SemiLEDs says ODM partner expressed interest in taking stake in subsidiary
In a regulatory filing made yesterday, SemiLEDs stated: "During the fourth quarter of fiscal 2016, the ODM partner, which just recovered from a serious catastrophic event, expressed its interest in acquiring a portion of the equity of one of our subsidiaries. Although the discussion is in a preliminary stage, management believes the evaluation will take time and may further delay the transition schedule, which caused us to update our long-term financial forecasts, which reflected lower estimated near-term and longer-term revenues and profitability compared to estimates developed from prior years. Our market capitalization had also fallen below its consolidated net book value based on the quoted market price of common stock for a sustained period of time. Based on these potential impairment indicators, we evaluated the recoverability of long-lived assets for impairment in fiscal 2016. The carrying amount of the Company's asset group associated with the manufacture and sale of LED chips and LED components exceeded the expected future net undiscounted cash flows to be generated from this asset group. The Company determined that the fair value of the asset group exceeded its carrying value by $8,635 thousand." Shares of SemiLEDs are up $1.02, or 27%, to $4.81 in early trading.