10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 31, 2013

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 001-35214

API TECHNOLOGIES CORP.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	98-0200798
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

4705 S. Apopka Vineland Rd. Suite 210

Orlando, FL 32819

(Address of Principal Executive Offices)

(407) 876-0279

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) filed all reports required to be filed by Section 13 and 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company (as defined Rule 12b-2 of the Exchange Act).

Large Accelerated Filer	¨	Accelerated Filer	x
Non-Accelerated Filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

State the number of shares outstanding of each of the issuer’s class of common equity as of the latest practicable date:

54,846,135 shares of common stock with a par value of $0.001 per share at October 1, 2013.

API TECHNOLOGIES CORP. AND SUBSIDIARIES

Report on Form 10-Q

Quarter Ended August 31, 2013

Table of Contents

	Page
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets at August 31, 2013 and November 30, 2012		3
Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended August 31, 2013 and August 31, 2012		4
Consolidated Statement of Changes in Shareholders’ Equity for the nine months ended August 31, 2013		5
Consolidated Statements of Cash Flows for the nine months ended August 31, 2013 and August 31, 2012		6
Notes to Consolidated Financial Statements		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		29
Forward-Looking Statements		40
Item 3. Quantitative and Qualitative Disclosures About Market Risk		41
Item 4. Controls and Procedures		41
PART II—OTHER INFORMATION
Item 1. Legal Proceedings		42
Item 1A. Risk Factors		42
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		42
Item 3. Defaults Upon Senior Securities		42
Item 4. Mine Safety Disclosures		42
Item 5. Other Information		42
Item 6. Exhibits		43
Signatures		44

2

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

(Unaudited) (Dollar Amounts in Thousands)

API TECHNOLOGIES CORP.

Consolidated Balance Sheets

	August 31, 2013			November 30, 2012
Assets
Current
Cash and cash equivalents	$	12,514		$	20,550
Restricted cash (note 5)		1,500			700
Accounts receivable, less allowance for doubtful accounts of $669 and $609 at August 31, 2013 and November 30, 2012, respectively		43,804			41,624
Inventories, less provision for obsolescence of $8,054 and $7,949 at August 31, 2013 and November 30, 2012, respectively (note 7)		61,638			57,863
Deferred income taxes		843			1,038
Prepaid expenses and other current assets		2,178			2,560
Current assets of discontinued operations (note 5)		—			13,836
		122,477			138,171
Fixed assets, net		36,258			40,075
Fixed assets held for sale (note 2)		150			900
Goodwill		116,770			116,770
Intangible assets, net		41,031			47,934
Other non-current assets		3,388			5,760
Long-lived assets of discontinued operations (note 5)		—			43,105
Total assets	$	320,074		$	392,715
Liabilities, Redeemable Preferred Stock and Shareholders’ Equity
Current
Accounts payable and accrued expenses	$	36,688		$	39,598
Deferred revenue		4,497			385
Current portion of long-term debt (note 11)		6,599			2,328
Current liabilities of discontinued operations (note 5)		—			1,888
		47,784			44,199
Deferred income taxes		3,901			3,411
Other long-term liabilities		1,056			1,048
Long-term debt, net of current portion, and discount of $7,394 and $6,570 at August 31, 2013 and November 30, 2012, respectively (note 11)		103,564			179,503
		156,305			228,161
Commitments and contingencies (note 17)
Redeemable Preferred Stock
Preferred stock (Series A Mandatorily Redeemable Preferred Stock, $1,027 liquidation preference and 1,000,000 authorized shares, 26,000 and 26,000 shares issued and outstanding at August 31, 2013 and November 30, 2012, respectively) (note 12)		25,898			25,581
Shareholders’ Equity
Common shares ($0.001 par value, 250,000,000 and 100,000,000 authorized shares, 54,846,071 and 54,764,553 shares issued and outstanding at August 31, 2013 and November 30, 2012, respectively)		55			55
Special voting stock ($0.01 par value, 1 share authorized, issued and outstanding at August 31, 2013 and November 30, 2012, respectively)		—			—
Additional paid-in capital		327,764			326,973
Common stock subscribed but not issued		2,373			2,373
Accumulated deficit		(193,169	)		(192,513	)
Accumulated other comprehensive income		848			2,085
		137,871			138,973
Total Liabilities, Redeemable Preferred Stock and Shareholders’ Equity	$	320,074		$	392,715

The accompanying notes are an integral part of these consolidated financial statements.

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API TECHNOLOGIES CORP.

Consolidated Statements of Operations

(Dollar Amounts in Thousands, Except Per Share Data)

	For the Three Months Ended August 31, 2013 (Unaudited)			For the Three Months Ended August 31, 2012 (Unaudited)			For the Nine Months Ended August 31, 2013 (Unaudited)			For the Nine Months Ended August 31, 2012 (Unaudited)
Revenue, net	$	62,630		$	58,759		$	185,163		$	189,014
Cost of revenues
Cost of revenues		47,641			44,171			143,338			144,276
Restructuring charges (note 19)		16			1,738			182			9,040
Total cost of revenues		47,657			45,909			143,520			153,316
Gross profit		14,973			12,850			41,643			35,698
Operating expenses
General and administrative		6,901			6,611			19,704			18,263
Selling expenses		3,505			3,607			11,263			10,758
Research and development		2,244			2,524			6,885			7,330
Business acquisition and related charges		(111	)		775			977			3,444
Restructuring charges		120			485			684			4,706
Total operating expenses		12,659			14,002			39,513			44,501
Operating income (loss)		2,314			(1,152	)		2,130			(8,803	)
Other expenses (income), net
Goodwill impairment (note 8)		—			20,495			—			107,495
Interest expense, net		3,086			3,993			11,907			11,898
Amortization of note discounts and deferred financing costs		521			869			11,795			14,957
Other expenses (income), net		189			(367	)		(186	)		(2,412	)
Total other expenses (income), net		3,796			24,990			23,516			131,938
Loss from continuing operations before income taxes & discontinued operations		(1,482	)		(26,142	)		(21,386	)		(140,741	)
Expense (benefit) for income taxes		(3,144	)		(579	)		(3,316	)		(4,885	)
Income (loss) from continuing operations		1,662			(25,563	)		(18,070	)		(135,856	)
Income (loss) from discontinued operations, net of income taxes		5,305			(2,103	)		18,085			(544	)
Net Income (loss)	$	6,967		$	(27,666	)	$	15		$	(136,400	)
Accretion on preferred stock		(381	)		—			(671	)		—
Net Income (loss) attributable to common shareholders	$	6,586		$	(27,666	)	$	(656	)	$	(136,400	)
Income (loss) per share from continuing operations—Basic and diluted	$	0.02		$	(0.46	)	$	(0.34	)	$	(2.46	)
Income (loss) per share from discontinued operations—Basic and diluted		0.10			(0.04	)		0.33			(0.01	)
Net income (loss) per share—Basic and diluted	$	0.12		$	(0.50	)	$	(0.01	)	$	(2.47	)
Weighted average shares outstanding
Basic		55,424,157			55,365,978			55,398,833			55,296,470
Diluted		55,424,157			55,365,978			55,398,833			55,296,470
Comprehensive income (loss)
Unrealized foreign currency translation adjustment	$	53		$	424		$	(1,237	)	$	1,025
Other comprehensive income (loss)		53			424			(1,237	)		1,025
Comprehensive income (loss)	$	7,020		$	(27,242	)	$	(1,222	)	$	(135,375	)

The accompanying notes are an integral part of these consolidated financial statements.

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API TECHNOLOGIES CORP.

Consolidated Statement of Changes in Redeemable Preferred Stock and Shareholders’ Equity

(Unaudited)

(Dollar Amounts in Thousands)

	Preferred Stock- number of shares		Preferred stock amount			Common stock- number of shares			Common stock amount		Additional paid- in capital		Common stock subscribed but not issued		Accumulated deficit			Accumulated other comprehensive income			Total shareholders’ equity
Balance at November 30, 2012		26,000	$	25,581			54,764,553		$	55	$	326,973	$	2,373	$	(192,513	)	$	2,085		$	138,973
Stock issued as compensation		—		—			72,333			—		—		—		—			—			—
Stock withheld for taxes		—		—			(13,731	)		—		—		—		—			—			—
Stock exchanged for subsidiary exchangeable shares (see Note 13)		—		—			22,916			—		—		—		—			—			—
Accrued dividend in kind (effective) on Series A Mandatorily Redeemable Preferred Stock (see Note 12)		—		(354	)		—			—		—		—		—			—			—
Accretion on Preferred stock (dividends)		—		671			—			—		—		—		(671	)		—			(671	)
Stock-based compensation expense		—		—			—			—		791		—		—			—			791
Net income for the period		—		—			—			—		—		—		15			—			15
Other comprehensive loss		—		—			—			—		—		—		—			(1,237	)		(1,237	)
Balance at August 31, 2013		26,000	$	25,898			54,846,071		$	55	$	327,764	$	2,373	$	(193,169	)	$	848		$	137,871

The accompanying notes are an integral part of these consolidated financial statements.

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API TECHNOLOGIES CORP.

Consolidated Statements of Cash Flows

(Unaudited)

(Dollar Amounts in Thousands)

	Nine Months Ended August 31,
	2013			2012
Cash flows from operating activities
Net income (loss)	$	15		$	(136,400	)
Less: Income from discontinued operations		(18,085	)		544
Adjustments to reconcile net income to net cash used by operating activities:
Depreciation and amortization		13,225			12,456
Amortization of note discounts and deferred financing costs		1,519			2,313
Amortization of note discounts due to debt extinguishment		10,277			12,644
Income tax accruals for discontinued operations		(7,373	)		—
Impairment of goodwill		—			107,495
Stock based compensation		791			1,934
Write down of fixed assets		—			865
Loss (gain) on sale of fixed assets		—			(2	)
Deferred income taxes		751			(4,254	)
Changes in operating asset and liabilities, net of business acquisitions
Accounts receivable		(2,296	)		10,636
Inventories		(3,893	)		10,897
Prepaid expenses and other current assets		378			(1,577	)
Accounts payable and accrued expenses		(1,914	)		(18,326	)
Deferred revenue		(166	)		(1,368	)
Net cash used by continuing activities		(6,771	)		(2,143	)
Net cash provided by discontinued operations		2,639			5,124
Net cash provided (used) by operating activities		(4,132	)		2,981
Cash flows from investing activities
Purchase of fixed assets		(2,084	)		(799	)
Purchase of intangible assets		(463	)		(1,089	)
Restricted cash		(800	)		—
Net proceeds from sale of discontinued operations		80,498			—
Proceeds from sale of fixed assets		739			32
Business acquisitions net of cash acquired of $nil (note 4c), and $3,045 (note 4a)		(600	)		(29,052	)
Discontinued operations		(17	)		359
Net cash provided (used) by investing activities		77,273			(30,549	)
Cash flows from financing activities
Repayment of long-term debt (note 11)		(296,362	)		(1,587	)
Net proceeds from long-term debt (note 11)		215,678			29,155
Discontinued operations		—			5
Net cash provided (used) by financing activities		(80,684	)		27,573
Effect of exchange rate on cash and cash equivalents		(478	)		123
Net change in cash and cash equivalents		(8,021	)		128
Cash and cash equivalents, beginning of period—continuing operations		20,550			15,628
Cash and cash equivalents, beginning of period—discontinued operations		(15	)		62
Cash and cash equivalents, beginning of period		20,535			15,690
Cash and cash equivalents, end of period	$	12,514		$	15,818
Less: cash and cash equivalents of discontinued operations, end of period		—			(23	)
Cash and cash equivalents of continuing operations, end of period	$	12,514		$	15,841

The accompanying notes are an integral part of these consolidated financial statements.

6

API Technologies Corp.

Notes to Consolidated Financial Statements

(Unaudited) (Dollar Amounts in Thousands, Except Per Share Data)

1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

Nature of Business

API Technologies Corp. (“API”, and together with its subsidiaries, the “Company”) designs, develops and manufactures high reliability engineered solutions, RF, power systems management technology, systems, secure communications and electronic components for military and aerospace applications, including mission critical information systems and technologies.

Prior to the third quarter of 2012, the Company reported in two business segments: Systems & Subsystems and Secure Systems & Informational Assurance. To better highlight to investors its profitability and product offerings, the Company made organizational changes that have resulted in changes to the way in which the Company’s Chief Operating Decision Maker manages and evaluates the business. For this reason and in accordance with authoritative guidance, beginning with the quarter ended August 31, 2012, the Company redefined its reportable operating segments. The Electronic Manufacturing Services (“EMS”) business (formerly part of the Systems & Subsystems segment) is now reported as a separate segment, as this more closely aligns with the Company’s management organization and strategic direction. The Company also renamed the Systems & Subsystems segment to Systems, Subsystems & Components (“SSC”) to more accurately describe the product offering of this segment. There were no changes to the Secure Systems & Information Assurance (“SSIA”) segment. Prior periods have been revised to conform with the new segments: SSC, EMS and SSIA.

On July 5, 2013, the Company entered into an agreement (the “APA”) with ILC Industries, LLC (“Parent”) and Data Device Corporation, a Delaware corporation and a wholly owned subsidiary of Parent (the “Purchaser”) pursuant to which the Company sold to the Purchaser certain assets comprising the Company’s data bus business (“Databus”) in the U.S. and the U.K., including substantially all of the assets the Company’s wholly owned subsidiary, National Hybrid, Inc., a New York corporation (the “Asset Sale”). The Purchaser paid the Company approximately $32,150 in cash for the assets, after certain adjustments based on closing inventory values as set forth in the APA and customary indemnification provisions. Substantially all of the proceeds from the Asset Sale were used to repay certain of the Company’s outstanding debt.

On April 17, 2013 the Company sold all of the issued and outstanding shares of capital stock or other equity interests of Spectrum Sensors and Controls, Inc., a Pennsylvania corporation (“Sub 1”), Spectrum Sensors and Controls, LLC, a California limited liability company (“Sub 2”), and Spectrum Sensors and Controls, Inc., an Ohio corporation (“Sub 3” and together with Sub 1 and Sub 2, “Sensors”), for gross cash proceeds of approximately $51,350. Of this amount, $1,500 was placed into an escrow account for 12 months to secure any indemnification claims made by the purchaser against the sellers, API and Spectrum Control, Inc. (“Spectrum”), a wholly owned subsidiary of API.

On March 22, 2012, API completed the acquisition, through its UK-based subsidiary API Technologies (UK) Limited (“API UK”), of the entire issued share capital of C-MAC Aerospace Limited (“C-MAC”), for a total purchase price of £20,950 pounds sterling (approximately $33,000 USD), including the assumption of C-MAC’s loan facility (see Note 4a). C-MAC is a leading provider of high-reliability electronic systems, modules, and components to the defense, aerospace, space, industrial and energy sectors.

On March 19, 2012, API completed the acquisition of substantially all of the assets of RTI Electronics (“RTIE”) for a total purchase price of $2,295, with $1,500 payable in cash at closing and the remainder pursuant to a $795 Promissory Note payable in 24 equal monthly installments (see Note 4b). Based in Anaheim, California, RTIE is a leading manufacturer of passive electronic components, including thermistors, film capacitors, magnetic transformers and inductors, and audio power conditioning units. RTIE had revenues for the year ended December 31, 2011 of approximately $5,300 from a diverse Fortune 500 customer base spanning the audio, defense, aerospace, and industrial markets.

The unaudited consolidated financial statements include the accounts of API and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. There are no other entities controlled by the Company, either directly or indirectly. The financial statements have been prepared in accordance with the requirements of Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures required in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) that the Company considers necessary for the fair presentation of the Company’s consolidated financial position as of August 31, 2013 and the results of its operations and cash flows for the nine month period ended August 31, 2013. Results for the interim period are not necessarily indicative of results that may be expected for the entire year or for any other interim periods. The unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements of the Company and the notes thereto as of and for the year ended November 30, 2012 included in the Company’s Form 10-K filed with the SEC on February 12, 2013.

7

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts in the consolidated financial statements, and the disclosures made in the accompanying notes. Examples of estimates include the provisions made for bad debts and obsolete inventory, estimates associated with annual goodwill impairment tests, and estimates of deferred income tax and liabilities. The Company also uses estimates when assessing fair values of assets and liabilities acquired in business acquisitions as well as any fair value and any related impairment charges related to the carrying value of machinery and equipment, other long-lived assets, fixed assets held for sale and discontinued operations. The Company also uses estimates in determining the remaining economic lives of long-lived assets. In addition, the Company uses assumptions when employing the Black-Scholes valuation model to estimate the fair value of share options. Despite the Company’s intention to establish accurate estimates and use reasonable assumptions, actual results may differ from these estimates.

Inventories

Inventories, which include materials, labor, and manufacturing overhead, are stated at the lower of cost (on a first-in, first-out basis) or net realizable value. The Company records a provision for both excess and obsolete inventory when write-downs or write-offs are identified. The inventory valuation is based upon assumptions about future demand, product mix and possible alternative uses.

The Company periodically reviews and analyzes its inventory management systems and conducts inventory impairment testing on an annual basis.

Fixed Assets

Fixed assets are recorded at cost less accumulated depreciation and are depreciated using the following methods over the following periods:

Straight line basis
Buildings and leasehold improvements	5-40 years
Computer equipment	3-5 years
Furniture and fixtures	5-8 years
Machinery and equipment	5-10 years
Vehicles	3 years

Betterments are capitalized and amortized by the Company, using the same amortization basis as the underlying assets over the remaining useful life of the original asset. Betterments include renovations, major repairs and upgrades that increase the service of a fixed asset and extend the useful life. Gains and losses on depreciable assets retired or sold are recognized in the consolidated statements of operations in the year of disposal. Repairs and maintenance expenditures are expensed as incurred.

Fixed Assets Held for Sale

Certain fixed assets held for sale from within our SSC segment have been classified as held for sale in the consolidated balance sheets. The Company estimated the fair value of the net assets to be sold at approximately $150 at August 31, 2013 compared to $900 at November 30, 2012. On March 14, 2013, the Company sold certain land and a building in Palm Bay, Florida from the Spectrum acquisition for net proceeds of $739. This land and building were part of the fixed assets held for sale reported at November 30, 2012.

Discontinued Operations

Components of the Company that have been disposed of are reported as discontinued operations. The assets and liabilities relating to the Company’s Databus business and Sensors companies have been reclassified as discontinued operations in the consolidated balance sheets for fiscal 2012 and the results of operations of Databus and Sensors for the current and prior periods are reported as discontinued operations (Note 5) and not included in the continuing operations figures.

Goodwill and Intangible Assets

Goodwill and intangible assets result primarily from business acquisitions accounted for under the purchase method. Goodwill and intangible assets with indefinite lives are not amortized but are subject to impairment by applying a fair value based test. The Company completes an annual (or more often if circumstances require) impairment assessment of its goodwill on a reporting unit level. The Company’s annual impairment test for goodwill is September 1^st.

8

The Company has three reporting units: (i) SSC, (ii) EMS, and (iii) SSIA. The goodwill in the consolidated financial statements relates to the acquisition of RTIE in March 2012, C-MAC in March 2012, CMT in November 2011, Spectrum in June 2011, SenDEC Corp. (“SenDEC”) in January 2011, the acquisition of the assets of Kuchera Defense Systems, Inc. (“KDS”), KII, Inc. (“KII”) and Kuchera Industries, LLC (“KI Industries” and collectively with KDS and KII, the “KGC Companies”) by API and three of its subsidiaries (the “API Pennsylvania Subsidiaries”), in January 2010, and the acquisition of the Filtran Group companies, which was completed in 2002. All of the goodwill relates to our SSC reporting unit, except for SenDEC and the KGC Companies, which relate to the EMS reporting unit. Goodwill represents the excess of the purchase price of acquired companies over the estimated fair value assigned to the individual assets acquired and liabilities assumed. The Company does not amortize goodwill but instead tests goodwill for impairment annually (on September 1) or more frequently if impairment indicators arise under the applicable accounting guidance.

A two-step test is performed to assess goodwill impairment. First, the fair value of each reporting unit is compared to its carrying value. The fair value is determined based on a market approach as well as the discounted future cash flows of the subsidiary carrying the goodwill. If the calculated fair value exceeds the carrying value of the assets, goodwill is not impaired and no further testing is performed. The second step is performed if the carrying value exceeds the fair value of the goodwill. If the carrying value of the reporting unit’s goodwill exceeds its implied fair value, an impairment loss equal to the difference is recorded.

As at May 31, 2012, given lower than projected revenues and the Company’s outlook for the EMS portion of the Systems & Subsystems segment (now the EMS segment), the Company determined that the appropriate triggers had been reached to perform an impairment test beyond the annual goodwill impairment test. The Company performed the first step of the goodwill impairment assessment and the carrying value of the assets exceeded the fair value. As of the date of filing the 10-Q for May 31, 2012, the Company determined that an impairment of goodwill was probable, determined a reasonable estimate and therefore recorded a write-down of $87,000. During the third quarter of fiscal 2012, the Company completed its impairment analysis and determined that an additional $24,300 write-down of goodwill was required.

Following the required accounting guidance, the Company performed the first step of the two-step test method based on discounted future cash flows on September 1, 2012. The respective reporting units’ future cash flows exceeded the carrying value of the underlying assets and therefore goodwill was not impaired and no further testing was required for the year ending November 30, 2012.

As at April 17, 2013, given the sale of Sensors, which was part of the SSC segment, the Company determined that the appropriate triggers had been reached to perform an impairment test beyond the annual goodwill impairment test. The Company performed the first step of the goodwill impairment assessment and the carrying value of the assets exceeded the fair value of the assets and determined that an impairment of goodwill had not occurred.

As at July 5, 2013, given the sale of Databus, which also was part of the SSC segment, the Company determined that the appropriate triggers had been reached to perform an impairment test beyond the annual goodwill impairment test. The Company performed the first step of the goodwill impairment assessment and the carrying value of the assets exceeded the fair value of the assets. As of the date of the filing of this report, the Company determined that an impairment of goodwill had not occurred.

Intangible assets that have a finite life are amortized using the following basis over the following periods:

Non-compete agreements	Straight line over 5 years
Computer software	Straight line over 3-5 years
Customer related intangibles	Straight line or the pattern in which the economic benefits are expected to be realized, over an estimated life of 4-15 years
Marketing related intangibles	The pattern in which the economic benefits are expected to be realized, over an estimated life of 3-10 years
Technology related intangibles	The pattern in which the economic benefits are expected to be realized, over an estimated life of 10 years

Long-Lived Assets

The Company periodically evaluates the net realizable values of long-lived assets, principally identifiable intangibles and capital assets, for potential impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable, as determined based on the estimated future undiscounted cash flows. If such assets were considered to be impaired, the carrying value of the related assets would be reduced to their estimated fair value.

9

Income Taxes

Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial reporting and tax bases of assets and liabilities and available net operating loss carry forwards. A valuation allowance is established to reduce tax assets if it is more likely than not that all or some portions of such tax assets will not be realized.

The Company’s valuation allowance was recorded on the deferred tax assets to provide for a reasonable provision, which in the Company’s estimation is more likely than not that all or some portions of such tax assets will not be realized. In determining the adequacy of the valuation allowance, the Company applied the authoritative guidance and considered such factors as (i) which subsidiaries were producing income and which subsidiaries were producing losses and (ii) temporary differences occurring from depreciation and amortization which the Company expects to increase the taxable income over future periods.

The Company follows the guidance concerning accounting for uncertainty in income taxes, which clarifies the accounting and disclosure for uncertainty in tax positions. The guidance requires that the Company determine whether it is more likely than not that a tax position will not be sustained upon examination by the appropriate taxing authority. If a tax position does not meet the more likely than not recognition criterion, the guidance requires that the tax position be measured at the largest amount of benefit greater than 50 percent not likely of being sustained upon ultimate settlement.

Based on the Company’s evaluation, management has concluded that there are no significant uncertain tax positions requiring recognition in the consolidated financial statements or adjustments to deferred tax assets and related valuation allowance. Open tax years include the tax years ended May 31, 2008 through November 30, 2012.

The Company from time to time has been assessed interest or penalties by major tax jurisdictions, however such assessments historically have been minimal and immaterial to our financial results. If the Company receives an assessment for interest and/or penalties, it would be classified in the consolidated financial statements as general and administrative expense.

Revenue Recognition

The Company recognizes non-contract revenue when it is realized or realizable and earned. The Company considers non-contract revenue realized or realizable and earned when it has persuasive evidence of an arrangement, delivery has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. Delivery is not considered to have occurred until products have been shipped and risk of loss and ownership has transferred to the client. Revenue from production-type contracts, which represents less than one per cent of total revenue, is recognized using the percentage of completion method. The degree of completion is determined based on costs incurred, excluding costs that are not representative of progress to completion, as a percentage of total costs anticipated for each contract. A provision is made for losses on contracts in progress when such losses first become known. Revisions in cost and profit estimates, which can be significant, are reflected in the accounting period in which the relevant facts become known. Revenue from contracts under the percentage of completion method is not significant to the financial statements.

Deferred Revenue

The Company defers revenue when payment is received in advance of the service or product being shipped or delivered, including transition services agreements related to discontinued operations. For some of the larger government contracts, the Company will bill upon meeting certain milestones. These milestones are established by the customer and are specific to each contract. Unearned revenue is recorded as deferred revenue. The Company generally recognizes revenue on the contracts when items are shipped.

Research and Development

Research and development costs are expensed when incurred.

Stock-Based Compensation

The Company follows the authoritative guidance for accounting for stock-based compensation. The guidance requires that new, modified and unvested stock-based payment transactions with employees, such as grants of stock options, restricted stock units (“RSUs”) and restricted stock, be recognized in the financial statements based on their fair value at the grant date and recognized as compensation expense over their vesting periods. Stock-based compensation cost for RSUs is measured based on the closing fair market value of the Company’s common stock on the date of grant. The fair value of each option granted is estimated on the grant date using the Black-Scholes option pricing model which takes into account as of the grant date the exercise price and expected life of the option, the current price of the underlying shares and its expected volatility, expected dividends on the shares and the risk-free interest rate for the term of the option.

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Foreign Currency Translation and Transactions

The Company’s functional currency is United States dollars and the consolidated financial statements are stated in United States dollars, “the reporting currency.” Integrated operations have been translated from various foreign currencies (Canadian dollars, British Pounds Sterling, Chinese Yuan, Euros, and Mexican Pesos) into United States dollars at the period-end exchange rate for monetary balance sheet items, the historical rate for fixed assets and shareholders’ equity, and the average exchange rate for the year for revenues, expenses, gains and losses. The gains or losses on translation are included as a component of other comprehensive income (loss) for the period.

Financial Instruments

The fair values of financial instruments including cash and cash equivalents, marketable securities, accounts receivable, accounts payable, and short-term borrowings approximate their carrying values due to the short-term nature of these instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest rate, currency or credit risks arising from its financial instruments. Marketable securities are included at fair value based on quoted market prices in active markets. The recorded value of long-term debt approximates the fair value of the debt as the terms and rates approximate market rates.

In the ordinary course of business, the Company carries out transactions in various foreign currencies (Canadian Dollars, British Pounds Sterling, Chinese Yuan, Euros, and Mexican Pesos) included in the Company’s cash, accounts receivable, accounts payable, bank indebtedness, as well as a mortgage loan. The translation adjustments related to these accounts have been reflected as a component of comprehensive income. Currently, the Company does not maintain a foreign currency hedging program.

Derivative Liabilities

Fair value accounting requires bifurcation of embedded derivative instruments of convertible debt or equity instruments, and measurement of their fair value for accounting purposes. The Company’s embedded derivative instruments such as put and call features, make whole provisions and default interest and dividend rates in the convertible note and convertible preferred stock are measured at fair value using the discounted cash flows model by taking the present value of probability weighted cash flow scenarios. Derivative liabilities are adjusted to reflect fair value at the end of each reporting period, with any change in the fair value being recorded in results of operations as Other expense (income), net.

Debt Issuance Costs and Long-term Debt Discounts

Fees paid to obtain debt financing or amendments under such debt financing are treated as debt issuance costs and are capitalized and amortized over the life of the debt using the effective interest method. These payments are shown as a financing activity on the consolidated statement of cash flows and are shown as Other non-current assets in the consolidated balance sheets.

In accordance with accounting standards, the Company recognized the value of detachable warrants issued in conjunction with the issuance of the secured promissory notes and the modification of the convertible promissory notes. The Company valued the warrants using the Black-Scholes pricing model. The Company recorded the warrant relative fair value as an increase to additional paid-in capital and a discount against the related debt. The discount attributed to the value of the warrants was being amortized over the term of the underlying debt using the effective interest method and was written off when the related debt was extinguished.

The Company may record debt and equity discounts in connection with raising funds through the issuance of convertible notes or equity instruments. These discounts may arise from (i) the receipt of proceeds less than the face value of the convertible notes or equity instruments, (ii) beneficial conversion features and/or (iii) recording derivative liabilities related to embedded features. These costs are amortized over the life of the debt to interest expense utilizing the effective interest method. If a conversion of the underlying debt occurs, a proportionate share of the unamortized discount is immediately expensed.

Concentration of Credit Risk

The Company maintains cash balances, at times, with financial institutions, which are in excess of amounts insured by the Federal Deposit Insurance Corporation (FDIC), Canadian Deposit Insurance Corporation (CDIC) and Financial Services Compensation Scheme (FSCS in the United Kingdom). Management monitors the soundness of these institutions and has not experienced any collection losses with these institutions.

The US, Canadian and United Kingdom Governments’ Departments of Defense (directly and through subcontractors) accounts for approximately 48%, 2% and 8% of the Company’s revenues for the nine months ended August 31, 2013 (44%, 3% and 9% for the nine months ended August 31, 2012), respectively. A loss of a significant customer could adversely impact the future operations of the Company.

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Earnings (Loss) per Share of Common Stock

Basic earnings per share of common stock is computed by dividing income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share of common stock gives effect to all dilutive potential shares of common stock outstanding during the period. The computation of diluted earnings per share does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings per share (Note 16).

Comprehensive Income (Loss)

Comprehensive income (loss), which includes foreign currency translation adjustments is shown in the Consolidated Statement of Operations and Comprehensive Income (Loss).

Comparative Reclassifications

Certain amounts from 2012 have been reclassified to conform to the August 31, 2013 financial statement presentation. The reclassifications related to the restatement of discontinued operations (see Note 5) and a change in the balance sheet presentation of deferred financing costs incurred directly with the lenders of long-term debt.

3. EFFECTS OF RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

During the second quarter of 2011, the FASB issued guidance that provides two alternatives for the presentation of other comprehensive income, either (i) present items of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income or (ii) present items of other comprehensive income in a separate statement immediately following the statement of net income. Under either presentation method, amounts reclassified from other comprehensive income to net income and totals for net income, other comprehensive income, and comprehensive income will be presented. This guidance does not change the items that are reported in net income and other comprehensive income or the calculation of earnings per share. The Company adopted this guidance effective December 1, 2012, and included retrospective application for all periods presented.

4. ACQUISITIONS

a) C-MAC

On March 22, 2012, the Company completed the acquisition, through its UK-based subsidiary API UK, of the entire issued share capital of C-MAC Aerospace Limited (“C-MAC”), for a total purchase price of £20,950 pounds sterling (approximately $33,000 USD), consisting of i) the payment at closing of £19,250 pounds sterling (approximately $30,300 USD) and ii) the assumption of C-MAC’s term loan facility of £1,700 pounds sterling (approximately $2,700 USD) (see Note 11e). C-MAC was a leading provider of high-reliability electronic systems, modules, and components to the defense, aerospace, space, industrial and energy sectors. The acquisition expanded the Company’s RF and Microwave and microelectronics capabilities and the Company believes that additional revenue opportunities will be generated through cross selling, C-MAC’s European based operation and API’s expansion into international markets. These factors contributed to a purchase price resulting in the recognition of goodwill. On May 31, 2012, C-MAC Aerospace Limited changed its name to RF2M Limited (“RF2M UK”).

The Company has accounted for the acquisition using the purchase method of accounting in accordance with the guidance on business combinations. The Company also incurred legal costs, reorganization charges and professional fees in connection with the acquisition of approximately $1,586 as of November 30, 2012. These expenses have been accounted for as operating expenses. The results of operations of C-MAC have been included in the Company’s results of operations beginning on March 22, 2012.

Accounting guidance requires that identifiable assets acquired and liabilities assumed be reported at fair value as of the acquisition date of a business combination. Assets and liabilities acquired were as follows:

	(in thousands)
Cash	$	3,045
Accounts receivable and other current assets		6,182
Inventory		7,235
Fixed assets		5,432
Customer related intangible assets		7,848
Goodwill		11,364
Current liabilities		(4,614	)
Long-term liabilities		(3,265	)
Fair value of net assets acquired	$	33,227

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The fair value of C-MAC exceeded the underlying fair value of all net assets acquired, giving rise to the goodwill. The resulting goodwill will be non-deductible for tax purposes. Customer, marketing and technology related intangibles are amortized based on the pattern in which the economic benefits are expected to be realized, over estimated lives of three to ten years.

Revenues and net income of RF2M UK for the nine months ended August 31, 2013 were approximately $23,193 and $797, respectively. Revenues and net loss of RF2M UK for the period from the acquisition of March 22, 2012 to November 30, 2012 were approximately $25,336 and $(1,403), respectively.

Fixed assets acquired in this transaction consist of the following:

	(in thousands)
Land	$	155
Buildings and leasehold improvements		1,415
Computer equipment		280
Furniture and fixtures		70
Machinery and equipment		3,504
Vehicles		8
Total fixed assets acquired	$	5,432

b) RTIE

On March 19, 2012, the Company completed the acquisition of substantially all of the assets of RTIE for a total purchase price of $2,295, with $1,500 payable in cash at closing and the remainder pursuant to a $795 Promissory Note payable in 24 equal monthly installments. Based in Anaheim, California, RTIE is a leading manufacturer of passive electronic components, including thermistors, film capacitors, magnetic transformers and inductors, and audio power conditioning units. RTIE had revenues for the year ended December 31, 2011 of approximately $5,300 from a diverse Fortune 500 customer base spanning the audio, defense, aerospace, and industrial markets. The acquisition expands the Company’s RF and Microwave capabilities and the Company believes that its low-cost manufacturing capabilities and established sales channels will provide additional revenue opportunities and improved profitability for RTIE products. These factors contributed to a purchase price resulting in the recognition of goodwill.

The Company has accounted for the acquisition using the purchase method of accounting in accordance with the guidance on business combinations. The Company also incurred legal, travel and relocation costs, reorganization charges and professional fees in connection with the acquisition of approximately $769 as of November 30, 2012. These expenses have been accounted for as operating expenses. The results of operations of RTIE have been included in the Company’s results of operations beginning on March 19, 2012.

Accounting guidance requires that identifiable assets acquired and liabilities assumed be reported at fair value as of the acquisition date of a business combination. Assets and liabilities acquired were as follows:

	(in thousands)
Inventory	$	275
Fixed assets		82
Goodwill		2,177
Current liabilities		(225	)
Deferred revenue		(14	)
Fair value of net assets acquired	$	2,295

The fair value of RTIE exceeded the underlying fair value of all net assets acquired, giving rise to the goodwill. The resulting goodwill will be deductible for tax purposes.

Revenues and net income of RTIE for the nine months ended August 31, 2013 were approximately $1,728 and $292, respectively. Revenues and net income of RTIE for the period from March 19, 2012 to November 30, 2012 were approximately $2,088 and $568, respectively.

Fixed assets acquired in this transaction consist entirely of machinery and equipment.

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c) Commercial Microwave Technology

On November 29, 2011, the Company entered into the CMT Asset Purchase Agreement with CMT and Randall S. Wilson with respect to certain sections, as a shareholder of CMT, pursuant to which the Company purchased substantially all of the assets of CMT. CMT designs and manufactures Radio Frequency and Microwave Filters, Multiplexers, and related products for use in space and commercial applications. The acquisition expands the Company’s RF and Microwave capabilities and the Company believes that its low-cost manufacturing capability and established sales channels will provide additional revenue opportunities and improved profitability for CMT products. These factors contributed to a purchase price resulting in the recognition of goodwill.

The Company also assumed certain liabilities of CMT relating to the assets acquired. The Company purchased the assets of CMT for $8,200, subject to certain adjustments; as a result the Company put $700 of the $8,200 purchase price into escrow for a period of twelve months to secure the indemnification obligations of CMT and Randall S. Wilson. During the quarter ended February 28, 2013, due to certain adjustments, the Company made a final purchase price payment of $600 and recorded Other income of $100.

The Company has accounted for the acquisition using the purchase method of accounting in accordance with the guidance on business combinations. The Company also incurred legal costs, reorganization charges and professional fees in connection with the acquisition of approximately $102 as of November 30, 2011, and an additional $79 as of November 30, 2012. These expenses have been accounted for during the respective periods as operating expenses. The results of operations of CMT have been included in the Company’s results of operations beginning on December 1, 2011.

Accounting guidance requires that identifiable assets acquired and liabilities assumed be reported at fair value as of the acquisition date of a business combination. Assets and liabilities acquired were as follows:

	(in thousands)
Accounts receivable and other current assets	$	2,007
Inventory		941
Fixed assets		371
Goodwill		1,893
Intangible assets		4,545
Current liabilities		(545	)
Deferred revenue		(1,012	)
Fair value of net assets acquired	$	8,200

The fair value of CMT exceeded the underlying fair value of all net assets acquired, giving rise to the goodwill. The resulting goodwill will be deductible for tax purposes.

Revenues and net income of CMT for the nine months ended August 31, 2013 were approximately $4,613 and $133, respectively. Revenues and net income of CMT for the year ended November 30, 2012 were approximately $7,288 and $447, respectively.

Fixed assets acquired in this transaction consist entirely of machinery and equipment.

The following unaudited pro forma summary presents the combined results of operations as if the C-MAC and RTIE acquisitions described above had occurred at the beginning of the nine month periods ended August 31, 2012.

	(in thousands) Nine months ended August 31, 2012
Revenues	$	200,926
Loss from continuing operations	$	(136,105	)
Net loss	$	(136,649	)
Loss from continuing operations per share – basic and diluted	$	2.46
Net loss per share – basic and diluted	$	2.47

5. DISCONTINUED OPERATIONS

a) Databus

On July 5, 2013, the Company entered into the APA with Parent and the Purchaser, pursuant to which the Company sold to the Purchaser certain assets comprising the Company’s Databus business in the U.S. and the U.K., including substantially all of the assets of the Company’s wholly owned subsidiary, National Hybrid, Inc., a New York corporation. The Purchaser paid the Company approximately $32,150 in cash for the assets, after certain adjustments based on closing inventory values as set forth in the APA and customary indemnification provisions.

