Costs Associated with Exit and Restructuring Activities

6 Months Ended

Jun. 29, 2013

Restructuring And Related Activities [Abstract]

Costs Associated with Exit and Restructuring Activities

Note 7 – Costs Associated with Exit and Restructuring Activities

In December 2012, we began a plan, “2012 restructuring plan,” to restructure our Location Solutions business management structure. We also announced a project to further optimize our manufacturing operations, which includes the consolidation and relocation of support functions.

During the third quarter of 2012, the Location Solutions revenue decreased from our previous business plans. The Locations Solutions 2012 restructuring plan was initiated as expected revenue increases failed to be realized due to slower than anticipated growth in the automotive and process manufacturing industries, weakness in the government sector, and lack of near term improvement related to Location Solutions.

In the second quarter of 2013 management determined that additional restructuring actions would be required to meet our financial goals for the Location Solutions business.

During 2007, Zebra began a plan to outsource printer manufacturing which was completed during 2010. During the fourth quarter of 2012, we determined that further supply chain cost reductions were possible by moving certain supply chain support operations closer to our contract printer manufacturer.

The costs below incurred for the year ended December 31, 2012, represent the costs related to the restructuring of our Location Solutions business management structure. Costs incurred for 2013 and costs expected to be incurred relate to the following: restructuring of Zebra’s manufacturing operations, relocation of a significant portion of Zebra’s supply chain operations from the U.S. to China, consolidating activities domestically, restructuring of our sales operations and corporate restructuring as well as an amendment to the Location Solutions “2012 restructuring plan” adding additional restructuring charges to be incurred.

There were no exit and restructuring costs for 2012, exit and restructuring costs for 2013 are as follows:

	Three Months Ended June  29, 2013		Six Months Ended June 29, 2013
Severance, stay bonuses, and other employee-related expenses	$	1,036	$	2,898
Professional services		54		66
Relocation and transition costs		11		32
Total	$	1,101	$	2,996

As of June 29, 2013, we have incurred the following exit and restructuring costs related to the Location Solutions business management structure and manufacturing operations relocation and restructuring (in thousands):

Type of Cost	Cost incurred through December 31, 2012		Costs incurred for the six months ended June 29, 2013		Total costs incurred as of June 29, 2013		Additional costs expected to be incurred		Total costs expected to be incurred
Severance, stay bonuses, and other employee-related expenses	$	960	$	2,898	$	3,858	$	2,702	$	6,560
Professional services		0		66		66		244		310
Relocation and transition costs		0		32		32		748		780
Total	$	960	$	2,996	$	3,956	$	3,694	$	7,650

Liabilities and expenses below relate to the 2011 and 2012 exit and restructuring plans (in thousands):

	Six Months Ended
	June 29, 2013			June 30, 2012
Balance at beginning of period	$	967		$	1,048
Charged to earnings		2,996			0
Cash paid		(3,175	)		(380	)
Balance at the end of period	$	788		$	668

Liabilities related to exit and restructuring activities are included in the accrued liabilities line item on the balance sheet. All exit costs are included in operating expenses under the line item exit and restructuring costs.