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Restructuring Charges
3 Months Ended
Dec. 31, 2011
Restructuring Charges [Abstract]  
Restructuring Charges

12. Restructuring Charges

In August 2011, the Company announced a realignment of its business to optimize the Company’s resources according to its strategic plan. As a result of the organizational change, the Company eliminated approximately 9% of its workforce. These employee terminations occurred across various functions, and the reorganization plan was completed by the end of the fourth quarter of fiscal 2011. The Company recorded total pre-tax restructuring charges of $1.0 million in the fourth quarter of fiscal 2011, which consisted of severance pay and benefits expenses.

In October 2010, the Company announced initiatives to reduce its cost structure and renew its focus on business units to more closely match operations and cost structure with the current customer environment. As a result of the organizational change, the Company eliminated 30 positions, or approximately 13% of its workforce. These employee terminations occurred across various functions, and the reorganization plan was completed by the end of the first quarter of fiscal 2011. The Company recorded total pre-tax restructuring charges of $0.6 million in the first quarter of fiscal 2011, which consisted of $0.6 million of severance pay and benefits expenses and less than $0.1 million of facility-related costs.

During the three months ended December 31, 2011, the Company did not incur any restructuring charges. The charges for fiscal 2011 have been presented separately as restructuring charges in the condensed consolidated statements of operations. All restructuring costs related to SurModics Pharmaceuticals are included in discontinued operations.

Cash payments associated with the two fiscal 2011 restructuring events totaled $0.3 million during the three months ended December 31, 2011, leaving a restructuring accrual balance of $0.4 million at December 31, 2011. There were also payments of less than $0.1 million during the three months ended December 31, 2011 associated with facility-related costs related to the fiscal 2010 restructuring event, leaving a restructuring accrual balance of $0.2 million at December 31, 2011.

The following table summarizes the restructuring accrual activity for the quarter ended December 31, 2011 (in thousands):

 

                         
    Employee     Facility-        
    severance and     related        
    benefits     costs     Total  

Balance at September 30, 2011

  $ 730     $ 250     $ 980  

Cash payments

    (343     (13     (356
   

 

 

   

 

 

   

 

 

 

Balance at December 31, 2011

  $ 387     $ 237     $ 624  
   

 

 

   

 

 

   

 

 

 

The remaining restructuring accrual balance relates to the fiscal 2011 and 2010 restructurings and is expected to be paid within the next 24 months. As such, the current portion totaling $0.5 million is recorded as a current liability within other current liabilities and the long-term portion totaling $0.1 million is recorded as a long-term liability within other long-term liabilities on the condensed consolidated balance sheet as of December 31, 2011.