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The operating results of Databus are summarized as follows:

	Three months ended August 31,					Nine months ended August 31,
	2013			2012		2013			2012
Revenue, net	$	991		$	3,032	$	7,571		$	9,282
Cost of revenues		547			2,336		4,435			7,666
Gross Profit		444			696		3,136			1,616
General and administrative		56			72		484			956
Selling expenses		2			—		82			19
Research and development		—			—		—			41
Restructuring		—			—		—			24
Provision for income taxes		(375	)		—		344			—
Provision for income taxes — Gain on sale of Databus		5,293			—		5,293			—
Other expenses (income)		(10,002	)		—		(10,002	)		—
Income from discontinued operations, net of tax	$	5,470		$	624	$	6,935		$	576

Other income in the three and nine months ended August 31, 2013 primarily relates to the gain on sale of Databus, net of approximately $705 transaction expenses and deferred revenue of $2,544 attributable to a transition services agreement, whereby the Company will manufacture products in the United States for a period of up to 12 months and manufacture certain products in the United Kingdom for a period of up to 4 years. The Company has determined that the U.K. transition services agreement does not result in the Company having a significant continuing involvement on these discontinued operations following the assessment period.

The assets relating to Databus consisted of the following:

	August 31, 2013		November 30, 2012
Cash and cash equivalents	$	—	$	—
Inventories		—		4,032
Current assets of discontinued operations	$	—	$	4,032
Fixed assets, net	$	—	$	242
Goodwill		—		14,802
Long-lived assets of discontinued operations	$	—	$	15,044

b) Sensors

On April 17, 2013 the Company sold all of the issued and outstanding shares of capital stock or other equity interests of the Sensors companies for gross cash proceeds of approximately $51,350. Of this amount, $1,500 was placed into an escrow account for 12 months to secure any indemnification claims made by the purchaser against the sellers, API and Spectrum.

The operating results of Sensors are summarized as follows:

	Three months ended August 31,						Nine months ended August 31,
	2013			2012			2013			2012
Revenue, net	$	—		$	6,656		$	9,270		$	19,775
Cost of revenues		—			4,918			7,155			13,763
Gross Profit		—			1,738			2,115			6,012
General and administrative		—			193			366			587
Selling expenses		—			301			497			1,035
Research and development		—			166			180			521
Provision for income taxes		—			—			66			1,100
Provision for income taxes — Gain on sale of Sensors		—			—			1,670			—
Other expenses (income)		165			3,805			(11,814	)		3,889
Income (loss) from discontinued operations, net of tax	$	(165	)	$	(2,727	)	$	11,150		$	(1,120	)

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Other income in the nine months ended August 31, 2013 primarily relates to the gain on sale of Sensors, net of approximately $2,131 transaction expenses and deferred revenue of $1,780 attributable to a transition services agreement, whereby the Company will manufacture products for a period of up to 9 months and provide certain administrative services to the Purchaser over a period of up to 18 months. The Company has determined that the transition services agreement does not result in the Company having a significant continuing involvement on these discontinued operations following the assessment period. Other expenses for the three and nine months ended August 31, 2012 primarily relates to the goodwill impairment charge recorded in the SSC segment attributable to Sensors.

The assets and liabilities relating to Sensors consisted of the following:

	August 31, 2013		November 30, 2012
Cash and cash equivalents	$	—	$	(15	)
Accounts Receivable		—		3,605
Inventories		—		6,067
Prepaid expenses and other current assets		—		146
Current assets of discontinued operations	$	—	$	9,803
Fixed assets, net	$	—	$	1,475
Intangible assets, net		—		2,156
Goodwill		—		24,430
Long-lived assets of discontinued operations	$	—	$	28,061
Accounts payable and accrued expenses	$	—	$	1,888
Current liabilities of discontinued operations	$	—	$	1,888

6. FAIR VALUE MEASUREMENTS

The following table summarizes assets and liabilities, which have been accounted for at fair value, along with the basis for the determination of fair value.

	(in thousands)
	August 31, 2013								November 30, 2012
	2013 Total			Unobservable Measurement Criteria (Level 3)			Impairment		2012 Total			Unobservable Measurement Criteria (Level 3)			Impairment
Fixed assets held for sale	$	150		$	150		$	—	$	900		$	900		$	1,781
Derivative liabilities – Redeemable Preferred Stock (Note 12)		(267	)		(267	)		—		(267	)		(267	)		—
Total	$	(117	)	$	(117	)	$	—	$	633		$	633		$	1,781

The following is a summary of activity for the nine months ended August 31, 2013 and year ended November 30, 2012 for assets and liabilities measured at fair value based on unobservable measure criteria:

	(in thousands)
	Fixed Assets Held for Sale			Derivative Liabilities – Preferred Stock
Balance, November 30, 2011	$	3,216		$	—
Less: Fixed assets sold		(535	)		—
Less: Impairment of fixed assets held for sale		(1,781	)		—
Add: Embedded features of convertible notes and preferred stock		—			(855	)
Less: Embedded features of convertible notes upon conversion to preferred stock		—			588
Balance, November 30, 2012	$	900		$	(267	)
Less: Fixed assets sold		(750	)		—
Balance, August 31, 2013	$	150		$	(267	)

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The fair value of the fixed assets held for sale was determined using a market approach by using prices and other relevant information generated by market transactions involving comparable assets. The Series A Preferred Stock (Note 10) also contain an embedded feature for a default dividend rate. The Company determined the fair value of the derivative liabilities related to the preferred stock by using the present value of probability weighted cash flow scenarios.

7. INVENTORIES

Inventories consisted of the following:

	(in thousands)
	August 31, 2013		November 30, 2012
Raw materials	$	30,008	$	29,067
Work in progress		22,489		20,572
Finished goods		9,141		8,224
Total	$	61,638	$	57,863

Inventories are presented net of valuation allowances.

8. GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of Goodwill were as follows:

	(in thousands)
Balance, November 30, 2011	$	253,170
Goodwill from business acquisition (note 4a)		11,364
Goodwill from business acquisition (note 4b)		2,177
Goodwill from business acquisition (note 4c)		(500	)
Goodwill from other business acquisition purchase price adjustments		1,091
Less: Goodwill impairment		(111,300	)
Less: Goodwill from Databus disposition (note 5) reclassified to discontinued operations		(14,802	)
Less: Goodwill from Sensors disposition (note 5) reclassified to discontinued operations		(24,430	)
Balance, November 30, 2012	$	116,770
Balance, August 31, 2013	$	116,770

Changes in the carrying amount of Intangible assets were as follows:

	(in thousands)
Balance, November 30, 2011	$	50,001
Intangible assets from business acquisition (note 4a)		7,848
Intangible assets from business acquisition (note 4c)		500
Computer software purchased		1,296
Less: Amortization		(9,555	)
Less: Intangible assets from Sensors disposition (note 5) reclassified to discontinued operations		(2,156	)
Balance, November 30, 2012	$	47,934
Computer software purchased		463
Less: Amortization		(7,366	)
Balance, August 31, 2013	$	41,031

9. SHORT-TERM DEBT

In connection with the acquisition of Spectrum, on June 1, 2011, API entered into a Credit Agreement with Morgan Stanley Senior Funding, Inc. as lead arranger, sole book runner and administrative agent, and with other lenders from time to time parties thereto (see Note 11a). In addition to a secured term loan, the Credit Agreement provided for a $15,000 secured revolving credit facility, with an option for the Company to request an increase in the revolving credit facility commitment of up to an aggregate of $5,000. This facility was undrawn as of November 30, 2012 and is no longer outstanding following the repayment of the term debt on February 6, 2013 (see Note 11a).

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The Company also has a credit facility in place for its U.K. subsidiaries for approximately $387 (250 GBP), which renews in July 2014. This line of credit is tied to the prime rate in the United Kingdom and is secured by the subsidiaries’ assets. This facility was undrawn as of August 31, 2013 and November 30, 2012.

10. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following:

	(in thousands)
	August 31, 2013		November 30, 2012
Trade accounts payable	$	26,741	$	24,575
Accrued expenses		6,905		10,045
Wage and vacation accrual		3,042		4,978
Total	$	36,688	$	39,598

11. LONG-TERM DEBT

The Company has the following long-term debt obligations:

	(in thousands)
	August 31, 2013			November 30, 2012
Term loans, due February 6, 2018, base rate plus 8.75% interest or LIBOR plus 9.75%, (a)	$	87,943		$	—
Asset based loans, due February 6, 2018, base rate plus a margin between 1.50% and 2.00%, or LIBOR plus a margin between 2.50% and 3.00%, (a)		27,834			—
Term loans, repaid February 6, 2013, originally due June 1, 2016, base rate plus 6.25% interest or LIBOR plus 7.25%, (a)		—			183,375
Mortgage loan, due 2027, 1.35% above Barclays fixed bank rate (b)		1,281			1,424
Lockman loan repaid February 6, 2013, – C-MAC acquisition (c)		—			2,724
Note payable – RTIE acquisition (d)		242			540
Capital leases payable		257			338
	$	117,557		$	188,401
Less: Current portion of long-term debt		(6,599	)		(2,328	)
Discount and deferred financing charges on term loans		(7,394	)		(6,570	)
Long-term portion	$	103,564		$	179,503

a) On February 6, 2013, the Company refinanced its credit facilities and entered into (i) a credit agreement with various lenders and Guggenheim Corporate Funding, LLC (the “Term Loan Agreement”) that provides for a $165.0 million term loan facility; and (ii) a credit agreement with various lenders and Wells Fargo Bank, National Association (the “Revolving Loan Agreement”) that provides for a $50.0 million asset-based revolving borrowing base credit facility, with a $10.0 million subfacility (or the Sterling equivalent) for certain of our United Kingdom subsidiaries, a $10.0 million subfacility for letters of credit and a $5.0 million subfacility for swingline loans.

On February 6, 2013, in connection with entering into the Term Loan Agreement and the Revolving Loan Agreement, the Amended and Restated Credit Agreement, dated as of June 27, 2011 and amended on January 6, 2012 and March 22, 2012, by and among the lenders from time to time party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent, lead arranger and sole book-runner, which had an outstanding balance of $183.4 million was paid off and terminated, which resulted in the write-off of approximately $10.3 million of deferred financing costs and note discounts. As of February 6, 2013, the Company borrowed $165.0 million under the Term Loan Agreement and approximately $29.4 million under the Revolving Loan Agreement.

On July 5, 2013 and April 17, 2013, the Company sold Databus and Sensors (Note 5) and repaid approximately $28,780 and $44,919, respectively, of its term loans from the proceeds of these sales, in accordance with the Term Loan Agreement. In addition, the Company repaid a portion of its term loans using the net proceeds of $739 from the March 14, 2013, sale of certain land and a building in Palm Bay, Florida.

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As of August 31, 2013, $87.9 million was outstanding under the Term Loan Agreement, approximately $27.8 million was outstanding under the Revolving Loan Agreement, and $11.8 million was available for future borrowings under the Revolving Loan Agreement.

On May 22, 2013, the Company entered into a First Amendment to the Revolving Loan Agreement that amends certain cash management and reporting requirements.

Term Loan Agreement

The term loans incurred pursuant to the Term Loan Agreement bear interest, at the Company’s option, at the base rate plus 8.75% or an adjusted LIBOR rate (based on one, two or three-month interest periods) plus 9.75% for the first year and at the base rate plus 9.75% or an adjusted LIBOR rate (based on one, two or three-month interest periods) plus 10.75% thereafter, with a LIBOR floor of 1.25%. For purposes of the Term Loan Agreement, the “base rate” means the highest of Wells Fargo Bank, National Association’s prime rate, the federal funds rate plus a margin equal to 0.50% and the adjusted LIBOR rate for a 3-month interest period plus a margin equal to 1.00%.

Interest is due and payable in arrears monthly for term loans bearing interest at the base rate and at the end of an interest period (or at each three month interval in the case of term loans with interest periods greater than three months) in the case of term loans bearing interest at the adjusted LIBOR rate. Principal payments of the term loans are paid at the end of each of the Company’s fiscal quarters, commencing for the fiscal quarter ending May 31, 2013, with the balance of any outstanding term loans due and payable in full on February 6, 2018. The quarterly principal payments will amortize at 1.25% for the fiscal quarters through the end of the Company’s 2014 fiscal year, at 1.875% for the fiscal quarters through the end of the Company’s 2015 fiscal year and at 2.50% for each of the fiscal quarters thereafter.

Under certain circumstances, we are required to prepay the term loans upon the receipt of cash proceeds of certain asset sales, cash proceeds of certain extraordinary receipts and cash proceeds of certain debt or equity financings, and based on a calculation of annual excess cash flow. Mandatory prepayments resulting from assets sales or certain debt financings may require the payment of certain prepayment premiums.

The term loans are secured by a second priority security interest in accounts receivable, inventory, machinery, equipment and certain other personal property relating to the foregoing, and any proceeds from any of the foregoing, subject to certain exceptions and liens, and a first priority security position on substantially all other real and personal property, in each case that are owned by the Company and the subsidiary guarantors.

The Term Loan Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company and its subsidiaries’ ability to, among other things, incur indebtedness, grant liens, dispose of assets and pay dividends or make distributions to stockholders, in each case subject to customary exceptions for a term loan of this size and type.

Pursuant to the Term Loan Agreement, the Company is required to maintain compliance with an interest coverage ratio and a leverage ratio and to limit its annual capital expenditures to $4.0 million per fiscal year (subject to carry-over rights).

Revolving Loan Agreement

The revolving loans incurred pursuant to the Revolving Loan Agreement bear interest, at the Company’s option, at the base rate plus a margin between 1.50% and 2.00% or an adjusted LIBOR rate (based on one, two, three or six-month interest periods) plus a margin between 2.50% and 3.00%, in each case with such margin being determined based on the Company’s average daily excess availability under the revolving credit facility for the preceding fiscal quarter. For purposes of the Revolving Loan Agreement, the “base rate” means the highest of Wells Fargo Bank, National Association’s prime rate, the federal funds rate plus a margin equal to 0.50% and the adjusted LIBOR rate for a 3-month interest period plus a margin equal to 1.00%.

Interest is due and payable in arrears monthly for revolving loans bearing interest at the base rate and at the end of an interest period (or at each three month interval in the case of loans with interest periods greater than three months) in the case of revolving loans bearing interest at the adjusted LIBOR rate. Principal, together with all accrued and unpaid interest, is due and payable on February 6, 2018. The Company may prepay the revolving loans and terminate the commitments, in whole or in part, at any time without premium or penalty. Under certain circumstances, we are required to prepay the revolving loans upon the receipt of cash proceeds of certain asset sales.

All borrowings under the Revolving Loan Agreement are limited by amounts available pursuant to a borrowing base calculation, which is based on percentages of eligible accounts receivable, inventory, machinery and equipment, in each case subject to reductions for applicable reserves.

The Revolving Loan Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company and its subsidiaries’ ability to, among other things, incur indebtedness, grant liens, dispose of assets and pay dividends or make distributions to stockholders, in each case subject to customary exceptions for a credit facility of this size and type.

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Pursuant to the Revolving Loan Agreement, the Company is also required to maintain compliance with a fixed charge coverage ratio and to limit its annual capital expenditures to $4.0 million per fiscal year (subject to carry-over rights) at such times that it fails to maintain excess availability under the revolving credit facility above a specified level.

b) A subsidiary of the Company in the United Kingdom entered into a 20 year term mortgage agreement in 2007, under which interest is charged at a margin of 1.35% over Barclays Fixed Base Rate of 0.5% at August 31, 2013. The mortgage is secured by the subsidiary’s assets.

c) A subsidiary of the Company in the United Kingdom entered into a 5 year term loan facility with Lockman Electronic Holdings Limited on December 16, 2011 (“Lockman Loan”), under which interest is charged at a margin of 5.5% over LIBOR. The margin was to increase by 0.5% each year on December 1 for the term of the agreement. The term loan was secured against a debenture over the subsidiary’s assets. This loan was repaid on February 6, 2013.

d) On March 19, 2012 the Company completed the acquisition of substantially all of the assets of RTIE (Note 4b) for a total purchase price of $2,295, with $1,500 payable in cash at closing and the remainder pursuant to a $795 Promissory Note payable in 24 equal monthly installments. The aggregate principal amount of the Promissory Note payable outstanding was $242 as of August 31, 2013.

12. REDEEMABLE PREFERRED STOCK

On March 22, 2012, following the acquisition of C-MAC, the Company entered into a Note Purchase Agreement by and among the Company and the purchaser referred to therein (the “Note Purchase Agreement”). Pursuant to the Note Purchase Agreement, the Company sold an aggregate initial principal amount of $26,000 of convertible subordinated notes (the “Note”) to a single purchaser in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended. The Company received aggregate gross proceeds of $16,000 from the private placement, all of which will be used for working capital purposes. The purchaser of the Note was an affiliate of Senator Investment Group LP. At the time of the issuance of the Note, the purchaser of the Note was the beneficial owner of approximately 10.7% of our outstanding common stock, without giving effect to the transactions contemplated by the Note Purchase Agreement.

Upon the filing of the amendment to the Charter and the Certificate of Designation (as described and defined below), the Note converted into 26,000 shares of Series A Mandatorily Redeemable Preferred Stock of API (“Series A Preferred Stock”). The holder has the option to convert all or any portion of the amount of the liquidation preference (“Liquidation Preference”) (initially $1,000 per share and $1,027 per share as of August 31, 2013) of the Series A Preferred Stock plus the amount of unpaid and accrued dividends into common stock of API at $6.00 per share. The outstanding Series A Preferred Stock, as of August 31, 2013, is convertible into approximately 4,451,189 shares of common stock.

On March 22, 2012, certain stockholders of the Company took action by written consent (the “Written Consent”), as permitted pursuant to the Company’s bylaws and Amended and Restated Certificate of Incorporation, as amended (the “Charter”), to amend the Charter to (i) increase the number of shares of common stock, par value $0.001 per share, issuable by the Company to 250,000,000 shares from 100,000,000 shares; and (ii) authorize the issuance by the Company’s Board of Directors, from time to time, of up to 10,000,000 shares of preferred stock, par value $0.001 per share (the “Preferred Stock”), in one or more series. The Written Consent also approved the issuance of shares of API common stock in connection with the conversion of the Note and Series A Preferred Stock as contemplated by the Note Purchase Agreement for all purposes, including pursuant to the rules and regulations of The NASDAQ Stock Market.

On March 22, 2012, subject to the effectiveness of the amendments to the Charter described above, the Company’s Board of Directors also authorized the creation of a class of Preferred Stock designated as “Series A Mandatorily Redeemable Preferred Stock” pursuant to a Certificate of Designation (the “Certificate of Designation”).

The Company received aggregate gross proceeds of $16,000 from the issuance of the Note. The Company recorded a debt discount of $10,000 representing the difference between the principal amount of the Note and the proceeds received. The Note contained embedded features for a default interest rate and make whole provisions. Accordingly, the Company evaluated these embedded features and recorded an additional debt discount in the amount of $588. The Company also recorded $2,272 of additional discount resulting from the beneficial conversion feature of the Notes. The total debt discount was amortized over the contracted life of the Notes using the effective interest method. Up to the date of conversion this resulted in interest expense of $218.

On May 16, 2012, the Company filed the amendments to the Charter and the Certificate of Designation with the Secretary of State of the State of Delaware, at which time they became effective. Pursuant to the Certificate of Designation, the Company is authorized to issue 1,000,000 shares of Series A Preferred Stock. As described above, the Note converted into 26,000 shares of Series A Preferred Stock.

Upon conversion of the Note, the remaining unamortized discount of $12,644 was recorded as interest expense and the $26,000 face value of the Note was recorded as Series A Preferred Stock.

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The Series A Preferred Stock will rank, with respect to dividend rights, redemption rights and rights upon liquidation, dissolution or wind-up (i) senior to the common stock and each other class of capital stock or series of Preferred Stock established by the Board of Directors, the terms of which expressly provide that such class or series ranks junior to the Series A Preferred Stock; (ii) junior to all capital stock or series of Preferred Stock established by the Board, the terms of which expressly provide that such class or series will rank senior to the Series A Preferred Stock; and (iii) on parity with all other classes of capital stock or series of Preferred Stock established by the Board of Directors, the terms of which expressly provide that such class or series will rank on parity with the Series A Preferred Stock.

The holders of Series A Preferred Stock will be entitled to vote on all matters voted on by holders of the common stock, voting together as a single class with the other shares entitled to vote. The holders of Series A Preferred Stock will have the right to cast the number of votes equal to the total number of votes which could be cast in such vote by a holder of the number of shares of common stock into which the shares of Series A Preferred Stock could be converted.

Commencing on March 22, 2013, holders of Series A Preferred Stock are entitled to receive cumulative dividends on the Liquidation Preference, computed on the basis of a 360-day year of twelve 30-day months at a rate equal to 6% per annum, compounded quarterly on the last day of each March, June, September and December. Accrued and unpaid dividends also will be paid on the date of any redemption or on any liquidation, dissolution or winding-up of the Company. Dividends will be paid in kind each quarter, by adding the amount of the accrued and unpaid dividend to the Liquidation Preference amount of each share of Series A Preferred Stock (the “Accreted Dividend Amount”). The Accreted Dividend Amount will constitute part of the Liquidation Preference of each share of Series A Preferred Stock as of each applicable quarterly dividend payment date and dividends will begin to accrue on each Accreted Dividend Amount beginning on the date on which such amount is added to the Liquidation Preference amount of each share of Series A Preferred Stock. However, all dividends due and payable on the date that the Liquidation Preference of a share of Series A Preferred Stock becomes due and payable will be payable in cash on such date. Upon an Early Redemption Event, dividends shall accrue while such event is continuing at the rate equal to the rate for the most recently issued actively traded ten year U.S. Treasury security, plus 10.0%. An “Early Redemption Event” means if (a) the Company (i) defaults in its obligation to pay the amounts in connection with a redemption of the Series A Preferred Stock and such default continues unremedied for three business days; (ii) breaches in material respect any of its representations or warranties contained in the Note Purchase Agreement, the Note or other document delivered in connection therewith; (iii) breaches certain covenants under the Note Purchase Agreement or other document delivered in connection therewith (subject to applicable grace periods); (iv) defaults (A) in any payment of any indebtedness in excess of $5,500 or (B) defaults in the observance of any condition or agreement in respect of any such indebtedness, and as a consequence of such default, such indebtedness becomes due and payable prior to its stated maturity; (v) commences certain bankruptcy or similar proceedings or has a bankruptcy or similar proceeding commenced against it that is not dismissed within the applicable grace period; or (b) a material provision of the Note Purchase Agreement, the Note or other agreement delivered in connection therewith ceases to be effective.

The Series A Preferred Stock will be convertible at any time at the discretion of the holders into that number of shares of common stock equal to the Liquidation Preference being converted (plus any accrued dividends that have not yet been accreted to the Liquidation Preference), divided by the initial conversion price of $6.00 per share, which initial conversion price is subject to adjustments as described below. In addition, upon a Change of Control (as defined in the Note Purchase Agreement), the sale of all or substantially all of the assets of the Company or the occurrence of certain dilution events (a “Mandatory Redemption Event”), then the holders of Series A Preferred Stock will have the right to receive upon conversion, in lieu of the common stock otherwise issuable, such shares of stock, securities or other property as would have been issued or payable upon such Mandatory Redemption Event had the shares of Series A Preferred Stock been converted into common stock immediately prior to such Mandatory Redemption Event.

On March 22, 2019, all of the outstanding shares of Series A Preferred Stock are to be redeemed by the Company for the amount of the Liquidation Preference, plus any and all amounts owing to the holder of such redeemed shares pursuant to the terms of the Note Purchase Agreement, the Note or any other document delivered in connection therewith. The Company must offer to redeem all of the shares of Series A Preferred Stock upon a Mandatory Redemption Event. A holder of Series A Mandatorily Redeemable Preferred Stock may accept or reject such offer of redemption.

13. SHAREHOLDERS’ EQUITY

On June 27, 2011, API entered into a Common Stock Purchase Agreement, by and among API and the purchasers (as defined therein), pursuant to which API issued 4,791,958 shares of its common stock in a private placement for a purchase price of $6.50 per share. API received aggregate gross proceeds of approximately $31,148 from the private placement. In connection with the private placement, API also issued 300,000 shares of common stock to certain purchasers in consideration for a backstop commitment provided by such purchasers.

On March 18, 2011, the Company entered into a Common Stock Purchase Agreement, by and among the Company and the Purchasers (as defined therein), pursuant to which the Company issued 17,095,102 shares of its common stock in a private placement for a purchase price of $6.00 per share.

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On March 28, 2011, the Company issued to an officer of the Company as part of his appointment as President and Chief Operating Officer, 300,000 shares of API’s common stock of which 140,019 of these shares were reacquired through the withholding of shares to pay employee tax obligations upon the issuance of the shares.

On January 31, 2011, the Company issued 1,216,667 shares of its common stock to the holders of the $3,650 of convertible notes for a price equal to $3.00 per share upon conversion of the convertible notes.

On January 21, 2011, API acquired all of the equity of SenDEC, which included SenDEC’s electronics manufacturing operations and approximately $30,000 of cash, in exchange for the issuance of 22,000,000 API common shares to Vintage.

On December 28, 2010, the Company filed a Certificate of Amendment of Amended and Restated Certificate of Incorporation, which effected a one-for-four reverse share split of the Company’s outstanding common shares. A one-for-four reverse share split was also effected for the exchangeable shares. All the references to number of shares, options and warrants presented in these financial statements have been adjusted to reflect the post split number of shares.

On January 20, 2010 the Company agreed to issue 800,000 shares of API common stock payable as part of the compensation to the KGC Companies or their designees. 250,000 shares were issued and delivered at closing, 250,000 shares were to be issued and delivered on the first anniversary of the closing and 300,000 shares were to be issued and delivered on the second anniversary of the closing. The Company has issued 126,250 shares into escrow from the 550,000 shares remaining to be delivered. The API Pennsylvania Subsidiaries have claimed a right of set off against the escrowed shares under the asset purchase agreement with respect to claimed amounts due to the Company under the indemnification provisions of the asset purchase agreement. The unissued shares have been accounted for as common shares subscribed but not issued. In addition, on January 20, 2010 and January 22, 2010, the Company issued warrants to purchase an aggregate of 892,862 shares of common stock with an exercise price of $5.60 per share, which expire on January 20, 2015 and January 22, 2015.

In connection with the Plan of Arrangement that occurred on November 6, 2006, the Company was obligated to issue 2,354,505 shares of either API common stock or exchangeable shares of API Nanotronics Sub, Inc. in exchange for the API Electronics Group Corp. common shares previously outstanding. As of August 31, 2013, API is obligated to issue a remaining approximately 580,553 shares of its common stock under the Plan of Arrangement either directly for API common shares or in exchange for API Nanotronics Sub, Inc. exchangeable shares not held by API or its affiliates. There are 539,284 exchangeable shares outstanding (excluding exchangeable shares held by the Company). Exchangeable shares are substantially equivalent to our common shares.

The Company issued 15,000 and 1,340,477 options and RSUs during nine months ended August 31, 2013 and the year ended November 30, 2012, respectively (Note 14). These option grants were valued using the Black-Scholes option-pricing model.

14. SHARE-BASED COMPENSATION

On October 26, 2006, the Company adopted its 2006 Equity Incentive Plan (the “Equity Incentive Plan”), which was approved at the 2007 Annual Meeting of Stockholders of the Company. All the prior options issued by API were carried over to this plan under the provisions of the Plan of Arrangement. On October 22, 2009, the Company amended the Equity Incentive Plan to increase the number of shares of common stock under the plan from 1,250,000 to 2,125,000. On January 21, 2011, the Company amended the Equity Incentive Plan to further increase the number of shares of common stock under the plan from 2,125,000 to 5,875,000, and on June 3, 2011 amended the plan to permit the issuance of RSUs, which amendments were approved by the shareholders of the Company on November 4, 2011. Of the 5,875,000 shares authorized under the Equity Incentive Plan, 3,178,127 shares are available for issuance pursuant to options, RSUs, or stock as of August 31, 2013. Under the Company’s Equity Incentive Plan, incentive options and non-statutory options may have a term of up to ten years from the date of grant. The stock option exercise prices are equal to at least 100 percent of the fair market value of the underlying shares on the date the options are granted.

As of August 31, 2013, there was $665 of total unrecognized compensation related to non-vested stock options, which are not contingent upon attainment of certain milestones. For options with certain milestones necessary for vesting, the fair value is not calculated until the conditions become probable. The cost is expected to be recognized over the remaining periods of the options, which are expected to vest from 2013 to 2016.

During the nine months ended August 31, 2013 and August 31, 2012, $791 and $1,934, respectively, has been recognized as share-based compensation expense in cost of revenues, general and administrative expense, selling expense, and research and development expense.

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The fair value of each option grant is estimated at the grant date using the Black-Scholes option-pricing model based on the assumptions detailed below:

	August 31, 2013			August 31, 2012
Expected volatility		81.9	%		89.5	%
Expected dividends		0	%		0	%
Expected term		6 years			6 years
Risk-free rate		0.85	%		0.91	%

The summary of the common stock options granted, cancelled, exchanged or exercised under the Plan:

	Options			Weighted Average Exercise Price
Stock Options outstanding—November 30, 2011		1,919,591		$	5.72
Less forfeited		(526,985	)	$	5.02
Exercised		—		$	—
Issued		1,025,000		$	3.51
Stock Options outstanding—November 30, 2012		2,417,606		$	5.06
Less forfeited		(526,786	)	$	5.38
Exercised		—		$	—
Issued		—		$	—
Stock Options outstanding—August 31, 2013		1,890,820		$	4.75
Stock Options exercisable—August 31, 2013		1,249,894		$	5.51

Restricted stock unit activity under the 2006 Equity Compensation Plan is presented below:

	Units			Weighted Average Grant Date Fair Value
RSUs outstanding—November 30, 2011		51,000		$	6.43
Issued		315,477		$	3.61
Exercised—Stock issued		(227,477	)	$	3.56
RSUs outstanding—November 30, 2012		139,000		$	4.43
Issued		15,000		$	2.56
Exercised—Stock issued		(72,333	)	$	4.94
RSUs outstanding—August 31, 2013		81,667		$	3.72
RSUs exercisable—August 31, 2013		—		$	—

	RSUs and Options Outstanding								RSUs and Options Exercisable
Range of Exercise Price	Number of Outstanding at August 31, 2013		Weighted Average Exercise Price		Weighted Average Remaining Life (Years)		Aggregate Intrinsic Value (in thousands)		Number Exercisable at August 31, 2013		Weighted Average Exercise Price		Aggregate Intrinsic Value (in thousands)
$0.00 – $ 3.55		893,333	$	3.19		8.49	$	224		273,317	$	3.51	$	—
$3.56 – $ 4.99		27,084	$	3.56		7.14	$	—		10,834	$	3.56	$	—
$5.00 – $ 6.99		1,034,984	$	6.01		7.01	$	—		948,657	$	6.00	$	—
$7.00 – $ 20.00		17, 086	$	11.85		4.23	$	—		17,086	$	11.85	$	—
		1,972,487				7.66	$	224		1,249,894			$	—

The intrinsic value is calculated as the excess of the market value as of August 31, 2013 over the exercise price of the shares. The market value as of August 31, 2013 was $2.74 as reported by the NASDAQ Stock Market.

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15. SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information:

	(in thousands) Nine months ended
	August 31, 2013		August 31, 2012
Supplemental Cash Flow Information
Cash paid for income taxes	$	1,348	$	74
Cash paid for interest	$	10,974	$	11,555

16. EARNINGS PER SHARE OF COMMON STOCK

The following table sets forth the computation of weighted-average shares outstanding for calculating basic and diluted earnings per share (EPS):

	Three months ended				Nine months ended
	August 31, 2013		August 31, 2012		August 31, 2013		August 31, 2012
Weighted average shares-basic		55,424,157		55,365,978		55,398,833		55,296,470
Effect of dilutive securities		*		*		*		*
Weighted average shares—diluted		55,424,157		55,365,978		55,398,833		55,296,470

Basic EPS and diluted EPS for the three months and nine months ended August 31, 2013 and August 31, 2012 have been computed by dividing the net income (loss) by the weighted average shares outstanding. The weighted average numbers of shares of common stock outstanding includes exchangeable shares and shares to be issued under the Plan of Arrangement.

* Outstanding options and RSUs aggregating 1,972,488 incremental shares, and 892,862 warrants have been excluded from the three and nine months ended August 31, 2013 computation of diluted EPS as none are exercisable and in-the-money. Outstanding options and RSUs aggregating 2,843,765 incremental shares, and 955,362 warrants have been excluded from the three and nine months ended August 31, 2012 computations of diluted EPS as they are anti-dilutive due to the losses generated in each respective period.

17. COMMITMENTS AND CONTINGENCIES

a) On September 15, 2011, Currency, Inc., KII Inc., Kuchera Industries, LLC, William Kuchera and Ronald Kuchera (the “Plaintiffs”) filed a lawsuit against API and the API Pennsylvania Subsidiaries in the Court of Chancery of the State of Delaware in relation to the Asset Purchase Agreement by and among API, the API Pennsylvania Subsidiaries, the KGC Companies, William Kuchera, and Ronald Kuchera dated January 20, 2010. Plaintiffs’ complaint alleges claims for breach of contract and unjust enrichment based on their contention that API and the API Pennsylvania Subsidiaries violated the Agreement by failing to issue certain shares of stock to Plaintiffs and by failing to cooperate with Plaintiffs in the filing of a final general and administrative overhead rate with the Defense Contracting Audit Agency. API and the API Pennsylvania Subsidiaries filed an answer to the complaint denying all liability and a counterclaim for breach of contract against Plaintiffs. The final outcome and impact of this matter is subject to many variables, and cannot be predicted. Of the 550,000 shares that have not been delivered under the Asset Purchase Agreement, 126,250 were placed in escrow and the remaining 423,750 shares have been accounted for as common shares subscribed but not issued with a value of $2,373.

b) The Aster Group filed a lawsuit on November 24, 2010 against Spectrum, in Worcester Superior Court. The lawsuit arose out of a lease between Aster as landlord and Spectrum as tenant for a commercial property located at 165 Cedar Hill Street in Marlborough Massachusetts (the “Property”). This claim was settled on March 19, 2013.

c) The Company did not file its July 31, 2011 U.S. tax return timely and filed a Private Letter Ruling to request the IRS to grant relief to allow the Company to file a consolidated U.S. tax return for its tax year ended July 31, 2011. A favorable ruling from the IRS was received during the fiscal quarter ended May 31, 2013, which allows the Company to file consolidated U.S. tax returns.

d) The Company is also a party to lawsuits in the normal course of its business. Litigation can be unforeseeable, expensive, lengthy and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict. An unfavorable resolution of a particular lawsuit could have a material adverse effect on the Company’s business, operating results, or financial condition.

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In accordance with required guidance, the Company accrues for litigation matters when losses become probable and reasonably estimable. The Company has recorded an accrual of approximately $49 relating to its outstanding legal matters as of August 31, 2013 (November 30, 2012—$1,076). As of the end of each applicable reporting period, or more frequently, as necessary, the Company reviews each outstanding matter and, where it is probable that a liability has been incurred, it accrues for all probable and reasonably estimable losses. Where the Company is able to reasonably estimate a range of losses with respect to such a matter, it records an accrual for the amount within the range that constitutes its best estimate. If the Company can reasonably estimate a range but no amount within the range appears to be a better estimate than any other, it will use the amount that is the low end of such range. Because of the uncertainty, the complexity and the many variables involved in litigation, the actual costs to the Company with respect to its legal matters may differ from our estimates, could result in a significant difference and could have a material adverse effect on the Company’s financial position, liquidity, or results of operations. If we determine that an additional loss in excess of our accrual is probable but not estimable, the Company will provide disclosure to that effect. The Company expenses legal costs as they are incurred.

18. INCOME TAXES

For the three and nine month periods ended August 31, 2013 , the Company’s effective income tax rates from continuing operations were 212.2% and 15.5%, respectively, and 2.2% and 3.5% for the three and nine month periods ended August 31, 2012, respectively, compared to an applicable U.S. federal statutory income tax rate of 34%. The difference between the effective tax rate and U.S. statutory tax as of August 31, 2013 is primarily due to the existence of valuation allowances for deferred tax assets including net operating losses, the accrual of non-cash tax expense due to additional valuation allowances in connection with the tax amortization of our indefinite-lived intangible assets that was not available to offset existing deferred tax assets, the federal and state benefit of current losses from continuing operations, and the income from foreign subsidiaries taxed at rates lower than the U.S. statutory rate. For the nine months ended August 31, 2013, the Company recorded valuation allowances on deferred tax assets relating to current year losses. The difference between the effective tax rate and U.S. statutory tax as of August 31, 2012 is primarily due to the release of reserves on uncertain tax positions and adjustments for previously recorded accruals.

As of August 31, 2013, the Company has no significant unrecognized tax benefits.

The Company’s practice is to recognize interest and penalties related to income tax matters as income tax expense. For each of the periods presented herein, there were no significant amounts accrued or charged to expense for tax-related interest and penalties.

The Company is subject to possible income tax examinations for its U.S. federal and state income tax returns filed for the tax years 2008 to present. International tax statutes may vary widely regarding the tax years subject to examination, but generally range from 2008 to the present. The Company did not file its July 31, 2011 U.S. tax return timely and filed a Private Letter Ruling to request the IRS to grant relief to allow the Company to file a consolidated U.S. tax return for the tax year ended July 31, 2011. During the second fiscal quarter of 2013, the Company received a favorable ruling, granting the Company’s request allowing it to continue to file its U.S. tax return as a consolidated group. No liability had been recognized for this potential deconsolidation pending the final ruling by the IRS as the Company believed that it was more likely than not that the relief would be granted by the IRS. The Company promptly filed its tax return subsequent to receipt of the ruling.

19. RESTRUCTURING CHARGES RELATED TO CONSOLIDATION OF OPERATIONS

In accordance with accounting guidance for costs associated with asset exit or disposal activities, restructuring costs are recorded as incurred. Restructuring charges for employee workforce reductions are recorded upon employee notification.

In May 2012, the Company announced the restructuring of its EMS business (“EMS restructuring”) in order to improve its profitability. The actions taken as part of the EMS restructuring are intended to realize synergies from our combined EMS operations, contain costs, reduce our exposure to low margin and unprofitable revenue streams within the EMS businesses, and streamline our operations. Elements of the EMS restructuring include management re-alignment, workforce reductions and write-downs and charges related to inventory, fixed assets, and long-term leases. The EMS restructuring was substantially completed by the end of fiscal 2012. As of November 30, 2012, the Company reduced its EMS workforce by approximately 10%, which represented approximately 2% of its global workforce.

During the period ending November 30, 2012, the Company incurred approximately $591 related to cash outlays, primarily due to employee separation expense. The majority of the non-cash charges are primarily related to the write-down of inventory related to the EMS product offerings, leasehold impairments and fixed asset impairments.

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The following tables summarize the charges related to EMS restructuring activities by type of cost:

	EMS Restructuring (in thousands)
Salary and related charges	$	591
Inventory write-down		7,401
Fixed asset impairment		865
Lease impairment		3,672
Accumulated restructuring charges at November 30, 2012		12,529

	EMS Restructuring (in thousands)
Cash payments		(591	)
Non-cash charges		(8,628	)
Balance – Lease impairment accrual, November 30, 2012	$	3,310
Balance – Lease impairment accrual, August 31, 2013	$	3,021

During the three months ended August 31, 2013, the Company incurred additional non-EMS restructuring charges of $136 primarily related to severance and legal costs.

