Restructuring Charges

12 Months Ended

Jul. 31, 2012

10. Restructuring Charges

During the first quarter of fiscal 2012, the Company reversed the balance of a reserve for the consolidation of its Chelmsford, Massachusetts facility totaling $0.2 million. The adjustment relates to a change in the previously estimated restructuring liability resulting from an amendment to extend the term of the facility lease and was recorded to operating expenses.

During the first quarter of fiscal 2011, the Company made the decision to integrate and realign its operations group with other functional areas to enhance operational efficiency and realize the benefits of identified synergies within the respective groups. The realignment resulted in the elimination of four positions. The Company recorded a restructuring charge of $0.3 million which was charged to cost of product revenue. This charge relates to employee separation packages, including severance pay, benefits continuation and outplacement costs.

In conjunction with the workforce reduction and early lease termination plans initiated in fiscal 2009, certain additional actions were implemented in fiscal 2010. These actions were taken to further re-align our cost structure, pace our development more closely in line with customer requirements and to better position the Company for success in the longer-term. During fiscal 2010, the Company recorded a restructuring charge of $5.7 million, of which $5.6 million was charged to operating expense and $0.1 million to cost of product revenue. This charge related to (i) employee separation packages including severance pay, benefits continuation and outplacement costs amounting to $3.2 million, of which $3.1 million was charged to operating expense and $0.1 million to cost of product revenue, (ii) a $1.9 million charge for a termination agreement related to our Moorestown, New Jersey facility, and (iii) a $0.6 million charge related to the consolidation of our Chelmsford, Massachusetts facility for rent associated with the portion of the facility that is no longer being used.

The Company has completed its cash restructuring payments. A roll-forward of the restructuring accrual since July 31, 2010 is summarized below (in thousands):


	Accrual Balance at July 31, 2010		Additions		Adjustments	Payments		Accrual Balance at July 31, 2011
Workforce reduction	$	—	$	339		$	272	$	67
Facility consolidations and certain other costs		498		—			271		227

Total	$	498	$	339		$	543	$	294


	Accrual Balance at July 31, 2011		Adjustments			Payments		Accrual Balance at July 31, 2012
Workforce reduction	$	67	$	—		$	67	$	—
Facility consolidations		227		(227	)		—		—

Total	$	294	$	(227	)	$	67	$	—

- 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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