Download Annual Report, 2.44 MB - Xyratex

XYRATEX LTDNOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)(U.S. dollars and amounts in thousands, except per share data, unless otherwise stated)3. Discontinued operations (Continued)Effective January 31, 2003, the Company sold its digital broadcast technology business tomanagement of the digital broadcast technology business. Proceeds received from the sale consisted ofcash of $258 payable in equal monthly installments over twelve months. The Company recorded anafter-tax loss on sale of this discontinued operation of $185 in the year ended November 30, 2003. TheCompany’s consolidated financial statements reflect the digital broadcast technology business asdiscontinued operations in accordance with FAS 144, ‘‘Accounting for the Impairment and Disposal ofLong Lived Assets’’. The financial position, results of operations and cash flows of this business havebeen classified as discontinued, and the Company has no continuing involvement with this business.The Company has not allocated interest expense to this discontinued operation.In November 2005, the Company received an amount of $400 from the purchaser of this businessin connection with the sale agreement, the amount being based on revenues of the business andproceeds of a subsequent sale of the business. No further amounts are expected to be received inconnection with the sale. This amount, less associated income tax of $120 has been recorded asdiscontinued operations in the year ended November 30, 2005.The following table shows the components of the loss on sale of the digital broadcast technologybusiness in January 2003.Proceeds .................................................... $258Less: Carrying value of net assets sold as of disposal date (January 31, 2003)Cash ..................................................... 275Accounts receivable .......................................... 300Inventory .................................................. 190Property, plant and equipment .................................. 174Employee compensation and benefits payable ........................ (286)Other accrued liabilities ....................................... (260)393Less: Costs of disposition ........................................ 50Loss on sale after income taxes of zero .............................. $185The following table shows the results of operations of this business until the date of disposal.Year endedNovember 30,2003Revenues .................................................... $606Costs and expenses ............................................. 860Loss from discontinued operations before income taxes ................... (254)Provision for income taxes ........................................ —Net loss from discontinued operations ............................... $(254)F-14