Asset Impairment, Restructuring and Other Charges

6 Months Ended

Dec. 25, 2011

Asset Impairment, Restructuring and Other Charges [Abstract]

Asset Impairment, Restructuring and Other Charges

11. Asset Impairment, Restructuring and Other Charges

 Asset impairment, restructuring and other charges reflect the impact of various cost reduction programs and initiatives implemented by the Company. These programs and initiatives include the closing of facilities, the termination and relocation of employees, and other related activities. Asset impairment, restructuring and other charges include program-specific exit costs, severance benefits pursuant to ongoing benefit arrangements, and special termination benefits.

            Asset impairment, restructuring and other charges represent costs related primarily to the following:

• El Segundo Fabrication Facility Closure Initiative
• Research and Development Facility Closure Initiative

 The following table summarizes restructuring charges incurred during the three and six months ended December 25, 2011 and December 26, 2010 related to the restructuring initiatives discussed below. These charges were recorded in asset impairment, restructuring and other charges (in thousands):

	Three Months Ended					Six Months Ended
	December 25, 2011		December 26, 2010			December 25, 2011		December 26, 2010
Reported in asset impairment, restructuring and other charges:
Severance and workforce reduction costs (recoveries)	$	—	$	(4	)	$	—	$	64
Other charges		—					—		66
Total asset impairment, restructuring and other charges	$	—	$	(4	)	$	—	$	130

In addition to the amounts in the table above, $0.1 million of workforce reduction expenses related to retention bonuses were recorded in cost of sales during the three and six months ended December 26, 2010, respectively, related to the restructuring initiatives.  The Company also incurred approximately $0.1 million and $0.2 million of costs to relocate and install equipment for the three and six months ended December 26, 2010, respectively.  These costs are not considered restructuring costs and were recorded in cost of sales.

The following table summarizes changes in the Company's restructuring related accruals for the six months ended December 25, 2011, which are included in other accrued expenses on the balance sheet (in thousands):

	El Segundo Fabrication Facility Closure Initiative
Accrued severance and workforce reduction costs, June 26, 2011	$	461
Accrued during the quarter and charged to asset impairment, restructuring and other charges		—
Accrued during the quarter and charged to operating expenses		—
Costs paid during the quarter		(461	)
Foreign exchange gains		—
Change in provision		—
Accrued severance and workforce reduction costs, December 25, 2011	$	—

The following tables summarize the total asset impairment, restructuring and other charges by initiative for the three and six months ended December 26, 2010 (in thousands):

	El Segundo Fabrication Facility Closure			Total
For the three months ended December 26, 2010, reported in asset impairment, restructuring and other charges:
Severance and workforce reduction costs (recoveries)	$	(4	)	$	(4	)
Other charges		—			—
For the three months ended December 26, 2010, total asset impairment, restructuring and other charges	$	(4	)	$	(4	)

	El Segundo Fabrication Facility Closure		Research and Development Facility Closure		Total
For the six months ended December 26, 2010, reported in asset impairment, restructuring and other charges:
Severance and workforce reduction costs	$	64	$	—	$	64
Other charges		—		66		66
For the six months ended December 26, 2010, total asset impairment, restructuring and other charges	$	64	$	66	$	130

El Segundo Fabrication Facility Closure Initiative

The Company adopted a plan for the closure of its El Segundo, California fabrication facility during fiscal year 2009. The expectation was that the plan would be carried out through calendar year 2010 with a revised estimated total pre-tax cost of $12.1 million, of which approximately $0.4 million would be non-cash charges. These estimated charges consisted of severance and other workforce reduction costs of $5.9 million and other costs incurred to close or consolidate the facility of $6.2 million.  Approximately $1.0 million of the additional costs related to equipment relocation and installation and the reconfiguration of ventilation systems.  These costs were charged to operating expense as incurred.  The restructuring charges recorded through fiscal year 2010 under this initiative included $4.0 million of severance, $1.7 million of other workforce reduction costs, and $3.9 million of other charges for this initiative.  Due to continued higher demand than at the time the plan was adopted, in mid-fiscal year 2011 the Company suspended, for the foreseeable future, the closure of this facility.  As a result of suspending this closure initiative, the Company recorded a credit to asset impairment, restructuring and other charges for approximately $3.5 million for previously accrued severance costs in fiscal year 2011.  The Company paid the remaining $0.5 million of accrued retention bonuses under this initiative during the three months ended December 25, 2011.

Research and Development Facility Closure Initiative

In the third quarter of fiscal year 2008, the Company adopted a plan for the closure of its Oxted, England research and development facility and its El Segundo, California research and development fabrication facility.  The costs associated with closing and exiting these facilities and severance costs were approximately $9.0 million. Of this amount, approximately $5.4 million represents the cash outlay related to this initiative.  The Company has completed the closure of the Oxted, England facility, and during the second quarter of fiscal year 2012 entered into agreements to sell the underlying real property. The sale agreements contain typical representations, covenants, and conditions for transactions of this type.  The Company completed the sale of the real property in January 2012 (See Note 19, “Subsequent Events”).

The El Segundo, California research and development fabrication facility is no longer used as a research and development fabrication facility.  It is now used only as a research and development test and office facility. As previously noted, the initiative to close the adjoining El Segundo, California fabrication facility has been suspended for the foreseeable future, and the final exit from the El Segundo, California research and development fabrication facility will not occur in the foreseeable future.  Given the ongoing modified use of the facility, the Company considers the restructuring initiative relating to this facility to be complete.