Business Disposition

9 Months Ended

Sep. 30, 2012

Discontinued Operations and Disposal Groups [Abstract]

Business Disposition

BUSINESS DISPOSITION

On October 15, 2010, we completed the sale of our gas flow control business, which included the Aera^® mass flow control and related product lines to Hitachi Metals, Ltd. ("Hitachi"), for approximately $43.3 million. Assets and liabilities sold included, without limitation, inventories, real property in Hachioji, Japan, equipment, certain contracts, intellectual property rights related to the gas flow control business and certain warranty liability obligations.

In connection with the closing of this asset disposition, we entered into a Master Services Agreement and a Supplemental Transition Services Agreement pursuant to which we provided certain transition services until October 2011 and we became an authorized service provider for Hitachi in all countries other than Japan. In March 2012, we entered into an agreement to sell certain fixed assets to Hitachi and cease providing contract manufacturing services. As of May 31, 2012 we ceased providing contract manufacturing services to Hitachi and completed the sale of certain fixed assets related to that manufacturing. The sale of these assets resulted in a $1.9 million gain, which is recorded in Other income (expense), net in our Condensed Consolidated Statements of Operations. As of June 30, 2012, all manufacturing activities and relationships with Hitachi related to the previously owned gas flow control business have ended. We do not anticipate any additional activity with Hitachi in respect of these assets that would materially impact our financial statements in the future.

In accordance with authoritative accounting guidance for reporting discontinued operations, for the periods reported in this Form 10-Q, the results of continuing operations were reduced by the revenue and costs associated with the gas flow control business, which are included in the Income from discontinued operations, net of income taxes, in our Condensed Consolidated Statements of Operations.

Operating results of discontinued operations are as follows (in thousands):

	Three Months Ended September 30,			Nine Months Ended September 30,
	2011			2012			2011
Sales	$	10,726		$	8,959		$	21,280
Cost of sales	10,288			9,189			20,948
Gross profit (loss)	438			(230		)	332
Operating expenses:
Research and development	1			—			6
Selling, general, and administrative	56			88			196
Total operating expenses	57			88			202
Operating income (loss) from discontinued operations	381			(318		)	130
Other income (expense)	(885		)	881			(117		)
Income (loss) from discontinued operations before income taxes	(504		)	563			13
Provision for income taxes	75			133			378
Income (loss) from discontinued operations, net of income taxes	$	(579	)	$	430		$	(365	)