCONTINUED OPERATIONS In the first quarter of 2014, the Company announced the cessation of all mems|cam manufacturing operations. This was the last manufacturing operation in the DigitalOptics business and for the entire Company. This action, which occurred primarily during the first half of 2014, included a reduction of over 300 employees and the closure of facilities in Arcadia, California, Rochester, New York, Hsinchu, Taiwan and Japan and was substantially complete in the first quarter of 2015. For more information regarding these actions, see Note 15 – "Restructuring, Impairment of Long-Lived Assets and Other Charges." The Company has reported the results of operations and financial position of this business in discontinued operations within the Condensed Consolidated Statements of Operations for all periods presented. Assets and liabilities of discontinued operations are not material as of December 31, 2014 and are, therefore, included in other line items on the Condensed Consolidated Balance Sheets. All assets and liabilities were written off or disposed of as of September 30, 2015. See below for more information regarding balance sheet classification. The results from discontinued operations were as follows (in thousands): Three Months Ended Nine Months Ended September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014 Revenues: Product and service revenues $ — $ — $ — $ 32 Total revenues — — — 32 Operating expenses: Cost of revenues — — — 21 Research, development and other related costs — 253 — 5,807 Selling, general and administrative — 263 389 2,640 Restructuring, impairment of long-lived assets and other charges — 1,231 (1 ) (371 ) 5,768 (1 ) Total operating expenses — 1,747 18 14,236 Operating loss before taxes — (1,747 ) (18 ) (14,204 ) Other income and expense, net — 198 — 685 Provision for (benefit from) income taxes 437 (7,561 ) 50 (8,259 ) Net income (loss) from discontinued operations $ (437 ) $ 6,012 $ (68 ) $ (5,260 ) (1) As noted above, in January 2014, the Company announced the cessation of all mems|cam manufacturing operations. As part of these actions, the Company incurred severance and accelerated lease obligations and other charges. See Note 15 for additional information. The current assets and current liabilities of discontinued operations were as follows (in thousands): September 30, 2015 December 31, 2014 Accounts receivable and other assets, net $ — (1) $ 390 (2) Total current assets of discontinued operations $ — $ 390 Accrued liabilities — (1) 2,873 (3) Total current liabilities of discontinued operations $ — $ 2,873 (1) As of September 30, 2015, the activities related to the discontinued operations described above have been substantially completed. Consequently, all balance sheet items have been written off, disposed of or settled. (2) This amount is included in "Other current assets" on the condensed consolidated balance sheet. (3) This amount is included in "Accrued liabilities" on the condensed consolidated balance sheet. BUSINESS COMBINATIONS Ziptronix On August 27, 2015, the Company completed its acquisition of Ziptronix, Inc. (“Ziptronix”) for approximately $39 million in cash, net of $1.5 million in working capital (which includes $1.9 million in cash) acquired. Approximately $0.7 million of the consideration was withheld until certain employees complete the term of their employment obligations. The acquisition expands on the Company's existing advanced packaging capabilities by adding a low-temperature wafer bonding technology platform that will accelerate delivery of 2.5D and 3DIC solutions to semiconductor industry customers. Ziptronix’s patented ZiBond® direct bonding and DBI® hybrid bonding technologies deliver scalable, low total cost-of-ownership manufacturing solutions for 3D stacking. Ziptronix’s intellectual property has been licensed to Sony Corporation for volume production of CMOS image sensors. Ziptronix’s technology is also relevant to next-generation stacked memory, 2.5D FPGAs, RF Front-End and MEMS devices, among other semiconductor applications. The significant future market opportunity for the Company to own Ziptronix contributed to a purchase price in excess of the fair value of the underlying net assets and identified intangible assets acquired from Ziptronix and, as a result, the Company has recorded goodwill in connection with this transaction. The business combination transaction was accounted for using the acquisition method of accounting. Preliminary purchase price allocation In accordance with the accounting guidance on business combinations, the total purchase price is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The preliminary allocation of the purchase price was based upon a preliminary valuation and thus the estimates and assumptions used are subject to change. Based upon the fair values acquired, the purchase price allocation is as follows (unaudited, in thousands): Amount Estimated Useful Life (Years) Net tangible assets and liabilities: Unbilled contract asset $ 3,380 Deferred tax assets and liabilities, net (7,427 ) (1 ) Other accrued liabilities (385 ) $ (4,432 ) Identified intangible assets: Patents/core technology $ 32,300 5-8 Trade name 1,300 8 Customer relationships 1,600 2 Goodwill 7,793 (2) N/A $ 42,993 Total purchase price $ 38,561 (1) The $7.4 million of deferred tax assets and liabilities, net is the anticipated tax effect from the amortization of identified intangible assets acquired, net of tax benefits from operating losses the Company expects to utilize. (2) The Company does not anticipate that any of this goodwill will be deductible for tax purposes. The amounts of revenue and earnings that would have been included in the Company’s condensed consolidated statement of operations for the three and nine months ended September 30, 2015 of the combined entity had the acquisition date been January 1, 2014, are as follows (unaudited, in thousands): Revenue Earnings Supplemental pro forma for the three months ended September 30, 2014 (unaudited) $ 93,860 $ 107,486 (1) Supplemental pro forma for the three months ended September 30, 2015 (unaudited) $ 67,454 $ 33,473 (2) Supplemental pro forma for the nine months ended September 30, 2014 (unaudited) $ 221,072 $ 130,225 (3) Supplemental pro forma for the nine months ended September 30, 2015 (unaudited) $ 242,779 (5) $ 116,174 (4) (5) (1) Includes $1.4 million in pre-tax amortization costs related to the intangible assets acquired. (2) Includes $1.4 million in pre-tax amortization costs related to the intangible assets acquired and excludes $3.1 million in acquisition related costs, primarily financial advisor fees and contract settlement costs incurred by Ziptronix in connection with the acquisition. (3) Includes $4.2 million in pre-tax amortization costs related to the intangible assets acquired. (4) Includes $4.2 million in pre-tax amortization costs related to the intangible assets acquired and excludes $3.1 million in acquisition related costs, primarily financial advisor fees and contract settlement costs incurred by Ziptronix in connection with the acquisition. (5) Almost all of the revenue and earnings related to Ziptronix in this period is the result of one -time license fee payments during the three months ended March 31, 2015 (unaudited). |