Manufacturing Consolidation Project and Tax Strategy

12 Months Ended

Dec. 30, 2011

Manufacturing Consolidation Project and Tax Strategy

Note 21 — Manufacturing Consolidation Project and Tax Strategy

During 2011 the Company devoted significant resources to two initiatives: a project to consolidate global manufacturing, and development of a strategy to optimize its global organization for tax purposes. The goal of both of these strategies is to continue the Company’s improvement in gross profit margin by reducing costs and to position the Company for future growth. STAAR currently manufactures its products in four facilities worldwide. It has developed a plan to methodically consolidate its manufacturing in a single site at its Monrovia, California location by the end of 2013, which is expected subsequently to yield significant savings in cost of goods and to lower its global administrative costs and reduce income taxes.

The Company expects these initiatives to cost approximately $6 million over a three-year period, of which it incurred approximately $1.1 million during 2011. These expenses are included in other general and administrative expenses in the consolidated statement of operations for the year ended December 30, 2011. Expenditures to date have largely consisted of professional fees to advisors and consultants. The Company also expects to spend approximately $2.4 million in capital expenditures to consolidate its manufacturing.

A summary of the activity for these initiatives is presented below as of December 30, 2011 (in thousands):

		Termination Benefits		Other Associated Costs			Total
Liability at December 31, 2010	$	—	$	—		$	—
Costs incurred and charged to expense		36		1,024			1,060
Cash payments		—		(931	)		(931	)
Liability at December 30, 2011	$	36	$	93		$	129
Total costs incurred to date	$	36	$	1,024		$	1,060
Total costs expected to be incurred	$	1,474	$	4,526		$	6,000