Business Combination

3 Months Ended

Oct. 01, 2011

Business Combination [Abstract]

BUSINESS COMBINATION

NOTE 4. BUSINESS COMBINATION

Acquisition of Mintera

On July 21, 2010, we acquired Mintera, a privately-held company providing high-performance optical transport sub-systems solutions. For accounting purposes, the total fair value of consideration given in connection with the acquisition of Mintera was $25.6 million, which we allocated to the assets acquired and liabilities assumed as of the acquisition date based on their estimated fair values. This acquisition is more fully discussed in Note 3, Business Combinations, to our consolidated financial statements included in our 2011 Form 10-K.

Under the terms of this agreement, we agreed to pay certain revenue-based consideration, whereby former security holders of Mintera are entitled to receive up to $20.0 million, determined based on a set of sliding scale formulas, to the extent revenue from Mintera products was more than $29.0 million in the 12 months following the acquisition and/or is more than $40.0 million in the 18 months following the acquisition. The earnout consideration is payable in cash or, at our option, newly issued shares of our common stock, or a combination of cash and stock. During the three months ended October 1, 2011, we reviewed the fair value of these obligations and determined that their fair value decreased by $3.8 million based on revised estimates of revenues from Mintera products. This $3.8 million decrease in fair value was recorded as a decrease in restructuring, acquisition and related expenses in the condensed consolidated statement of operations for the three months ended October 1, 2011. During the three months ended October 2, 2010, we recorded $0.2 million in interest expense related to these obligations.

Based on sales in the 12 month period following the acquisition, earnout consideration of $3.3 million became payable for the 12 month obligation during the three months ended October 1, 2011. This amount has been recorded in accrued expenses and other liabilities in our condensed consolidated balance sheet at October 1, 2011. On October 21, 2011, we paid $0.5 million in cash and issued 0.8 million shares of our common stock valued at $2.8 million to settle the 12 month obligation. See Note 15, Subsequent Events.

At October 1, 2011, the estimated fair value of the 18 month obligation of $9.0 million was determined using management estimates of the total amounts expected to be paid based on estimated future operating results, discounted to present value using our incremental borrowing cost. This amount has been recorded, along with accrued interest, in accrued expenses and other liabilities in our condensed consolidated balance sheet at October 1, 2011. The 18 month obligation is payable in April 2012.