20. SEGMENT INFORMATION

The Company follows the authoritative guidance on the required disclosures for segments which establish standards for the way that public business enterprises report information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in financial reports. The guidance also establishes standards for related disclosures about products and services, geographic areas and major customers.

The authoritative accounting guidance uses a management approach for determining segments. The management approach designates the internal organization that is used by management for making operating decisions and assessing performance as the source of the Company’s reportable segments. Previously, the Company reported our segment information in two segments: Systems & Subsystems and Secure Systems & Information Assurance. To better highlight to investors its profitability and product offerings, beginning with the third quarter of fiscal 2012, the Company redefined its reportable operating segments based on the way in which the Chief Operating Decision Maker manages and evaluates the business. For this reason and consistent with authoritative guidance, the Company concluded that the EMS business should be reported as a separate segment, as this more closely aligns with its management organization and strategic direction. The Company also renamed the Systems & Subsystems segment to Systems, Subsystems & Components to more accurately describe the product offering of this segment. There were no changes to the Secure Systems & Information Assurance segment. The Company’s operations are conducted in three principal business segments: Systems, Subsystems & Components (SSC), Secure Systems & Information Assurance (SSIA) and Electronic Manufacturing Services (EMS). The presentation of prior periods has been revised to conform to the new segments. Inter-segment sales are presented at their market value for disclosure purposes.

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Three months ended August 31, 2013 (in thousands)	SSC			SSIA			EMS			Corporate			Inter Segment Eliminations		Total
Sales to external customers	$	45,653		$	3,712		$	13,265		$	—		$	—	$	62,630
Total revenue		45,653			3,712			13,265						—		62,630
Operating income before expenses below:		8,071			696			440			—			—		9,207
Corporate—head office expenses		—			—			—			2,263			—		2,263
Acquisition related charges		30			—			10			(151	)		—		(111	)
Restructuring		67			(6	)		57			18			—		136
Depreciation and amortization		2,907			94			1,522			82			—		4,605
Goodwill impairment		—			—			—			—			—		—
Other expense (income)		75			(44	)		48			3,717			—		3,796
Income tax expense (benefit)		(3,304	)		46			—			114			—		(3,144	)
Income (loss) from continuing operations	$	8,296		$	606		$	(1,197	)	$	(6,043	)	$	—	$	1,662
Income from discontinued operations, net of tax		5,305			—			—			—			—		5,305
Net income (loss)	$	13,601		$	606		$	(1,197	)	$	(6,043	)	$	—	$	6,967
Segment assets—as at August 31, 2013	$	251,561		$	14,109		$	43,355		$	11,049		$	—	$	320,074
Goodwill included in assets—as at August 31, 2013	$	114,301		$	—		$	2,469		$	—		$	—	$	116,770
Purchase of fixed assets, three months ended August 31, 2013	$	876		$	10		$	68		$	4		$	—	$	958

Three months ended August 31, 2012 (in thousands)	SSC			SSIA			EMS			Corporate			Inter Segment Eliminations		Total
Sales to external customers	$	41,127		$	4,651		$	12,981		$	—		$	—	$	58,759
Total revenue		41,127			4,651			12,981			—			—		58,759
Operating income (loss) before expenses below:		7,193			701			(404	)		—			—		7,490
Corporate—head office expenses		—			—			—			1,800			—		1,800
Acquisition related charges		355			—			—			420			—		775
Restructuring		1,689			255			224			55			—		2,223
Depreciation and amortization		2,950			90			733			71			—		3,844
Goodwill impairment		20,387			—			108			—			—		20,495
Other expense (income)		13			(34	)		(405	)		4,921			—		4,495
Income tax expense (benefit)		(50	)		173			—			(702	)		—		(579	)
Income (loss) from continuing operations		(18,151	)		217			(1,064	)		(6,565	)		—		(25,563	)
Income from discontinued operations, net of tax		(2,103	)		—			—			—			—		(2,103	)
Net income (loss)	$	(20,254	)	$	217		$	(1,064	)	$	(6,565	)	$	—	$	(27,666	)
Segment assets—as at November 30, 2012	$	317,791		$	13,496		$	52,589		$	8,839		$	—	$	392,715
Goodwill included in assets—as at November 30, 2012	$	114,301		$	—		$	2,469		$	—		$	—	$	116,770
Purchase of fixed assets, three months ended August 31, 2012	$	127		$	—		$	—		$	—		$	—	$	127

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Nine months ended August 31, 2013 (in thousands)	SSC			SSIA		EMS			Corporate			Inter Segment Eliminations		Total
Sales to external customers	$	128,112		$	12,689	$	44,362		$	—		$	—	$	185,163
Total revenue		128,112			12,689		44,362						—		185,163
Operating income before expenses below:		19,144			2,861		1,803			—			—		23,808
Corporate—head office expenses		—			—		—			6,610			—		6,610
Acquisition related charges		103			—		22			852			—		977
Restructuring		532			75		109			150			—		866
Depreciation and amortization		8,695			286		3,997			247			—		13,225
Goodwill impairment		—			—		—			—			—		—
Other expense (income)		59			7		152			23,298			—		23,516
Income tax expense (benefit)		(5,875	)		225		—			2,334			—		(3,316	)
Income (loss) from continuing operations	$	15,630		$	2,268	$	(2,477	)	$	(33,491	)	$	—	$	(18,070	)
Income (loss) from discontinued operations, net of tax		18,085			—		—			—			—		18,085
Net Income (loss)	$	33,715		$	2,268	$	(2,477	)	$	(33,491	)	$	—	$	15
Purchase of fixed assets nine months ended August 31, 2013	$	1,685		$	33	$	362		$	4		$	—	$	2,084

Nine months ended August 31, 2012 (in thousands)	SSC			SSIA		EMS			Corporate			Inter Segment Eliminations		Total
Sales to external customers	$	121,241		$	19,131	$	48,642		$	—		$	—	$	189,014
Total revenue		121,241			19,131		48,642						—		189,014
Operating income before expenses below:		22,957			4,016		244			—			—		27,217
Corporate—head office expenses		—			—		—			6,374			—		6,374
Acquisition related charges		809			—		—			2,635			—		3,444
Restructuring		2,066			312		11,205			163			—		13,746
Depreciation and amortization		9,072			271		2,955			158			—		12,456
Goodwill impairment		20,387			—		87,108			—			—		107,495
Other expense (income)		(64	)		35		(26	)		24,498			—		24,443
Income tax expense (benefit)		(1,296	)		598		—			(4,187	)		—		(4,885	)
Income (loss) from continuing operations	$	(8,017	)	$	2,800	$	(100,998	)	$	(29,641	)	$	—	$	(135,856	)
Income (loss) from discontinued operations, net of tax		(544	)		—		—			—			—		(544	)
Net income (loss)	$	(8,561	)	$	2,800	$	(100,998	)	$	(29,641	)	$	—	$	(136,400	)
Purchase of fixed assets, nine months ended August 31, 2012	$	697		$	1	$	101		$	—		$	—	$	799

21. SUBSEQUENT EVENTS

The Company has evaluated subsequent events through October 9, 2013, the date the financial statements were issued, and up to the time of filing of the financial statements with the Securities and Exchange Commission.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introduction

This section is provided as a supplement to, and should be read in conjunction with, our unaudited Consolidated Financial Statements and accompanying Notes thereto included in this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the year ended November 30, 2012 to help provide an understanding of our financial condition, changes in financial condition and results of our operations.

Prior to the third quarter of fiscal 2012, we reported in two business segments: Systems & Subsystems and Secure Systems & Informational Assurance. To better highlight to our investors our profitability and product offerings, beginning with the quarter ended August 31, 2012, we redefined our reportable operating segments, based on the way in which the Chief Operating Decision Maker manages and evaluates the business. For this reason and consistent with authoritative guidance, we concluded that the Electronic Manufacturing Services business (formerly part of the Systems & Subsystems segment) should be reported as a separate segment (EMS), as this more closely aligns with our management organization and strategic direction. We also renamed the Systems & Subsystems segment to Systems, Subsystems & Components (SSC) to more accurately describe the product offering of this segment. There were no changes to the Secure Systems & Information Assurance (SSIA) segment. Prior periods have been revised to conform with the new segments: SSC, EMS and SSIA.

As discussed below, we sold Databus and Sensors. The results of Databus and Sensors are presented as discontinued operations for all periods presented.

Business Overview of API Technologies Corp.

General

We design, develop and manufacture electronic systems, subsystems, RF/Microwave, Power, and secure solutions for technically demanding defense, aerospace and commercial applications. We own and operate several state-of-the-art manufacturing facilities in the United States, the United Kingdom, Canada, China and Mexico. Our defense customers, which include military prime contractors, and the contract manufacturers who work for them, in the United States, Canada, the United Kingdom and various other countries in the world, outsource many of their defense electronic components and systems to us as a result of the combination of our design, development and manufacturing expertise. Our commercial customers, who represent the commercial, aerospace, space, industrial, and medical communities, leverage our products, engineering, and manufacturing capabilities to address high-reliability requirements.

Operating through our three segments, SSC, EMS, and SSIA, we are positioned as a total engineered solution provider to various world governments, military, defense, aerospace and homeland security contractors, and leading industrial and commercial firms. With a focus on high-reliability products for critical applications, our solutions portfolio spans RF/microwave and microelectronics, electromagnetics, power products, sensors, and security products. We also offer a wide range of electronic manufacturing services from prototyping to high volume production and secure communication products, including ruggedized computers and peripherals, network security appliances, and TEMPEST Emanation prevention products.

On April 17, 2013 we sold all of the issued and outstanding shares of capital stock or other equity interests of Spectrum Sensors and Controls, Inc., a Pennsylvania corporation (“Sub 1”), Spectrum Sensors and Controls, LLC, a California limited liability company (“Sub 2”), and Spectrum Sensors and Controls, Inc., an Ohio corporation (“Sub 3” and together with Sub 1 and Sub 2, “Sensors”), for gross cash proceeds of approximately $51.4 million. Of this amount, $1.5 million was placed into an escrow account for 12 months to secure any indemnification claims made by the purchaser against the sellers, API and Spectrum Control, Inc (“Spectrum”)., a wholly owned subsidiary of API.

On February 6, 2013, we refinanced substantially all of our outstanding indebtedness. In connection with this refinancing, we entered into (i) a credit agreement with various lenders and Guggenheim Corporate Funding, LLC (the “Term Loan Agreement”) that provides for a $165.0 million term loan facility; and (ii) a credit agreement with various lenders and Wells Fargo Bank, National Association (the “Revolving Loan Agreement”) that provides for a $50.0 million asset-based revolving borrowing base credit facility, with a $10.0 million subfacility (or the Sterling equivalent) for certain of our United Kingdom subsidiaries, a $10.0 million subfacility for letters of credit and a $5.0 million subfacility for swingline loans. On May 22, 2013, we entered into a First Amendment to the Revolving Credit Agreement, which amends certain cash management and reporting requirements.

On March 22, 2012, we, through our subsidiary API Technologies (UK) Limited (“API UK”), acquired the entire issued share capital of C-MAC Aerospace Limited (“C-MAC”) for a total purchase price of £21.0 million (approximately $33.0 million), including the assumption of C-MAC’s loan facility. C-MAC is a leading provider of high-reliability electronic systems, modules, and components to the defense, aerospace, space, industrial and energy sectors. On May 31, 2012, C-MAC Aerospace Limited changed its name to RF2M Limited (“RF2M UK”).

After closing the purchase of C-MAC, we raised $16.0 million of capital in a private placement through the form of a $26.0 million convertible subordinated note (the “Note”).

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On March 22, 2012, our Board also approved an amendment to our Amended and Restated Certificate of Incorporation (the “Charter”) to (i) increase the number of our shares of common stock from 100,000,000 to 250,000,000 shares, and (ii) authorize the issuance by the Company’s Board of Directors of up to 10,000,000 shares of Preferred Stock, in one or more series. Our Board of Directors also authorized, subject to the effectiveness of such amendment to the Charter, the creation of a class of Preferred Stock designated as “Series A Mandatorily Redeemable Preferred Stock” (which we also refer to as Series A Preferred Stock) pursuant to a Certificate of Designation. Pursuant to the Certificate of Designation, we are authorized to issue 1,000,000 shares of Series A Preferred Stock. Shareholders owning a majority of our common stock on March 22, 2012 approved such actions by a written consent and on May 16, 2012, we filed the amendment to the Charter and filed the Certificate of Designation with the Secretary of State of the State of Delaware, at which time they became effective. At such time, the Note, in accordance with its terms, converted into 26,000 shares of Series A Preferred Stock.

On March 19, 2012, we completed the acquisition of substantially all of the assets of RTI Electronics (“RTIE”) for a total purchase price of approximately $2.3 million, with $1.5 million payable in cash at closing and the remainder pursuant to a Promissory Note of approximately $0.8 million payable in 24 equal monthly installments. Based in Anaheim, California, RTIE is a leading manufacturer of passive electronic components, including thermistors, film capacitors, magnetic transformers and inductors, and audio power conditioning units. RTIE had revenues in the year ended December 31, 2011 of approximately $5.3 million from a diverse Fortune 500 customer base spanning the audio, defense, aerospace, and industrial markets.

Since 2010, we have implemented a number of cost reduction initiatives to rationalize the number of our facilities and personnel, which has resulted in us consolidating certain parts of our manufacturing operations. In May 2012 we initiated the restructuring of our EMS operations, and during the nine months ended August 31, 2013 we continued to implement cost reductions. We expect to continue to rationalize our cost structure over the next several quarters.

Recent Developments

On July 5, 2013, we entered into an asset purchase agreement (the “APA”) with ILC Industries, LLC (“Parent”) and Data Device Corporation, a Delaware corporation and a wholly owned subsidiary of Parent (the “Purchaser”) pursuant to which the Company sold to the Purchaser certain assets comprising our data bus business (“Databus”), including substantially all of the assets of our wholly owned subsidiary, National Hybrid, Inc., a New York corporation. The Purchaser paid gross proceeds of approximately $32.2 million in cash for the assets, of which $28.8 million of the proceeds from such sale were used to repay certain of the Company’s outstanding debt.

Operating Revenues

We derive operating revenues from our three principal business segments: SSC; EMS; and SSIA. The acquisitions of C-MAC on March 22, 2012, Spectrum on June 1, 2011 and the asset acquisitions of RTIE on March 19, 2012 and CMT on November 29, 2011 significantly expanded our SSC segment revenues. The operations of SenDEC and the KGC Companies are now substantially reflected in our EMS segment (previously reported as part of the SSC segment). The asset acquisition of Cryptek on July 7, 2009 resulted in the creation of our SSIA segment. Our customers are located primarily in the United States, Canada and the United Kingdom, but we also sell products to customers located throughout the world.

Systems, Subsystems& Components (SSC) Revenue includes high-performance RF/microwave, electromagnetic, power solutions, and microelectronics solutions used in high-reliability defense, space, industrial and commercial applications, including missile defense systems, radar systems, electronic warfare systems (e.g. counter-IED RF jamming devices), unmanned air, ground and robotic systems, satellites, as well as industrial, medical, energy and telecommunications products.

Electronic Manufacturing Services (EMS) Revenue includes high speed surface mount circuit card assemblies, electromechanical assemblies, system and integrated level solutions used in high-reliability defense, industrial, and commercial applications.

Secure Systems & Information Assurance (SSIA) Revenue includes revenues derived from the manufacturing of TEMPEST and Emanation products and services, ruggedized computers and peripherals, secure access and information assurance products. The principal market for these products are the government agencies of the United States, Canada and the United Kingdom and other NATO and European Union countries, Fortune 500 companies and telecommunication service providers.

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Cost of Revenue

We conduct all of our design and manufacturing efforts in the United States, Canada, United Kingdom, Mexico and China. Cost of goods sold primarily consists of costs that were incurred to design, manufacturer, test and ship the products. These costs include raw materials, including freight, direct labor, subcontractor services, tooling required to design and build the parts, and the cost of testing (labor and equipment) the products throughout the manufacturing process and final testing before the parts are shipped to the customer. Other costs include provision for obsolete and slow moving inventory, and restructuring charges related to the consolidation of operations.

Operating Expenses

Operating expenses consist of selling, general, administrative expenses, research and development, business acquisition and related charges and other income or expenses.

Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses include compensation and benefit costs for all employees, including sales and customer service, executive, finance and human resource personnel, as well as sales commissions. Also included in SG&A is compensation related to stock-based awards to employees and directors, professional services for accounting, legal and tax, information technology, rent and general corporate expenditures.

Research and Development Expenses

Research and development (“R&D”) expenses represent the cost of our development efforts. R&D expenses include salaries of engineers, technicians and related overhead expenses, and the cost of materials utilized in research. R&D costs are expensed as incurred.

Business Acquisition and Related Charges

Business acquisition charges primarily represent costs of engaging outside legal, accounting, due diligence, business valuation consultants and accelerated stock option expenses related to business combinations. Related charges include costs incurred related to our efforts to consolidate operations of recently acquired and legacy businesses and expenses associated with divestitures.

Other Expenses (Income)

Other expense (income) consists of interest expense on term loans, notes payable, operating loans and capital leases, interest income on cash and cash equivalents and marketable securities, amortization of note discounts and deferred financing costs, gains or losses on disposal of property and equipment, and gains or losses on foreign currency transactions. Other income also includes gains related to the sales of fixed assets held for sale and acquisition-related gains when net assets acquired exceed the purchase price of the business acquisition.

Backlog

Our sales backlog at August 31, 2013 was approximately $135.8 million compared to approximately $139.0 million at November 30, 2012. Our backlog figures represent confirmed customer purchase orders that we had not shipped at the time the figures were calculated. We lack control over the timing of new purchase orders, as such, the backlog can increase or decrease significantly based on timing of customer purchase orders.

	(dollar amounts in thousands)
	August 31, 2013		November 30, 2012		% Change
Backlog by segments (from continuing operations):
SSC	$	99,904	$	99,246		0.7	%
EMS		26,407		36,654		-27.9	%
SSIA		9,499		3,067		209.7	%
	$	135,810	$	138,967		-2.3	%

The decrease at August 31, 2013 compared to November 30, 2012 was primarily related to our EMS segment as a result of higher EMS revenues and lower bookings in the nine months ended August 31, 2013, following a high level of EMS bookings in the quarter ended November 30, 2012, partially offset by increased SSIA bookings in the quarter ended August 31, 2013.

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Results of Operations for the Three Months Ended August 31, 2013 and 2012

The following discussion of results of operations is a comparison of our three months ended August 31, 2013 and 2012.

Operating Revenue

	(dollar amounts in thousands) Three months ended August 31
	2013		2012		% Change
Revenues by segments (from continuing operations):
SSC	$	45,653	$	41,127		11.0	%
EMS		13,265		12,981		2.2	%
SSIA		3,712		4,651		(20.2	)%
	$	62,630	$	58,759		6.6	%

We recorded a 6.6% increase in overall revenues for the three months ended August 31, 2013 over the same period in 2012. The increase is mainly attributed to the increase in revenues in our SSC and EMS segments. The increase in our SSC segment revenues resulted primarily from higher revenues to the defense end market. During the three months ended August 31, 2013, the decrease in the SSIA segment revenues results primarily from lower revenue generated by our operations in the U.K. and Canada as a result of the completion of one U.K. program with a new customer in the third fiscal quarter of 2012, and in Canada from lower revenue from several existing customers.

Operating Expenses

Cost of Revenue and Gross Margin

	Three months ended August 31
	2013			2012
Gross margin by segments (from continuing operations):
SSC		28.6	%		28.4	%
EMS		4.9	%		(2.7	)%
SSIA		34.6	%		33.3	%
Overall		23.9	%		21.9	%

Our combined gross margin for the three months ended August 31, 2013 increased by approximately 2.0 percentage points compared to the three months ended August 31, 2012. Gross margin varies from period to period and can be affected by a number of factors, including material costs, product mix, production efficiency, and restructuring activities. Overall cost of revenues from continuing operations as a percentage of sales decreased in the three months ended August 31, 2013 from 78.1% to 76.1% compared to the same period last year. The SSC segment cost of revenues remained consistent with the same period in 2012. The EMS segment cost of revenues for the three months ended August 31, 2013 decreased by 7.6 percentage points compared with the same period in 2012, primarily as a result of restructuring charges taken in the prior year related to the EMS restructuring. The SSIA segment realized a decrease in cost of revenues of 1.3 percentage points mainly as a result of lower revenues attributable to a U.K. program completed in the third quarter of 2012 that consisted of products with higher cost of revenues. Combined restructuring costs recorded in the three months ended August 31, 2013 were approximately $0.0 million compared to approximately $1.7 million in the comparable period of 2012 related to the EMS restructuring.

General and Administrative Expenses

General and administrative expenses from continuing operations increased by approximately $0.3 million to $6.9 million for the three months ended August 31, 2013 from $6.6 million for the three months ended August 31, 2012. The increase is primarily a result of an increase in amortization of intangible assets and higher accounting and legal services in the quarter. As a percentage of sales, general and administrative expenses were 11.0% for the three months ended August 31, 2013, compared to 11.3% for the three months ended August 31, 2012.

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The major components of general and administrative expenses are as follows:

	(dollar amounts in thousands) Three months ended August 31
	2013		% of sales			2012		% of sales
Depreciation and Amortization	$	2,652		4.2	%	$	1,917		3.3	%
Accounting and Administration	$	1,346		2.1	%	$	1,302		2.2	%
Stock based compensation	$	191		0.3	%	$	409		0.7	%
Professional Services	$	785		1.3	%	$	186		0.3	%

Selling Expenses

Selling expenses from continuing operations decreased to approximately $3.5 million for the three months ended August 31, 2013 from approximately $3.6 million for the three months ended August 31, 2012. The decrease was largely due to a reduction in the mix of products sold that were subject to commissions. As a percentage of sales, selling expenses were 5.6% for the three months ended August 31, 2013, compared to 6.1% for the three months ended August 31, 2012.

The major components of selling expenses are as follows:

	(dollar amounts in thousands) Three months ended August 31
	2013		% of sales			2012		% of sales
Payroll Expense – Sales	$	1,931		3.1	%	$	1,764		3.0	%
Commissions	$	1,042		1.7	%	$	1,121		1.9	%
Advertising	$	224		0.4	%	$	132		0.2	%

Research and Development Expenses

Research and development costs from continuing operations decreased to approximately $2.2 million for the three months ended August 31, 2013 compared to approximately $2.5 million for the three months ended August 31, 2012. The decrease was largely due to cost reductions following restructuring initiatives. As a percentage of sales, research and development expenses were 3.6% for the three months ended August 31, 2013, compared to 4.3% for the three months ended August 31, 2012.

Business acquisition and related charges

Business acquisition charges primarily represent costs of engaging outside legal, accounting, due diligence, business valuation consultants and accelerated stock option expenses related to business combinations or divestitures. For the three months ended August 31, 2013, business acquisition charges of approximately ($0.1) million primarily related to actual costs being lower than previously estimated related to the sale of the Sensors operations, compared to approximately $0.8 million for the three months ended August 31, 2012, which primarily related to the C-MAC and RTIE acquisitions.

Operating Income

We recorded operating income from continuing operations for the three months ended August 31, 2013 of approximately $2.3 million compared to operating loss of approximately $1.2 million for the three months ended August 31, 2012. The increase in operating income of approximately $3.5 million is primarily attributed to lower restructuring and acquisition costs, primarily related to the C-MAC acquisition and EMS restructuring in the quarter ended August 31, 2012.

Other Expenses (Income)

Total other expense for the three months ended August 31, 2013 amounted to approximately $3.8 million, compared to other expense of $25.0 million for the three months ended August 31, 2012. The decrease in other expense in the three month period ended August 31, 2013, compared to the comparable period in 2012 is largely attributable to the write-down of $20.5 million of goodwill related to our EMS segment and higher interest expense in the prior year due to higher debt levels.

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Income Taxes

Income taxes from continuing operations amounted to a net benefit of approximately $3.1 million for the three months ended August 31, 2013 compared to a net benefit of $0.6 million in the three months ended August 31, 2012. The benefit during the three months ended August 31, 2013, is primarily due to the federal and state benefit on losses from continuing operations and foreign and state taxes incurred during the period. The current provision is greater than the statutory tax rate primarily due to valuation allowances placed upon the deferred tax assets. The prior year benefit related to the Company’s release of a portion of the valuation allowance as a result of acquiring Spectrum.

Income From Discontinued Operations

We recorded income from discontinued operations of approximately $5.3 million for the quarter ended August 31, 2013, compared to a loss from discontinued operations of approximately $2.1 million in the same period of fiscal 2012. This income is attributable to the operations of and the gain on the sale of our Databus operations. During the three months ended August 31, 2013 we recorded a gain on the sale of Databus of approximately $10.0 million. During the three months ended August 31, 2012, we recorded a goodwill impairment of approximately $3.8 million attributable to Sensors’ operations, partially offset by the operations of Sensors.

Net Income (Loss)

We recorded net income for the three months ended August 31, 2013 of approximately $7.0 million, compared to a net loss of approximately $27.7 million for the three months ended August 31, 2012. The increase in net income is largely due to the net gain on the sale of discontinued operations of approximately $10.0 million in the quarter ended August 31, 2013, lower expenses including restructuring and acquisition related costs of approximately $2.7 million in the quarter ended August 31, 2013 compared to the same period in 2012, and the write-down of $20.5 million of goodwill related to our EMS segment and higher interest costs during the quarter ended August 31, 2012.

Results of Operations for the Nine Months Ended August 31, 2013 and 2012

The following discussion of results of operations is a comparison of our nine months ended August 31, 2013 and 2012.

Operating Revenue

	(dollar amounts in thousands) Nine months ended August 31
	2013		2012		% Change
Revenues by segments (from continuing operations):
SSC	$	128,112	$	121,241		5.7	%
EMS		44,362		48,642		(8.8	)%
SSIA		12,689		19,131		(33.7	)%
	$	185,163	$	189,014		(2.0	)%

We recorded a 2.0% decrease in overall revenues for the nine months ended August 31, 2013 over the same period in 2012. The decrease is mainly attributed to the decrease in revenues in our EMS and SSIA segments. During the nine months ended August 31, 2013, the decrease in the SSIA segment revenues results primarily from lower revenue generated by our operations in the U.K. and Canada as a result of the completion of one U.K. program in the third fiscal quarter of 2012 and in Canada from lower revenue from several existing customers. The decrease in our EMS segment revenues resulted primarily from lower revenues to the defense end market.

Operating Expenses

Cost of Revenue and Gross Margin

	Nine months ended August 31
	2013			2012
Gross margin by segments (from continuing operations):
SSC		26.5	%		30.0	%
EMS		7.1	%		(15.5	)%
SSIA		36.1	%		36.1	%
Overall		22.5	%		18.9	%

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Our combined gross margin for the nine months ended August 31, 2013 increased by approximately 3.6 percentage points compared to the nine months ended August 31, 2012. Gross margin varies from period to period and can be affected by a number of factors, including material costs, product mix, production efficiency, and restructuring activities. Overall cost of revenues from continuing operations as a percentage of sales decreased in the nine months ended August 31, 2013 from 81.1% to 77.5% compared to the same period last year. The SSC segment cost of revenues increased by 3.5 percentage points compared to the same period in 2012, primarily due to the impact of a change in product mix in the nine months ended August 31, 2013, as we shipped products on certain programs with higher costs of revenues. The EMS segment cost of revenues for the nine months ended August 31, 2013 decreased by 22.6 percentage points compared with the same period in 2012 primarily as a result of restructuring charges taken in the prior year related to the EMS restructuring. The SSIA segment cost of revenues for the nine months ended August 31, 2013 remained consistent with the comparable period of fiscal 2012. Combined restructuring costs recorded in the nine months ended August 31, 2013 were approximately $0.2 million compared to approximately $9.0 million in the comparable period of 2012, primarily related to the EMS restructuring.

General and Administrative Expenses

General and administrative expenses from continuing operations increased to approximately $19.7 million for the nine months ended August 31, 2013 from $18.3 million for the nine months ended August 31, 2012. The increase is primarily a result of the addition of C-MAC, including the amortization of intangibles, for the full nine month period compared to March to August 2012 in the comparable period of fiscal 2012, which increased general and administrative expenses by approximately $1.2 million, partially offset by cost reductions following restructuring initiatives. As a percentage of sales, general and administrative expenses were 10.6% for the nine months ended August 31, 2013, compared to 9.7% for the nine months ended August 31, 2012.

The major components of general and administrative expenses are as follows:

	(dollar amounts in thousands) Nine months ended August 31
	2013		% of sales			2012		% of sales
Depreciation and Amortization	$	7,949		4.3	%	$	6,873		3.6	%
Accounting and Administration	$	4,176		2.3	%	$	3,738		2.0	%
Stock based compensation	$	791		0.4	%	$	1,769		0.9	%
Professional Services	$	1,939		1.0	%	$	1,617		0.9	%

Selling Expenses

Selling expenses from continuing operations increased to approximately $11.3 million for the nine months ended August 31, 2013 from approximately $10.8 million for the nine months ended August 31, 2012. The increase was primarily a result of the addition of C-MAC for the full nine month period compared to March to August 2012 in the comparable period of fiscal 2012, which increased selling expenses by approximately $0.2 million, and the mix of sales to more products that are subject to commissions. As a percentage of sales, selling expenses were 6.1% for the nine months ended August 31, 2013, compared to 5.7% for the nine months ended August 31, 2012.

The major components of selling expenses are as follows:

	(dollar amounts in thousands) Nine months ended August 31
	2013		% of sales			2012		% of sales
Payroll Expense – Sales	$	5,991		3.2	%	$	5,491		2.9	%
Commissions	$	3,509		1.9	%	$	3,258		1.7	%
Advertising	$	810		0.4	%	$	446		0.2	%

Research and Development Expenses

Research and development costs from continuing operations decreased to approximately $6.9 million for the nine months ended August 31, 2013 compared to approximately $7.3 million for the nine months ended August 31, 2012. The decrease was largely due to cost reductions following restructuring initiatives. As a percentage of sales, research and development expenses were 3.7% for the nine months ended August 31, 2013 and 3.9% for the nine months ended August 31, 2012.

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Business acquisition and related charges

Business acquisition charges primarily represent costs of engaging outside legal, accounting, due diligence, business valuation consultants and accelerated stock option expenses related to business combinations or divestitures. For the nine months ended August 31, 2013, business acquisition charges of approximately $1.0 million primarily related to the sale of the Databus and Sensors operations compared to approximately $3.4 million for the nine months ended August 31, 2012, which primarily related to the C-MAC and RTIE acquisitions.

Operating Income

We recorded operating income from continuing operations for the nine months ended August 31, 2013 of approximately $2.1 million compared to an operating loss of approximately $8.8 million for the nine months ended August 31, 2012. The increase in operating income of approximately $10.9 million is primarily attributed to lower restructuring and acquisition costs, primarily related to the C-MAC acquisition and EMS restructuring in the nine months ended August 31, 2012, partially offset by lower contribution margin due to lower revenues and higher amortization of intangible assets following the C-MAC acquisition.

Other Expenses (Income)

Total other expense for the nine months ended August 31, 2013 amounted to approximately $23.5 million, compared to other expense of $131.9 million for the nine months ended August 31, 2012. The decrease in other expense in the nine month period ended August 31, 2013, compared to the comparable period in 2012 is largely attributable to the write-down of $107.5 million of goodwill related to our EMS segment and approximately $12.6 million of discounts related to the convertible subordinated note that converted to shares of Series A Preferred Stock during the quarter ended August 31, 2012 (the “Note”), partially offset by the reduction of $2.2 million from previously accrued earn-out payments related to the SenDEC acquisition and the write-down of discounts and deferred financing costs of $10.3 million in the nine months ended August 31, 2013.

Income Taxes

Income taxes from continuing operations amounted to a net benefit of approximately $3.3 million for the nine months ended August 31, 2013 compared to a net benefit of $4.9 million in the nine months ended August 31, 2012. The benefit during the nine months ended August 31, 2013, is primarily due to the federal and state benefit on losses from continuing operations and the tax amortization of indefinite lived intangibles, alternative minimum tax and foreign and state taxes incurred during the period. The current provision is less than the statutory tax rate due to valuation allowances placed upon the deferred tax assets. The prior year benefit related to the Company’s release of a portion of the valuation allowance as a result of acquiring Spectrum.

Income From Discontinued Operations

We recorded income from discontinued operations of approximately $18.1 million for the nine months ended August 31, 2013, compared to a loss from discontinued operations of approximately $0.5 million in the same period of fiscal 2012. This increase in income is attributable to the operations of and the gain on the sales of our Databus assets and Sensors operations. During the nine months ended August 31, 2013 we recorded gains on the sales of Databus and Sensors of approximately $10.0 million and $11.8 million, respectively.

Net Loss

We recorded net income for the nine months ended August 31, 2013 of approximately $0.0 million, compared to a net loss of approximately $136.4 million for the nine months ended August 31, 2012. The decrease in net loss is largely due to the write-down of $107.5 million of goodwill related to our EMS segment in the nine months ended August 31, 2012, the gains on the sale of discontinued operations of approximately $21.9 million in the nine months ended August 31, 2013, and lower expenses including restructuring and acquisition related costs of approximately $15.0 million and a lower write-down of approximately $2.4 million of discounts and deferred financing costs during the nine months ended August 31, 2013, compared to the nine months ended August 31, 2012, partially offset by lower contribution margin due to lower revenues in the nine months ended August 31, 2013.

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Liquidity and Capital Resources

Overview and Summary

Our sources of capital include cash flows from operations, available credit facilities and the issuance of equity securities.

At August 31, 2013, we held cash and cash equivalents of approximately $12.5 million compared to $20.5 million at November 30, 2012. We believe that (i) our available cash and cash equivalents, (ii) funds available under our Revolving Loan Agreement as described below, and (iii) future cash flows from operations will be sufficient to satisfy our anticipated cash requirements for the next twelve months, including scheduled debt repayments, lease commitments, planned capital expenditures, and research and development expenses. There can be no assurance, however, that unplanned capital replacements or other future events, will not require us to seek additional debt or equity financing and, if so required, that it will be available on terms acceptable to us, if at all. Any issuance of additional equity could dilute our current stockholders’ ownership interests.

Term Loan Agreement and Revolving Loan Agreement

On February 6, 2013, in connection with entering into the Term Loan Agreement and the Revolving Loan Agreement, the Amended and Restated Credit Agreement, dated as of June 27, 2011 and amended on January 6, 2012 and March 22, 2012, by and among the lenders from time to time party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent, lead arranger and sole book-runner (the “Credit Agreement”) was paid off and terminated.

As of August 31, 2013, $87.9 million was outstanding under the Term Loan Agreement and approximately $27.8 million was outstanding under the Revolving Loan Agreement. As of August 31, 2013, we had $11.8 million available for future borrowings under the Revolving Loan Agreement.

Term Loan Agreement

The term loans incurred pursuant to the Term Loan Agreement bear interest, at the Company’s option, at the base rate plus 8.75% or an adjusted LIBOR rate (based on one, two or three-month interest periods) plus 9.75% for the first year and at the base rate plus 9.75% or an adjusted LIBOR rate (based on one, two or three-month interest periods) plus 10.75% thereafter, with a LIBOR floor of 1.25%. For purposes of the Term Loan Agreement, the “base rate” means the highest of Wells Fargo Bank, National Association’s prime rate, the federal funds rate plus a margin equal to 0.50% and the adjusted LIBOR rate for a 3-month interest period plus a margin equal to 1.00%.

Interest is due and payable in arrears monthly for term loans bearing interest at the base rate and at the end of an interest period (or at each three month interval in the case of term loans with interest periods greater than three months) in the case of term loans bearing interest at the adjusted LIBOR rate. Principal payments of the term loans are paid at the end of each of the Company’s fiscal quarters, commencing for the fiscal quarter ending May 31, 2013, with the balance of any outstanding term loans due and payable in full on February 6, 2018. The quarterly principal payments will amortize at 1.25% for the fiscal quarters through the end of the Company’s 2014 fiscal year, at 1.875% for the fiscal quarters through the end of the Company’s 2015 fiscal year and at 2.50% for each of the fiscal quarters thereafter.

Under certain circumstances, we are required to prepay the term loans upon the receipt of cash proceeds of certain asset sales, cash proceeds of certain extraordinary receipts and cash proceeds of certain debt or equity financings, and based on a calculation of annual excess cash flow. Mandatory prepayments resulting from assets sales or certain debt financings may require the payment of certain prepayment premiums.

The term loans are secured by a second priority security interest in accounts receivable, inventory, machinery, equipment and certain other personal property relating to the foregoing, and any proceeds from any of the foregoing, subject to certain exceptions and liens, and a first priority security position on substantially all other real and personal property, in each case that are owned by the Company and the subsidiary guarantors.

The Term Loan Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company and its subsidiaries’ ability to, among other things, incur indebtedness, grant liens, dispose of assets and pay dividends or make distributions to stockholders, in each case subject to customary exceptions for a term loan of this size and type.

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Pursuant to the Term Loan Agreement, the Company is required to maintain compliance with an interest coverage ratio and a leverage ratio and to limit its annual capital expenditures to $4.0 million per fiscal year (subject to carry-over rights). The interest coverage ratio, which is defined as the ratio of Consolidated EBITDA to cash Interest Expense (as each term as defined in the Term Loan Agreement), as at the end of each fiscal quarter of the Company, must be not less than the ratio set forth opposite such period below:

Applicable Ratio	Applicable Period
1.90:1.00	For the three quarter period ending on August 31, 2013
1.90:1.00	For the Test Period ending on November 30, 2013
2.10.1.00	For the Test Period ending on February 28, 2014
2.10.1.00	For the Test Period ending on May 31, 2014
2.20.1.00	For the Test Period ending on August 31, 2014
2.50.1.00	For the Test Period ending on November 30, 2014

The leverage ratio, which is defined as Funded Debt to Consolidated EBITDA (as each term as defined in the Term Loan Agreement), as at the end of each fiscal quarter of the Company, must be not greater than the ratio set forth opposite such period below:

Applicable Ratio	Test Period Ending
5.50:1.00	August 31, 2013
5.50:1.00	November 30, 2013
4.10:1.00	February 28, 2014
4.00:1.00	May 31, 2014
3.85:1.00	August 31, 2014
3.85:1.00	November 30, 2014

As at August 31, 2013, the Company was in compliance with its financial covenants under the Term Loan Agreement.

