11. Restructuring, Restatement Related Costs and Other

The following table summarizes restructuring, restatement related costs and other in the accompanying consolidated statements of operations:


	Three Months Ended					Six Months Ended
	July 1, 2011			July 2, 2010		July 1, 2011		July 2, 2010
	(In thousands)
United Kingdom restructuring	$	—		$	—	$	—	$	(70	)
Germany restructuring		(75	)		18		60		69
Bedford restructuring		—			—		—		1

Restructuring		(75	)		18		60		—
Restatement related costs and other		14			993		62		1,679

Total restructuring, restatement related costs and other	$	(61	)	$	1,011	$	122	$	1,679

Restructuring

The Company’s initial estimate for its liability for ongoing costs associated with workforce reductions and abandoned lease facilities are recorded at fair value. Generally, the expense and liability recorded is calculated using discounted cash flows of the Company’s estimated ongoing severance obligations and lease obligations, including contractual rental and build-out commitments, net of estimated sublease rentals, offset by related sublease costs. In estimating the expense and liability for its lease obligations, the Company estimated: (i) The costs to be incurred to satisfy rental and build-out commitments under the lease, (ii) The lead time necessary to sublease the space, (iii) The projected sublease rental rates, and (iv) The anticipated duration of subleases. The Company used a credit adjusted risk free rate of approximately 5.25% to discount the estimated cash flows for obligations with payments due in excess of one year.

The Company reviews its assumptions and estimates quarterly and updates its estimates of the liability as changes in circumstances require. The Company’s estimates have changed in the past, and may change in the future, resulting in additional adjustments to the estimate of the liability, and the effect of any such adjustments could be material. Changes to the Company’s estimate of the liability are recorded as additional restructuring expense (benefit). In addition, because the Company’s estimate of the liability includes the application of a discount rate to reflect the time-value of money, the Company records imputed interest costs related to the liability each period. These costs are reflected in restructuring expense (benefit) on the accompanying consolidated statements of operations.

Germany Restructuring

As a result of restructuring programs undertaken in 2000 through 2004, and the subsequent sublease of the Company’s Munich, Germany facility within the Precision Motion and Technologies segment in May 2007 through the end of its lease term, the Company carried a $2.1 million accrual for the cost of this lease as of December 31, 2009. As noted above, the Company regularly reviews its assumptions with respect to excess space, including contractual lease payments and expected proceeds from the sublessor. During the year-ended December 31, 2009, the Company determined that it would no longer recover sublease payments from the subtenant. Accordingly, the previous estimate of future sublease payments was revised. As a result, the Company recorded an additional restructuring charge of $1.3 million during the year-ended December 31, 2009 related to revised sublease assumptions. The $0.1 million of expense recognized during the six months ended July 2, 2010 relates primarily to accretion charges recorded during the period. No significant adjustments were recorded during the three months ended July 2, 2010. During the three and six months ended July 1, 2011, the Company recorded $(0.1) million and $0.1 million, respectively, restructuring (benefit) charge related to revised future lease payment assumptions. As of July 1, 2011, cumulative expense related to this restructuring plan is $4.6 million. The remaining accrual of $1.3 million will be paid ratably over the remaining term of the lease, which expires in January 2013.

Novi Restructuring

In the second quarter of 2008, the Company implemented a plan to close its Novi, Michigan facility, which provided U.S. sales, applications and service support to a product line included in the Company’s Laser Products segment. The Novi facility was consolidated within the Company’s Bedford, Massachusetts facility. In connection with this action, the Company recorded a restructuring charge of $1.4 million during the year ended December 31, 2008, consisting of $0.7 million for employee severance costs and $0.7 million in lease abandonment and related costs. The majority of the employee severance payments were made in 2008, and the remaining amounts were paid in 2009. The lease costs are being paid ratably over the duration of the lease, which ends in November 2012.

Restatement Related Costs and Other

During the three and six months ended July 1, 2011 and July 2, 2010, the Company incurred costs for professional services performed in connection with the restatement of the Company’s previously issued financial statements as reported in its Annual Report on Form 10-K for the year-ended December 31, 2008 and its Quarterly Report on Form 10-Q for the quarter ended September 26, 2008, including, the SEC investigation, certain shareholder actions and the internal Foreign Corrupt Practices Act investigation. These costs are charged to expense as incurred and are included in the Company’s restructuring, restatement related costs and other charges for the respective periods in the accompanying consolidated statements of operations. The costs incurred were less than $0.1 million and $1.0 million for the three months ended July 1, 2011 and July 2, 2010, respectively, and $0.1 million and $1.7 million for the six months ended July 1, 2011 and July 2, 2010, respectively.

Rollforward of Accrued Expenses Related to Restructuring

The following table summarizes the accrual activity related to the Company’s restructuring charges recorded on the accompanying consolidated balance sheets (in thousands):


Balance at December 31, 2010	$	1,566
Restructuring charges (benefits), net		60
Cash payments		(391	)
Non-cash write-offs or other adjustments		219

Balance at July 1, 2011	$	1,454

As of July 1, 2011 and December 31, 2010, $0.5 million and $0.8 million, respectively, of accrued restructuring charges were included in long-term liabilities classified as accrued restructuring, net of current portion in the accompanying consolidated balance sheets. The current portion of accrued restructuring charges is included in other accrued expenses. See Note 6 to Consolidated Financial Statements.