Discontinued Operations and Assets Held for Sale

12 Months Ended

Dec. 31, 2021

Discontinued Operations and Assets Held for Sale [Abstract]

Discontinued Operations and Assets Held for Sale

2. Discontinued Operations

On September 1, 2020, the Company completed the sale of its Foundry Services Group business and Fab 4. As a result of the sale of the Foundry Services Group business and Fab 4, the Company recorded a gain of $287,117 thousand and all operations from the Foundry Services Group business and Fab 4 were classified as discontinued operations for all periods presented. Following the consummation of the sale, and for up to three years, the Company is expected to provide the Transitional Fab 3 Foundry Services at an agreed upon cost plus mark-up. For the periods prior to the Closing Date, revenue from providing the Transitional Fab 3 Foundry Services to the Foundry Services Group is recorded at cost on both of the continuing and discontinued businesses for comparative purposes. Cash inflows to the Company from the Buyer related to providing the Transitional Fab 3 Foundry Services were $46,611 thousand and $7,643 thousand for the years ended December 31, 2021 and 2020, respectively.

The following table summarizes the results from discontinued operations, net of tax, for the years ended December 31, 2020 and 2019.

	Year Ended December 31,
	2020			2019
	(In thousands of U.S. dollars)
Revenues:
Net sales—Foundry Services Group	$	254,732		$	307,348
Net sales—transitional Fab 3 foundry services		(25,887	)		(35,824	)
Total revenues		228,845			271,524
Cost of sales:
Cost of sales—Foundry Services Group		182,872			243,134
Cost of sales—transitional Fab 3 foundry services		(25,887	)		(35,824	)
Total cost of sales		156,985			207,310
Gross profit		71,860			64,214
Operating expenses:
Selling, general and administrative expenses		14,797			24,042
Research and development expenses		19,484			30,332
Restructuring and other charges		15,873			9,142
Total operating expenses		50,154			63,516
Operating income from discontinued operations		21,706			698
Foreign currency gain, net		1,277			503
Others, net		72			(67	)
Income from discontinued operations before income tax expense		23,055			1,134
Income tax expense		11,452			2,547
Gain on sale of discontinued operations		287,117			—
Transaction costs		(10,814	)		—
Income (loss) from discontinued operations, net of tax		287,906			(1,413	)

For the years ended December 31, 2020 and 2019, the Company recorded $15,873 thousand and $6,991 thousand, respectively, in professional fees and transaction related expenses incurred in connection with the sale of the Foundry Services Group business and Fab 4, and recorded such costs as restructuring and other charges. For the year ended December 31, 2019, the Company also recorded in restructuring and other charges a $2,151 thousand restructuring-related charge to its fab employees.

The following table provides supplemental cash flows information related to discontinued operations:

	Year Ended December 31,
	2020			2019
	(In thousands of U.S. dollars)
Significant non-cash operating activities:
Depreciation and amortization	$	5,365		$	22,411
Provision for severance benefits		8,209			10,879
Stock-based compensation		388			899
Investing activities:
Capital expenditures	$	(5,838	)	$	(11,653	)