The Term Loan Agreement includes customary events of default including, among other things, non-payment defaults, inaccuracy of representations and warranties, covenant defaults, cross default to material indebtedness, bankruptcy and insolvency defaults, non-compliance with ERISA laws and regulations, defaults under the security documents or guaranties, material judgment defaults, and a change of control default, in each case subject to certain exceptions for a term loan of this type. The occurrence of an event of default could result in an increased interest rate equal to 2.0% above the applicable interest rate for loans, the acceleration of the Company’s obligations pursuant to the Term Loan Agreement and an obligation of the subsidiary guarantors to repay the full amount of the Company’s borrowings under the Term Loan Agreement. If the Company were unable to obtain a waiver for a breach of covenant and the lenders accelerated the payment of any outstanding amounts, such acceleration may cause the Company’s cash position to deteriorate or, if cash on hand were insufficient to satisfy the payment due, may require the Company to obtain alternate financing to satisfy the accelerated payment. If the Company’s cash is utilized to repay any outstanding debt, we could experience an immediate and significant reduction in working capital available to operate our business.

Revolving Loan Agreement

The revolving loans incurred pursuant to the Revolving Loan Agreement bear interest, at the Company’s option, at the base rate plus a margin between 1.50% and 2.00% or an adjusted LIBOR rate (based on one, two, three or six-month interest periods) plus a margin between 2.50% and 3.00%, in each case with such margin being determined based on the Company’s average daily excess availability under the revolving credit facility for the preceding fiscal quarter. For purposes of the Revolving Loan Agreement, the “base rate” means the highest of Wells Fargo Bank, National Association’s prime rate, the federal funds rate plus a margin equal to 0.50% and the adjusted LIBOR rate for a 3-month interest period plus a margin equal to 1.00%.

Interest is due and payable in arrears monthly for revolving loans bearing interest at the base rate and at the end of an interest period (or at each three month interval in the case of loans with interest periods greater than three months) in the case of revolving loans bearing interest at the adjusted LIBOR rate. Principal, together with all accrued and unpaid interest, is due and payable on February 6, 2018. The Company may prepay the revolving loans and terminate the commitments, in whole or in part, at any time without premium or penalty. Under certain circumstances, we are required to prepay the revolving loans upon the receipt of cash proceeds of certain asset sales.

All borrowings under the Revolving Loan Agreement are limited by amounts available pursuant to a borrowing base calculation, which is based on percentages of eligible accounts receivable, inventory, machinery and equipment, in each case subject to reductions for applicable reserves.

The Revolving Loan Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company and its subsidiaries’ ability to, among other things, incur indebtedness, grant liens, dispose of assets and pay dividends or make distributions to stockholders, in each case subject to customary exceptions for a credit facility of this size and type.

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Pursuant to the Revolving Loan Agreement, the Company is also required to maintain compliance with a fixed charge coverage ratio and to limit its annual capital expenditures to $4.0 million per fiscal year (subject to carry-over rights) at such times that it fails to maintain excess availability under the revolving credit facility above a specified level. The fixed charge coverage ratio, which is defined as the ratio of EBITDA minus unfinanced capital expenditures to Fixed Charges (as each term as defined in the Revolving Loan Agreement), as at the end of each fiscal quarter of the Company, must be not less than the ratio set forth opposite such period below:

Applicable Ratio	Applicable Period
1.0:1.0	For the three quarter period ending August 31, 2013
1.0:1.0	For the four quarter period ending on the last day of each November, February, May or August thereafter

As at August 31, 2013, the Company was in compliance with its financial covenants under the Revolving Loan Agreement.

The Revolving Loan Agreement contains customary events of default including, among others, non-payment defaults, defaults due to an inaccuracy of representations and warranties, covenant defaults, bankruptcy and insolvency defaults and a change of control default, in each case subject to customary exceptions for a credit facility of this size and type. The occurrence of an event of default could result in an increased interest rate equal to 2.0% above the applicable interest rate for loans, the acceleration of the Company’s obligations pursuant to the Revolving Loan Agreement, a termination of the commitments under the Revolving Loan Agreement, an obligation by any guarantors to repay their respective obligations in full and the right of the lenders to exercise remedies with respect to any collateral securing the obligations under the Revolving Loan Agreement. If the Company were unable to obtain a waiver for a breach of covenant and the lenders accelerated the payment of any outstanding amounts, such acceleration may cause the Company’s cash position to deteriorate or, if cash on hand were insufficient to satisfy the payment due, may require the Company to obtain alternate financing to satisfy the accelerated payment. If the Company’s cash is utilized to repay any outstanding debt, we could experience an immediate and significant reduction in working capital available to operate our business.

Nine Months Ended August 31, 2013 Compared to August 31, 2012

Cash used by continuing operating activities of approximately $6.8 million for the nine months ended August 31, 2013 (“Q3 YTD FY2013”) was higher than cash used by continuing operations of approximately $2.1 million for the nine months ended August 31, 2012 (“Q3 YTD FY2012”). The increase in cash used by operating activities resulted primarily from an increase in the net cash used by changes in operating assets and liabilities during Q3 YTD FY2013, which was primarily related to changes in inventory, accounts payable and accounts receivable.

Cash generated by investing activities for the nine months ended August 31, 2013 was approximately $77.3 million, which consisted primarily of the net proceeds of $31.4 million for the sale of the Databus assets, $49.1 million for the sale of the Sensors operations and $0.8 million net proceeds for the sale of certain land and a building in Palm Bay, Florida, and net proceeds of $0.1 million from a negotiated reduction in the final payment made in the quarter for the CMT acquisition that was previously held as restricted cash, partially offset by the acquisition of fixed and intangibles assets and restricted cash of $1.5 million related to the sale of Sensors. Cash used by investing activities for the nine months ended August 31, 2012 was approximately $30.5 million, which consisted of approximately $29.0 million used for the purchase of C-MAC and RTIE and $1.9 million from the acquisition of fixed and intangible assets, partially offset by proceeds on the sale of fixed assets of approximately $0.5 million from the sale of the St. Mary’s, Pennsylvania land and building, which was a part of the Sensors operations.

Cash used by financing activities for the nine months ended August 31, 2013 totaled approximately $80.7 million, and resulted from the repayment of long-term debt, mainly related to the term loans under the Credit Agreement using the majority of the proceeds from the sale of Databus and Sensors, and the Lockman Electronic Holdings Limited loan, partially offset by net proceeds associated with the loans under the Term Loan Agreement and the Revolving Loan Agreement. Cash generated by financing activities for the nine months ended August 31, 2012 totaled approximately $27.6 million, and resulted from the net proceeds associated with term loans under the Credit Agreement and the Note, partially offset by the repayment of long-term debt, mainly related to the term loans under the Credit Agreement.

39

Contractual Obligations

Future cash payments required under debt arrangements, operating leases, unconditional purchase obligations pursuant to material contracts entered into by the Company in the normal course of business, and capital leases as of August 31, 2013 are summarized in the following table.

	Payments Due by Period (dollar amounts in thousands)
	Total		Remainder of 2013		2014		2015		2016		2017		Thereafter
Operating lease obligations (a)	$	15,936	$	1,035	$	3,720	$	2,742	$	2,387	$	2,196	$	3,856
Long-term debt obligations (b)		117,557		1,619		5,052		7,177		9,441		9,057		85,211
Estimated interest payments		45,315		7,912		10,112		9,448		8,536		7,536		1,771
Asset retirement obligations (c)		1,056		—		—		—		—		—		1,056
Other contractual obligations (d)		37,167		—		—		—		—		—		37,167
Total	$	217,031	$	10,566	$	18,884	$	19,367	$	20,364	$	18,789	$	129,061

Note: Deferred tax liabilities are omitted from this schedule because their ultimate payoff date cannot be reasonably established given the long-term nature of this obligation.

(a) As described in Note 20 (a) to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2012.

(b) As described in Note 11 to the consolidated financial statements included in this Quarterly Report on Form 10-Q.

(c) As described in Note 13 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2012.

(d) Other contractual obligations relate to the redeemable preferred stock as described in Note 12 to the consolidated financial statements included in this Quarterly Report on Form 10-Q.

Critical Accounting Policies and Estimates

We describe our significant accounting policies in Note 2 to the unaudited consolidated financial statements in Item 1 of this Report and the effects of recently adopted accounting pronouncements in Note 3 to the unaudited consolidated financial statements in Item 1 of this Report. There were no significant changes in our accounting policies or critical accounting estimates that are discussed in our Annual Report on Form 10-K for the year ended November 30, 2012.

Off-Balance Sheet Arrangements

During the year ended November 30, 2012 and the nine months ended August 31, 2013, the Company did not have any off-balance sheet arrangements.

FORWARD-LOOKING STATEMENTS

This document and the documents incorporated in this document by reference contain forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact contained in this document and the materials accompanying this document are forward-looking statements.

The forward-looking statements are based on the beliefs of management, as well as assumptions made by and information currently available to management. Frequently, but not always, forward-looking statements are identified by the use of the future tense and by words such as “believes,” “expects,” “anticipates,” “intends,” “will,” “may,” “could,” “would,” “projects,” “continues,” “estimates” or similar expressions. Forward-looking statements are not guarantees of future performance and actual results could differ materially from those indicated by the forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the Company or its industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by the forward-looking statements.

40

The forward-looking statements contained or incorporated by reference in this document are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (“Securities Act”) and Section 21E of the Exchange Act and are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. These statements include declarations regarding our plans, intentions, beliefs or current expectations.

Management wishes to caution investors that any forward-looking statements made by or on behalf of the Company are subject to uncertainties and other factors that could cause actual results to differ materially from such statements. Among the important factors that could cause actual results to differ materially from those indicated by forward-looking statements are the risks and uncertainties described under “Risk Factors” in our Annual Report on Form 10-K for the year ended November 30, 2012 and in our other filings with the SEC. These uncertainties and other risk factors include, but are not limited to: changing economic and political conditions in the United States and in other countries, the ability to effectively integrate acquired companies, our ability to maintain compliance with our financial covenants, war, changes in governmental spending and budgetary policies, governmental laws and regulations surrounding various matters such as environmental remediation, contract pricing, and international trading restrictions, customer product acceptance, continued access to capital markets, and foreign currency risks.

Management wishes to caution investors that other factors might, in the future, prove to be important in affecting the Company’s results of operations. New factors emerge from time to time and it is not possible for management to predict all such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or a combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Forward-looking statements are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this document are made as of the date of this document and management does not undertake any obligation to update forward-looking statements to reflect new information, subsequent events or otherwise.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency

Certain of our European sales and related selling expenses are denominated in Euros, British Pounds Sterling, and other local currencies. In addition, certain of our operating expenses are denominated in Canadian dollars, Mexican Pesos and Chinese Yuan. As a result, fluctuations in currency exchange rates may affect our operating results and cash flows. For each of the periods presented herein, realized currency exchange rate gains and losses were not material.

Interest Rate Exposure

We have market risk exposure relating to possible fluctuations in interest rates. We may utilize interest rate swap agreements in the future to minimize the risks and costs associated with variable rate debt, however, we have not done so to date. We do not enter into derivative financial instruments for trading or speculative purposes.

ITEM 4. CONTROLS AND PROCEDURES

Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures.

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended. We have carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of August 31, 2013. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of August 31, 2013.

(b) Changes in Internal Control over Financial Reporting

During the quarter ended August 31, 2013, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Information with respect to legal proceedings can be found in Note 17 “Commitments and Contingencies” to the Consolidated Financial Statements contained in Part I, Item 1 of this report, which is incorporated by reference herein.

ITEM 1A. RISK FACTORS

There are no material changes from the risk factors set forth under Part I, Item 1A–“Risk Factors” in our Annual Report on Form 10-K for the year ended November 30, 2012.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) None.

(b) Not applicable.

(c) None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

Exhibit Number	Exhibit Title
31.1	Rule 13a-14(a)/15d-14(a) Certification by Chief Executive Officer (filed herewith).
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer (filed herewith).
32.1	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (filed herewith).
32.2	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (filed herewith).
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

43

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	API TECHNOLOGIES CORP.
Date: October 9, 2013	By:	/S/ PHIL REHKEMPER
		Phil Rehkemper
		Chief Financial Officer (Duly Authorized Officer)

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EX-31.1

Exhibit 31.1

Rule 13a-14(a)

CERTIFICATION

I, Bel Lazar, hereby certify that:

1. I have reviewed this quarterly report on Form 10-Q of API Technologies Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 9, 2013

/s/ Bel Lazar

Bel Lazar

Chief Executive Officer

EX-31.2

Exhibit 31.2

Rule 13a-14(a)

CERTIFICATION

I, Phil Rehkemper, hereby certify that:

1. I have reviewed this quarterly report on Form 10-Q of API Technologies Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 9, 2013

/s/ Phil Rehkemper

Phil Rehkemper

Chief Financial Officer

EX-32.1

Exhibit 32.1

Section 1350

CERTIFICATION

In connection with the Quarterly Report of API Technologies Corp. (the “Company”) on Form 10-Q for the period ending August 31, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Bel Lazar, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Bel Lazar

Bel Lazar

Chief Executive Officer

October 9, 2013

EX-32.2

Exhibit 32.2

Section 1350

CERTIFICATION

In connection with the Quarterly Report of API Technologies Corp. (the “Company”) on Form 10-Q for the period ending August 31, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”) I, Phil Rehkemper, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Phil Rehkemper

Phil Rehkemper

Chief Financial Officer

October 9, 2013

XML

Restructuring Charges Related to Consolidation of Operations (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended			12 Months Ended
	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013 E M S Restructuring	Nov. 30, 2012 E M S Restructuring	Aug. 31, 2013 E M S Restructuring Lease Impairments	Nov. 30, 2012 E M S Restructuring Lease Impairments
Restructuring Cost and Reserve [Line Items]
Restructuring charges	$ 120	$ 485	$ 684	$ 4,706		$ 591
Inventory write-down						7,401
Fixed asset impairment						865
Lease impairment						3,672
Accumulated restructuring charges						12,529
Cash payments					(591)
Non-cash charges					(8,628)
Balance - Lease impairment accrual							$ 3,021	$ 3,310

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Accounts Payable and Accrued Expenses

9 Months Ended

Aug. 31, 2013

Accounts Payable and Accrued Expenses

10. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following:

	(in thousands)
	August 31, 2013		November 30, 2012
Trade accounts payable	$	26,741	$	24,575
Accrued expenses		6,905		10,045
Wage and vacation accrual		3,042		4,978
Total	$	36,688	$	39,598

XML

Assets and Liabilities Relating to Discontinued Operations (Detail) (USD $) In Thousands, unless otherwise specified	Nov. 30, 2012	Aug. 31, 2012	Nov. 30, 2011
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash and cash equivalents	$ (15)	$ 23	$ 62
Current assets of discontinued operations	13,836
Long-lived assets of discontinued operations	43,105
Current liabilities of discontinued operations	1,888
Sensors
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash and cash equivalents	(15)
Accounts Receivable	3,605
Inventories	6,067
Prepaid expenses and other current assets	146
Current assets of discontinued operations	9,803
Fixed assets, net	1,475
Intangible assets, net	2,156
Goodwill	24,430
Long-lived assets of discontinued operations	28,061
Accounts payable and accrued expenses	1,888
Current liabilities of discontinued operations	1,888
Databus
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Inventories	4,032
Current assets of discontinued operations	4,032
Fixed assets, net	242
Goodwill	14,802
Long-lived assets of discontinued operations	$ 15,044

XML

Consolidated Statements of Operations (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013	Aug. 31, 2012
Revenue, net	$ 62,630	$ 58,759	$ 185,163	$ 189,014
Cost of revenues
Cost of revenues	47,641	44,171	143,338	144,276
Restructuring charges (note 19)	16	1,738	182	9,040
Total cost of revenues	47,657	45,909	143,520	153,316
Gross profit	14,973	12,850	41,643	35,698
Operating expenses
General and administrative	6,901	6,611	19,704	18,263
Selling expenses	3,505	3,607	11,263	10,758
Research and development	2,244	2,524	6,885	7,330
Business acquisition and related charges	(111)	775	977	3,444
Restructuring charges	120	485	684	4,706
Total operating expenses	12,659	14,002	39,513	44,501
Operating income (loss)	2,314	(1,152)	2,130	(8,803)
Other expenses (income), net
Goodwill impairment (note 8)		20,495		107,495
Interest expense, net	3,086	3,993	11,907	11,898
Amortization of note discounts and deferred financing costs	521	869	11,795	14,957
Other expenses (income), net	189	(367)	(186)	(2,412)
Total other expenses (income), net	3,796	24,990	23,516	131,938
Loss from continuing operations before income taxes & discontinued operations	(1,482)	(26,142)	(21,386)	(140,741)
Expense (benefit) for income taxes	(3,144)	(579)	(3,316)	(4,885)
Income (loss) from continuing operations	1,662	(25,563)	(18,070)	(135,856)
Income (loss) from discontinued operations, net of income taxes	5,305	(2,103)	18,085	(544)
Net Income (loss)	6,967	(27,666)	15	(136,400)
Accretion on preferred stock	(381)		(671)
Net Income (loss) attributable to common shareholders	6,586	(27,666)	(656)	(136,400)
Income (loss) per share from continuing operations-Basic and diluted	$ 0.02	$ (0.46)	$ (0.34)	$ (2.46)
Income (loss) per share from discontinued operations-Basic and diluted	$ 0.10	$ (0.04)	$ 0.33	$ (0.01)
Net income (loss) per share-Basic and diluted	$ 0.12	$ (0.50)	$ (0.01)	$ (2.47)
Weighted average shares outstanding
Basic	55,424,157	55,365,978	55,398,833	55,296,470
Diluted	55,424,157	55,365,978	55,398,833	55,296,470
Comprehensive income (loss)
Unrealized foreign currency translation adjustment	53	424	(1,237)	1,025
Other comprehensive income (loss)	53	424	(1,237)	1,025
Comprehensive income (loss)	$ 7,020	$ (27,242)	$ (1,222)	$ (135,375)

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Effects of Recent Accounting Pronouncements

9 Months Ended

Aug. 31, 2013

Effects of Recent Accounting Pronouncements

3. EFFECTS OF RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

During the second quarter of 2011, the FASB issued guidance that provides two alternatives for the presentation of other comprehensive income, either (i) present items of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income or (ii) present items of other comprehensive income in a separate statement immediately following the statement of net income. Under either presentation method, amounts reclassified from other comprehensive income to net income and totals for net income, other comprehensive income, and comprehensive income will be presented. This guidance does not change the items that are reported in net income and other comprehensive income or the calculation of earnings per share. The Company adopted this guidance effective December 1, 2012, and included retrospective application for all periods presented.

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Commitments and Contingencies

9 Months Ended

Aug. 31, 2013

Commitments and Contingencies

17. COMMITMENTS AND CONTINGENCIES

a) On September 15, 2011, Currency, Inc., KII Inc., Kuchera Industries, LLC, William Kuchera and Ronald Kuchera (the “Plaintiffs”) filed a lawsuit against API and the API Pennsylvania Subsidiaries in the Court of Chancery of the State of Delaware in relation to the Asset Purchase Agreement by and among API, the API Pennsylvania Subsidiaries, the KGC Companies, William Kuchera, and Ronald Kuchera dated January 20, 2010. Plaintiffs’ complaint alleges claims for breach of contract and unjust enrichment based on their contention that API and the API Pennsylvania Subsidiaries violated the Agreement by failing to issue certain shares of stock to Plaintiffs and by failing to cooperate with Plaintiffs in the filing of a final general and administrative overhead rate with the Defense Contracting Audit Agency. API and the API Pennsylvania Subsidiaries filed an answer to the complaint denying all liability and a counterclaim for breach of contract against Plaintiffs. The final outcome and impact of this matter is subject to many variables, and cannot be predicted. Of the 550,000 shares that have not been delivered under the Asset Purchase Agreement, 126,250 were placed in escrow and the remaining 423,750 shares have been accounted for as common shares subscribed but not issued with a value of $2,373.

b) The Aster Group filed a lawsuit on November 24, 2010 against Spectrum, in Worcester Superior Court. The lawsuit arose out of a lease between Aster as landlord and Spectrum as tenant for a commercial property located at 165 Cedar Hill Street in Marlborough Massachusetts (the “Property”). This claim was settled on March 19, 2013.

c) The Company did not file its July 31, 2011 U.S. tax return timely and filed a Private Letter Ruling to request the IRS to grant relief to allow the Company to file a consolidated U.S. tax return for its tax year ended July 31, 2011. A favorable ruling from the IRS was received during the fiscal quarter ended May 31, 2013, which allows the Company to file consolidated U.S. tax returns.

d) The Company is also a party to lawsuits in the normal course of its business. Litigation can be unforeseeable, expensive, lengthy and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict. An unfavorable resolution of a particular lawsuit could have a material adverse effect on the Company’s business, operating results, or financial condition.

In accordance with required guidance, the Company accrues for litigation matters when losses become probable and reasonably estimable. The Company has recorded an accrual of approximately $49 relating to its outstanding legal matters as of August 31, 2013 (November 30, 2012—$1,076). As of the end of each applicable reporting period, or more frequently, as necessary, the Company reviews each outstanding matter and, where it is probable that a liability has been incurred, it accrues for all probable and reasonably estimable losses. Where the Company is able to reasonably estimate a range of losses with respect to such a matter, it records an accrual for the amount within the range that constitutes its best estimate. If the Company can reasonably estimate a range but no amount within the range appears to be a better estimate than any other, it will use the amount that is the low end of such range. Because of the uncertainty, the complexity and the many variables involved in litigation, the actual costs to the Company with respect to its legal matters may differ from our estimates, could result in a significant difference and could have a material adverse effect on the Company’s financial position, liquidity, or results of operations. If we determine that an additional loss in excess of our accrual is probable but not estimable, the Company will provide disclosure to that effect. The Company expenses legal costs as they are incurred.

XML

Summary of Common Stock Option Activity (Detail) (USD $)	9 Months Ended	12 Months Ended
	Aug. 31, 2013	Nov. 30, 2012
Options
Beginning Balance	2,417,606	1,919,591
Less forfeited	(526,786)	(526,985)
Exercised
Issued		1,025,000
Ending Balance	1,890,820	2,417,606
Stock Options exercisable	1,249,894
Weighted Average Exercise Price
Beginning Balance	$ 5.06	$ 5.72
Less forfeited	$ 5.38	$ 5.02
Weighted Average Exercise Price, Exercised
Weighted Average Exercise Price, Issued		$ 3.51
Ending Balance	$ 4.75	$ 5.06
Stock Options exercisable	$ 5.51

XML

Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Aug. 31, 2013	Nov. 30, 2012
Inventory [Line Items]
Raw materials	$ 30,008	$ 29,067
Work in progress	22,489	20,572
Finished goods	9,141	8,224
Total	$ 61,638	$ 57,863

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Long-Term Debt

9 Months Ended

Aug. 31, 2013

Long-Term Debt

11. LONG-TERM DEBT

The Company has the following long-term debt obligations:

	(in thousands)
	August 31, 2013			November 30, 2012
Term loans, due February 6, 2018, base rate plus 8.75% interest or LIBOR plus 9.75%, (a)	$	87,943		$	—
Asset based loans, due February 6, 2018, base rate plus a margin between 1.50% and 2.00%, or LIBOR plus a margin between 2.50% and 3.00%, (a)		27,834			—
Term loans, repaid February 6, 2013, originally due June 1, 2016, base rate plus 6.25% interest or LIBOR plus 7.25%, (a)		—			183,375
Mortgage loan, due 2027, 1.35% above Barclays fixed bank rate (b)		1,281			1,424
Lockman loan repaid February 6, 2013, – C-MAC acquisition (c)		—			2,724
Note payable – RTIE acquisition (d)		242			540
Capital leases payable		257			338
	$	117,557		$	188,401
Less: Current portion of long-term debt		(6,599	)		(2,328	)
Discount and deferred financing charges on term loans		(7,394	)		(6,570	)
Long-term portion	$	103,564		$	179,503

a) On February 6, 2013, the Company refinanced its credit facilities and entered into (i) a credit agreement with various lenders and Guggenheim Corporate Funding, LLC (the “Term Loan Agreement”) that provides for a $165.0 million term loan facility; and (ii) a credit agreement with various lenders and Wells Fargo Bank, National Association (the “Revolving Loan Agreement”) that provides for a $50.0 million asset-based revolving borrowing base credit facility, with a $10.0 million subfacility (or the Sterling equivalent) for certain of our United Kingdom subsidiaries, a $10.0 million subfacility for letters of credit and a $5.0 million subfacility for swingline loans.

On February 6, 2013, in connection with entering into the Term Loan Agreement and the Revolving Loan Agreement, the Amended and Restated Credit Agreement, dated as of June 27, 2011 and amended on January 6, 2012 and March 22, 2012, by and among the lenders from time to time party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent, lead arranger and sole book-runner, which had an outstanding balance of $183.4 million was paid off and terminated, which resulted in the write-off of approximately $10.3 million of deferred financing costs and note discounts. As of February 6, 2013, the Company borrowed $165.0 million under the Term Loan Agreement and approximately $29.4 million under the Revolving Loan Agreement.

On July 5, 2013 and April 17, 2013, the Company sold Databus and Sensors (Note 5) and repaid approximately $28,780 and $44,919, respectively, of its term loans from the proceeds of these sales, in accordance with the Term Loan Agreement. In addition, the Company repaid a portion of its term loans using the net proceeds of $739 from the March 14, 2013, sale of certain land and a building in Palm Bay, Florida.

As of August 31, 2013, $87.9 million was outstanding under the Term Loan Agreement, approximately $27.8 million was outstanding under the Revolving Loan Agreement, and $11.8 million was available for future borrowings under the Revolving Loan Agreement.

On May 22, 2013, the Company entered into a First Amendment to the Revolving Loan Agreement that amends certain cash management and reporting requirements.

Term Loan Agreement

The term loans incurred pursuant to the Term Loan Agreement bear interest, at the Company’s option, at the base rate plus 8.75% or an adjusted LIBOR rate (based on one, two or three-month interest periods) plus 9.75% for the first year and at the base rate plus 9.75% or an adjusted LIBOR rate (based on one, two or three-month interest periods) plus 10.75% thereafter, with a LIBOR floor of 1.25%. For purposes of the Term Loan Agreement, the “base rate” means the highest of Wells Fargo Bank, National Association’s prime rate, the federal funds rate plus a margin equal to 0.50% and the adjusted LIBOR rate for a 3-month interest period plus a margin equal to 1.00%.

Interest is due and payable in arrears monthly for term loans bearing interest at the base rate and at the end of an interest period (or at each three month interval in the case of term loans with interest periods greater than three months) in the case of term loans bearing interest at the adjusted LIBOR rate. Principal payments of the term loans are paid at the end of each of the Company’s fiscal quarters, commencing for the fiscal quarter ending May 31, 2013, with the balance of any outstanding term loans due and payable in full on February 6, 2018. The quarterly principal payments will amortize at 1.25% for the fiscal quarters through the end of the Company’s 2014 fiscal year, at 1.875% for the fiscal quarters through the end of the Company’s 2015 fiscal year and at 2.50% for each of the fiscal quarters thereafter.

Under certain circumstances, we are required to prepay the term loans upon the receipt of cash proceeds of certain asset sales, cash proceeds of certain extraordinary receipts and cash proceeds of certain debt or equity financings, and based on a calculation of annual excess cash flow. Mandatory prepayments resulting from assets sales or certain debt financings may require the payment of certain prepayment premiums.

The term loans are secured by a second priority security interest in accounts receivable, inventory, machinery, equipment and certain other personal property relating to the foregoing, and any proceeds from any of the foregoing, subject to certain exceptions and liens, and a first priority security position on substantially all other real and personal property, in each case that are owned by the Company and the subsidiary guarantors.

The Term Loan Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company and its subsidiaries’ ability to, among other things, incur indebtedness, grant liens, dispose of assets and pay dividends or make distributions to stockholders, in each case subject to customary exceptions for a term loan of this size and type.

Pursuant to the Term Loan Agreement, the Company is required to maintain compliance with an interest coverage ratio and a leverage ratio and to limit its annual capital expenditures to $4.0 million per fiscal year (subject to carry-over rights).

Revolving Loan Agreement

The revolving loans incurred pursuant to the Revolving Loan Agreement bear interest, at the Company’s option, at the base rate plus a margin between 1.50% and 2.00% or an adjusted LIBOR rate (based on one, two, three or six-month interest periods) plus a margin between 2.50% and 3.00%, in each case with such margin being determined based on the Company’s average daily excess availability under the revolving credit facility for the preceding fiscal quarter. For purposes of the Revolving Loan Agreement, the “base rate” means the highest of Wells Fargo Bank, National Association’s prime rate, the federal funds rate plus a margin equal to 0.50% and the adjusted LIBOR rate for a 3-month interest period plus a margin equal to 1.00%.

Interest is due and payable in arrears monthly for revolving loans bearing interest at the base rate and at the end of an interest period (or at each three month interval in the case of loans with interest periods greater than three months) in the case of revolving loans bearing interest at the adjusted LIBOR rate. Principal, together with all accrued and unpaid interest, is due and payable on February 6, 2018. The Company may prepay the revolving loans and terminate the commitments, in whole or in part, at any time without premium or penalty. Under certain circumstances, we are required to prepay the revolving loans upon the receipt of cash proceeds of certain asset sales.

All borrowings under the Revolving Loan Agreement are limited by amounts available pursuant to a borrowing base calculation, which is based on percentages of eligible accounts receivable, inventory, machinery and equipment, in each case subject to reductions for applicable reserves.

The Revolving Loan Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company and its subsidiaries’ ability to, among other things, incur indebtedness, grant liens, dispose of assets and pay dividends or make distributions to stockholders, in each case subject to customary exceptions for a credit facility of this size and type.

Pursuant to the Revolving Loan Agreement, the Company is also required to maintain compliance with a fixed charge coverage ratio and to limit its annual capital expenditures to $4.0 million per fiscal year (subject to carry-over rights) at such times that it fails to maintain excess availability under the revolving credit facility above a specified level.

b) A subsidiary of the Company in the United Kingdom entered into a 20 year term mortgage agreement in 2007, under which interest is charged at a margin of 1.35% over Barclays Fixed Base Rate of 0.5% at August 31, 2013. The mortgage is secured by the subsidiary’s assets.

c) A subsidiary of the Company in the United Kingdom entered into a 5 year term loan facility with Lockman Electronic Holdings Limited on December 16, 2011 (“Lockman Loan”), under which interest is charged at a margin of 5.5% over LIBOR. The margin was to increase by 0.5% each year on December 1 for the term of the agreement. The term loan was secured against a debenture over the subsidiary’s assets. This loan was repaid on February 6, 2013.

d) On March 19, 2012 the Company completed the acquisition of substantially all of the assets of RTIE (Note 4b) for a total purchase price of $2,295, with $1,500 payable in cash at closing and the remainder pursuant to a $795 Promissory Note payable in 24 equal monthly installments. The aggregate principal amount of the Promissory Note payable outstanding was $242 as of August 31, 2013.

XML

Assets and Liabilities Acquired (Detail) (USD $) In Thousands, unless otherwise specified	Aug. 31, 2013	Nov. 30, 2012	Nov. 30, 2011	Mar. 19, 2012 RTIE	Nov. 29, 2011 CMT	Mar. 22, 2012 C-MAC (RF2M UK)	Mar. 22, 2012 C-MAC (RF2M UK) Customer related
Business Acquisition [Line Items]
Cash						$ 3,045
Accounts receivable and other current assets					2,007	6,182
Inventory				275	941	7,235
Fixed assets				82	371	5,432
Goodwill	116,770	116,770	253,170	2,177	1,893	11,364
Intangible assets					4,545		7,848
Current liabilities				(225)	(545)	(4,614)
Long-term liabilities						(3,265)
Deferred revenue				(14)	(1,012)
Fair value of net assets acquired				$ 2,295	$ 8,200	$ 33,227

XML

Changes in Carrying Amount of Goodwill (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended		12 Months Ended		12 Months Ended		12 Months Ended		12 Months Ended
	Nov. 30, 2012	Aug. 31, 2013	Nov. 30, 2012 C-MAC (RF2M UK)	Mar. 22, 2012 C-MAC (RF2M UK)	Nov. 30, 2012 RTIE	Mar. 19, 2012 RTIE	Nov. 30, 2012 CMT	Nov. 29, 2011 CMT	Nov. 30, 2012 Databus	Nov. 30, 2012 Sensors
Goodwill [Line Items]
Beginning balance, net	$ 253,170	$ 116,770		$ 11,364		$ 2,177		$ 1,893
Goodwill from business acquisition			11,364		2,177		(500)
Goodwill from other business acquisition purchase price adjustments	1,091
Less: Goodwill impairment	(111,300)
Less: Goodwill from disposition reclassified to discontinued operations									(14,802)	(24,430)
Ending balance, net	$ 116,770	$ 116,770		$ 11,364		$ 2,177		$ 1,893

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Share-Based Compensation (Tables)

9 Months Ended

Aug. 31, 2013

Black-Scholes Option Pricing Model

The fair value of each option grant is estimated at the grant date using the Black-Scholes option-pricing model based on the assumptions detailed below:

	August 31, 2013			August 31, 2012
Expected volatility		81.9	%		89.5	%
Expected dividends		0	%		0	%
Expected term		6 years			6 years
Risk-free rate		0.85	%		0.91	%

Summary of Common Stock Option Activity

The summary of the common stock options granted, cancelled, exchanged or exercised under the Plan:

	Options			Weighted Average Exercise Price
Stock Options outstanding—November 30, 2011		1,919,591		$	5.72
Less forfeited		(526,985	)	$	5.02
Exercised		—		$	—
Issued		1,025,000		$	3.51
Stock Options outstanding—November 30, 2012		2,417,606		$	5.06
Less forfeited		(526,786	)	$	5.38
Exercised		—		$	—
Issued		—		$	—
Stock Options outstanding—August 31, 2013		1,890,820		$	4.75
Stock Options exercisable—August 31, 2013		1,249,894		$	5.51

Restricted Stock Unit Activity

Restricted stock unit activity under the 2006 Equity Compensation Plan is presented below:

	Units			Weighted Average Grant Date Fair Value
RSUs outstanding—November 30, 2011		51,000		$	6.43
Issued		315,477		$	3.61
Exercised—Stock issued		(227,477	)	$	3.56
RSUs outstanding—November 30, 2012		139,000		$	4.43
Issued		15,000		$	2.56
Exercised—Stock issued		(72,333	)	$	4.94
RSUs outstanding—August 31, 2013		81,667		$	3.72
RSUs exercisable—August 31, 2013		—		$	—

Restricted Stock Unit Activity Range of Exercise Price

	RSUs and Options Outstanding								RSUs and Options Exercisable
Range of Exercise Price	Number of Outstanding at August 31, 2013		Weighted Average Exercise Price		Weighted Average Remaining Life (Years)		Aggregate Intrinsic Value (in thousands)		Number Exercisable at August 31, 2013		Weighted Average Exercise Price		Aggregate Intrinsic Value (in thousands)
$0.00 – $ 3.55		893,333	$	3.19		8.49	$	224		273,317	$	3.51	$	—
$3.56 – $ 4.99		27,084	$	3.56		7.14	$	—		10,834	$	3.56	$	—
$5.00 – $ 6.99		1,034,984	$	6.01		7.01	$	—		948,657	$	6.00	$	—
$7.00 – $ 20.00		17, 086	$	11.85		4.23	$	—		17,086	$	11.85	$	—
		1,972,487				7.66	$	224		1,249,894			$	—

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Segment Information

9 Months Ended

Aug. 31, 2013

Segment Information

20. SEGMENT INFORMATION

The Company follows the authoritative guidance on the required disclosures for segments which establish standards for the way that public business enterprises report information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in financial reports. The guidance also establishes standards for related disclosures about products and services, geographic areas and major customers.

The authoritative accounting guidance uses a management approach for determining segments. The management approach designates the internal organization that is used by management for making operating decisions and assessing performance as the source of the Company’s reportable segments. Previously, the Company reported our segment information in two segments: Systems & Subsystems and Secure Systems & Information Assurance. To better highlight to investors its profitability and product offerings, beginning with the third quarter of fiscal 2012, the Company redefined its reportable operating segments based on the way in which the Chief Operating Decision Maker manages and evaluates the business. For this reason and consistent with authoritative guidance, the Company concluded that the EMS business should be reported as a separate segment, as this more closely aligns with its management organization and strategic direction. The Company also renamed the Systems & Subsystems segment to Systems, Subsystems & Components to more accurately describe the product offering of this segment. There were no changes to the Secure Systems & Information Assurance segment. The Company’s operations are conducted in three principal business segments: Systems, Subsystems & Components (SSC), Secure Systems & Information Assurance (SSIA) and Electronic Manufacturing Services (EMS). The presentation of prior periods has been revised to conform to the new segments. Inter-segment sales are presented at their market value for disclosure purposes.

