Restructuring

12 Months Ended

Sep. 30, 2011

9. RESTRUCTURING

2011 Restructuring

On July 21, 2011, we announced a restructuring of our manufacturing operations in Breisach, Germany. The restructuring reduced our manufacturing footprint by consolidating prototype and production functions and centralizing outsourced production control in our Eden Prairie, Minnesota production facility. The consolidation was driven by our strategy of driving efficiency improvements and enhancing customer service globally through more centralized operations. We will continue to maintain sales and research and development activities at the leased facility in Breisach, Germany. As a result of these initiatives, we expect the total charge to be $0.6 million on a pre-tax basis, which consists of $0.5 million for employee termination costs for 25 employees and $0.1 million for asset write-downs. We recorded a charge of $0.2 million in the fourth quarter of fiscal 2011, and expect to record charges of $0.3 million in the first quarter of fiscal 2012 and $0.1 million in the second quarter of fiscal 2012. The payments are expected to be completed in the second quarter of fiscal 2012. We expect to cease manufacturing in Breisach by the end of December 2011 and the majority of the manufacturing positions will be vacated by the end of December 2011.

A summary of the restructuring charges and other activity within the restructuring accrual is listed below (in thousands):


	Employee
	Termination Costs			Other			Total
Restructuring charge	$	148		$	76		$	224
Foreign currency fluctutation		(3	)		(1	)		(4	)

Balance at September 30, 2011	$	145		$	75		$	220

2009 Restructuring

On April 23, 2009, we announced a business restructuring to increase our focus on wireless products and solutions that include hardware, software and services. The restructuring included the closing of an engineering facility in Long Beach, California, and the relocation and consolidation of the manufacturing facility in Davis, California to our Minnetonka, Minnesota headquarters. We paid a lease cancellation fee for one of the leased facilities in Davis and had vacated the facility as of the end of fiscal 2009. We continue to maintain non-manufacturing activities at the remaining leased facility in Davis, California. As a result of these initiatives, during the third quarter of fiscal 2009 we recorded a $2.0 million charge, which consisted of $1.8 million for employee termination costs for 86 positions and $0.2 million for contract termination fees and other relocation costs.

All of the 86 positions were vacated in fiscal 2009. The employee termination costs included severance and the associated costs of continued medical benefits and outplacement services. The other restructuring expenses included contract termination fees for non-renewal of lease terms relating to one of the facilities in Davis, California and relocation expenses for employees.

9. RESTRUCTURING (RESTRUCTURING)

A summary of the restructuring charges and other activity within the restructuring accrual is listed below (in thousands):


	Employee
	Termination Costs			Other			Total
Balance at September 30, 2008	$	—		$	—		$	—
Restructuring charge		1,766			187			1,953
Payments		(1,146	)		(86	)		(1,232	)

Balance at September 30, 2009	$	620		$	101		$	721
Restructuring charge		75			—			75
Payments		(244	)		(11	)		(255	)
Reversal		(438	)		(30	)		(468	)

Balance at September 30, 2010	$	13		$	60		$	73

Payments		(3	)		—			(3	)
Reversal		(10	)		(60	)		(70	)

Balance at September 30, 2011	$	—		$	—		$	—

During fiscal 2010, we recorded an additional $0.1 million for an additional six months of continued medical benefits as a result of new healthcare legislation passed in December 2009 related to the aforementioned restructuring. Also during fiscal 2010 we reversed $0.5 million of the restructuring accrual since costs associated with continued medical benefits and relocation were lower than expected. During fiscal 2011, we paid a small amount of employee termination costs and reversed the remaining restructuring accrual.