Discontinued Operations

9 Months Ended

Jul. 01, 2011

Discontinued Operations

Discontinued Operations

18. DISCONTINUED OPERATIONS

In September 2008, the Company approved a plan to sell Research Instruments, which developed, manufactured and serviced highly customized scientific instrument components and systems for fundamental and applied physics research primarily for national research laboratories worldwide. Research Instruments was part of the January 2007 ACCEL acquisition and was previously included in the "Other" category in the Company's Condensed Consolidated Financial Statements. The Company decided to sell Research Instruments in order to focus exclusively on the development of VPT. In the second quarter of fiscal year 2009, the Company completed the sale of Research Instruments for total cash proceeds of $0.4 million. In connection with the sale of Research Instruments, the Company entered into a non-binding supply agreement with the buyer to supply certain inventory parts for VPT. The supply agreement can be terminated by either party upon six months' notice after December 31, 2011. The inventory purchases under this supply agreement are not expected to have a significant impact on the cash flows of Research Instruments.

The Company classified the operating results of Research Instruments as a discontinued operation in the Condensed Consolidated Statements of Earnings for all periods presented. Because the amounts related to Research Instruments are not material in the Condensed Consolidated Balance Sheet and the Condensed, Consolidated Statements of Cash Flows for all periods presented, the Company has not segregated them from continuing operations.

The Company did not record any profit or loss and did not recognize any revenues in discontinued operations for the three and nine months ended July 1, 2011. For the three months ended July 2, 2010, the Company accrued an additional loss of $6.5 million related to the estimated costs to complete and settle two customer contracts, which were related to the sale of Research Instruments. These contracts had been accounted for under the percentage-of-completion method, under which revenues and costs of sales are adjusted to reflect changes in estimated costs to complete the contracts. Including the additional loss recognized for the two contracts, total losses of Research Instruments for the three and nine months ended July 2, 2010 were both $6.5 million, less applicable income tax of zero. Total revenues of Research Instruments, reported in discontinued operations, for the three and nine months ended July 2, 2010, were $(3.8) million and $(3.6) million, respectively.

As of July 1, 2011, the Company retained one Research Instruments customer contract. If the estimated loss to complete or settle the remaining contract increases, the variance will be recognized in the periods these variances arise.