Three months ended August 31, 2013 (in thousands)	SSC			SSIA			EMS			Corporate			Inter Segment Eliminations		Total
Sales to external customers	$	45,653		$	3,712		$	13,265		$	—		$	—	$	62,630
Total revenue		45,653			3,712			13,265						—		62,630
Operating income before expenses below:		8,071			696			440			—			—		9,207
Corporate—head office expenses		—			—			—			2,263			—		2,263
Acquisition related charges		30			—			10			(151	)		—		(111	)
Restructuring		67			(6	)		57			18			—		136
Depreciation and amortization		2,907			94			1,522			82			—		4,605
Goodwill impairment		—			—			—			—			—		—
Other expense (income)		75			(44	)		48			3,717			—		3,796
Income tax expense (benefit)		(3,304	)		46			—			114			—		(3,144	)
Income (loss) from continuing operations	$	8,296		$	606		$	(1,197	)	$	(6,043	)	$	—	$	1,662
Income from discontinued operations, net of tax		5,305			—			—			—			—		5,305
Net income (loss)	$	13,601		$	606		$	(1,197	)	$	(6,043	)	$	—	$	6,967
Segment assets—as at August 31, 2013	$	251,561		$	14,109		$	43,355		$	11,049		$	—	$	320,074
Goodwill included in assets—as at August 31, 2013	$	114,301		$	—		$	2,469		$	—		$	—	$	116,770
Purchase of fixed assets, three months ended August 31, 2013	$	876		$	10		$	68		$	4		$	—	$	958

Three months ended August 31, 2012 (in thousands)	SSC			SSIA			EMS			Corporate			Inter Segment Eliminations		Total
Sales to external customers	$	41,127		$	4,651		$	12,981		$	—		$	—	$	58,759
Total revenue		41,127			4,651			12,981			—			—		58,759
Operating income (loss) before expenses below:		7,193			701			(404	)		—			—		7,490
Corporate—head office expenses		—			—			—			1,800			—		1,800
Acquisition related charges		355			—			—			420			—		775
Restructuring		1,689			255			224			55			—		2,223
Depreciation and amortization		2,950			90			733			71			—		3,844
Goodwill impairment		20,387			—			108			—			—		20,495
Other expense (income)		13			(34	)		(405	)		4,921			—		4,495
Income tax expense (benefit)		(50	)		173			—			(702	)		—		(579	)
Income (loss) from continuing operations		(18,151	)		217			(1,064	)		(6,565	)		—		(25,563	)
Income from discontinued operations, net of tax		(2,103	)		—			—			—			—		(2,103	)
Net income (loss)	$	(20,254	)	$	217		$	(1,064	)	$	(6,565	)	$	—	$	(27,666	)
Segment assets—as at November 30, 2012	$	317,791		$	13,496		$	52,589		$	8,839		$	—	$	392,715
Goodwill included in assets—as at November 30, 2012	$	114,301		$	—		$	2,469		$	—		$	—	$	116,770
Purchase of fixed assets, three months ended August 31, 2012	$	127		$	—		$	—		$	—		$	—	$	127

Nine months ended August 31, 2013 (in thousands)	SSC			SSIA		EMS			Corporate			Inter Segment Eliminations		Total
Sales to external customers	$	128,112		$	12,689	$	44,362		$	—		$	—	$	185,163
Total revenue		128,112			12,689		44,362						—		185,163
Operating income before expenses below:		19,144			2,861		1,803			—			—		23,808
Corporate—head office expenses		—			—		—			6,610			—		6,610
Acquisition related charges		103			—		22			852			—		977
Restructuring		532			75		109			150			—		866
Depreciation and amortization		8,695			286		3,997			247			—		13,225
Goodwill impairment		—			—		—			—			—		—
Other expense (income)		59			7		152			23,298			—		23,516
Income tax expense (benefit)		(5,875	)		225		—			2,334			—		(3,316	)
Income (loss) from continuing operations	$	15,630		$	2,268	$	(2,477	)	$	(33,491	)	$	—	$	(18,070	)
Income (loss) from discontinued operations, net of tax		18,085			—		—			—			—		18,085
Net Income (loss)	$	33,715		$	2,268	$	(2,477	)	$	(33,491	)	$	—	$	15
Purchase of fixed assets nine months ended August 31, 2013	$	1,685		$	33	$	362		$	4		$	—	$	2,084

Nine months ended August 31, 2012 (in thousands)	SSC			SSIA		EMS			Corporate			Inter Segment Eliminations		Total
Sales to external customers	$	121,241		$	19,131	$	48,642		$	—		$	—	$	189,014
Total revenue		121,241			19,131		48,642						—		189,014
Operating income before expenses below:		22,957			4,016		244			—			—		27,217
Corporate—head office expenses		—			—		—			6,374			—		6,374
Acquisition related charges		809			—		—			2,635			—		3,444
Restructuring		2,066			312		11,205			163			—		13,746
Depreciation and amortization		9,072			271		2,955			158			—		12,456
Goodwill impairment		20,387			—		87,108			—			—		107,495
Other expense (income)		(64	)		35		(26	)		24,498			—		24,443
Income tax expense (benefit)		(1,296	)		598		—			(4,187	)		—		(4,885	)
Income (loss) from continuing operations	$	(8,017	)	$	2,800	$	(100,998	)	$	(29,641	)	$	—	$	(135,856	)
Income (loss) from discontinued operations, net of tax		(544	)		—		—			—			—		(544	)
Net income (loss)	$	(8,561	)	$	2,800	$	(100,998	)	$	(29,641	)	$	—	$	(136,400	)
Purchase of fixed assets, nine months ended August 31, 2012	$	697		$	1	$	101		$	—		$	—	$	799

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Restructuring Charges Related to Consolidation of Operations

9 Months Ended

Aug. 31, 2013

Restructuring Charges Related to Consolidation of Operations

19. RESTRUCTURING CHARGES RELATED TO CONSOLIDATION OF OPERATIONS

In accordance with accounting guidance for costs associated with asset exit or disposal activities, restructuring costs are recorded as incurred. Restructuring charges for employee workforce reductions are recorded upon employee notification.

In May 2012, the Company announced the restructuring of its EMS business (“EMS restructuring”) in order to improve its profitability. The actions taken as part of the EMS restructuring are intended to realize synergies from our combined EMS operations, contain costs, reduce our exposure to low margin and unprofitable revenue streams within the EMS businesses, and streamline our operations. Elements of the EMS restructuring include management re-alignment, workforce reductions and write-downs and charges related to inventory, fixed assets, and long-term leases. The EMS restructuring was substantially completed by the end of fiscal 2012. As of November 30, 2012, the Company reduced its EMS workforce by approximately 10%, which represented approximately 2% of its global workforce.

During the period ending November 30, 2012, the Company incurred approximately $591 related to cash outlays, primarily due to employee separation expense. The majority of the non-cash charges are primarily related to the write-down of inventory related to the EMS product offerings, leasehold impairments and fixed asset impairments.

The following tables summarize the charges related to EMS restructuring activities by type of cost:

	EMS Restructuring (in thousands)
Salary and related charges	$	591
Inventory write-down		7,401
Fixed asset impairment		865
Lease impairment		3,672
Accumulated restructuring charges at November 30, 2012		12,529

	EMS Restructuring (in thousands)
Cash payments		(591	)
Non-cash charges		(8,628	)
Balance – Lease impairment accrual, November 30, 2012	$	3,310
Balance – Lease impairment accrual, August 31, 2013	$	3,021

During the three months ended August 31, 2013, the Company incurred additional non-EMS restructuring charges of $136 primarily related to severance and legal costs.

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Amortization Period of Finite Lived Intangible Assets (Detail)	9 Months Ended
	Aug. 31, 2013
Noncompete Agreements
Finite-Lived Intangible Assets [Line Items]
Amortization period of finite lived intangible assets	5 years
Finite lived intangible assets amortization method	Straight line over 5 years
Computer Software, Intangible Asset
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible assets amortization method	Straight line over 3-5 years
Computer Software, Intangible Asset | Minimum
Finite-Lived Intangible Assets [Line Items]
Amortization period of finite lived intangible assets	3 years
Computer Software, Intangible Asset | Maximum
Finite-Lived Intangible Assets [Line Items]
Amortization period of finite lived intangible assets	5 years
Customer Related Intangibles
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible assets amortization method	Straight line or the pattern in which the economic benefits are expected to be realized, over an estimated life of 4-15 years
Customer Related Intangibles | Minimum
Finite-Lived Intangible Assets [Line Items]
Amortization period of finite lived intangible assets	4 years
Customer Related Intangibles | Maximum
Finite-Lived Intangible Assets [Line Items]
Amortization period of finite lived intangible assets	15 years
Marketing Related Intangibles
Finite-Lived Intangible Assets [Line Items]
Finite lived intangible assets amortization method	The pattern in which the economic benefits are expected to be realized, over an estimated life of 3-10 years
Marketing Related Intangibles | Minimum
Finite-Lived Intangible Assets [Line Items]
Amortization period of finite lived intangible assets	3 years
Marketing Related Intangibles | Maximum
Finite-Lived Intangible Assets [Line Items]
Amortization period of finite lived intangible assets	10 years
Technology Related Intangibles
Finite-Lived Intangible Assets [Line Items]
Amortization period of finite lived intangible assets	10 years
Finite lived intangible assets amortization method	The pattern in which the economic benefits are expected to be realized, over an estimated life of 10 years

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Inventories (Tables)

9 Months Ended

Aug. 31, 2013

Summary of Inventories

Inventories consisted of the following:

	(in thousands)
	August 31, 2013		November 30, 2012
Raw materials	$	30,008	$	29,067
Work in progress		22,489		20,572
Finished goods		9,141		8,224
Total	$	61,638	$	57,863

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Earnings Per Share of Common Stock (Tables)

9 Months Ended

Aug. 31, 2013

The Computation of Weighted Average Shares Outstanding

The following table sets forth the computation of weighted-average shares outstanding for calculating basic and diluted earnings per share (EPS):

	Three months ended				Nine months ended
	August 31, 2013		August 31, 2012		August 31, 2013		August 31, 2012
Weighted average shares-basic		55,424,157		55,365,978		55,398,833		55,296,470
Effect of dilutive securities		*		*		*		*
Weighted average shares—diluted		55,424,157		55,365,978		55,398,833		55,296,470

* Outstanding options and RSUs aggregating 1,972,488 incremental shares, and 892,862 warrants have been excluded from the three and nine months ended August 31, 2013 computation of diluted EPS as none are exercisable and in-the-money. Outstanding options and RSUs aggregating 2,843,765 incremental shares, and 955,362 warrants have been excluded from the three and nine months ended August 31, 2012 computations of diluted EPS as they are anti-dilutive due to the losses generated in each respective period.

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Fixed Assets Acquired in Acquisition (Detail) (C-MAC (RF2M UK), USD $) In Thousands, unless otherwise specified	Mar. 22, 2012
Business Acquisition [Line Items]
Land	$ 155
Buildings and leasehold improvements	1,415
Total fixed assets acquired	5,432
Computer equipment
Business Acquisition [Line Items]
Business equipments	280
Furniture and fixtures
Business Acquisition [Line Items]
Business equipments	70
Machinery and equipment
Business Acquisition [Line Items]
Business equipments	3,504
Vehicles
Business Acquisition [Line Items]
Business equipments	$ 8

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Acquisitions (Tables)

9 Months Ended

Aug. 31, 2013

Summary of Combined Results of Operations

The following unaudited pro forma summary presents the combined results of operations as if the C-MAC and RTIE acquisitions described above had occurred at the beginning of the nine month periods ended August 31, 2012.

	(in thousands) Nine months ended August 31, 2012
Revenues	$	200,926
Loss from continuing operations	$	(136,105	)
Net loss	$	(136,649	)
Loss from continuing operations per share – basic and diluted	$	2.46
Net loss per share – basic and diluted	$	2.47

C-MAC (RF2M UK)

Assets and Liabilities

Accounting guidance requires that identifiable assets acquired and liabilities assumed be reported at fair value as of the acquisition date of a business combination. Assets and liabilities acquired were as follows:

	(in thousands)
Cash	$	3,045
Accounts receivable and other current assets		6,182
Inventory		7,235
Fixed assets		5,432
Customer related intangible assets		7,848
Goodwill		11,364
Current liabilities		(4,614	)
Long-term liabilities		(3,265	)
Fair value of net assets acquired	$	33,227

Fixed Assets Acquired in Acquisition

Fixed assets acquired in this transaction consist of the following:

	(in thousands)
Land	$	155
Buildings and leasehold improvements		1,415
Computer equipment		280
Furniture and fixtures		70
Machinery and equipment		3,504
Vehicles		8
Total fixed assets acquired	$	5,432

RTIE

Assets and Liabilities

Accounting guidance requires that identifiable assets acquired and liabilities assumed be reported at fair value as of the acquisition date of a business combination. Assets and liabilities acquired were as follows:

	(in thousands)
Inventory	$	275
Fixed assets		82
Goodwill		2,177
Current liabilities		(225	)
Deferred revenue		(14	)
Fair value of net assets acquired	$	2,295

Commercial Microwave Technology

Assets and Liabilities

Accounting guidance requires that identifiable assets acquired and liabilities assumed be reported at fair value as of the acquisition date of a business combination. Assets and liabilities acquired were as follows:

	(in thousands)
Accounts receivable and other current assets	$	2,007
Inventory		941
Fixed assets		371
Goodwill		1,893
Intangible assets		4,545
Current liabilities		(545	)
Deferred revenue		(1,012	)
Fair value of net assets acquired	$	8,200

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Shareholders' Equity - Additional Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	1 Months Ended	9 Months Ended		12 Months Ended			1 Months Ended					9 Months Ended				1 Months Ended
	Dec. 31, 2010	Aug. 31, 2013	Aug. 31, 2012	Nov. 30, 2012	Mar. 22, 2012	Jan. 31, 2011	Jan. 31, 2011 Convertible Common Stock	Jan. 21, 2011 Sen DEC	Aug. 31, 2013 A P I	Aug. 31, 2013 A P I Exchangeable Shares	Mar. 18, 2011 Stock Repurchase Program	Aug. 31, 2013 President And Chief Operating Officer	Aug. 31, 2013 Equity Based Compensation	Aug. 31, 2013 Equity Based Compensation First Anniversary	Aug. 31, 2013 Equity Based Compensation Second Anniversary	Jun. 27, 2011 Repurchase Of Common Stock	Jan. 22, 2010 Common Stock Equity Based Compensation	Jan. 20, 2010 Common Stock Equity Based Compensation
Equity [Line Items]
Common stock issued		54,846,071		54,846,071	100,000,000						17,095,102		250,000			4,791,958
Common stock per share price											$ 6.00					$ 6.50
Proceeds from private placement																$ 31,148
Common stock share issued																300,000
Stock issued for employee benefit plan												300,000
Repurchased shares												140,019
Common stock issued						1,216,667
Convertible notes							3,650
Conversion price			$ 3.00
Cash acquired at the acquisition								$ 30,000
Share issuance								22,000,000
Share split	0.25
Share authorized													800,000
Shares available for issuance													550,000	250,000	300,000
Common shares issued in escrow													126,250
Warrants issued, shares of common stock to purchase by warrant																	892,862	892,862
Warrants issued, exercise price																	5.60	5.60
Warrants expiry date																	Jan. 22, 2015	Jan. 20, 2015
Common stock shares authorized		250,000,000		100,000,000						2,354,505
Common stock share outstanding		54,764,553		54,764,553					580,553
Exchangeable share outstanding									539,284
Stock issued, options and RSUs		15,000		1,340,477

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Earnings Per Share Table (Parenthetical) (Detail)	Aug. 31, 2013	Aug. 31, 2012
Earnings Per Share [Line Items]
Outstanding Options and RSUs	1,972,488	2,843,765
Warrants	892,862	955,362

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Redeemable Preferred Stock - Additional Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended				9 Months Ended
	Aug. 31, 2013	Nov. 30, 2012	Mar. 22, 2012	Mar. 22, 2012 Scenario, Adjustment	Aug. 31, 2013 Series A Preferred Stock	May 16, 2012 Series A Preferred Stock	Mar. 22, 2012 Series A Preferred Stock
Preferred Stock [Line Items]
Convertible subordinated notes principal amount			$ 26,000
Gross proceeds from issuance of notes	16,000
Common stock own percentage	10.70%
Redeemable Preferred Stock							26,000
Redeemable preferred stock per share price	$ 1,027		$ 1,000
Transaction price per common share			$ 6.00
Convertible to common stock	4,451,189
Common stock par value			$ 0.001
Common stock issuable	54,846,071	54,846,071	100,000,000	250,000,000
Preferred stock authorized			10,000,000			1,000,000
Preferred stock par value			$ 0.001
Debt discount			10,000
Gross proceeds from issuance of notes	16,000
Additional debt discount amount			588
Discount from beneficial conversion	2,272
Debt conversion interest expense	218
Preferred stock						26,000
Unamortized discount						12,644
Preferred stock						26,000
Dividend rate					6.00%
Preferred stock, early redemption multiplier					10.00%
Indebtedness in excess	$ 5,500
Dividend initial conversion price per share							$ 6.00

XML

Nature of Business and Basis of Presentation - Additional Information (Detail) In Thousands, unless otherwise specified	6 Months Ended	9 Months Ended		1 Months Ended			6 Months Ended	12 Months Ended	1 Months Ended
	Jun. 30, 2012	Aug. 31, 2013	Aug. 31, 2012 USD ($)	Mar. 22, 2012 C-MAC (RF2M UK) USD ($)	Mar. 22, 2012 C-MAC (RF2M UK) GBP (£)	Mar. 19, 2012 RTIE USD ($)	May 31, 2013 RTIE USD ($)	Dec. 31, 2011 RTIE USD ($)	Jul. 05, 2013 Databus USD ($)	Apr. 17, 2013 Sensors USD ($)
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Number of reporting units	2	3
Cash received from purchaser									$ 32,150
Cash received on sale of subsidiary's shares of capital stock										51,350
Amount placed on escrow account										1,500
Acquisition price				33,000	20,950	2,295
Asset purchased agreement							2,295
Cash payable for acquisition							1,500
Acquisition cost remainder						795
Promissory note installments payable							24
Proforma revenue			$ 200,926					$ 5,300

XML

Restricted Stock Unit Activity Range of Exercise Price (Detail) (Restricted Stock Unit, USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended
	Aug. 31, 2013
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding, Number of Outstanding Shares	1,972,487
Options Outstanding, Weighted Average Remaining Life (Years)	7 years 7 months 28 days
Options Outstanding, Aggregate Intrinsic Value	$ 224
Options Exercisable, Number Exercisable Shares	1,249,894
Options Exercisable, Aggregate Intrinsic Value
$0.00 - $ 3.55
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price, Lower Range Limit	$ 0.00
Exercise Price, Upper Range Limit	$ 3.55
Options Outstanding, Number of Outstanding Shares	893,333
Options Outstanding, Weighted Average Exercise Price	$ 3.19
Options Outstanding, Weighted Average Remaining Life (Years)	8 years 5 months 27 days
Options Outstanding, Aggregate Intrinsic Value	224
Options Exercisable, Number Exercisable Shares	273,317
Options Exercisable, Weighted Average Exercise Price	$ 3.51
Options Exercisable, Aggregate Intrinsic Value
$3.56 - $ 4.99
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price, Lower Range Limit	$ 3.56
Exercise Price, Upper Range Limit	$ 4.99
Options Outstanding, Number of Outstanding Shares	27,084
Options Outstanding, Weighted Average Exercise Price	$ 3.56
Options Outstanding, Weighted Average Remaining Life (Years)	7 years 1 month 21 days
Options Exercisable, Number Exercisable Shares	10,834
Options Exercisable, Weighted Average Exercise Price	$ 3.56
Options Exercisable, Aggregate Intrinsic Value
$5.00 - $ 6.99
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price, Lower Range Limit	$ 5.00
Exercise Price, Upper Range Limit	$ 6.99
Options Outstanding, Number of Outstanding Shares	1,034,984
Options Outstanding, Weighted Average Exercise Price	$ 6.01
Options Outstanding, Weighted Average Remaining Life (Years)	7 years 4 days
Options Exercisable, Number Exercisable Shares	948,657
Options Exercisable, Weighted Average Exercise Price	$ 6.00
Options Exercisable, Aggregate Intrinsic Value
$7.00 - $ 20.00
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price, Lower Range Limit	$ 7.00
Exercise Price, Upper Range Limit	$ 20.00
Options Outstanding, Number of Outstanding Shares	17,086
Options Outstanding, Weighted Average Exercise Price	$ 11.85
Options Outstanding, Weighted Average Remaining Life (Years)	4 years 2 months 23 days
Options Exercisable, Number Exercisable Shares	17,086
Options Exercisable, Weighted Average Exercise Price	$ 11.85
Options Exercisable, Aggregate Intrinsic Value

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Income Taxes

9 Months Ended

Aug. 31, 2013

Income Taxes

18. INCOME TAXES

For the three and nine month periods ended August 31, 2013 , the Company’s effective income tax rates from continuing operations were 212.2% and 15.5%, respectively, and 2.2% and 3.5% for the three and nine month periods ended August 31, 2012, respectively, compared to an applicable U.S. federal statutory income tax rate of 34%. The difference between the effective tax rate and U.S. statutory tax as of August 31, 2013 is primarily due to the existence of valuation allowances for deferred tax assets including net operating losses, the accrual of non-cash tax expense due to additional valuation allowances in connection with the tax amortization of our indefinite-lived intangible assets that was not available to offset existing deferred tax assets, the federal and state benefit of current losses from continuing operations, and the income from foreign subsidiaries taxed at rates lower than the U.S. statutory rate. For the nine months ended August 31, 2013, the Company recorded valuation allowances on deferred tax assets relating to current year losses. The difference between the effective tax rate and U.S. statutory tax as of August 31, 2012 is primarily due to the release of reserves on uncertain tax positions and adjustments for previously recorded accruals.

As of August 31, 2013, the Company has no significant unrecognized tax benefits.

The Company’s practice is to recognize interest and penalties related to income tax matters as income tax expense. For each of the periods presented herein, there were no significant amounts accrued or charged to expense for tax-related interest and penalties.

The Company is subject to possible income tax examinations for its U.S. federal and state income tax returns filed for the tax years 2008 to present. International tax statutes may vary widely regarding the tax years subject to examination, but generally range from 2008 to the present. The Company did not file its July 31, 2011 U.S. tax return timely and filed a Private Letter Ruling to request the IRS to grant relief to allow the Company to file a consolidated U.S. tax return for the tax year ended July 31, 2011. During the second fiscal quarter of 2013, the Company received a favorable ruling, granting the Company’s request allowing it to continue to file its U.S. tax return as a consolidated group. No liability had been recognized for this potential deconsolidation pending the final ruling by the IRS as the Company believed that it was more likely than not that the relief would be granted by the IRS. The Company promptly filed its tax return subsequent to receipt of the ruling.

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Aug. 31, 2013	Aug. 31, 2012
Cash flows from operating activities
Net income (loss)	$ 15	$ (136,400)
Less: Income from discontinued operations	(18,085)	544
Adjustments to reconcile net income to net cash used by operating activities:
Depreciation and amortization	13,225	12,456
Amortization of note discounts and deferred financing costs	1,519	2,313
Amortization of note discounts due to debt extinguishment	10,277	12,644
Income tax accruals for discontinued operations	(7,373)
Impairment of goodwill		107,495
Stock based compensation	791	1,934
Write down of fixed assets		865
Loss (gain) on sale of fixed assets		(2)
Deferred income taxes	751	(4,254)
Changes in operating asset and liabilities, net of business acquisitions
Accounts receivable	(2,296)	10,636
Inventories	(3,893)	10,897
Prepaid expenses and other current assets	378	(1,577)
Accounts payable and accrued expenses	(1,914)	(18,326)
Deferred revenue	(166)	(1,368)
Net cash used by continuing activities	(6,771)	(2,143)
Net cash provided by discontinued operations	2,639	5,124
Net cash provided (used) by operating activities	(4,132)	2,981
Cash flows from investing activities
Purchase of fixed assets	(2,084)	(799)
Purchase of intangible assets	(463)	(1,089)
Restricted cash	(800)
Net proceeds from sale of discontinued operations	80,498
Proceeds from sale of fixed assets	739	32
Business acquisitions net of cash acquired of $nil (note 4c), and $3,045 (note 4a)	(600)	(29,052)
Discontinued operations	(17)	359
Net cash provided (used) by investing activities	77,273	(30,549)
Cash flows from financing activities
Repayment of long-term debt (note 11)	(296,362)	(1,587)
Net proceeds from long-term debt (note 11)	215,678	29,155
Discontinued operations		5
Net cash provided (used) by financing activities	(80,684)	27,573
Effect of exchange rate on cash and cash equivalents	(478)	123
Net change in cash and cash equivalents	(8,021)	128
Cash and cash equivalents, beginning of period-continuing operations	20,550	15,628
Cash and cash equivalents, beginning of period-discontinued operations	(15)	62
Cash and cash equivalents, beginning of period	20,535	15,690
Cash and cash equivalents, end of period	12,514	15,818
Less: cash and cash equivalents of discontinued operations, end of period		(23)
Cash and cash equivalents of continuing operations, end of period	$ 12,514	$ 15,841

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Nature of Business and Basis of Presentation

9 Months Ended

Aug. 31, 2013

Nature of Business and Basis of Presentation

1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

Nature of Business

API Technologies Corp. (“API”, and together with its subsidiaries, the “Company”) designs, develops and manufactures high reliability engineered solutions, RF, power systems management technology, systems, secure communications and electronic components for military and aerospace applications, including mission critical information systems and technologies.

Prior to the third quarter of 2012, the Company reported in two business segments: Systems & Subsystems and Secure Systems & Informational Assurance. To better highlight to investors its profitability and product offerings, the Company made organizational changes that have resulted in changes to the way in which the Company’s Chief Operating Decision Maker manages and evaluates the business. For this reason and in accordance with authoritative guidance, beginning with the quarter ended August 31, 2012, the Company redefined its reportable operating segments. The Electronic Manufacturing Services (“EMS”) business (formerly part of the Systems & Subsystems segment) is now reported as a separate segment, as this more closely aligns with the Company’s management organization and strategic direction. The Company also renamed the Systems & Subsystems segment to Systems, Subsystems & Components (“SSC”) to more accurately describe the product offering of this segment. There were no changes to the Secure Systems & Information Assurance (“SSIA”) segment. Prior periods have been revised to conform with the new segments: SSC, EMS and SSIA.

On July 5, 2013, the Company entered into an agreement (the “APA”) with ILC Industries, LLC (“Parent”) and Data Device Corporation, a Delaware corporation and a wholly owned subsidiary of Parent (the “Purchaser”) pursuant to which the Company sold to the Purchaser certain assets comprising the Company’s data bus business (“Databus”) in the U.S. and the U.K., including substantially all of the assets the Company’s wholly owned subsidiary, National Hybrid, Inc., a New York corporation (the “Asset Sale”). The Purchaser paid the Company approximately $32,150 in cash for the assets, after certain adjustments based on closing inventory values as set forth in the APA and customary indemnification provisions. Substantially all of the proceeds from the Asset Sale were used to repay certain of the Company’s outstanding debt.

On April 17, 2013 the Company sold all of the issued and outstanding shares of capital stock or other equity interests of Spectrum Sensors and Controls, Inc., a Pennsylvania corporation (“Sub 1”), Spectrum Sensors and Controls, LLC, a California limited liability company (“Sub 2”), and Spectrum Sensors and Controls, Inc., an Ohio corporation (“Sub 3” and together with Sub 1 and Sub 2, “Sensors”), for gross cash proceeds of approximately $51,350. Of this amount, $1,500 was placed into an escrow account for 12 months to secure any indemnification claims made by the purchaser against the sellers, API and Spectrum Control, Inc. (“Spectrum”), a wholly owned subsidiary of API.

On March 22, 2012, API completed the acquisition, through its UK-based subsidiary API Technologies (UK) Limited (“API UK”), of the entire issued share capital of C-MAC Aerospace Limited (“C-MAC”), for a total purchase price of £20,950 pounds sterling (approximately $33,000 USD), including the assumption of C-MAC’s loan facility (see Note 4a). C-MAC is a leading provider of high-reliability electronic systems, modules, and components to the defense, aerospace, space, industrial and energy sectors.

On March 19, 2012, API completed the acquisition of substantially all of the assets of RTI Electronics (“RTIE”) for a total purchase price of $2,295, with $1,500 payable in cash at closing and the remainder pursuant to a $795 Promissory Note payable in 24 equal monthly installments (see Note 4b). Based in Anaheim, California, RTIE is a leading manufacturer of passive electronic components, including thermistors, film capacitors, magnetic transformers and inductors, and audio power conditioning units. RTIE had revenues for the year ended December 31, 2011 of approximately $5,300 from a diverse Fortune 500 customer base spanning the audio, defense, aerospace, and industrial markets.

The unaudited consolidated financial statements include the accounts of API and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. There are no other entities controlled by the Company, either directly or indirectly. The financial statements have been prepared in accordance with the requirements of Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures required in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) that the Company considers necessary for the fair presentation of the Company’s consolidated financial position as of August 31, 2013 and the results of its operations and cash flows for the nine month period ended August 31, 2013. Results for the interim period are not necessarily indicative of results that may be expected for the entire year or for any other interim periods. The unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements of the Company and the notes thereto as of and for the year ended November 30, 2012 included in the Company’s Form 10-K filed with the SEC on February 12, 2013.

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Acquisitions

9 Months Ended

Aug. 31, 2013

Acquisitions

4. ACQUISITIONS

a) C-MAC

On March 22, 2012, the Company completed the acquisition, through its UK-based subsidiary API UK, of the entire issued share capital of C-MAC Aerospace Limited (“C-MAC”), for a total purchase price of £20,950 pounds sterling (approximately $33,000 USD), consisting of i) the payment at closing of £19,250 pounds sterling (approximately $30,300 USD) and ii) the assumption of C-MAC’s term loan facility of £1,700 pounds sterling (approximately $2,700 USD) (see Note 11e). C-MAC was a leading provider of high-reliability electronic systems, modules, and components to the defense, aerospace, space, industrial and energy sectors. The acquisition expanded the Company’s RF and Microwave and microelectronics capabilities and the Company believes that additional revenue opportunities will be generated through cross selling, C-MAC’s European based operation and API’s expansion into international markets. These factors contributed to a purchase price resulting in the recognition of goodwill. On May 31, 2012, C-MAC Aerospace Limited changed its name to RF2M Limited (“RF2M UK”).

The Company has accounted for the acquisition using the purchase method of accounting in accordance with the guidance on business combinations. The Company also incurred legal costs, reorganization charges and professional fees in connection with the acquisition of approximately $1,586 as of November 30, 2012. These expenses have been accounted for as operating expenses. The results of operations of C-MAC have been included in the Company’s results of operations beginning on March 22, 2012.

Accounting guidance requires that identifiable assets acquired and liabilities assumed be reported at fair value as of the acquisition date of a business combination. Assets and liabilities acquired were as follows:

	(in thousands)
Cash	$	3,045
Accounts receivable and other current assets		6,182
Inventory		7,235
Fixed assets		5,432
Customer related intangible assets		7,848
Goodwill		11,364
Current liabilities		(4,614	)
Long-term liabilities		(3,265	)
Fair value of net assets acquired	$	33,227

The fair value of C-MAC exceeded the underlying fair value of all net assets acquired, giving rise to the goodwill. The resulting goodwill will be non-deductible for tax purposes. Customer, marketing and technology related intangibles are amortized based on the pattern in which the economic benefits are expected to be realized, over estimated lives of three to ten years.

Revenues and net income of RF2M UK for the nine months ended August 31, 2013 were approximately $23,193 and $797, respectively. Revenues and net loss of RF2M UK for the period from the acquisition of March 22, 2012 to November 30, 2012 were approximately $25,336 and $(1,403), respectively.

Fixed assets acquired in this transaction consist of the following:

	(in thousands)
Land	$	155
Buildings and leasehold improvements		1,415
Computer equipment		280
Furniture and fixtures		70
Machinery and equipment		3,504
Vehicles		8
Total fixed assets acquired	$	5,432

b) RTIE

On March 19, 2012, the Company completed the acquisition of substantially all of the assets of RTIE for a total purchase price of $2,295, with $1,500 payable in cash at closing and the remainder pursuant to a $795 Promissory Note payable in 24 equal monthly installments. Based in Anaheim, California, RTIE is a leading manufacturer of passive electronic components, including thermistors, film capacitors, magnetic transformers and inductors, and audio power conditioning units. RTIE had revenues for the year ended December 31, 2011 of approximately $5,300 from a diverse Fortune 500 customer base spanning the audio, defense, aerospace, and industrial markets. The acquisition expands the Company’s RF and Microwave capabilities and the Company believes that its low-cost manufacturing capabilities and established sales channels will provide additional revenue opportunities and improved profitability for RTIE products. These factors contributed to a purchase price resulting in the recognition of goodwill.

The Company has accounted for the acquisition using the purchase method of accounting in accordance with the guidance on business combinations. The Company also incurred legal, travel and relocation costs, reorganization charges and professional fees in connection with the acquisition of approximately $769 as of November 30, 2012. These expenses have been accounted for as operating expenses. The results of operations of RTIE have been included in the Company’s results of operations beginning on March 19, 2012.

Accounting guidance requires that identifiable assets acquired and liabilities assumed be reported at fair value as of the acquisition date of a business combination. Assets and liabilities acquired were as follows:

	(in thousands)
Inventory	$	275
Fixed assets		82
Goodwill		2,177
Current liabilities		(225	)
Deferred revenue		(14	)
Fair value of net assets acquired	$	2,295

The fair value of RTIE exceeded the underlying fair value of all net assets acquired, giving rise to the goodwill. The resulting goodwill will be deductible for tax purposes.

Revenues and net income of RTIE for the nine months ended August 31, 2013 were approximately $1,728 and $292, respectively. Revenues and net income of RTIE for the period from March 19, 2012 to November 30, 2012 were approximately $2,088 and $568, respectively.

Fixed assets acquired in this transaction consist entirely of machinery and equipment.

c) Commercial Microwave Technology

On November 29, 2011, the Company entered into the CMT Asset Purchase Agreement with CMT and Randall S. Wilson with respect to certain sections, as a shareholder of CMT, pursuant to which the Company purchased substantially all of the assets of CMT. CMT designs and manufactures Radio Frequency and Microwave Filters, Multiplexers, and related products for use in space and commercial applications. The acquisition expands the Company’s RF and Microwave capabilities and the Company believes that its low-cost manufacturing capability and established sales channels will provide additional revenue opportunities and improved profitability for CMT products. These factors contributed to a purchase price resulting in the recognition of goodwill.

The Company also assumed certain liabilities of CMT relating to the assets acquired. The Company purchased the assets of CMT for $8,200, subject to certain adjustments; as a result the Company put $700 of the $8,200 purchase price into escrow for a period of twelve months to secure the indemnification obligations of CMT and Randall S. Wilson. During the quarter ended February 28, 2013, due to certain adjustments, the Company made a final purchase price payment of $600 and recorded Other income of $100.

The Company has accounted for the acquisition using the purchase method of accounting in accordance with the guidance on business combinations. The Company also incurred legal costs, reorganization charges and professional fees in connection with the acquisition of approximately $102 as of November 30, 2011, and an additional $79 as of November 30, 2012. These expenses have been accounted for during the respective periods as operating expenses. The results of operations of CMT have been included in the Company’s results of operations beginning on December 1, 2011.

Accounting guidance requires that identifiable assets acquired and liabilities assumed be reported at fair value as of the acquisition date of a business combination. Assets and liabilities acquired were as follows:

	(in thousands)
Accounts receivable and other current assets	$	2,007
Inventory		941
Fixed assets		371
Goodwill		1,893
Intangible assets		4,545
Current liabilities		(545	)
Deferred revenue		(1,012	)
Fair value of net assets acquired	$	8,200

The fair value of CMT exceeded the underlying fair value of all net assets acquired, giving rise to the goodwill. The resulting goodwill will be deductible for tax purposes.

Revenues and net income of CMT for the nine months ended August 31, 2013 were approximately $4,613 and $133, respectively. Revenues and net income of CMT for the year ended November 30, 2012 were approximately $7,288 and $447, respectively.

Fixed assets acquired in this transaction consist entirely of machinery and equipment.

The following unaudited pro forma summary presents the combined results of operations as if the C-MAC and RTIE acquisitions described above had occurred at the beginning of the nine month periods ended August 31, 2012.

	(in thousands) Nine months ended August 31, 2012
Revenues	$	200,926
Loss from continuing operations	$	(136,105	)
Net loss	$	(136,649	)
Loss from continuing operations per share – basic and diluted	$	2.46
Net loss per share – basic and diluted	$	2.47

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Commitments and Contingencies - Additional Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	Aug. 31, 2013	Nov. 30, 2012	Aug. 31, 2012
Long-term Purchase Commitment [Line Items]
Shares place under escrow			126,250
Common shares subscribed but not issued			423,750
Common shares subscribed but not issued value			$ 2,373
Accrual for outstanding legal matters	$ 49	$ 1,076
Asset Purchase Agreement
Long-term Purchase Commitment [Line Items]
Shares not delivered under asset purchase agreement			550,000

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Summary of Significant Accounting Policies

9 Months Ended

Aug. 31, 2013

Summary of Significant Accounting Policies

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts in the consolidated financial statements, and the disclosures made in the accompanying notes. Examples of estimates include the provisions made for bad debts and obsolete inventory, estimates associated with annual goodwill impairment tests, and estimates of deferred income tax and liabilities. The Company also uses estimates when assessing fair values of assets and liabilities acquired in business acquisitions as well as any fair value and any related impairment charges related to the carrying value of machinery and equipment, other long-lived assets, fixed assets held for sale and discontinued operations. The Company also uses estimates in determining the remaining economic lives of long-lived assets. In addition, the Company uses assumptions when employing the Black-Scholes valuation model to estimate the fair value of share options. Despite the Company’s intention to establish accurate estimates and use reasonable assumptions, actual results may differ from these estimates.

Inventories

Inventories, which include materials, labor, and manufacturing overhead, are stated at the lower of cost (on a first-in, first-out basis) or net realizable value. The Company records a provision for both excess and obsolete inventory when write-downs or write-offs are identified. The inventory valuation is based upon assumptions about future demand, product mix and possible alternative uses.

The Company periodically reviews and analyzes its inventory management systems and conducts inventory impairment testing on an annual basis.

Fixed Assets

Fixed assets are recorded at cost less accumulated depreciation and are depreciated using the following methods over the following periods:

Straight line basis
Buildings and leasehold improvements	5-40 years
Computer equipment	3-5 years
Furniture and fixtures	5-8 years
Machinery and equipment	5-10 years
Vehicles	3 years

Betterments are capitalized and amortized by the Company, using the same amortization basis as the underlying assets over the remaining useful life of the original asset. Betterments include renovations, major repairs and upgrades that increase the service of a fixed asset and extend the useful life. Gains and losses on depreciable assets retired or sold are recognized in the consolidated statements of operations in the year of disposal. Repairs and maintenance expenditures are expensed as incurred.

Fixed Assets Held for Sale

Certain fixed assets held for sale from within our SSC segment have been classified as held for sale in the consolidated balance sheets. The Company estimated the fair value of the net assets to be sold at approximately $150 at August 31, 2013 compared to $900 at November 30, 2012. On March 14, 2013, the Company sold certain land and a building in Palm Bay, Florida from the Spectrum acquisition for net proceeds of $739. This land and building were part of the fixed assets held for sale reported at November 30, 2012.

Discontinued Operations

Components of the Company that have been disposed of are reported as discontinued operations. The assets and liabilities relating to the Company’s Databus business and Sensors companies have been reclassified as discontinued operations in the consolidated balance sheets for fiscal 2012 and the results of operations of Databus and Sensors for the current and prior periods are reported as discontinued operations (Note 5) and not included in the continuing operations figures.

Goodwill and Intangible Assets

Goodwill and intangible assets result primarily from business acquisitions accounted for under the purchase method. Goodwill and intangible assets with indefinite lives are not amortized but are subject to impairment by applying a fair value based test. The Company completes an annual (or more often if circumstances require) impairment assessment of its goodwill on a reporting unit level. The Company’s annual impairment test for goodwill is September 1^st.

The Company has three reporting units: (i) SSC, (ii) EMS, and (iii) SSIA. The goodwill in the consolidated financial statements relates to the acquisition of RTIE in March 2012, C-MAC in March 2012, CMT in November 2011, Spectrum in June 2011, SenDEC Corp. (“SenDEC”) in January 2011, the acquisition of the assets of Kuchera Defense Systems, Inc. (“KDS”), KII, Inc. (“KII”) and Kuchera Industries, LLC (“KI Industries” and collectively with KDS and KII, the “KGC Companies”) by API and three of its subsidiaries (the “API Pennsylvania Subsidiaries”), in January 2010, and the acquisition of the Filtran Group companies, which was completed in 2002. All of the goodwill relates to our SSC reporting unit, except for SenDEC and the KGC Companies, which relate to the EMS reporting unit. Goodwill represents the excess of the purchase price of acquired companies over the estimated fair value assigned to the individual assets acquired and liabilities assumed. The Company does not amortize goodwill but instead tests goodwill for impairment annually (on September 1) or more frequently if impairment indicators arise under the applicable accounting guidance.

