Restructuring Charges

6 Months Ended

Jun. 29, 2013

Restructuring and Related Activities [Abstract]

Restructuring charges include costs related to employee termination benefits, cost of long-lived assets abandoned or impaired, as well as contract termination costs. Restructuring charges are reflected separately as "Restructuring charges, net" in the Condensed Consolidated Statements of Operations. A summary of the actions we have taken during the six months ended June 29, 2013 and June 30, 2012 are discussed below.

2013 Restructuring Activities

In the first fiscal quarter of 2013, we implemented a restructuring plan (the "Q1 2013 Restructuring Plan") which resulted in the reduction of our global workforce by 31 employees across the organization. In addition we reduced our temporary workforce by approximately 20 positions. We also suspended development activities and engineering efforts for our next generation DRAM Matrix platform and terminated development activities for a certain SoC product platform. We recorded $4.0 million of restructuring charges during the first fiscal quarter of 2013, which was comprised of $1.3 million in severance and related benefits, and recorded $2.7 million in impairment charges for certain equipment that would no longer be utilized. As a result of the Q1 2013 Restructuring Plan, we expect to realize quarterly savings, excluding stock-based compensation in the range of $2.0 million to $2.5 million in subsequent quarters.

In the second quarter of 2013, we recorded $0.1 million of severance and related benefits due to the reduction of 4 employees across the organization.

The liabilities we accrued represent our best estimate of the obligations we expect to incur and could be subject to adjustment as market conditions change. The remaining cash payments associated with our various reductions in workforce are expected to be paid by the end of the first fiscal quarter of 2014. As such, the restructuring accrual is recorded as a current liability within ‘Accrued liabilities’ in the Condensed Consolidated Balance Sheets.

2012 Restructuring Activities

There were no restructuring charges in the first quarter of 2012. In the second fiscal quarter of 2012, we recorded $0.1 million in charges for severance and related benefits to restructuring activities.

The activities in the restructuring accrual for the six months ended June 29, 2013 were as follows (in thousands):



	Employee Severance and Benefits			Property and Equipment Impairment			Contract Termination and Other Costs			Total
Accrual at December 29, 2012	$	548		$	—		$	68		$	616
Restructuring charges	1,468			2,743			14			4,225
Cash payments	(1,552		)	(32		)	(17		)	(1,601		)
Asset impairment				(2,743		)				(2,743		)
Adjustments to restructuring charges	(152		)	(5		)				(157		)
Other settlements	9			37			(65		)	(19		)
Accrual at June 29, 2013	$	321		$	—		$	—		$	321

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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