Discontinued Operations

3 Months Ended

Jun. 30, 2023

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Note 5 — Discontinued Operations

On October 1, 2022, the Company entered into an Asset Purchase Agreement to sell the Link-16 TDL Business in its government systems segment to L3Harris in exchange for approximately $1.96 billion in cash, subject to adjustments. In accordance with ASC 205-20, the Company determined that the Link-16 TDL Business met held-for sale and discontinued operations accounting criteria at the end of the second quarter of fiscal year 2023. On January 3, 2023, the Company completed the Link-16 TDL Sale. Therefore, for comparability purposes, the Company recast the previously disclosed first quarter of fiscal year 2023 information and classified the results of the Link-16 TDL Business as discontinued operations in its condensed consolidated statements of operations for the three months ended June 30, 2022.

In connection with the closing of the Link-16 TDL Sale on January 3, 2023, the Company and L3Harris entered into certain ancillary commercial agreements, including certain license agreements for the cross-licensing by each party of certain intellectual property rights relating to the Link-16 TDL Business and the Company’s retained businesses, a supply agreement with respect to the supply of certain Link-16 and related products following the closing, and certain services agreements for the provision of engineering and support services for the transition of the Link-16 TDL Business following the closing, in each case subject to the terms and conditions set forth therein. The impact of these agreements on the Company's condensed consolidated financial statements was not significant.

The operating results of the discontinued operations only reflect revenues and expenses that are directly attributable to the Link-16 TDL Business that will be eliminated from continuing operations. The following table presents key components of “Net income (loss) from discontinued operations, net of tax” for the three months ended June 30, 2022:

	Three Months Ended
	June 30, 2022
	(In thousands)
Revenues	$	103,167
Operating expenses:
Cost of revenues		64,605
Other operating expenses		8,986
Net income (loss) from discontinued operations before income taxes	$	29,576
(Provision for) benefit from income taxes		(12,051	)
Net income (loss) from discontinued operations, net of tax	$	17,525

The cash flows related to discontinued operations have not been segregated and are included in the condensed consolidated statements of cash flows. The following table presents key cash flow and non-cash information related to discontinued operations for the three months ended June 30, 2022:

	Three Months Ended
	June 30, 2022
	(In thousands)
Depreciation	$	2,968
Amortization of intangible assets		462
Capital expenditures		3,289