A two-step test is performed to assess goodwill impairment. First, the fair value of each reporting unit is compared to its carrying value. The fair value is determined based on a market approach as well as the discounted future cash flows of the subsidiary carrying the goodwill. If the calculated fair value exceeds the carrying value of the assets, goodwill is not impaired and no further testing is performed. The second step is performed if the carrying value exceeds the fair value of the goodwill. If the carrying value of the reporting unit’s goodwill exceeds its implied fair value, an impairment loss equal to the difference is recorded.

As at May 31, 2012, given lower than projected revenues and the Company’s outlook for the EMS portion of the Systems & Subsystems segment (now the EMS segment), the Company determined that the appropriate triggers had been reached to perform an impairment test beyond the annual goodwill impairment test. The Company performed the first step of the goodwill impairment assessment and the carrying value of the assets exceeded the fair value. As of the date of filing the 10-Q for May 31, 2012, the Company determined that an impairment of goodwill was probable, determined a reasonable estimate and therefore recorded a write-down of $87,000. During the third quarter of fiscal 2012, the Company completed its impairment analysis and determined that an additional $24,300 write-down of goodwill was required.

Following the required accounting guidance, the Company performed the first step of the two-step test method based on discounted future cash flows on September 1, 2012. The respective reporting units’ future cash flows exceeded the carrying value of the underlying assets and therefore goodwill was not impaired and no further testing was required for the year ending November 30, 2012.

As at April 17, 2013, given the sale of Sensors, which was part of the SSC segment, the Company determined that the appropriate triggers had been reached to perform an impairment test beyond the annual goodwill impairment test. The Company performed the first step of the goodwill impairment assessment and the carrying value of the assets exceeded the fair value of the assets and determined that an impairment of goodwill had not occurred.

As at July 5, 2013, given the sale of Databus, which also was part of the SSC segment, the Company determined that the appropriate triggers had been reached to perform an impairment test beyond the annual goodwill impairment test. The Company performed the first step of the goodwill impairment assessment and the carrying value of the assets exceeded the fair value of the assets. As of the date of the filing of this report, the Company determined that an impairment of goodwill had not occurred.

Intangible assets that have a finite life are amortized using the following basis over the following periods:

Non-compete agreements	Straight line over 5 years
Computer software	Straight line over 3-5 years
Customer related intangibles	Straight line or the pattern in which the economic benefits are expected to be realized, over an estimated life of 4-15 years
Marketing related intangibles	The pattern in which the economic benefits are expected to be realized, over an estimated life of 3-10 years
Technology related intangibles	The pattern in which the economic benefits are expected to be realized, over an estimated life of 10 years

Long-Lived Assets

The Company periodically evaluates the net realizable values of long-lived assets, principally identifiable intangibles and capital assets, for potential impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable, as determined based on the estimated future undiscounted cash flows. If such assets were considered to be impaired, the carrying value of the related assets would be reduced to their estimated fair value.

Income Taxes

Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial reporting and tax bases of assets and liabilities and available net operating loss carry forwards. A valuation allowance is established to reduce tax assets if it is more likely than not that all or some portions of such tax assets will not be realized.

The Company’s valuation allowance was recorded on the deferred tax assets to provide for a reasonable provision, which in the Company’s estimation is more likely than not that all or some portions of such tax assets will not be realized. In determining the adequacy of the valuation allowance, the Company applied the authoritative guidance and considered such factors as (i) which subsidiaries were producing income and which subsidiaries were producing losses and (ii) temporary differences occurring from depreciation and amortization which the Company expects to increase the taxable income over future periods.

The Company follows the guidance concerning accounting for uncertainty in income taxes, which clarifies the accounting and disclosure for uncertainty in tax positions. The guidance requires that the Company determine whether it is more likely than not that a tax position will not be sustained upon examination by the appropriate taxing authority. If a tax position does not meet the more likely than not recognition criterion, the guidance requires that the tax position be measured at the largest amount of benefit greater than 50 percent not likely of being sustained upon ultimate settlement.

Based on the Company’s evaluation, management has concluded that there are no significant uncertain tax positions requiring recognition in the consolidated financial statements or adjustments to deferred tax assets and related valuation allowance. Open tax years include the tax years ended May 31, 2008 through November 30, 2012.

The Company from time to time has been assessed interest or penalties by major tax jurisdictions, however such assessments historically have been minimal and immaterial to our financial results. If the Company receives an assessment for interest and/or penalties, it would be classified in the consolidated financial statements as general and administrative expense.

Revenue Recognition

The Company recognizes non-contract revenue when it is realized or realizable and earned. The Company considers non-contract revenue realized or realizable and earned when it has persuasive evidence of an arrangement, delivery has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. Delivery is not considered to have occurred until products have been shipped and risk of loss and ownership has transferred to the client. Revenue from production-type contracts, which represents less than one per cent of total revenue, is recognized using the percentage of completion method. The degree of completion is determined based on costs incurred, excluding costs that are not representative of progress to completion, as a percentage of total costs anticipated for each contract. A provision is made for losses on contracts in progress when such losses first become known. Revisions in cost and profit estimates, which can be significant, are reflected in the accounting period in which the relevant facts become known. Revenue from contracts under the percentage of completion method is not significant to the financial statements.

Deferred Revenue

The Company defers revenue when payment is received in advance of the service or product being shipped or delivered, including transition services agreements related to discontinued operations. For some of the larger government contracts, the Company will bill upon meeting certain milestones. These milestones are established by the customer and are specific to each contract. Unearned revenue is recorded as deferred revenue. The Company generally recognizes revenue on the contracts when items are shipped.

Research and Development

Research and development costs are expensed when incurred.

Stock-Based Compensation

The Company follows the authoritative guidance for accounting for stock-based compensation. The guidance requires that new, modified and unvested stock-based payment transactions with employees, such as grants of stock options, restricted stock units (“RSUs”) and restricted stock, be recognized in the financial statements based on their fair value at the grant date and recognized as compensation expense over their vesting periods. Stock-based compensation cost for RSUs is measured based on the closing fair market value of the Company’s common stock on the date of grant. The fair value of each option granted is estimated on the grant date using the Black-Scholes option pricing model which takes into account as of the grant date the exercise price and expected life of the option, the current price of the underlying shares and its expected volatility, expected dividends on the shares and the risk-free interest rate for the term of the option.

Foreign Currency Translation and Transactions

The Company’s functional currency is United States dollars and the consolidated financial statements are stated in United States dollars, “the reporting currency.” Integrated operations have been translated from various foreign currencies (Canadian dollars, British Pounds Sterling, Chinese Yuan, Euros, and Mexican Pesos) into United States dollars at the period-end exchange rate for monetary balance sheet items, the historical rate for fixed assets and shareholders’ equity, and the average exchange rate for the year for revenues, expenses, gains and losses. The gains or losses on translation are included as a component of other comprehensive income (loss) for the period.

Financial Instruments

The fair values of financial instruments including cash and cash equivalents, marketable securities, accounts receivable, accounts payable, and short-term borrowings approximate their carrying values due to the short-term nature of these instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest rate, currency or credit risks arising from its financial instruments. Marketable securities are included at fair value based on quoted market prices in active markets. The recorded value of long-term debt approximates the fair value of the debt as the terms and rates approximate market rates.

In the ordinary course of business, the Company carries out transactions in various foreign currencies (Canadian Dollars, British Pounds Sterling, Chinese Yuan, Euros, and Mexican Pesos) included in the Company’s cash, accounts receivable, accounts payable, bank indebtedness, as well as a mortgage loan. The translation adjustments related to these accounts have been reflected as a component of comprehensive income. Currently, the Company does not maintain a foreign currency hedging program.

Derivative Liabilities

Fair value accounting requires bifurcation of embedded derivative instruments of convertible debt or equity instruments, and measurement of their fair value for accounting purposes. The Company’s embedded derivative instruments such as put and call features, make whole provisions and default interest and dividend rates in the convertible note and convertible preferred stock are measured at fair value using the discounted cash flows model by taking the present value of probability weighted cash flow scenarios. Derivative liabilities are adjusted to reflect fair value at the end of each reporting period, with any change in the fair value being recorded in results of operations as Other expense (income), net.

Debt Issuance Costs and Long-term Debt Discounts

Fees paid to obtain debt financing or amendments under such debt financing are treated as debt issuance costs and are capitalized and amortized over the life of the debt using the effective interest method. These payments are shown as a financing activity on the consolidated statement of cash flows and are shown as Other non-current assets in the consolidated balance sheets.

In accordance with accounting standards, the Company recognized the value of detachable warrants issued in conjunction with the issuance of the secured promissory notes and the modification of the convertible promissory notes. The Company valued the warrants using the Black-Scholes pricing model. The Company recorded the warrant relative fair value as an increase to additional paid-in capital and a discount against the related debt. The discount attributed to the value of the warrants was being amortized over the term of the underlying debt using the effective interest method and was written off when the related debt was extinguished.

The Company may record debt and equity discounts in connection with raising funds through the issuance of convertible notes or equity instruments. These discounts may arise from (i) the receipt of proceeds less than the face value of the convertible notes or equity instruments, (ii) beneficial conversion features and/or (iii) recording derivative liabilities related to embedded features. These costs are amortized over the life of the debt to interest expense utilizing the effective interest method. If a conversion of the underlying debt occurs, a proportionate share of the unamortized discount is immediately expensed.

Concentration of Credit Risk

The Company maintains cash balances, at times, with financial institutions, which are in excess of amounts insured by the Federal Deposit Insurance Corporation (FDIC), Canadian Deposit Insurance Corporation (CDIC) and Financial Services Compensation Scheme (FSCS in the United Kingdom). Management monitors the soundness of these institutions and has not experienced any collection losses with these institutions.

The US, Canadian and United Kingdom Governments’ Departments of Defense (directly and through subcontractors) accounts for approximately 48%, 2% and 8% of the Company’s revenues for the nine months ended August 31, 2013 (44%, 3% and 9% for the nine months ended August 31, 2012), respectively. A loss of a significant customer could adversely impact the future operations of the Company.

Earnings (Loss) per Share of Common Stock

Basic earnings per share of common stock is computed by dividing income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share of common stock gives effect to all dilutive potential shares of common stock outstanding during the period. The computation of diluted earnings per share does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings per share (Note 16).

Comprehensive Income (Loss)

Comprehensive income (loss), which includes foreign currency translation adjustments is shown in the Consolidated Statement of Operations and Comprehensive Income (Loss).

Comparative Reclassifications

Certain amounts from 2012 have been reclassified to conform to the August 31, 2013 financial statement presentation. The reclassifications related to the restatement of discontinued operations (see Note 5) and a change in the balance sheet presentation of deferred financing costs incurred directly with the lenders of long-term debt.

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Restructuring Charges Related to Consolidation of Operations (Tables)

9 Months Ended

Aug. 31, 2013

Summary of Charges Related to EMS Restructuring Activities by Type of Cost

The following tables summarize the charges related to EMS restructuring activities by type of cost:

	EMS Restructuring (in thousands)
Salary and related charges	$	591
Inventory write-down		7,401
Fixed asset impairment		865
Lease impairment		3,672
Accumulated restructuring charges at November 30, 2012		12,529

	EMS Restructuring (in thousands)
Cash payments		(591	)
Non-cash charges		(8,628	)
Balance – Lease impairment accrual, November 30, 2012	$	3,310
Balance – Lease impairment accrual, August 31, 2013	$	3,021

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Subsequent Events

9 Months Ended

Aug. 31, 2013

Subsequent Events

21. SUBSEQUENT EVENTS

The Company has evaluated subsequent events through October 9, 2013, the date the financial statements were issued, and up to the time of filing of the financial statements with the Securities and Exchange Commission.

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Discontinued Operations (Tables)

9 Months Ended

Aug. 31, 2013

Databus

Operating Results and Assets and Liabilities

The operating results of Databus are summarized as follows:

	Three months ended August 31,					Nine months ended August 31,
	2013			2012		2013			2012
Revenue, net	$	991		$	3,032	$	7,571		$	9,282
Cost of revenues		547			2,336		4,435			7,666
Gross Profit		444			696		3,136			1,616
General and administrative		56			72		484			956
Selling expenses		2			—		82			19
Research and development		—			—		—			41
Restructuring		—			—		—			24
Provision for income taxes		(375	)		—		344			—
Provision for income taxes — Gain on sale of Databus		5,293			—		5,293			—
Other expenses (income)		(10,002	)		—		(10,002	)		—
Income from discontinued operations, net of tax	$	5,470		$	624	$	6,935		$	576

The assets relating to Databus consisted of the following:

	August 31, 2013		November 30, 2012
Cash and cash equivalents	$	—	$	—
Inventories		—		4,032
Current assets of discontinued operations	$	—	$	4,032
Fixed assets, net	$	—	$	242
Goodwill		—		14,802
Long-lived assets of discontinued operations	$	—	$	15,044

Sensors

Operating Results and Assets and Liabilities

The operating results of Sensors are summarized as follows:

	Three months ended August 31,						Nine months ended August 31,
	2013			2012			2013			2012
Revenue, net	$	—		$	6,656		$	9,270		$	19,775
Cost of revenues		—			4,918			7,155			13,763
Gross Profit		—			1,738			2,115			6,012
General and administrative		—			193			366			587
Selling expenses		—			301			497			1,035
Research and development		—			166			180			521
Provision for income taxes		—			—			66			1,100
Provision for income taxes — Gain on sale of Sensors		—			—			1,670			—
Other expenses (income)		165			3,805			(11,814	)		3,889
Income (loss) from discontinued operations, net of tax	$	(165	)	$	(2,727	)	$	11,150		$	(1,120	)

The assets and liabilities relating to Sensors consisted of the following:

	August 31, 2013		November 30, 2012
Cash and cash equivalents	$	—	$	(15	)
Accounts Receivable		—		3,605
Inventories		—		6,067
Prepaid expenses and other current assets		—		146
Current assets of discontinued operations	$	—	$	9,803
Fixed assets, net	$	—	$	1,475
Intangible assets, net		—		2,156
Goodwill		—		24,430
Long-lived assets of discontinued operations	$	—	$	28,061
Accounts payable and accrued expenses	$	—	$	1,888
Current liabilities of discontinued operations	$	—	$	1,888

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Earnings Per Share Table (Detail)	3 Months Ended				9 Months Ended
	Aug. 31, 2013		Aug. 31, 2012		Aug. 31, 2013		Aug. 31, 2012
Earnings Per Share [Line Items]
Weighted average shares-basic	55,424,157		55,365,978		55,398,833		55,296,470
Effect of dilutive securities		[1]		[1]		[1]		[1]
Weighted average shares-diluted	55,424,157		55,365,978		55,398,833		55,296,470

[1] Outstanding options and RSUs aggregating 1,972,488 incremental shares, and 892,862 warrants have been excluded from the three and nine months ended August 31, 2013 computation of diluted EPS as none are exercisable and in-the-money. Outstanding options and RSUs aggregating 2,843,765 incremental shares, and 955,362 warrants have been excluded from the three and nine months ended August 31, 2012 computations of diluted EPS as they are anti-dilutive due to the losses generated in each respective period.

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Long-Term Debt (Tables)

9 Months Ended

Aug. 31, 2013

Long-Term Debt Obligation

The Company has the following long-term debt obligations:

	(in thousands)
	August 31, 2013			November 30, 2012
Term loans, due February 6, 2018, base rate plus 8.75% interest or LIBOR plus 9.75%, (a)	$	87,943		$	—
Asset based loans, due February 6, 2018, base rate plus a margin between 1.50% and 2.00%, or LIBOR plus a margin between 2.50% and 3.00%, (a)		27,834			—
Term loans, repaid February 6, 2013, originally due June 1, 2016, base rate plus 6.25% interest or LIBOR plus 7.25%, (a)		—			183,375
Mortgage loan, due 2027, 1.35% above Barclays fixed bank rate (b)		1,281			1,424
Lockman loan repaid February 6, 2013, – C-MAC acquisition (c)		—			2,724
Note payable – RTIE acquisition (d)		242			540
Capital leases payable		257			338
	$	117,557		$	188,401
Less: Current portion of long-term debt		(6,599	)		(2,328	)
Discount and deferred financing charges on term loans		(7,394	)		(6,570	)
Long-term portion	$	103,564		$	179,503

a) On February 6, 2013, the Company refinanced its credit facilities and entered into (i) a credit agreement with various lenders and Guggenheim Corporate Funding, LLC (the “Term Loan Agreement”) that provides for a $165.0 million term loan facility; and (ii) a credit agreement with various lenders and Wells Fargo Bank, National Association (the “Revolving Loan Agreement”) that provides for a $50.0 million asset-based revolving borrowing base credit facility, with a $10.0 million subfacility (or the Sterling equivalent) for certain of our United Kingdom subsidiaries, a $10.0 million subfacility for letters of credit and a $5.0 million subfacility for swingline loans.

On February 6, 2013, in connection with entering into the Term Loan Agreement and the Revolving Loan Agreement, the Amended and Restated Credit Agreement, dated as of June 27, 2011 and amended on January 6, 2012 and March 22, 2012, by and among the lenders from time to time party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent, lead arranger and sole book-runner, which had an outstanding balance of $183.4 million was paid off and terminated, which resulted in the write-off of approximately $10.3 million of deferred financing costs and note discounts. As of February 6, 2013, the Company borrowed $165.0 million under the Term Loan Agreement and approximately $29.4 million under the Revolving Loan Agreement.

On July 5, 2013 and April 17, 2013, the Company sold Databus and Sensors (Note 5) and repaid approximately $28,780 and $44,919, respectively, of its term loans from the proceeds of these sales, in accordance with the Term Loan Agreement. In addition, the Company repaid a portion of its term loans using the net proceeds of $739 from the March 14, 2013, sale of certain land and a building in Palm Bay, Florida.

As of August 31, 2013, $87.9 million was outstanding under the Term Loan Agreement, approximately $27.8 million was outstanding under the Revolving Loan Agreement, and $11.8 million was available for future borrowings under the Revolving Loan Agreement.

On May 22, 2013, the Company entered into a First Amendment to the Revolving Loan Agreement that amends certain cash management and reporting requirements.

Term Loan Agreement

The term loans incurred pursuant to the Term Loan Agreement bear interest, at the Company’s option, at the base rate plus 8.75% or an adjusted LIBOR rate (based on one, two or three-month interest periods) plus 9.75% for the first year and at the base rate plus 9.75% or an adjusted LIBOR rate (based on one, two or three-month interest periods) plus 10.75% thereafter, with a LIBOR floor of 1.25%. For purposes of the Term Loan Agreement, the “base rate” means the highest of Wells Fargo Bank, National Association’s prime rate, the federal funds rate plus a margin equal to 0.50% and the adjusted LIBOR rate for a 3-month interest period plus a margin equal to 1.00%.

Interest is due and payable in arrears monthly for term loans bearing interest at the base rate and at the end of an interest period (or at each three month interval in the case of term loans with interest periods greater than three months) in the case of term loans bearing interest at the adjusted LIBOR rate. Principal payments of the term loans are paid at the end of each of the Company’s fiscal quarters, commencing for the fiscal quarter ending May 31, 2013, with the balance of any outstanding term loans due and payable in full on February 6, 2018. The quarterly principal payments will amortize at 1.25% for the fiscal quarters through the end of the Company’s 2014 fiscal year, at 1.875% for the fiscal quarters through the end of the Company’s 2015 fiscal year and at 2.50% for each of the fiscal quarters thereafter.

Under certain circumstances, we are required to prepay the term loans upon the receipt of cash proceeds of certain asset sales, cash proceeds of certain extraordinary receipts and cash proceeds of certain debt or equity financings, and based on a calculation of annual excess cash flow. Mandatory prepayments resulting from assets sales or certain debt financings may require the payment of certain prepayment premiums.

The term loans are secured by a second priority security interest in accounts receivable, inventory, machinery, equipment and certain other personal property relating to the foregoing, and any proceeds from any of the foregoing, subject to certain exceptions and liens, and a first priority security position on substantially all other real and personal property, in each case that are owned by the Company and the subsidiary guarantors.

The Term Loan Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company and its subsidiaries’ ability to, among other things, incur indebtedness, grant liens, dispose of assets and pay dividends or make distributions to stockholders, in each case subject to customary exceptions for a term loan of this size and type.

Pursuant to the Term Loan Agreement, the Company is required to maintain compliance with an interest coverage ratio and a leverage ratio and to limit its annual capital expenditures to $4.0 million per fiscal year (subject to carry-over rights).

Revolving Loan Agreement

The revolving loans incurred pursuant to the Revolving Loan Agreement bear interest, at the Company’s option, at the base rate plus a margin between 1.50% and 2.00% or an adjusted LIBOR rate (based on one, two, three or six-month interest periods) plus a margin between 2.50% and 3.00%, in each case with such margin being determined based on the Company’s average daily excess availability under the revolving credit facility for the preceding fiscal quarter. For purposes of the Revolving Loan Agreement, the “base rate” means the highest of Wells Fargo Bank, National Association’s prime rate, the federal funds rate plus a margin equal to 0.50% and the adjusted LIBOR rate for a 3-month interest period plus a margin equal to 1.00%.

Interest is due and payable in arrears monthly for revolving loans bearing interest at the base rate and at the end of an interest period (or at each three month interval in the case of loans with interest periods greater than three months) in the case of revolving loans bearing interest at the adjusted LIBOR rate. Principal, together with all accrued and unpaid interest, is due and payable on February 6, 2018. The Company may prepay the revolving loans and terminate the commitments, in whole or in part, at any time without premium or penalty. Under certain circumstances, we are required to prepay the revolving loans upon the receipt of cash proceeds of certain asset sales.

All borrowings under the Revolving Loan Agreement are limited by amounts available pursuant to a borrowing base calculation, which is based on percentages of eligible accounts receivable, inventory, machinery and equipment, in each case subject to reductions for applicable reserves.

The Revolving Loan Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company and its subsidiaries’ ability to, among other things, incur indebtedness, grant liens, dispose of assets and pay dividends or make distributions to stockholders, in each case subject to customary exceptions for a credit facility of this size and type.

Pursuant to the Revolving Loan Agreement, the Company is also required to maintain compliance with a fixed charge coverage ratio and to limit its annual capital expenditures to $4.0 million per fiscal year (subject to carry-over rights) at such times that it fails to maintain excess availability under the revolving credit facility above a specified level.

b) A subsidiary of the Company in the United Kingdom entered into a 20 year term mortgage agreement in 2007, under which interest is charged at a margin of 1.35% over Barclays Fixed Base Rate of 0.5% at August 31, 2013. The mortgage is secured by the subsidiary’s assets.

c) A subsidiary of the Company in the United Kingdom entered into a 5 year term loan facility with Lockman Electronic Holdings Limited on December 16, 2011 (“Lockman Loan”), under which interest is charged at a margin of 5.5% over LIBOR. The margin was to increase by 0.5% each year on December 1 for the term of the agreement. The term loan was secured against a debenture over the subsidiary’s assets. This loan was repaid on February 6, 2013.

d) On March 19, 2012 the Company completed the acquisition of substantially all of the assets of RTIE (Note 4b) for a total purchase price of $2,295, with $1,500 payable in cash at closing and the remainder pursuant to a $795 Promissory Note payable in 24 equal monthly installments. The aggregate principal amount of the Promissory Note payable outstanding was $242 as of August 31, 2013.

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Supplemental Cash Flow Information (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Aug. 31, 2013	Aug. 31, 2012
Supplemental Cash Flow Information
Cash paid for income taxes	$ 1,348	$ 74
Cash paid for interest	$ 10,974	$ 11,555

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Summary of Assets Measured at Fair Value Based on Unobservable Measure Criteria (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Nov. 30, 2012	Aug. 31, 2013
Assets Held-for-sale
Fair Value Assets And Liabilities Measured On Unobservable Inputs [Line Items]
Balance	$ 3,216	$ 150
Less: Fixed assets sold	(535)	(750)
Less: Impairment of fixed assets held for sale	(1,781)
Balance	900	150
Derivative Liabilities, Preferred Stock
Fair Value Assets And Liabilities Measured On Unobservable Inputs [Line Items]
Balance		(267)
Add: Embedded features of convertible notes and preferred stock	(855)
Less: Embedded features of convertible notes upon conversion to preferred stock	588
Balance	$ (267)	$ (267)

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Summary of Combined Result of Operations Due to Business Acquisitions (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	9 Months Ended
	Aug. 31, 2012
Business Acquisition [Line Items]
Proforma revenue	$ 200,926
Loss from continuing operations	(136,105)
Net loss	$ (136,649)
Loss from continuing operations per share - basic and diluted	$ 2.46
Net loss per share - basic and diluted	$ 2.47

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Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	1 Months Ended	3 Months Ended	6 Months Ended	9 Months Ended			3 Months Ended		9 Months Ended
	Mar. 31, 2013	Aug. 31, 2012	Jun. 30, 2012	Aug. 31, 2013	Aug. 31, 2012	Nov. 30, 2012	Aug. 31, 2012 Electronic Manufacturing Services	May 31, 2012 Electronic Manufacturing Services	Aug. 31, 2013 UNITED STATES	Aug. 31, 2012 UNITED STATES	Aug. 31, 2013 CANADA	Aug. 31, 2012 CANADA	Aug. 31, 2013 UNITED KINGDOM	Aug. 31, 2012 UNITED KINGDOM
Summary Of Significant Accounting Policies [Line Items]
Fixed assets held for sale				$ 150		$ 900
Proceeds from sale of land and building	739
Number of reporting units			2	3
Write down of goodwill		$ 20,495			$ 107,495		$ 24,300	$ 87,000
Income tax position rate				50.00%
Concentration risk Concentration risk									48.00%	44.00%	2.00%	3.00%	8.00%	9.00%

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Aug. 31, 2013	Nov. 30, 2012
Allowance for doubtful accounts	$ 669	$ 609
Provision for obsolescence	8,054	7,949
Long-term debt discount	7,394	6,570
Preferred stock, liquidation preference	$ 1,027	$ 1,027
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	26,000	26,000
Preferred stock, shares outstanding	26,000	26,000
Common shares, par value	$ 0.001	$ 0.001
Common shares, authorized shares	250,000,000	100,000,000
Common shares, shares issued	54,846,071	54,846,071
Common shares, shares outstanding	54,764,553	54,764,553
Special voting stock, par value	$ 0.01	$ 0.01
Special voting stock, share authorized	1	1
Special voting stock, Share Issued	1	1
Special voting stock, Share Outstanding	1	1

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Inventories

9 Months Ended

Aug. 31, 2013

Inventories

7. INVENTORIES

Inventories consisted of the following:

	(in thousands)
	August 31, 2013		November 30, 2012
Raw materials	$	30,008	$	29,067
Work in progress		22,489		20,572
Finished goods		9,141		8,224
Total	$	61,638	$	57,863

Inventories are presented net of valuation allowances.

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Consolidated Statement of Changes in Redeemable Preferred Stock and Shareholders' Equity (USD $) In Thousands, except Share data	Total	Preferred Stock	Common Stock	Additional Paid-in Capital	Common Stock Subscribed But Not Issued	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning Balance at Nov. 30, 2012	$ 138,973	$ 25,581	$ 55	$ 326,973	$ 2,373	$ (192,513)	$ 2,085
Beginning Balance (in shares) at Nov. 30, 2012		26,000	54,764,553
Stock issued as compensation			72,333
Stock withheld for taxes
Stock withheld for taxes, shares			(13,731)
Stock exchanged for subsidiary exchangeable shares (see Note 13)			22,916
Accrued dividend in kind (effective) on Series A Mandatorily Redeemable Preferred Stock (see Note 12)		(354)
Accretion on Preferred stock (dividends)	(671)	671				(671)
Stock-based compensation expense	791			791
Net income for the period	15					15
Other comprehensive loss	(1,237)						(1,237)
Ending Balance at Aug. 31, 2013	$ 137,871	$ 25,898	$ 55	$ 327,764	$ 2,373	$ (193,169)	$ 848
Ending Balance (in shares) at Aug. 31, 2013		26,000	54,846,071

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Changes in Carrying Amount of Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Aug. 31, 2013	Nov. 30, 2012
Finite-Lived Intangible Assets [Line Items]
Beginning balance, net	$ 47,934	$ 50,001
Computer software purchased	463	1,296
Less: Amortization	(7,366)	(9,555)
Less: Intangible assets from Sensors disposition (note 5) reclassified to discontinued operations		(2,156)
Ending balance, net	41,031	47,934
C-MAC (RF2M UK)
Finite-Lived Intangible Assets [Line Items]
Intangible assets from business acquisition		7,848
CMT
Finite-Lived Intangible Assets [Line Items]
Intangible assets from business acquisition		$ 500

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Aug. 31, 2013	Nov. 30, 2012
Current
Cash and cash equivalents	$ 12,514	$ 20,550
Restricted cash (note 5)	1,500	700
Accounts receivable, less allowance for doubtful accounts of $669 and $609 at August 31, 2013 and November 30, 2012, respectively	43,804	41,624
Inventories, less provision for obsolescence of $8,054 and $7,949 at August 31, 2013 and November 30, 2012, respectively (note 7)	61,638	57,863
Deferred income taxes	843	1,038
Prepaid expenses and other current assets	2,178	2,560
Current assets of discontinued operations (note 5)		13,836
Assets, Current, Total	122,477	138,171
Fixed assets, net	36,258	40,075
Fixed assets held for sale (note 2)	150	900
Goodwill	116,770	116,770
Intangible assets, net	41,031	47,934
Other non-current assets	3,388	5,760
Long-lived assets of discontinued operations (note 5)		43,105
Total assets	320,074	392,715
Current
Accounts payable and accrued expenses	36,688	39,598
Deferred revenue	4,497	385
Current portion of long-term debt (note 11)	6,599	2,328
Current liabilities of discontinued operations (note 5)		1,888
Total current liabilities	47,784	44,199
Deferred income taxes	3,901	3,411
Other long-term liabilities	1,056	1,048
Long-term debt, net of current portion, and discount of $7,394 and $6,570 at August 31, 2013 and November 30, 2012, respectively (note 11)	103,564	179,503
Liabilities, Total	156,305	228,161
Commitments and contingencies (note 17)
Redeemable Preferred Stock
Preferred stock (Series A Mandatorily Redeemable Preferred Stock, $1,027 liquidation preference and 1,000,000 authorized shares, 26,000 and 26,000 shares issued and outstanding at August 31, 2013 and November 30, 2012, respectively) (note 12)	25,898	25,581
Shareholders' Equity
Common shares ($0.001 par value, 250,000,000 and 100,000,000 authorized shares, 54,846,071 and 54,764,553 shares issued and outstanding at August 31, 2013 and November 30, 2012, respectively)	55	55
Special voting stock ($0.01 par value, 1 share authorized, issued and outstanding at August 31, 2013 and November 30, 2012, respectively)
Additional paid-in capital	327,764	326,973
Common stock subscribed but not issued	2,373	2,373
Accumulated deficit	(193,169)	(192,513)
Accumulated other comprehensive income	848	2,085
Stockholders' Equity Attributable to Parent	137,871	138,973
Total Liabilities, Redeemable Preferred Stock and Shareholders' Equity	$ 320,074	$ 392,715

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Discontinued Operations - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	1 Months Ended	3 Months Ended	9 Months Ended			1 Months Ended	3 Months Ended	9 Months Ended		9 Months Ended
	Jul. 05, 2013 Databus	Aug. 31, 2013 Databus	Aug. 31, 2013 Databus	Aug. 31, 2013 Databus UNITED STATES Maximum	Aug. 31, 2013 Databus UNITED KINGDOM Maximum	Apr. 30, 2013 Sensors	Aug. 31, 2013 Sensors	Aug. 31, 2013 Sensors	Apr. 17, 2013 Sensors	Aug. 31, 2013 Sensors Maximum
Discontinued Operations [Line Items]
Cash received from purchaser	$ 32,150
Transaction expenses		705	705				2,131	2,131
Deferred revenue		2,544	2,544				1,780	1,780
Manufacturing period				12 months	4 years					9 months
Proceeds from sale of subsidiary						51,350
Amount deposited in escrow against contingent payments to the purchaser									$ 1,500
Administrative service period										18 months

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Restructuring Charges Related to Consolidation of Operations - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended			3 Months Ended	12 Months Ended
	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013	Aug. 31, 2012	Nov. 30, 2012	Aug. 31, 2013 Severance and Legal Costs	Nov. 30, 2012 E M S Restructuring
Restructuring Cost and Reserve [Line Items]
Employee reduction					2.00%		10.00%
Cash Outlay	$ 120	$ 485	$ 684	$ 4,706		$ 136	$ 591

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Aug. 31, 2013

Accounting Estimates

Accounting Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts in the consolidated financial statements, and the disclosures made in the accompanying notes. Examples of estimates include the provisions made for bad debts and obsolete inventory, estimates associated with annual goodwill impairment tests, and estimates of deferred income tax and liabilities. The Company also uses estimates when assessing fair values of assets and liabilities acquired in business acquisitions as well as any fair value and any related impairment charges related to the carrying value of machinery and equipment, other long-lived assets, fixed assets held for sale and discontinued operations. The Company also uses estimates in determining the remaining economic lives of long-lived assets. In addition, the Company uses assumptions when employing the Black-Scholes valuation model to estimate the fair value of share options. Despite the Company’s intention to establish accurate estimates and use reasonable assumptions, actual results may differ from these estimates.

Inventories

Inventories

Inventories, which include materials, labor, and manufacturing overhead, are stated at the lower of cost (on a first-in, first-out basis) or net realizable value. The Company records a provision for both excess and obsolete inventory when write-downs or write-offs are identified. The inventory valuation is based upon assumptions about future demand, product mix and possible alternative uses.

The Company periodically reviews and analyzes its inventory management systems and conducts inventory impairment testing on an annual basis.

Fixed Assets

Fixed Assets

Fixed assets are recorded at cost less accumulated depreciation and are depreciated using the following methods over the following periods:

Straight line basis
Buildings and leasehold improvements	5-40 years
Computer equipment	3-5 years
Furniture and fixtures	5-8 years
Machinery and equipment	5-10 years
Vehicles	3 years

Betterments are capitalized and amortized by the Company, using the same amortization basis as the underlying assets over the remaining useful life of the original asset. Betterments include renovations, major repairs and upgrades that increase the service of a fixed asset and extend the useful life. Gains and losses on depreciable assets retired or sold are recognized in the consolidated statements of operations in the year of disposal. Repairs and maintenance expenditures are expensed as incurred.

Fixed Assets Held for Sale

Fixed Assets Held for Sale

Certain fixed assets held for sale from within our SSC segment have been classified as held for sale in the consolidated balance sheets. The Company estimated the fair value of the net assets to be sold at approximately $150 at August 31, 2013 compared to $900 at November 30, 2012. On March 14, 2013, the Company sold certain land and a building in Palm Bay, Florida from the Spectrum acquisition for net proceeds of $739. This land and building were part of the fixed assets held for sale reported at November 30, 2012.

Discontinued Operations

Discontinued Operations

Components of the Company that have been disposed of are reported as discontinued operations. The assets and liabilities relating to the Company’s Databus business and Sensors companies have been reclassified as discontinued operations in the consolidated balance sheets for fiscal 2012 and the results of operations of Databus and Sensors for the current and prior periods are reported as discontinued operations (Note 5) and not included in the continuing operations figures.

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Goodwill and intangible assets result primarily from business acquisitions accounted for under the purchase method. Goodwill and intangible assets with indefinite lives are not amortized but are subject to impairment by applying a fair value based test. The Company completes an annual (or more often if circumstances require) impairment assessment of its goodwill on a reporting unit level. The Company’s annual impairment test for goodwill is September 1^st.

The Company has three reporting units: (i) SSC, (ii) EMS, and (iii) SSIA. The goodwill in the consolidated financial statements relates to the acquisition of RTIE in March 2012, C-MAC in March 2012, CMT in November 2011, Spectrum in June 2011, SenDEC Corp. (“SenDEC”) in January 2011, the acquisition of the assets of Kuchera Defense Systems, Inc. (“KDS”), KII, Inc. (“KII”) and Kuchera Industries, LLC (“KI Industries” and collectively with KDS and KII, the “KGC Companies”) by API and three of its subsidiaries (the “API Pennsylvania Subsidiaries”), in January 2010, and the acquisition of the Filtran Group companies, which was completed in 2002. All of the goodwill relates to our SSC reporting unit, except for SenDEC and the KGC Companies, which relate to the EMS reporting unit. Goodwill represents the excess of the purchase price of acquired companies over the estimated fair value assigned to the individual assets acquired and liabilities assumed. The Company does not amortize goodwill but instead tests goodwill for impairment annually (on September 1) or more frequently if impairment indicators arise under the applicable accounting guidance.

A two-step test is performed to assess goodwill impairment. First, the fair value of each reporting unit is compared to its carrying value. The fair value is determined based on a market approach as well as the discounted future cash flows of the subsidiary carrying the goodwill. If the calculated fair value exceeds the carrying value of the assets, goodwill is not impaired and no further testing is performed. The second step is performed if the carrying value exceeds the fair value of the goodwill. If the carrying value of the reporting unit’s goodwill exceeds its implied fair value, an impairment loss equal to the difference is recorded.

As at May 31, 2012, given lower than projected revenues and the Company’s outlook for the EMS portion of the Systems & Subsystems segment (now the EMS segment), the Company determined that the appropriate triggers had been reached to perform an impairment test beyond the annual goodwill impairment test. The Company performed the first step of the goodwill impairment assessment and the carrying value of the assets exceeded the fair value. As of the date of filing the 10-Q for May 31, 2012, the Company determined that an impairment of goodwill was probable, determined a reasonable estimate and therefore recorded a write-down of $87,000. During the third quarter of fiscal 2012, the Company completed its impairment analysis and determined that an additional $24,300 write-down of goodwill was required.

Following the required accounting guidance, the Company performed the first step of the two-step test method based on discounted future cash flows on September 1, 2012. The respective reporting units’ future cash flows exceeded the carrying value of the underlying assets and therefore goodwill was not impaired and no further testing was required for the year ending November 30, 2012.

As at April 17, 2013, given the sale of Sensors, which was part of the SSC segment, the Company determined that the appropriate triggers had been reached to perform an impairment test beyond the annual goodwill impairment test. The Company performed the first step of the goodwill impairment assessment and the carrying value of the assets exceeded the fair value of the assets and determined that an impairment of goodwill had not occurred.

As at July 5, 2013, given the sale of Databus, which also was part of the SSC segment, the Company determined that the appropriate triggers had been reached to perform an impairment test beyond the annual goodwill impairment test. The Company performed the first step of the goodwill impairment assessment and the carrying value of the assets exceeded the fair value of the assets. As of the date of the filing of this report, the Company determined that an impairment of goodwill had not occurred.

Intangible assets that have a finite life are amortized using the following basis over the following periods:

Non-compete agreements	Straight line over 5 years
Computer software	Straight line over 3-5 years
Customer related intangibles	Straight line or the pattern in which the economic benefits are expected to be realized, over an estimated life of 4-15 years
Marketing related intangibles	The pattern in which the economic benefits are expected to be realized, over an estimated life of 3-10 years
Technology related intangibles	The pattern in which the economic benefits are expected to be realized, over an estimated life of 10 years

Long-Lived Assets

Long-Lived Assets

The Company periodically evaluates the net realizable values of long-lived assets, principally identifiable intangibles and capital assets, for potential impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable, as determined based on the estimated future undiscounted cash flows. If such assets were considered to be impaired, the carrying value of the related assets would be reduced to their estimated fair value.

