Summary of Significant Accounting Policies (Tables)

3 Months Ended

Oct. 31, 2013

Components of Inventories

The components of inventories are as follows:

	October 31, 2013		July 31, 2013
	(in thousands)
Material and purchased components	$	16,265	$	15,379
Work-in-process		1,851		2,887
Finished testers, including inventory consigned to customers		11,122		10,873
Total inventories	$	29,238	$	29,139

Intangible Assets

The Company’s intangible assets as of October 31, 2013 and July 31, 2013, all of which relate to the Credence merger, consisted of the following:

			As of October 31, 2013
Description	Estimated Useful Life		Gross Carrying Amount		Accumulated Amortization		Net Amount
	(in years)		(in thousands)		(in thousands)		(in thousands)
Developed technology—ASL		6.0		16,000		15,803		197
Developed technology—Diamond		9.0		9,400		8,965		435
Maintenance agreements		7.0		1,900		1,154		746
Total intangible assets			$	27,300	$	25,922	$	1,378

			As of July 31, 2013
Description	Estimated Useful Life		Gross Carrying Amount		Accumulated Amortization		Net Amount
	(in years)		(in thousands)		(in thousands)		(in thousands)
Developed technology—ASL		6.0		16,000		15,737		263
Developed technology—Diamond		9.0		9,400		8,906		494
Maintenance agreements		7.0		1,900		1,086		814
Total intangible assets			$	27,300	$	25,729	$	1,571

Expected Amortization of Intangible Assets

The Company expects amortization for these intangible assets to be:

Year ending July 31,	Amount (in thousands)
Remainder of 2014	$	576
2015		396
2016		321
2017		85
Thereafter		—
Total	$	1,378

Change in Product Warranty Liability

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

	Three Months Ended October 31,
Product Warranty Activity	2013			2012
	(in thousands)
Balance at beginning of period	$	1,217		$	1,672
Warranty expenditures for current period		(705	)		(966	)
Changes in liability related to pre-existing warranties		2			—
Provision for warranty costs in the period		781			1,011
Balance at end of period	$	1,295		$	1,717

Net (Loss) Income Per Share

Reconciliation between the Company’s basic and diluted net (loss) income per share for the three month periods ended October 31, 2013 and October 31, 2012 were as follows:

	Three Months Ended October 31,
	2013			2012
	(in thousands, except per share data)
Net (loss) income	$	(6,900	)	$	549
Basic (loss) earnings per share
Weighted average shares outstanding- basic		47,900			48,303
Basic (loss) earnings per share	$	(0.14	)	$	0.01
Diluted (loss) earnings per share
Weighted average shares outstanding- basic		47,900			48,303
Plus: impact of stock options and unvested restricted stock units		—			408
Weighted average common and common equivalent shares outstanding- diluted		47,900			48,711
Diluted (loss) earnings per share	$	(0.14	)	$	0.01

Summary of Property and Equipment

The Company’s property and equipment as of October 31, 2013 and July 31, 2013 are summarized as follows:

	October 31, 2013			July 31, 2013			Estimated Useful Lives
	(in thousands)						(in years)
Equipment spares	$	58,110		$	58,461		5 or 7
Machinery, equipment and internally manufactured systems		36,068			34,587		3-7
Office furniture and equipment		2,063			2,014		3-7
Purchased software		488			488		3
Land		2,524			2,524		—
Leasehold improvements		6,952			6,983		Term of lease or useful life, not to exceed 10 years
Property and equipment, gross		106,205			105,057
Less: accumulated depreciation and amortization		(89,227	)		(88,410	)
Property and equipment, net	$	16,978		$	16,647