Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jan. 31, 2013

Change in Product Warranty Liability

The following table shows the change in the product warranty liability, as required by Topic 460, Guarantees, to the FASB ASC for the six months ended January 31, 2013 and 2012:

	Six Months Ended January 31,
Product Warranty Activity	2013			2012
	(in thousands)
Balance at beginning of period	$	1,672		$	2,281
Warranty expenditures for current period		(2,025	)		(1,783	)
Changes in liability related to pre-existing warranties		(33	)		20
Provision for warranty costs in the period		1,644			887
Balance at end of period	$	1,258		$	1,405

Reconciliation Between Basic and Diluted Net Income (Loss) Per Share

Reconciliation between basic and diluted earnings per share is as follows:

	Three Months Ended January 31,						Six Months Ended January 31,
	2013			2012			2013			2012
	(in thousands, except per share data)
Net loss	$	(3,276	)	$	(9,688	)	$	(2,727	)	$	(14,596	)
Basic EPS:
Weighted average shares outstanding		47,425			48,961			47,864			49,225
Basic EPS	$	(0.07	)	$	(0.20	)	$	(0.06	)	$	(0.30	)
Diluted EPS:
Weighted average shares outstanding		47,425			48,961			47,864			49,225
Plus: impact of stock options and unvested restricted stock units		—			—			—			—
Weighted average common and common equivalents shares outstanding		47,425			48,961			47,864			49,225
Diluted EPS	$	(0.07	)	$	(0.20	)	$	(0.06	)	$	(0.30	)

Components of Inventories

The components of inventories are as follows:

	January 31, 2013		July 31, 2012
	(in thousands)
Purchased components and parts	$	15,015	$	13,811
Units-in-progress		3,302		3,045
Finished units		11,033		11,994
Total inventories	$	29,350	$	28,850

Summary of Property and Equipment

Property and equipment are summarized as follows:

	January 31, 2013			July 31, 2012			Estimated Useful Lives
	(in thousands)						(in years)
Equipment spares	$	51,036		$	57,841		5 or 7
Machinery, equipment and internally manufactured systems		39,078			38,067		3-7
Office furniture and equipment		3,664			3,885		3-7
Purchased software		2,867			2,870		3
Land		2,524			2,524		—
Leasehold improvements		6,235			6,187		Term of lease or useful life, not to exceed 10 years
Property and equipment, gross		105,404			111,374
Less: accumulated depreciation and amortization		(87,660	)		(93,145	)
Property and equipment, net	$	17,744		$	18,229

Goodwill

The Company’s goodwill consists of the following:

Goodwill	January 31, 2013		July 31, 2012
	(in thousands)
Merger with Credence Systems Corporation (August 29, 2008)	$	28,662	$	28,662
Acquisition with Step Tech Inc. (June 10, 2003)		14,368		14,368
Total goodwill	$	43,030	$	43,030

Intangible Assets

Intangible assets, all of which relate to the Credence merger, consist of the following:

			As of January 31, 2013
Description	Estimated Useful  Life		Gross  Carrying Amount		Accumulated Amortization		Net Amount
	(in years)		(in thousands)		(in thousands)		(in thousands)
Trade names		2.0	$	300	$	300	$	—
Distributor relationships		2.0		2,800		2,800		—
Key customer relationships		3.0		8,500		8,500		—
Developed technology—ASL		6.0		16,000		15,352		648
Developed technology—Diamond		9.0		9,400		8,636		764
Maintenance agreements		7.0		1,900		950		950
Total intangible assets			$	38,900	$	36,538	$	2,362

			As of July 31, 2012
Description	Estimated Useful  Life		Gross  Carrying Amount		Accumulated Amortization		Net Amount
	(in years)		(in thousands)		(in thousands)		(in thousands)
Trade names		2.0	$	300	$	300	$	—
Distributor relationships		2.0		2,800		2,800		—
Key customer relationships		3.0		8,500		8,500		—
Developed technology—ASL		6.0		16,000		14,965		1,035
Developed technology—Diamond		9.0		9,400		8,367		1,033
Maintenance agreements		7.0		1,900		815		1,085
Total intangible assets			$	38,900	$	35,747	$	3,153

Expected Amortization of Intangible Assets

The Company expects amortization for these intangible assets to be:

For the fiscal year ending July 31,	Amount
	(in thousands)
Remainder of 2013	$	791
2014		769
2015		396
2016		321
2017		85
Total	$	2,362