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RELATED-PARTY TRANSACTIONS
6 Months Ended
Mar. 29, 2019
Related Party Transactions [Abstract]  
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS
Investment in Privately-Held Companies
The Company has a 40% ownership interest in dpiX Holding LLC (“dpiX Holding”), a four-member consortium that has a 100% ownership interest in dpiX LLC (“dpiX”), a supplier of amorphous silicon based thin film transistor arrays for digital flat panel image detectors. In accordance with the dpiX Holding operating agreement, net profits or losses are allocated to the members in accordance with their ownership interests.
The equity investment in dpiX Holding is accounted for under the equity method of accounting. When the Company recognizes its share of net profits or losses of dpiX Holding, profits or losses in inventory purchased from dpiX are eliminated. During the three months ended March 29, 2019 and March 30, 2018, the Company recorded income on the equity investment in dpiX Holding of zero and $3.8 million, respectively. During the six months ended March 29, 2019 and March 30, 2018, the Company recorded (loss) and income on the equity investment in dpiX Holding of $(0.7) million and $3.1 million, respectively. Income and loss on the equity investment in dpiX Holding is included in other expense, net in the condensed consolidated statements of earnings. The carrying value of the equity investment in dpiX Holding was $48.2 million and $48.9 million at March 29, 2019 and September 28, 2018, respectively.
During the three months ended March 29, 2019 and March 30, 2018, the Company purchased glass transistor arrays from dpiX totaling $1.4 million and $5.4 million, respectively. During the six months ended March 29, 2019 and March 30, 2018, the Company purchased glass transistor arrays from dpiX totaling $4.2 million and $12.0 million, respectively. These purchases of glass transistor arrays are included as a component of inventories on the condensed consolidated balance sheets or cost of revenues in the condensed consolidated statements of earnings.
As of March 29, 2019, and September 28, 2018, the Company had accounts payable to dpiX totaling $3.4 million and $3.7 million, respectively.
In October 2013, the Company entered into an amended agreement with dpiX and other parties that, among other things, provides the Company with the right to 50% of dpiX’s total manufacturing capacity produced after January 1, 2014. The amended agreement requires the Company to pay for 50% of the fixed costs (as defined in the amended agreement), as determined at the beginning of each calendar year. In January 2019, the fixed cost commitment was determined and approved by the dpiX board of directors to be $14.7 million for calendar year 2019. As of March 29, 2019, the Company had $11.0 million fixed cost commitments related to this agreement remaining for calendar year 2019. The amended agreement will continue unless the ownership structure of dpiX changes as provided in the amended agreement.
The Company has determined that dpiX is a variable interest entity because at-risk equity holders, as a group, lack the characteristics of a controlling financial interest. Majority votes are required to direct the manufacturing activities, legal operations and other activities that most significantly affect dpiX’s economic performance. The Company does not have majority voting rights and no power to direct the activities of dpiX and therefore is not the primary beneficiary of dpiX. The Company’s exposure to loss as a result of its involvement with dpiX is limited to the carrying value of the Company’s investment of $48.2 million and fixed cost commitments.