Income Taxes

Income Taxes

Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial reporting and tax bases of assets and liabilities and available net operating loss carry forwards. A valuation allowance is established to reduce tax assets if it is more likely than not that all or some portions of such tax assets will not be realized.

The Company’s valuation allowance was recorded on the deferred tax assets to provide for a reasonable provision, which in the Company’s estimation is more likely than not that all or some portions of such tax assets will not be realized. In determining the adequacy of the valuation allowance, the Company applied the authoritative guidance and considered such factors as (i) which subsidiaries were producing income and which subsidiaries were producing losses and (ii) temporary differences occurring from depreciation and amortization which the Company expects to increase the taxable income over future periods.

The Company follows the guidance concerning accounting for uncertainty in income taxes, which clarifies the accounting and disclosure for uncertainty in tax positions. The guidance requires that the Company determine whether it is more likely than not that a tax position will not be sustained upon examination by the appropriate taxing authority. If a tax position does not meet the more likely than not recognition criterion, the guidance requires that the tax position be measured at the largest amount of benefit greater than 50 percent not likely of being sustained upon ultimate settlement.

Based on the Company’s evaluation, management has concluded that there are no significant uncertain tax positions requiring recognition in the consolidated financial statements or adjustments to deferred tax assets and related valuation allowance. Open tax years include the tax years ended May 31, 2008 through November 30, 2012.

The Company from time to time has been assessed interest or penalties by major tax jurisdictions, however such assessments historically have been minimal and immaterial to our financial results. If the Company receives an assessment for interest and/or penalties, it would be classified in the consolidated financial statements as general and administrative expense.

Revenue Recognition

Revenue Recognition

The Company recognizes non-contract revenue when it is realized or realizable and earned. The Company considers non-contract revenue realized or realizable and earned when it has persuasive evidence of an arrangement, delivery has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. Delivery is not considered to have occurred until products have been shipped and risk of loss and ownership has transferred to the client. Revenue from production-type contracts, which represents less than one per cent of total revenue, is recognized using the percentage of completion method. The degree of completion is determined based on costs incurred, excluding costs that are not representative of progress to completion, as a percentage of total costs anticipated for each contract. A provision is made for losses on contracts in progress when such losses first become known. Revisions in cost and profit estimates, which can be significant, are reflected in the accounting period in which the relevant facts become known. Revenue from contracts under the percentage of completion method is not significant to the financial statements.

Deferred Revenue

Deferred Revenue

The Company defers revenue when payment is received in advance of the service or product being shipped or delivered, including transition services agreements related to discontinued operations. For some of the larger government contracts, the Company will bill upon meeting certain milestones. These milestones are established by the customer and are specific to each contract. Unearned revenue is recorded as deferred revenue. The Company generally recognizes revenue on the contracts when items are shipped.

Research and Development

Research and Development

Research and development costs are expensed when incurred.

Stock-Based Compensation

Stock-Based Compensation

The Company follows the authoritative guidance for accounting for stock-based compensation. The guidance requires that new, modified and unvested stock-based payment transactions with employees, such as grants of stock options, restricted stock units (“RSUs”) and restricted stock, be recognized in the financial statements based on their fair value at the grant date and recognized as compensation expense over their vesting periods. Stock-based compensation cost for RSUs is measured based on the closing fair market value of the Company’s common stock on the date of grant. The fair value of each option granted is estimated on the grant date using the Black-Scholes option pricing model which takes into account as of the grant date the exercise price and expected life of the option, the current price of the underlying shares and its expected volatility, expected dividends on the shares and the risk-free interest rate for the term of the option.

Foreign Currency Translation and Transactions

Foreign Currency Translation and Transactions

The Company’s functional currency is United States dollars and the consolidated financial statements are stated in United States dollars, “the reporting currency.” Integrated operations have been translated from various foreign currencies (Canadian dollars, British Pounds Sterling, Chinese Yuan, Euros, and Mexican Pesos) into United States dollars at the period-end exchange rate for monetary balance sheet items, the historical rate for fixed assets and shareholders’ equity, and the average exchange rate for the year for revenues, expenses, gains and losses. The gains or losses on translation are included as a component of other comprehensive income (loss) for the period.

Financial Instruments

Financial Instruments

The fair values of financial instruments including cash and cash equivalents, marketable securities, accounts receivable, accounts payable, and short-term borrowings approximate their carrying values due to the short-term nature of these instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest rate, currency or credit risks arising from its financial instruments. Marketable securities are included at fair value based on quoted market prices in active markets. The recorded value of long-term debt approximates the fair value of the debt as the terms and rates approximate market rates.

In the ordinary course of business, the Company carries out transactions in various foreign currencies (Canadian Dollars, British Pounds Sterling, Chinese Yuan, Euros, and Mexican Pesos) included in the Company’s cash, accounts receivable, accounts payable, bank indebtedness, as well as a mortgage loan. The translation adjustments related to these accounts have been reflected as a component of comprehensive income. Currently, the Company does not maintain a foreign currency hedging program.

Derivative Liabilities

Derivative Liabilities

Fair value accounting requires bifurcation of embedded derivative instruments of convertible debt or equity instruments, and measurement of their fair value for accounting purposes. The Company’s embedded derivative instruments such as put and call features, make whole provisions and default interest and dividend rates in the convertible note and convertible preferred stock are measured at fair value using the discounted cash flows model by taking the present value of probability weighted cash flow scenarios. Derivative liabilities are adjusted to reflect fair value at the end of each reporting period, with any change in the fair value being recorded in results of operations as Other expense (income), net.

Debt Issuance Costs and Long-term Debt Discounts

Debt Issuance Costs and Long-term Debt Discounts

Fees paid to obtain debt financing or amendments under such debt financing are treated as debt issuance costs and are capitalized and amortized over the life of the debt using the effective interest method. These payments are shown as a financing activity on the consolidated statement of cash flows and are shown as Other non-current assets in the consolidated balance sheets.

In accordance with accounting standards, the Company recognized the value of detachable warrants issued in conjunction with the issuance of the secured promissory notes and the modification of the convertible promissory notes. The Company valued the warrants using the Black-Scholes pricing model. The Company recorded the warrant relative fair value as an increase to additional paid-in capital and a discount against the related debt. The discount attributed to the value of the warrants was being amortized over the term of the underlying debt using the effective interest method and was written off when the related debt was extinguished.

The Company may record debt and equity discounts in connection with raising funds through the issuance of convertible notes or equity instruments. These discounts may arise from (i) the receipt of proceeds less than the face value of the convertible notes or equity instruments, (ii) beneficial conversion features and/or (iii) recording derivative liabilities related to embedded features. These costs are amortized over the life of the debt to interest expense utilizing the effective interest method. If a conversion of the underlying debt occurs, a proportionate share of the unamortized discount is immediately expensed.

Concentration of Credit Risk

Concentration of Credit Risk

The Company maintains cash balances, at times, with financial institutions, which are in excess of amounts insured by the Federal Deposit Insurance Corporation (FDIC), Canadian Deposit Insurance Corporation (CDIC) and Financial Services Compensation Scheme (FSCS in the United Kingdom). Management monitors the soundness of these institutions and has not experienced any collection losses with these institutions.

The US, Canadian and United Kingdom Governments’ Departments of Defense (directly and through subcontractors) accounts for approximately 48%, 2% and 8% of the Company’s revenues for the nine months ended August 31, 2013 (44%, 3% and 9% for the nine months ended August 31, 2012), respectively. A loss of a significant customer could adversely impact the future operations of the Company.

Earnings (Loss) per Share of Common Stock

Earnings (Loss) per Share of Common Stock

Basic earnings per share of common stock is computed by dividing income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share of common stock gives effect to all dilutive potential shares of common stock outstanding during the period. The computation of diluted earnings per share does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings per share (Note 16).

Comprehensive Income (Loss)

Comprehensive Income (Loss)

Comprehensive income (loss), which includes foreign currency translation adjustments is shown in the Consolidated Statement of Operations and Comprehensive Income (Loss).

Comparative Reclassifications

Comparative Reclassifications

Certain amounts from 2012 have been reclassified to conform to the August 31, 2013 financial statement presentation. The reclassifications related to the restatement of discontinued operations (see Note 5) and a change in the balance sheet presentation of deferred financing costs incurred directly with the lenders of long-term debt.

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Earnings Per Share of Common Stock

9 Months Ended

Aug. 31, 2013

Earnings Per Share of Common Stock

16. EARNINGS PER SHARE OF COMMON STOCK

The following table sets forth the computation of weighted-average shares outstanding for calculating basic and diluted earnings per share (EPS):

	Three months ended				Nine months ended
	August 31, 2013		August 31, 2012		August 31, 2013		August 31, 2012
Weighted average shares-basic		55,424,157		55,365,978		55,398,833		55,296,470
Effect of dilutive securities		*		*		*		*
Weighted average shares—diluted		55,424,157		55,365,978		55,398,833		55,296,470

Basic EPS and diluted EPS for the three months and nine months ended August 31, 2013 and August 31, 2012 have been computed by dividing the net income (loss) by the weighted average shares outstanding. The weighted average numbers of shares of common stock outstanding includes exchangeable shares and shares to be issued under the Plan of Arrangement.

* Outstanding options and RSUs aggregating 1,972,488 incremental shares, and 892,862 warrants have been excluded from the three and nine months ended August 31, 2013 computation of diluted EPS as none are exercisable and in-the-money. Outstanding options and RSUs aggregating 2,843,765 incremental shares, and 955,362 warrants have been excluded from the three and nine months ended August 31, 2012 computations of diluted EPS as they are anti-dilutive due to the losses generated in each respective period.

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Fixed Assets Depreciation Period (Detail)	9 Months Ended
	Aug. 31, 2013
Minimum | Buildings and leasehold improvements
Property, Plant and Equipment [Line Items]
Useful life	5 years
Minimum | Computer equipment
Property, Plant and Equipment [Line Items]
Useful life	3 years
Minimum | Furniture and fixtures
Property, Plant and Equipment [Line Items]
Useful life	5 years
Minimum | Machinery and equipment
Property, Plant and Equipment [Line Items]
Useful life	5 years
Maximum | Buildings and leasehold improvements
Property, Plant and Equipment [Line Items]
Useful life	40 years
Maximum | Computer equipment
Property, Plant and Equipment [Line Items]
Useful life	5 years
Maximum | Furniture and fixtures
Property, Plant and Equipment [Line Items]
Useful life	8 years
Maximum | Machinery and equipment
Property, Plant and Equipment [Line Items]
Useful life	10 years
Maximum | Vehicles
Property, Plant and Equipment [Line Items]
Useful life	3 years

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Segment Reporting Information by Segment (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended				3 Months Ended		9 Months Ended			3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended			3 Months Ended		9 Months Ended			3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended			3 Months Ended		9 Months Ended		3 Months Ended			9 Months Ended			3 Months Ended		9 Months Ended			3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended				3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended
	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013	Aug. 31, 2012	Nov. 30, 2012	Nov. 30, 2011	Aug. 31, 2013 Operating Segments	Aug. 31, 2012 Operating Segments	Aug. 31, 2013 Operating Segments	Aug. 31, 2012 Operating Segments	Nov. 30, 2012 Operating Segments	Aug. 31, 2013 Corporate, Non-Segment	Aug. 31, 2012 Corporate, Non-Segment	Aug. 31, 2013 Corporate, Non-Segment	Aug. 31, 2012 Corporate, Non-Segment	Aug. 31, 2013 Segment Reconciling Items	Aug. 31, 2012 Segment Reconciling Items	Aug. 31, 2013 Segment Reconciling Items	Aug. 31, 2012 Segment Reconciling Items	Aug. 31, 2013 Systems And Subsystems	Aug. 31, 2012 Systems And Subsystems	Aug. 31, 2013 Systems And Subsystems	Aug. 31, 2012 Systems And Subsystems	Nov. 30, 2012 Systems And Subsystems	Aug. 31, 2013 Systems And Subsystems Operating Segments	Aug. 31, 2012 Systems And Subsystems Operating Segments	Aug. 31, 2013 Systems And Subsystems Operating Segments	Aug. 31, 2012 Systems And Subsystems Operating Segments	Nov. 30, 2012 Systems And Subsystems Operating Segments	Aug. 31, 2013 Systems And Subsystems Segment Reconciling Items	Aug. 31, 2012 Systems And Subsystems Segment Reconciling Items	Aug. 31, 2013 Systems And Subsystems Segment Reconciling Items	Aug. 31, 2012 Systems And Subsystems Segment Reconciling Items	Aug. 31, 2013 Secure Systems And Information Assurance	Aug. 31, 2012 Secure Systems And Information Assurance	Aug. 31, 2013 Secure Systems And Information Assurance	Aug. 31, 2012 Secure Systems And Information Assurance	Aug. 31, 2013 Secure Systems And Information Assurance Operating Segments	Aug. 31, 2012 Secure Systems And Information Assurance Operating Segments	Aug. 31, 2013 Secure Systems And Information Assurance Operating Segments	Aug. 31, 2012 Secure Systems And Information Assurance Operating Segments	Nov. 30, 2012 Secure Systems And Information Assurance Operating Segments	Aug. 31, 2013 Secure Systems And Information Assurance Segment Reconciling Items	Aug. 31, 2012 Secure Systems And Information Assurance Segment Reconciling Items	Aug. 31, 2013 Secure Systems And Information Assurance Segment Reconciling Items	Aug. 31, 2012 Secure Systems And Information Assurance Segment Reconciling Items	Aug. 31, 2013 Electronic Manufacturing Services	Aug. 31, 2012 Electronic Manufacturing Services	May 31, 2012 Electronic Manufacturing Services	Aug. 31, 2013 Electronic Manufacturing Services	Aug. 31, 2012 Electronic Manufacturing Services	Nov. 30, 2012 Electronic Manufacturing Services	Aug. 31, 2013 Electronic Manufacturing Services Operating Segments	Aug. 31, 2012 Electronic Manufacturing Services Operating Segments	Aug. 31, 2013 Electronic Manufacturing Services Operating Segments	Aug. 31, 2012 Electronic Manufacturing Services Operating Segments	Nov. 30, 2012 Electronic Manufacturing Services Operating Segments	Aug. 31, 2013 Electronic Manufacturing Services Segment Reconciling Items	Aug. 31, 2012 Electronic Manufacturing Services Segment Reconciling Items	Aug. 31, 2013 Electronic Manufacturing Services Segment Reconciling Items	Aug. 31, 2012 Electronic Manufacturing Services Segment Reconciling Items	Aug. 31, 2013 Corporate	Aug. 31, 2012 Corporate	Aug. 31, 2013 Corporate	Aug. 31, 2012 Corporate	Aug. 31, 2013 Corporate Operating Segments	Nov. 30, 2012 Corporate Operating Segments	Aug. 31, 2013 Corporate Corporate, Non-Segment	Aug. 31, 2012 Corporate Corporate, Non-Segment	Aug. 31, 2013 Corporate Corporate, Non-Segment	Aug. 31, 2012 Corporate Corporate, Non-Segment	Aug. 31, 2013 Corporate Segment Reconciling Items	Aug. 31, 2012 Corporate Segment Reconciling Items	Aug. 31, 2013 Corporate Segment Reconciling Items	Aug. 31, 2012 Corporate Segment Reconciling Items
Operating Statistics [Line Items ]
Sales to external customers	$ 62,630	$ 58,759	$ 185,163	$ 189,014																$ 45,653	$ 41,127	$ 128,112	$ 121,241											$ 3,712	$ 4,651	$ 12,689	$ 19,131										$ 13,265	$ 12,981		$ 44,362	$ 48,642
Total revenue	62,630	58,759	185,163	189,014																45,653	41,127	128,112	121,241											3,712	4,651	12,689	19,131										13,265	12,981		44,362	48,642
Operating income (loss) before expenses below:	2,314	(1,152)	2,130	(8,803)			9,207	7,490	23,808	27,217															8,071	7,193	19,144	22,957										696	701	2,861	4,016												440	(404)	1,803	244
Corporate-head office expenses	6,901	6,611	19,704	18,263								2,263	1,800	6,610	6,374																																																					2,263	1,800	6,610	6,374
Acquisition related charges	(111)	775	977	3,444												(111)	775	977	3,444											30	355	103	809																									10		22												(151)	420	852	2,635
Restructuring																136	2,223	866	13,746											67	1,689	532	2,066										(6)	255	75	312												57	224	109	11,205											18	55	150	163
Depreciation and amortization			13,225	12,456												4,605	3,844	13,225	12,456											2,907	2,950	8,695	9,072										94	90	286	271												1,522	733	3,997	2,955											82	71	247	158
Goodwill impairment		20,495		107,495													20,495		107,495												20,387		20,387															24,300	87,000										108		87,108
Other expense (income)	(3,796)	(24,990)	(23,516)	(131,938)												3,796	4,495	23,516	24,443											75	13	59	(64)										(44)	(34)	7	35												48	(405)	152	(26)											3,717	4,921	23,298	24,498
Income tax expense (benefit)	(3,144)	(579)	(3,316)	(4,885)												(3,144)	(579)	(3,316)	(4,885)											(3,304)	(50)	(5,875)	(1,296)										46	173	225	598																										114	(702)	2,334	(4,187)
Income (loss) from continuing operations	1,662	(25,563)	(18,070)	(135,856)												1,662	(25,563)	(18,070)	(135,856)											8,296	(18,151)	15,630	(8,017)										606	217	2,268	2,800												(1,197)	(1,064)	(2,477)	(100,998)											(6,043)	(6,565)	(33,491)	(29,641)
Income from discontinued operations, net of tax																5,305	(2,103)													5,305	(2,103)
Income (loss) from discontinued operations, net of tax	5,305	(2,103)	18,085	(544)														18,085	(544)													18,085	(544)
Net income (loss)	6,967	(27,666)	15	(136,400)																13,601	(20,254)	33,715	(8,561)											606	217	2,268	2,800										(1,197)	(1,064)		(2,477)	(100,998)											(6,043)	(6,565)	(33,491)	(29,641)
Segment assets	320,074		320,074		392,715		320,074		320,074		392,715														251,561		251,561		317,791									14,109		14,109		13,496											43,355		43,355		52,589									11,049	8,839
Goodwill included in assets	116,770		116,770		116,770	253,170														114,301		114,301		114,301																							2,469			2,469		2,469
Purchase of fixed assets	$ 958	$ 127	$ 2,084	$ 799																$ 876	$ 127	$ 1,685	$ 697											$ 10		$ 33	$ 1										$ 68			$ 362	$ 101											$ 4		$ 4

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Fair Value of Assets and Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Aug. 31, 2013	Nov. 30, 2012
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed assets held for sale	$ 150	$ 900
Total	(117)	633
Series A Preferred Stock
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative liabilities - Redeemable Preferred Stock (Note 12)	(267)	(267)
Unobservable Measurement Criteria (Level 3)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed assets held for sale	150	900
Total	(117)	633
Unobservable Measurement Criteria (Level 3) | Series A Preferred Stock
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative liabilities - Redeemable Preferred Stock (Note 12)	(267)	(267)
Impairments
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed assets held for sale		1,781
Total		$ 1,781

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Share-Based Compensation - Additional Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	1 Months Ended		9 Months Ended
	Jan. 21, 2011	Oct. 22, 2009	Aug. 31, 2013	Aug. 31, 2012
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Equity incentive plan under common stock		1,250,000
Equity incentive plan under common stock, additional shares authorized	5,875,000	2,125,000
Available for issuance pursuant to option			3,178,127
Maximum award term			10 years
Stock option exercise price			100.00%
Total unrecognized compensation related non-vested stock options			$ 665
Stock based compensation			$ 791	$ 1,934
Market value per share			$ 2.74

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Supplemental Cash Flow Information (Tables)

9 Months Ended

Aug. 31, 2013

Supplemental Cash Flow Information

Supplemental cash flow information:

	(in thousands) Nine months ended
	August 31, 2013		August 31, 2012
Supplemental Cash Flow Information
Cash paid for income taxes	$	1,348	$	74
Cash paid for interest	$	10,974	$	11,555

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Goodwill and Intangible Assets (Tables)

9 Months Ended

Aug. 31, 2013

Changes in Carrying Amount of Goodwill

Changes in the carrying amount of Goodwill were as follows:

	(in thousands)
Balance, November 30, 2011	$	253,170
Goodwill from business acquisition (note 4a)		11,364
Goodwill from business acquisition (note 4b)		2,177
Goodwill from business acquisition (note 4c)		(500	)
Goodwill from other business acquisition purchase price adjustments		1,091
Less: Goodwill impairment		(111,300	)
Less: Goodwill from Databus disposition (note 5) reclassified to discontinued operations		(14,802	)
Less: Goodwill from Sensors disposition (note 5) reclassified to discontinued operations		(24,430	)
Balance, November 30, 2012	$	116,770
Balance, August 31, 2013	$	116,770

Changes in Carrying Amount of Intangible Assets

Changes in the carrying amount of Intangible assets were as follows:

	(in thousands)
Balance, November 30, 2011	$	50,001
Intangible assets from business acquisition (note 4a)		7,848
Intangible assets from business acquisition (note 4c)		500
Computer software purchased		1,296
Less: Amortization		(9,555	)
Less: Intangible assets from Sensors disposition (note 5) reclassified to discontinued operations		(2,156	)
Balance, November 30, 2012	$	47,934
Computer software purchased		463
Less: Amortization		(7,366	)
Balance, August 31, 2013	$	41,031

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Accounts Payable and Accrued Expenses (Tables)

9 Months Ended

Aug. 31, 2013

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following:

	(in thousands)
	August 31, 2013		November 30, 2012
Trade accounts payable	$	26,741	$	24,575
Accrued expenses		6,905		10,045
Wage and vacation accrual		3,042		4,978
Total	$	36,688	$	39,598

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Fair Value Measurements

9 Months Ended

Aug. 31, 2013

Fair Value Measurements

6. FAIR VALUE MEASUREMENTS

The following table summarizes assets and liabilities, which have been accounted for at fair value, along with the basis for the determination of fair value.

	(in thousands)
	August 31, 2013								November 30, 2012
	2013 Total			Unobservable Measurement Criteria (Level 3)			Impairment		2012 Total			Unobservable Measurement Criteria (Level 3)			Impairment
Fixed assets held for sale	$	150		$	150		$	—	$	900		$	900		$	1,781
Derivative liabilities – Redeemable Preferred Stock (Note 12)		(267	)		(267	)		—		(267	)		(267	)		—
Total	$	(117	)	$	(117	)	$	—	$	633		$	633		$	1,781

The following is a summary of activity for the nine months ended August 31, 2013 and year ended November 30, 2012 for assets and liabilities measured at fair value based on unobservable measure criteria:

	(in thousands)
	Fixed Assets Held for Sale			Derivative Liabilities – Preferred Stock
Balance, November 30, 2011	$	3,216		$	—
Less: Fixed assets sold		(535	)		—
Less: Impairment of fixed assets held for sale		(1,781	)		—
Add: Embedded features of convertible notes and preferred stock		—			(855	)
Less: Embedded features of convertible notes upon conversion to preferred stock		—			588
Balance, November 30, 2012	$	900		$	(267	)
Less: Fixed assets sold		(750	)		—
Balance, August 31, 2013	$	150		$	(267	)

The fair value of the fixed assets held for sale was determined using a market approach by using prices and other relevant information generated by market transactions involving comparable assets. The Series A Preferred Stock (Note 10) also contain an embedded feature for a default dividend rate. The Company determined the fair value of the derivative liabilities related to the preferred stock by using the present value of probability weighted cash flow scenarios.

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Long-Term Debt Obligations (Parenthetical) (Detail) (USD $)	1 Months Ended			9 Months Ended		6 Months Ended	9 Months Ended				9 Months Ended												9 Months Ended					9 Months Ended					1 Months Ended
	Jul. 05, 2013	Apr. 17, 2013	Mar. 14, 2013	Aug. 31, 2013	Aug. 31, 2012	May 31, 2013 Term Loan A	Aug. 31, 2013 Term Loan A		Feb. 28, 2013 Term Loan A	Feb. 06, 2013 Term Loan A	Aug. 31, 2013 Term Loan A Thereafter	Aug. 31, 2013 Term Loan A Three Month Libor Rate Plus	Aug. 31, 2013 Term Loan A Base Rate Plus	Aug. 31, 2013 Term Loan A Base Rate Plus First Year	Aug. 31, 2013 Term Loan A Maximum	Aug. 31, 2013 Secured Debt	Aug. 31, 2013 Asset Based Loan Facility Maximum Base Rate Plus	Aug. 31, 2013 Asset Based Loan Facility Maximum Libor Rate Plus	Aug. 31, 2013 Asset Based Loan Facility Minimum Base Rate Plus	Aug. 31, 2013 Asset Based Loan Facility Minimum Libor Rate Plus	Aug. 31, 2013 Revolving Loan Agreement	Feb. 28, 2013 Revolving Loan Agreement	Aug. 31, 2013 Revolving Loan Agreement Three Month Libor Rate Plus	Feb. 06, 2013 Revolving Loan Agreement Asset Based Revolving Credit Facility	Feb. 06, 2013 Revolving Loan Agreement Credit Sub Facility	Feb. 06, 2013 Revolving Loan Agreement Letter Of Credit Sub Facility	Feb. 06, 2013 Revolving Loan Agreement Swing Line Loan Subfacility	Aug. 31, 2013 Revolving Loan Agreement Maximum	Aug. 31, 2013 Revolving Loan Agreement Maximum Base Rate Plus	Aug. 31, 2013 Revolving Loan Agreement Minimum	Aug. 31, 2013 Revolving Loan Agreement Minimum Base Rate Plus	Aug. 31, 2013 Barclays	Mar. 19, 2012 RTIE Installment	Aug. 31, 2013 RTIE
Debt [Line Items]
Asset based loans, due date						Feb. 06, 2018										Feb. 06, 2018
Debt instrument, margin plus rate																	2.00%	3.00%	1.50%	2.50%									2.00%		1.50%
Long Term Loans Payable							$ 87,943,000	[1]		$ 165,000,000
Secured revolving credit facility																						29,400,000		50,000,000	10,000,000	10,000,000	5,000,000
Outstanding loan balance, paid off and terminated				183,400,000
Write-off of deferred financing cost				10,300,000
Secured term loan principal amount									165,000,000
Repayment of term loans from the proceeds of the sale	28,780,000	44,919,000	739,000	296,362,000	1,587,000
Line of credit facility, outstanding balance																					27,800,000
Secured revolving credit facility, available for future borrowing																					11,800,000
Base rate													8.75%	9.75%
LIBOR							9.75%				10.75%	1.00%			1.25%								1.00%					3.00%		2.50%
Federal funds rate							0.50%														0.50%
Term loan, principal payment commencement date						May 31, 2013
Term loan, amortization percentage for principal payments, 2014 fiscal year						1.25%
Term loan, amortization percentage for principal payments, 2015 fiscal year						1.875%
Term loan, amortization percentage for principal payments, thereafter						2.50%
Term loan, annual capital expenditure							4,000,000
Mortgage agreement term				20 years
Mortgage loan interest charges				1.35%
Barclays Fixed Base Rate																																0.50%
Interest charge at margin over LIBOR				5.50%
Increased interest amount				0.50%
Asset purchase price																																	2,295,000
Cash payable																																	1,500,000
Promissory Note payable																																	795,000
Promissory Note payable installment																																	24
Promissory Note payable outstanding																																		$ 242,000

[1] On February 6, 2013, the Company refinanced its credit facilities and entered into (i) a credit agreement with various lenders and Guggenheim Corporate Funding, LLC (the "Term Loan Agreement") that provides for a $165.0 million term loan facility; and (ii) a credit agreement with various lenders and Wells Fargo Bank, National Association (the "Revolving Loan Agreement") that provides for a $50.0 million asset-based revolving borrowing base credit facility, with a $10.0 million subfacility (or the Sterling equivalent) for certain of our United Kingdom subsidiaries, a $10.0 million subfacility for letters of credit and a $5.0 million subfacility for swingline loans. On February 6, 2013, in connection with entering into the Term Loan Agreement and the Revolving Loan Agreement, the Amended and Restated Credit Agreement, dated as of June 27, 2011 and amended on January 6, 2012 and March 22, 2012, by and among the lenders from time to time party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent, lead arranger and sole book-runner, which had an outstanding balance of $183.4 million was paid off and terminated, which resulted in the write-off of approximately $10.3 million of deferred financing costs and note discounts. As of February 6, 2013, the Company borrowed $165.0 million under the Term Loan Agreement and approximately $29.4 million under the Revolving Loan Agreement. On July 5, 2013 and April 17, 2013, the Company sold Databus and Sensors (Note 5) and repaid approximately $28,780 and $44,919, respectively, of its term loans from the proceeds of these sales, in accordance with the Term Loan Agreement. In addition, the Company repaid a portion of its term loans using the net proceeds of $739 from the March 14, 2013, sale of certain land and a building in Palm Bay, Florida. As of August 31, 2013, $87.9 million was outstanding under the Term Loan Agreement, approximately $27.8 million was outstanding under the Revolving Loan Agreement, and $11.8 million was available for future borrowings under the Revolving Loan Agreement. On May 22, 2013, the Company entered into a First Amendment to the Revolving Loan Agreement that amends certain cash management and reporting requirements. Term Loan Agreement The term loans incurred pursuant to the Term Loan Agreement bear interest, at the Company's option, at the base rate plus 8.75% or an adjusted LIBOR rate (based on one, two or three-month interest periods) plus 9.75% for the first year and at the base rate plus 9.75% or an adjusted LIBOR rate (based on one, two or three-month interest periods) plus 10.75% thereafter, with a LIBOR floor of 1.25%. For purposes of the Term Loan Agreement, the "base rate" means the highest of Wells Fargo Bank, National Association's prime rate, the federal funds rate plus a margin equal to 0.50% and the adjusted LIBOR rate for a 3-month interest period plus a margin equal to 1.00%. Interest is due and payable in arrears monthly for term loans bearing interest at the base rate and at the end of an interest period (or at each three month interval in the case of term loans with interest periods greater than three months) in the case of term loans bearing interest at the adjusted LIBOR rate. Principal payments of the term loans are paid at the end of each of the Company's fiscal quarters, commencing for the fiscal quarter ending May 31, 2013, with the balance of any outstanding term loans due and payable in full on February 6, 2018. The quarterly principal payments will amortize at 1.25% for the fiscal quarters through the end of the Company's 2014 fiscal year, at 1.875% for the fiscal quarters through the end of the Company's 2015 fiscal year and at 2.50% for each of the fiscal quarters thereafter. Under certain circumstances, we are required to prepay the term loans upon the receipt of cash proceeds of certain asset sales, cash proceeds of certain extraordinary receipts and cash proceeds of certain debt or equity financings, and based on a calculation of annual excess cash flow. Mandatory prepayments resulting from assets sales or certain debt financings may require the payment of certain prepayment premiums. The term loans are secured by a second priority security interest in accounts receivable, inventory, machinery, equipment and certain other personal property relating to the foregoing, and any proceeds from any of the foregoing, subject to certain exceptions and liens, and a first priority security position on substantially all other real and personal property, in each case that are owned by the Company and the subsidiary guarantors. The Term Loan Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company and its subsidiaries' ability to, among other things, incur indebtedness, grant liens, dispose of assets and pay dividends or make distributions to stockholders, in each case subject to customary exceptions for a term loan of this size and type. Pursuant to the Term Loan Agreement, the Company is required to maintain compliance with an interest coverage ratio and a leverage ratio and to limit its annual capital expenditures to $4.0 million per fiscal year (subject to carry-over rights). Revolving Loan Agreement The revolving loans incurred pursuant to the Revolving Loan Agreement bear interest, at the Company's option, at the base rate plus a margin between 1.50% and 2.00% or an adjusted LIBOR rate (based on one, two, three or six-month interest periods) plus a margin between 2.50% and 3.00%, in each case with such margin being determined based on the Company's average daily excess availability under the revolving credit facility for the preceding fiscal quarter. For purposes of the Revolving Loan Agreement, the "base rate" means the highest of Wells Fargo Bank, National Association's prime rate, the federal funds rate plus a margin equal to 0.50% and the adjusted LIBOR rate for a 3-month interest period plus a margin equal to 1.00%. Interest is due and payable in arrears monthly for revolving loans bearing interest at the base rate and at the end of an interest period (or at each three month interval in the case of loans with interest periods greater than three months) in the case of revolving loans bearing interest at the adjusted LIBOR rate. Principal, together with all accrued and unpaid interest, is due and payable on February 6, 2018. The Company may prepay the revolving loans and terminate the commitments, in whole or in part, at any time without premium or penalty. Under certain circumstances, we are required to prepay the revolving loans upon the receipt of cash proceeds of certain asset sales. All borrowings under the Revolving Loan Agreement are limited by amounts available pursuant to a borrowing base calculation, which is based on percentages of eligible accounts receivable, inventory, machinery and equipment, in each case subject to reductions for applicable reserves. The Revolving Loan Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company and its subsidiaries' ability to, among other things, incur indebtedness, grant liens, dispose of assets and pay dividends or make distributions to stockholders, in each case subject to customary exceptions for a credit facility of this size and type. Pursuant to the Revolving Loan Agreement, the Company is also required to maintain compliance with a fixed charge coverage ratio and to limit its annual capital expenditures to $4.0 million per fiscal year (subject to carry-over rights) at such times that it fails to maintain excess availability under the revolving credit facility above a specified level.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Aug. 31, 2013

Useful Life

Fixed assets are recorded at cost less accumulated depreciation and are depreciated using the following methods over the following periods:

Straight line basis
Buildings and leasehold improvements	5-40 years
Computer equipment	3-5 years
Furniture and fixtures	5-8 years
Machinery and equipment	5-10 years
Vehicles	3 years

Intangible Assets Finite Life

Intangible assets that have a finite life are amortized using the following basis over the following periods:

Non-compete agreements	Straight line over 5 years
Computer software	Straight line over 3-5 years
Customer related intangibles	Straight line or the pattern in which the economic benefits are expected to be realized, over an estimated life of 4-15 years
Marketing related intangibles	The pattern in which the economic benefits are expected to be realized, over an estimated life of 3-10 years
Technology related intangibles	The pattern in which the economic benefits are expected to be realized, over an estimated life of 10 years

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Segment Information (Tables)

9 Months Ended

Aug. 31, 2013

Schedule of Segment Reporting Information, by Segment

Three months ended August 31, 2013 (in thousands)	SSC			SSIA			EMS			Corporate			Inter Segment Eliminations		Total
Sales to external customers	$	45,653		$	3,712		$	13,265		$	—		$	—	$	62,630
Total revenue		45,653			3,712			13,265						—		62,630
Operating income before expenses below:		8,071			696			440			—			—		9,207
Corporate—head office expenses		—			—			—			2,263			—		2,263
Acquisition related charges		30			—			10			(151	)		—		(111	)
Restructuring		67			(6	)		57			18			—		136
Depreciation and amortization		2,907			94			1,522			82			—		4,605
Goodwill impairment		—			—			—			—			—		—
Other expense (income)		75			(44	)		48			3,717			—		3,796
Income tax expense (benefit)		(3,304	)		46			—			114			—		(3,144	)
Income (loss) from continuing operations	$	8,296		$	606		$	(1,197	)	$	(6,043	)	$	—	$	1,662
Income from discontinued operations, net of tax		5,305			—			—			—			—		5,305
Net income (loss)	$	13,601		$	606		$	(1,197	)	$	(6,043	)	$	—	$	6,967
Segment assets—as at August 31, 2013	$	251,561		$	14,109		$	43,355		$	11,049		$	—	$	320,074
Goodwill included in assets—as at August 31, 2013	$	114,301		$	—		$	2,469		$	—		$	—	$	116,770
Purchase of fixed assets, three months ended August 31, 2013	$	876		$	10		$	68		$	4		$	—	$	958

Three months ended August 31, 2012 (in thousands)	SSC			SSIA			EMS			Corporate			Inter Segment Eliminations		Total
Sales to external customers	$	41,127		$	4,651		$	12,981		$	—		$	—	$	58,759
Total revenue		41,127			4,651			12,981			—			—		58,759
Operating income (loss) before expenses below:		7,193			701			(404	)		—			—		7,490
Corporate—head office expenses		—			—			—			1,800			—		1,800
Acquisition related charges		355			—			—			420			—		775
Restructuring		1,689			255			224			55			—		2,223
Depreciation and amortization		2,950			90			733			71			—		3,844
Goodwill impairment		20,387			—			108			—			—		20,495
Other expense (income)		13			(34	)		(405	)		4,921			—		4,495
Income tax expense (benefit)		(50	)		173			—			(702	)		—		(579	)
Income (loss) from continuing operations		(18,151	)		217			(1,064	)		(6,565	)		—		(25,563	)
Income from discontinued operations, net of tax		(2,103	)		—			—			—			—		(2,103	)
Net income (loss)	$	(20,254	)	$	217		$	(1,064	)	$	(6,565	)	$	—	$	(27,666	)
Segment assets—as at November 30, 2012	$	317,791		$	13,496		$	52,589		$	8,839		$	—	$	392,715
Goodwill included in assets—as at November 30, 2012	$	114,301		$	—		$	2,469		$	—		$	—	$	116,770
Purchase of fixed assets, three months ended August 31, 2012	$	127		$	—		$	—		$	—		$	—	$	127

Nine months ended August 31, 2013 (in thousands)	SSC			SSIA		EMS			Corporate			Inter Segment Eliminations		Total
Sales to external customers	$	128,112		$	12,689	$	44,362		$	—		$	—	$	185,163
Total revenue		128,112			12,689		44,362						—		185,163
Operating income before expenses below:		19,144			2,861		1,803			—			—		23,808
Corporate—head office expenses		—			—		—			6,610			—		6,610
Acquisition related charges		103			—		22			852			—		977
Restructuring		532			75		109			150			—		866
Depreciation and amortization		8,695			286		3,997			247			—		13,225
Goodwill impairment		—			—		—			—			—		—
Other expense (income)		59			7		152			23,298			—		23,516
Income tax expense (benefit)		(5,875	)		225		—			2,334			—		(3,316	)
Income (loss) from continuing operations	$	15,630		$	2,268	$	(2,477	)	$	(33,491	)	$	—	$	(18,070	)
Income (loss) from discontinued operations, net of tax		18,085			—		—			—			—		18,085
Net Income (loss)	$	33,715		$	2,268	$	(2,477	)	$	(33,491	)	$	—	$	15
Purchase of fixed assets nine months ended August 31, 2013	$	1,685		$	33	$	362		$	4		$	—	$	2,084

Nine months ended August 31, 2012 (in thousands)	SSC			SSIA		EMS			Corporate			Inter Segment Eliminations		Total
Sales to external customers	$	121,241		$	19,131	$	48,642		$	—		$	—	$	189,014
Total revenue		121,241			19,131		48,642						—		189,014
Operating income before expenses below:		22,957			4,016		244			—			—		27,217
Corporate—head office expenses		—			—		—			6,374			—		6,374
Acquisition related charges		809			—		—			2,635			—		3,444
Restructuring		2,066			312		11,205			163			—		13,746
Depreciation and amortization		9,072			271		2,955			158			—		12,456
Goodwill impairment		20,387			—		87,108			—			—		107,495
Other expense (income)		(64	)		35		(26	)		24,498			—		24,443
Income tax expense (benefit)		(1,296	)		598		—			(4,187	)		—		(4,885	)
Income (loss) from continuing operations	$	(8,017	)	$	2,800	$	(100,998	)	$	(29,641	)	$	—	$	(135,856	)
Income (loss) from discontinued operations, net of tax		(544	)		—		—			—			—		(544	)
Net income (loss)	$	(8,561	)	$	2,800	$	(100,998	)	$	(29,641	)	$	—	$	(136,400	)
Purchase of fixed assets, nine months ended August 31, 2012	$	697		$	1	$	101		$	—		$	—	$	799

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Short-Term Debt

9 Months Ended

Aug. 31, 2013

Short-Term Debt

9. SHORT-TERM DEBT

In connection with the acquisition of Spectrum, on June 1, 2011, API entered into a Credit Agreement with Morgan Stanley Senior Funding, Inc. as lead arranger, sole book runner and administrative agent, and with other lenders from time to time parties thereto (see Note 11a). In addition to a secured term loan, the Credit Agreement provided for a $15,000 secured revolving credit facility, with an option for the Company to request an increase in the revolving credit facility commitment of up to an aggregate of $5,000. This facility was undrawn as of November 30, 2012 and is no longer outstanding following the repayment of the term debt on February 6, 2013 (see Note 11a).

The Company also has a credit facility in place for its U.K. subsidiaries for approximately $387 (250 GBP), which renews in July 2014. This line of credit is tied to the prime rate in the United Kingdom and is secured by the subsidiaries’ assets. This facility was undrawn as of August 31, 2013 and November 30, 2012.

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Income Taxes - Additional Information (Detail)	3 Months Ended		9 Months Ended
	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013	Aug. 31, 2012
Income Taxes [Line Items]
Effective income tax rates	212.20%	2.20%	15.50%	3.50%
Federal statutory income tax rate			34.00%

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Discontinued Operations

9 Months Ended

Aug. 31, 2013

Discontinued Operations

5. DISCONTINUED OPERATIONS

a) Databus

On July 5, 2013, the Company entered into the APA with Parent and the Purchaser, pursuant to which the Company sold to the Purchaser certain assets comprising the Company’s Databus business in the U.S. and the U.K., including substantially all of the assets of the Company’s wholly owned subsidiary, National Hybrid, Inc., a New York corporation. The Purchaser paid the Company approximately $32,150 in cash for the assets, after certain adjustments based on closing inventory values as set forth in the APA and customary indemnification provisions.

The operating results of Databus are summarized as follows:

	Three months ended August 31,					Nine months ended August 31,
	2013			2012		2013			2012
Revenue, net	$	991		$	3,032	$	7,571		$	9,282
Cost of revenues		547			2,336		4,435			7,666
Gross Profit		444			696		3,136			1,616
General and administrative		56			72		484			956
Selling expenses		2			—		82			19
Research and development		—			—		—			41
Restructuring		—			—		—			24
Provision for income taxes		(375	)		—		344			—
Provision for income taxes — Gain on sale of Databus		5,293			—		5,293			—
Other expenses (income)		(10,002	)		—		(10,002	)		—
Income from discontinued operations, net of tax	$	5,470		$	624	$	6,935		$	576

Other income in the three and nine months ended August 31, 2013 primarily relates to the gain on sale of Databus, net of approximately $705 transaction expenses and deferred revenue of $2,544 attributable to a transition services agreement, whereby the Company will manufacture products in the United States for a period of up to 12 months and manufacture certain products in the United Kingdom for a period of up to 4 years. The Company has determined that the U.K. transition services agreement does not result in the Company having a significant continuing involvement on these discontinued operations following the assessment period.

The assets relating to Databus consisted of the following:

	August 31, 2013		November 30, 2012
Cash and cash equivalents	$	—	$	—
Inventories		—		4,032
Current assets of discontinued operations	$	—	$	4,032
Fixed assets, net	$	—	$	242
Goodwill		—		14,802
Long-lived assets of discontinued operations	$	—	$	15,044

b) Sensors

On April 17, 2013 the Company sold all of the issued and outstanding shares of capital stock or other equity interests of the Sensors companies for gross cash proceeds of approximately $51,350. Of this amount, $1,500 was placed into an escrow account for 12 months to secure any indemnification claims made by the purchaser against the sellers, API and Spectrum.

The operating results of Sensors are summarized as follows:

	Three months ended August 31,						Nine months ended August 31,
	2013			2012			2013			2012
Revenue, net	$	—		$	6,656		$	9,270		$	19,775
Cost of revenues		—			4,918			7,155			13,763
Gross Profit		—			1,738			2,115			6,012
General and administrative		—			193			366			587
Selling expenses		—			301			497			1,035
Research and development		—			166			180			521
Provision for income taxes		—			—			66			1,100
Provision for income taxes — Gain on sale of Sensors		—			—			1,670			—
Other expenses (income)		165			3,805			(11,814	)		3,889
Income (loss) from discontinued operations, net of tax	$	(165	)	$	(2,727	)	$	11,150		$	(1,120	)

Other income in the nine months ended August 31, 2013 primarily relates to the gain on sale of Sensors, net of approximately $2,131 transaction expenses and deferred revenue of $1,780 attributable to a transition services agreement, whereby the Company will manufacture products for a period of up to 9 months and provide certain administrative services to the Purchaser over a period of up to 18 months. The Company has determined that the transition services agreement does not result in the Company having a significant continuing involvement on these discontinued operations following the assessment period. Other expenses for the three and nine months ended August 31, 2012 primarily relates to the goodwill impairment charge recorded in the SSC segment attributable to Sensors.

The assets and liabilities relating to Sensors consisted of the following:

	August 31, 2013		November 30, 2012
Cash and cash equivalents	$	—	$	(15	)
Accounts Receivable		—		3,605
Inventories		—		6,067
Prepaid expenses and other current assets		—		146
Current assets of discontinued operations	$	—	$	9,803
Fixed assets, net	$	—	$	1,475
Intangible assets, net		—		2,156
Goodwill		—		24,430
Long-lived assets of discontinued operations	$	—	$	28,061
Accounts payable and accrued expenses	$	—	$	1,888
Current liabilities of discontinued operations	$	—	$	1,888

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Consolidated Statements of Cash Flows (Parenthetical) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Aug. 31, 2013	Aug. 31, 2012
Business acquisitions cash acquired		$ 3,045

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Operating Results (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013	Aug. 31, 2012
Databus
Discontinued Operations [Line Items]
Revenue, net	$ 991	$ 3,032	$ 7,571	$ 9,282
Cost of revenues	547	2,336	4,435	7,666
Gross Profit	444	696	3,136	1,616
General and administrative	56	72	484	956
Selling expenses	2		82	19
Research and development				41
Restructuring				24
Provision for income taxes	(375)		344
Provision for income taxes -Gain on sale of business	5,293		5,293
Other expenses (income)	(10,002)		(10,002)
Income (loss) from discontinued operations, net of tax	5,470	624	6,935	576
Sensors
Discontinued Operations [Line Items]
Revenue, net		6,656	9,270	19,775
Cost of revenues		4,918	7,155	13,763
Gross Profit		1,738	2,115	6,012
General and administrative		193	366	587
Selling expenses		301	497	1,035
Research and development		166	180	521
Provision for income taxes			66	1,100
Provision for income taxes -Gain on sale of business			1,670
Other expenses (income)	165	3,805	(11,814)	3,889
Income (loss) from discontinued operations, net of tax	$ (165)	$ (2,727)	$ 11,150	$ (1,120)

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Acquisitions - Additional Information (Detail) In Thousands, unless otherwise specified	3 Months Ended			9 Months Ended				1 Months Ended		9 Months Ended		1 Months Ended	9 Months Ended		12 Months Ended	1 Months Ended	9 Months Ended	12 Months Ended
	Aug. 31, 2013 USD ($)	Feb. 28, 2013 USD ($)	Aug. 31, 2012 USD ($)	Aug. 31, 2013 USD ($)	Aug. 31, 2012 USD ($)	Aug. 31, 2013 Minimum	Aug. 31, 2013 Maximum	Mar. 22, 2012 C-MAC (RF2M UK) USD ($)	Mar. 22, 2012 C-MAC (RF2M UK) GBP (£)	Nov. 30, 2012 C-MAC (RF2M UK) USD ($)	Aug. 31, 2013 C-MAC (RF2M UK) USD ($)	Mar. 19, 2012 RTIE USD ($)	Nov. 30, 2012 RTIE USD ($)	Aug. 31, 2013 RTIE USD ($)	Dec. 31, 2011 RTIE USD ($)	Nov. 30, 2012 Commercial Microwave Technology USD ($)	Aug. 31, 2013 Commercial Microwave Technology USD ($)	Nov. 30, 2012 Commercial Microwave Technology USD ($)	Nov. 30, 2011 Commercial Microwave Technology USD ($)
Business Acquisition [Line Items]
Total purchase price								$ 33,000	£ 20,950			$ 2,295				$ 8,200
Payment at closing								30,300	19,250			1,500
Loans Payable								2,700	1,700			795
Cost incurred in acquisition										1,586			769			79		79	102
Intangible assets, estimated lives						3 years	10 years
Revenue	62,630		58,759	185,163	189,014					25,336	23,193		2,088	1,728	5,300		4,613	7,288
Net income (loss)	6,967		(27,666)	15	(136,400)					(1,403)	797		568	292			133	447
Business acquisition purchase price amount held in escrow to secure indemnification obligations																700		700
Final purchase price payment		600
Other income		$ 100

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Fair Value Measurements (Tables)

9 Months Ended

Aug. 31, 2013

Summary of Assets and Liabilities

The following table summarizes assets and liabilities, which have been accounted for at fair value, along with the basis for the determination of fair value.

	(in thousands)
	August 31, 2013								November 30, 2012
	2013 Total			Unobservable Measurement Criteria (Level 3)			Impairment		2012 Total			Unobservable Measurement Criteria (Level 3)			Impairment
Fixed assets held for sale	$	150		$	150		$	—	$	900		$	900		$	1,781
Derivative liabilities – Redeemable Preferred Stock (Note 12)		(267	)		(267	)		—		(267	)		(267	)		—
Total	$	(117	)	$	(117	)	$	—	$	633		$	633		$	1,781

Summary of Assets at Fair Value

The following is a summary of activity for the nine months ended August 31, 2013 and year ended November 30, 2012 for assets and liabilities measured at fair value based on unobservable measure criteria:

	(in thousands)
	Fixed Assets Held for Sale			Derivative Liabilities – Preferred Stock
Balance, November 30, 2011	$	3,216		$	—
Less: Fixed assets sold		(535	)		—
Less: Impairment of fixed assets held for sale		(1,781	)		—
Add: Embedded features of convertible notes and preferred stock		—			(855	)
Less: Embedded features of convertible notes upon conversion to preferred stock		—			588
Balance, November 30, 2012	$	900		$	(267	)
Less: Fixed assets sold		(750	)		—
Balance, August 31, 2013	$	150		$	(267	)

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Assumptions in Black-Scholes Option Pricing Model (Detail)	9 Months Ended
	Aug. 31, 2013	Aug. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	81.90%	89.50%
Expected dividends	0.00%	0.00%
Expected term	6 years	6 years
Risk-free rate	0.85%	0.91%

XML

Short Term Debt - Additional Information (Detail) In Thousands, unless otherwise specified	9 Months Ended
	Aug. 31, 2013 USD ($)	Aug. 31, 2013 U K USD ($)	Aug. 31, 2013 U K GBP (£)
Debt [Line Items]
Secured revolving credit facility	$ 15,000
Increase in secured revolving credit facility	5,000
Credit facility for subsidiary		$ 387	£ 250

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Redeemable Preferred Stock

9 Months Ended

Aug. 31, 2013

Redeemable Preferred Stock

12. REDEEMABLE PREFERRED STOCK

On March 22, 2012, following the acquisition of C-MAC, the Company entered into a Note Purchase Agreement by and among the Company and the purchaser referred to therein (the “Note Purchase Agreement”). Pursuant to the Note Purchase Agreement, the Company sold an aggregate initial principal amount of $26,000 of convertible subordinated notes (the “Note”) to a single purchaser in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended. The Company received aggregate gross proceeds of $16,000 from the private placement, all of which will be used for working capital purposes. The purchaser of the Note was an affiliate of Senator Investment Group LP. At the time of the issuance of the Note, the purchaser of the Note was the beneficial owner of approximately 10.7% of our outstanding common stock, without giving effect to the transactions contemplated by the Note Purchase Agreement.

Upon the filing of the amendment to the Charter and the Certificate of Designation (as described and defined below), the Note converted into 26,000 shares of Series A Mandatorily Redeemable Preferred Stock of API (“Series A Preferred Stock”). The holder has the option to convert all or any portion of the amount of the liquidation preference (“Liquidation Preference”) (initially $1,000 per share and $1,027 per share as of August 31, 2013) of the Series A Preferred Stock plus the amount of unpaid and accrued dividends into common stock of API at $6.00 per share. The outstanding Series A Preferred Stock, as of August 31, 2013, is convertible into approximately 4,451,189 shares of common stock.

On March 22, 2012, certain stockholders of the Company took action by written consent (the “Written Consent”), as permitted pursuant to the Company’s bylaws and Amended and Restated Certificate of Incorporation, as amended (the “Charter”), to amend the Charter to (i) increase the number of shares of common stock, par value $0.001 per share, issuable by the Company to 250,000,000 shares from 100,000,000 shares; and (ii) authorize the issuance by the Company’s Board of Directors, from time to time, of up to 10,000,000 shares of preferred stock, par value $0.001 per share (the “Preferred Stock”), in one or more series. The Written Consent also approved the issuance of shares of API common stock in connection with the conversion of the Note and Series A Preferred Stock as contemplated by the Note Purchase Agreement for all purposes, including pursuant to the rules and regulations of The NASDAQ Stock Market.

On March 22, 2012, subject to the effectiveness of the amendments to the Charter described above, the Company’s Board of Directors also authorized the creation of a class of Preferred Stock designated as “Series A Mandatorily Redeemable Preferred Stock” pursuant to a Certificate of Designation (the “Certificate of Designation”).

The Company received aggregate gross proceeds of $16,000 from the issuance of the Note. The Company recorded a debt discount of $10,000 representing the difference between the principal amount of the Note and the proceeds received. The Note contained embedded features for a default interest rate and make whole provisions. Accordingly, the Company evaluated these embedded features and recorded an additional debt discount in the amount of $588. The Company also recorded $2,272 of additional discount resulting from the beneficial conversion feature of the Notes. The total debt discount was amortized over the contracted life of the Notes using the effective interest method. Up to the date of conversion this resulted in interest expense of $218.

On May 16, 2012, the Company filed the amendments to the Charter and the Certificate of Designation with the Secretary of State of the State of Delaware, at which time they became effective. Pursuant to the Certificate of Designation, the Company is authorized to issue 1,000,000 shares of Series A Preferred Stock. As described above, the Note converted into 26,000 shares of Series A Preferred Stock.

Upon conversion of the Note, the remaining unamortized discount of $12,644 was recorded as interest expense and the $26,000 face value of the Note was recorded as Series A Preferred Stock.

The Series A Preferred Stock will rank, with respect to dividend rights, redemption rights and rights upon liquidation, dissolution or wind-up (i) senior to the common stock and each other class of capital stock or series of Preferred Stock established by the Board of Directors, the terms of which expressly provide that such class or series ranks junior to the Series A Preferred Stock; (ii) junior to all capital stock or series of Preferred Stock established by the Board, the terms of which expressly provide that such class or series will rank senior to the Series A Preferred Stock; and (iii) on parity with all other classes of capital stock or series of Preferred Stock established by the Board of Directors, the terms of which expressly provide that such class or series will rank on parity with the Series A Preferred Stock.

The holders of Series A Preferred Stock will be entitled to vote on all matters voted on by holders of the common stock, voting together as a single class with the other shares entitled to vote. The holders of Series A Preferred Stock will have the right to cast the number of votes equal to the total number of votes which could be cast in such vote by a holder of the number of shares of common stock into which the shares of Series A Preferred Stock could be converted.

Commencing on March 22, 2013, holders of Series A Preferred Stock are entitled to receive cumulative dividends on the Liquidation Preference, computed on the basis of a 360-day year of twelve 30-day months at a rate equal to 6% per annum, compounded quarterly on the last day of each March, June, September and December. Accrued and unpaid dividends also will be paid on the date of any redemption or on any liquidation, dissolution or winding-up of the Company. Dividends will be paid in kind each quarter, by adding the amount of the accrued and unpaid dividend to the Liquidation Preference amount of each share of Series A Preferred Stock (the “Accreted Dividend Amount”). The Accreted Dividend Amount will constitute part of the Liquidation Preference of each share of Series A Preferred Stock as of each applicable quarterly dividend payment date and dividends will begin to accrue on each Accreted Dividend Amount beginning on the date on which such amount is added to the Liquidation Preference amount of each share of Series A Preferred Stock. However, all dividends due and payable on the date that the Liquidation Preference of a share of Series A Preferred Stock becomes due and payable will be payable in cash on such date. Upon an Early Redemption Event, dividends shall accrue while such event is continuing at the rate equal to the rate for the most recently issued actively traded ten year U.S. Treasury security, plus 10.0%. An “Early Redemption Event” means if (a) the Company (i) defaults in its obligation to pay the amounts in connection with a redemption of the Series A Preferred Stock and such default continues unremedied for three business days; (ii) breaches in material respect any of its representations or warranties contained in the Note Purchase Agreement, the Note or other document delivered in connection therewith; (iii) breaches certain covenants under the Note Purchase Agreement or other document delivered in connection therewith (subject to applicable grace periods); (iv) defaults (A) in any payment of any indebtedness in excess of $5,500 or (B) defaults in the observance of any condition or agreement in respect of any such indebtedness, and as a consequence of such default, such indebtedness becomes due and payable prior to its stated maturity; (v) commences certain bankruptcy or similar proceedings or has a bankruptcy or similar proceeding commenced against it that is not dismissed within the applicable grace period; or (b) a material provision of the Note Purchase Agreement, the Note or other agreement delivered in connection therewith ceases to be effective.

The Series A Preferred Stock will be convertible at any time at the discretion of the holders into that number of shares of common stock equal to the Liquidation Preference being converted (plus any accrued dividends that have not yet been accreted to the Liquidation Preference), divided by the initial conversion price of $6.00 per share, which initial conversion price is subject to adjustments as described below. In addition, upon a Change of Control (as defined in the Note Purchase Agreement), the sale of all or substantially all of the assets of the Company or the occurrence of certain dilution events (a “Mandatory Redemption Event”), then the holders of Series A Preferred Stock will have the right to receive upon conversion, in lieu of the common stock otherwise issuable, such shares of stock, securities or other property as would have been issued or payable upon such Mandatory Redemption Event had the shares of Series A Preferred Stock been converted into common stock immediately prior to such Mandatory Redemption Event.

On March 22, 2019, all of the outstanding shares of Series A Preferred Stock are to be redeemed by the Company for the amount of the Liquidation Preference, plus any and all amounts owing to the holder of such redeemed shares pursuant to the terms of the Note Purchase Agreement, the Note or any other document delivered in connection therewith. The Company must offer to redeem all of the shares of Series A Preferred Stock upon a Mandatory Redemption Event. A holder of Series A Mandatorily Redeemable Preferred Stock may accept or reject such offer of redemption.

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Goodwill and Intangible Assets

9 Months Ended

Aug. 31, 2013

Goodwill and Intangible Assets

8. GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of Goodwill were as follows:

	(in thousands)
Balance, November 30, 2011	$	253,170
Goodwill from business acquisition (note 4a)		11,364
Goodwill from business acquisition (note 4b)		2,177
Goodwill from business acquisition (note 4c)		(500	)
Goodwill from other business acquisition purchase price adjustments		1,091
Less: Goodwill impairment		(111,300	)
Less: Goodwill from Databus disposition (note 5) reclassified to discontinued operations		(14,802	)
Less: Goodwill from Sensors disposition (note 5) reclassified to discontinued operations		(24,430	)
Balance, November 30, 2012	$	116,770
Balance, August 31, 2013	$	116,770

Changes in the carrying amount of Intangible assets were as follows:

	(in thousands)
Balance, November 30, 2011	$	50,001
Intangible assets from business acquisition (note 4a)		7,848
Intangible assets from business acquisition (note 4c)		500
Computer software purchased		1,296
Less: Amortization		(9,555	)
Less: Intangible assets from Sensors disposition (note 5) reclassified to discontinued operations		(2,156	)
Balance, November 30, 2012	$	47,934
Computer software purchased		463
Less: Amortization		(7,366	)
Balance, August 31, 2013	$	41,031

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Restricted Stock Unit Activity (Detail) (USD $)	9 Months Ended	12 Months Ended
	Aug. 31, 2013	Nov. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning Balance	2,417,606	1,919,591
Issued		1,025,000
Exercised-Stock issued
Ending Balance	1,890,820	2,417,606
Beginning Balance	$ 5.06	$ 5.72
Exercisable	1,249,894
Ending Balance	$ 4.75	$ 5.06
Exercisable	$ 5.51
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning Balance	139,000	51,000
Issued	15,000	315,477
Exercised-Stock issued	(72,333)	(227,477)
Ending Balance	81,667	139,000
Beginning Balance	$ 4.43	$ 6.43
Exercisable
Issued	$ 2.56	$ 3.61
Exercised-Stock issued	$ 4.94	$ 3.56
Ending Balance	$ 3.72	$ 4.43
Exercisable

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Supplemental Cash Flow Information

9 Months Ended

Aug. 31, 2013

Supplemental Cash Flow Information

15. SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information:

	(in thousands) Nine months ended
	August 31, 2013		August 31, 2012
Supplemental Cash Flow Information
Cash paid for income taxes	$	1,348	$	74
Cash paid for interest	$	10,974	$	11,555

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Shareholders' Equity

9 Months Ended

Aug. 31, 2013

Shareholders' Equity

13. SHAREHOLDERS’ EQUITY

On June 27, 2011, API entered into a Common Stock Purchase Agreement, by and among API and the purchasers (as defined therein), pursuant to which API issued 4,791,958 shares of its common stock in a private placement for a purchase price of $6.50 per share. API received aggregate gross proceeds of approximately $31,148 from the private placement. In connection with the private placement, API also issued 300,000 shares of common stock to certain purchasers in consideration for a backstop commitment provided by such purchasers.

On March 18, 2011, the Company entered into a Common Stock Purchase Agreement, by and among the Company and the Purchasers (as defined therein), pursuant to which the Company issued 17,095,102 shares of its common stock in a private placement for a purchase price of $6.00 per share.

On March 28, 2011, the Company issued to an officer of the Company as part of his appointment as President and Chief Operating Officer, 300,000 shares of API’s common stock of which 140,019 of these shares were reacquired through the withholding of shares to pay employee tax obligations upon the issuance of the shares.

On January 31, 2011, the Company issued 1,216,667 shares of its common stock to the holders of the $3,650 of convertible notes for a price equal to $3.00 per share upon conversion of the convertible notes.

On January 21, 2011, API acquired all of the equity of SenDEC, which included SenDEC’s electronics manufacturing operations and approximately $30,000 of cash, in exchange for the issuance of 22,000,000 API common shares to Vintage.

On December 28, 2010, the Company filed a Certificate of Amendment of Amended and Restated Certificate of Incorporation, which effected a one-for-four reverse share split of the Company’s outstanding common shares. A one-for-four reverse share split was also effected for the exchangeable shares. All the references to number of shares, options and warrants presented in these financial statements have been adjusted to reflect the post split number of shares.

On January 20, 2010 the Company agreed to issue 800,000 shares of API common stock payable as part of the compensation to the KGC Companies or their designees. 250,000 shares were issued and delivered at closing, 250,000 shares were to be issued and delivered on the first anniversary of the closing and 300,000 shares were to be issued and delivered on the second anniversary of the closing. The Company has issued 126,250 shares into escrow from the 550,000 shares remaining to be delivered. The API Pennsylvania Subsidiaries have claimed a right of set off against the escrowed shares under the asset purchase agreement with respect to claimed amounts due to the Company under the indemnification provisions of the asset purchase agreement. The unissued shares have been accounted for as common shares subscribed but not issued. In addition, on January 20, 2010 and January 22, 2010, the Company issued warrants to purchase an aggregate of 892,862 shares of common stock with an exercise price of $5.60 per share, which expire on January 20, 2015 and January 22, 2015.

In connection with the Plan of Arrangement that occurred on November 6, 2006, the Company was obligated to issue 2,354,505 shares of either API common stock or exchangeable shares of API Nanotronics Sub, Inc. in exchange for the API Electronics Group Corp. common shares previously outstanding. As of August 31, 2013, API is obligated to issue a remaining approximately 580,553 shares of its common stock under the Plan of Arrangement either directly for API common shares or in exchange for API Nanotronics Sub, Inc. exchangeable shares not held by API or its affiliates. There are 539,284 exchangeable shares outstanding (excluding exchangeable shares held by the Company). Exchangeable shares are substantially equivalent to our common shares.

The Company issued 15,000 and 1,340,477 options and RSUs during nine months ended August 31, 2013 and the year ended November 30, 2012, respectively (Note 14). These option grants were valued using the Black-Scholes option-pricing model.

XML

Document and Entity Information	9 Months Ended
	Aug. 31, 2013	Oct. 01, 2013
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Aug. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Trading Symbol	ATNY
Entity Registrant Name	API TECHNOLOGIES CORP.
Entity Central Index Key	0001081078
Current Fiscal Year End Date	--11-30
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		54,846,135

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Share-Based Compensation

9 Months Ended

Aug. 31, 2013

Share-Based Compensation

14. SHARE-BASED COMPENSATION

On October 26, 2006, the Company adopted its 2006 Equity Incentive Plan (the “Equity Incentive Plan”), which was approved at the 2007 Annual Meeting of Stockholders of the Company. All the prior options issued by API were carried over to this plan under the provisions of the Plan of Arrangement. On October 22, 2009, the Company amended the Equity Incentive Plan to increase the number of shares of common stock under the plan from 1,250,000 to 2,125,000. On January 21, 2011, the Company amended the Equity Incentive Plan to further increase the number of shares of common stock under the plan from 2,125,000 to 5,875,000, and on June 3, 2011 amended the plan to permit the issuance of RSUs, which amendments were approved by the shareholders of the Company on November 4, 2011. Of the 5,875,000 shares authorized under the Equity Incentive Plan, 3,178,127 shares are available for issuance pursuant to options, RSUs, or stock as of August 31, 2013. Under the Company’s Equity Incentive Plan, incentive options and non-statutory options may have a term of up to ten years from the date of grant. The stock option exercise prices are equal to at least 100 percent of the fair market value of the underlying shares on the date the options are granted.

As of August 31, 2013, there was $665 of total unrecognized compensation related to non-vested stock options, which are not contingent upon attainment of certain milestones. For options with certain milestones necessary for vesting, the fair value is not calculated until the conditions become probable. The cost is expected to be recognized over the remaining periods of the options, which are expected to vest from 2013 to 2016.

During the nine months ended August 31, 2013 and August 31, 2012, $791 and $1,934, respectively, has been recognized as share-based compensation expense in cost of revenues, general and administrative expense, selling expense, and research and development expense.

The fair value of each option grant is estimated at the grant date using the Black-Scholes option-pricing model based on the assumptions detailed below:

	August 31, 2013			August 31, 2012
Expected volatility		81.9	%		89.5	%
Expected dividends		0	%		0	%
Expected term		6 years			6 years
Risk-free rate		0.85	%		0.91	%

The summary of the common stock options granted, cancelled, exchanged or exercised under the Plan:

	Options			Weighted Average Exercise Price
Stock Options outstanding—November 30, 2011		1,919,591		$	5.72
Less forfeited		(526,985	)	$	5.02
Exercised		—		$	—
Issued		1,025,000		$	3.51
Stock Options outstanding—November 30, 2012		2,417,606		$	5.06
Less forfeited		(526,786	)	$	5.38
Exercised		—		$	—
Issued		—		$	—
Stock Options outstanding—August 31, 2013		1,890,820		$	4.75
Stock Options exercisable—August 31, 2013		1,249,894		$	5.51

Restricted stock unit activity under the 2006 Equity Compensation Plan is presented below:

	Units			Weighted Average Grant Date Fair Value
RSUs outstanding—November 30, 2011		51,000		$	6.43
Issued		315,477		$	3.61
Exercised—Stock issued		(227,477	)	$	3.56
RSUs outstanding—November 30, 2012		139,000		$	4.43
Issued		15,000		$	2.56
Exercised—Stock issued		(72,333	)	$	4.94
RSUs outstanding—August 31, 2013		81,667		$	3.72
RSUs exercisable—August 31, 2013		—		$	—

	RSUs and Options Outstanding								RSUs and Options Exercisable
Range of Exercise Price	Number of Outstanding at August 31, 2013		Weighted Average Exercise Price		Weighted Average Remaining Life (Years)		Aggregate Intrinsic Value (in thousands)		Number Exercisable at August 31, 2013		Weighted Average Exercise Price		Aggregate Intrinsic Value (in thousands)
$0.00 – $ 3.55		893,333	$	3.19		8.49	$	224		273,317	$	3.51	$	—
$3.56 – $ 4.99		27,084	$	3.56		7.14	$	—		10,834	$	3.56	$	—
$5.00 – $ 6.99		1,034,984	$	6.01		7.01	$	—		948,657	$	6.00	$	—
$7.00 – $ 20.00		17, 086	$	11.85		4.23	$	—		17,086	$	11.85	$	—
		1,972,487				7.66	$	224		1,249,894			$	—

The intrinsic value is calculated as the excess of the market value as of August 31, 2013 over the exercise price of the shares. The market value as of August 31, 2013 was $2.74 as reported by the NASDAQ Stock Market.

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Long-Term Debt Obligations (Detail) (USD $) In Thousands, unless otherwise specified	Aug. 31, 2013		Nov. 30, 2012		Aug. 31, 2013 Long Term Debt Current	Nov. 30, 2012 Long Term Debt Current	Aug. 31, 2013 RTIE		Nov. 30, 2012 RTIE		Nov. 30, 2012 C-MAC (RF2M UK)		Aug. 31, 2013 Term Loan A		Feb. 06, 2013 Term Loan A	Nov. 30, 2012 Term Loan B
Debt [Line Items]
Term loans													$ 87,943	[1]	$ 165,000	$ 183,375	[1]
Asset based loans, due February 6, 2018, base rate plus a margin between 1.50% and 2.00%, or LIBOR plus a margin between 2.50% and 3.00%	27,834	[1]
Mortgage loan, due 2027, 1.35% above Barclays fixed bank rate	1,281	[2]	1,424	[2]
Lockman loan-C-MAC acquisition											2,724	[3]
Note payable - RTIE acquisition							242	[4]	540	[4]
Capital leases payable	257		338
Total Loans	117,557		188,401
Less: Current portion of long-term debt	(6,599)		(2,328)		(6,599)	(2,328)
Discount and deferred financing charges on term loans	(7,394)		(6,570)
Long-term portion	$ 103,564		$ 179,503

[1] On February 6, 2013, the Company refinanced its credit facilities and entered into (i) a credit agreement with various lenders and Guggenheim Corporate Funding, LLC (the "Term Loan Agreement") that provides for a $165.0 million term loan facility; and (ii) a credit agreement with various lenders and Wells Fargo Bank, National Association (the "Revolving Loan Agreement") that provides for a $50.0 million asset-based revolving borrowing base credit facility, with a $10.0 million subfacility (or the Sterling equivalent) for certain of our United Kingdom subsidiaries, a $10.0 million subfacility for letters of credit and a $5.0 million subfacility for swingline loans. On February 6, 2013, in connection with entering into the Term Loan Agreement and the Revolving Loan Agreement, the Amended and Restated Credit Agreement, dated as of June 27, 2011 and amended on January 6, 2012 and March 22, 2012, by and among the lenders from time to time party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent, lead arranger and sole book-runner, which had an outstanding balance of $183.4 million was paid off and terminated, which resulted in the write-off of approximately $10.3 million of deferred financing costs and note discounts. As of February 6, 2013, the Company borrowed $165.0 million under the Term Loan Agreement and approximately $29.4 million under the Revolving Loan Agreement. On July 5, 2013 and April 17, 2013, the Company sold Databus and Sensors (Note 5) and repaid approximately $28,780 and $44,919, respectively, of its term loans from the proceeds of these sales, in accordance with the Term Loan Agreement. In addition, the Company repaid a portion of its term loans using the net proceeds of $739 from the March 14, 2013, sale of certain land and a building in Palm Bay, Florida. As of August 31, 2013, $87.9 million was outstanding under the Term Loan Agreement, approximately $27.8 million was outstanding under the Revolving Loan Agreement, and $11.8 million was available for future borrowings under the Revolving Loan Agreement. On May 22, 2013, the Company entered into a First Amendment to the Revolving Loan Agreement that amends certain cash management and reporting requirements. Term Loan Agreement The term loans incurred pursuant to the Term Loan Agreement bear interest, at the Company's option, at the base rate plus 8.75% or an adjusted LIBOR rate (based on one, two or three-month interest periods) plus 9.75% for the first year and at the base rate plus 9.75% or an adjusted LIBOR rate (based on one, two or three-month interest periods) plus 10.75% thereafter, with a LIBOR floor of 1.25%. For purposes of the Term Loan Agreement, the "base rate" means the highest of Wells Fargo Bank, National Association's prime rate, the federal funds rate plus a margin equal to 0.50% and the adjusted LIBOR rate for a 3-month interest period plus a margin equal to 1.00%. Interest is due and payable in arrears monthly for term loans bearing interest at the base rate and at the end of an interest period (or at each three month interval in the case of term loans with interest periods greater than three months) in the case of term loans bearing interest at the adjusted LIBOR rate. Principal payments of the term loans are paid at the end of each of the Company's fiscal quarters, commencing for the fiscal quarter ending May 31, 2013, with the balance of any outstanding term loans due and payable in full on February 6, 2018. The quarterly principal payments will amortize at 1.25% for the fiscal quarters through the end of the Company's 2014 fiscal year, at 1.875% for the fiscal quarters through the end of the Company's 2015 fiscal year and at 2.50% for each of the fiscal quarters thereafter. Under certain circumstances, we are required to prepay the term loans upon the receipt of cash proceeds of certain asset sales, cash proceeds of certain extraordinary receipts and cash proceeds of certain debt or equity financings, and based on a calculation of annual excess cash flow. Mandatory prepayments resulting from assets sales or certain debt financings may require the payment of certain prepayment premiums. The term loans are secured by a second priority security interest in accounts receivable, inventory, machinery, equipment and certain other personal property relating to the foregoing, and any proceeds from any of the foregoing, subject to certain exceptions and liens, and a first priority security position on substantially all other real and personal property, in each case that are owned by the Company and the subsidiary guarantors. The Term Loan Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company and its subsidiaries' ability to, among other things, incur indebtedness, grant liens, dispose of assets and pay dividends or make distributions to stockholders, in each case subject to customary exceptions for a term loan of this size and type. Pursuant to the Term Loan Agreement, the Company is required to maintain compliance with an interest coverage ratio and a leverage ratio and to limit its annual capital expenditures to $4.0 million per fiscal year (subject to carry-over rights). Revolving Loan Agreement The revolving loans incurred pursuant to the Revolving Loan Agreement bear interest, at the Company's option, at the base rate plus a margin between 1.50% and 2.00% or an adjusted LIBOR rate (based on one, two, three or six-month interest periods) plus a margin between 2.50% and 3.00%, in each case with such margin being determined based on the Company's average daily excess availability under the revolving credit facility for the preceding fiscal quarter. For purposes of the Revolving Loan Agreement, the "base rate" means the highest of Wells Fargo Bank, National Association's prime rate, the federal funds rate plus a margin equal to 0.50% and the adjusted LIBOR rate for a 3-month interest period plus a margin equal to 1.00%. Interest is due and payable in arrears monthly for revolving loans bearing interest at the base rate and at the end of an interest period (or at each three month interval in the case of loans with interest periods greater than three months) in the case of revolving loans bearing interest at the adjusted LIBOR rate. Principal, together with all accrued and unpaid interest, is due and payable on February 6, 2018. The Company may prepay the revolving loans and terminate the commitments, in whole or in part, at any time without premium or penalty. Under certain circumstances, we are required to prepay the revolving loans upon the receipt of cash proceeds of certain asset sales. All borrowings under the Revolving Loan Agreement are limited by amounts available pursuant to a borrowing base calculation, which is based on percentages of eligible accounts receivable, inventory, machinery and equipment, in each case subject to reductions for applicable reserves. The Revolving Loan Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company and its subsidiaries' ability to, among other things, incur indebtedness, grant liens, dispose of assets and pay dividends or make distributions to stockholders, in each case subject to customary exceptions for a credit facility of this size and type. Pursuant to the Revolving Loan Agreement, the Company is also required to maintain compliance with a fixed charge coverage ratio and to limit its annual capital expenditures to $4.0 million per fiscal year (subject to carry-over rights) at such times that it fails to maintain excess availability under the revolving credit facility above a specified level.

[2] A subsidiary of the Company in the United Kingdom entered into a 20 year term mortgage agreement in 2007, under which interest is charged at a margin of 1.35% over Barclays Fixed Base Rate of 0.5% at August 31, 2013. The mortgage is secured by the subsidiary's assets.

[3] A subsidiary of the Company in the United Kingdom entered into a 5 year term loan facility with Lockman Electronic Holdings Limited on December 16, 2011 ("Lockman Loan"), under which interest is charged at a margin of 5.5% over LIBOR. The margin was to increase by 0.5% each year on December 1 for the term of the agreement. The term loan was secured against a debenture over the subsidiary's assets. This loan was repaid on February 6, 2013.

[4] On March 19, 2012 the Company completed the acquisition of substantially all of the assets of RTIE (Note 4b) for a total purchase price of $2,295, with $1,500 payable in cash at closing and the remainder pursuant to a $795 Promissory Note payable in 24 equal monthly installments. The aggregate principal amount of the Promissory Note payable outstanding was $242 as of August 31, 2013.

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Accounts Payable and Accrued Expenses (Detail) (USD $) In Thousands, unless otherwise specified	Aug. 31, 2013	Nov. 30, 2012
Accounts Payable [Line Items]
Trade accounts payable	$ 26,741	$ 24,575
Accrued expenses	6,905	10,045
Wage and vacation accrual	3,042	4,978
Total	$ 36,688	$ 39,598