Restructuring Expenses

6 Months Ended

Jun. 30, 2013

Restructuring And Related Activities [Abstract]

Restructuring Expenses

15. Restructuring Expenses

On July 25, 2013, the Board of Directors approved a plan of restructuring intended to bring the Company’s operating expenses better in line with revenues. The restructuring plan involves a realignment of organizational structures, facility consolidations/closures and headcount reductions that will amount to approximately 25-30% of the Company’s worldwide workforce. The restructuring plan is expected to be implemented primarily during the third quarter of the Company’s 2013 fiscal year.

The Company currently expects that implementation of the restructuring plan will result in special charges totaling approximately $5.0-6.8 million which will be recorded during the third quarter of 2013. These charges include lease/rental terminations of approximately 3.5 million, severance costs for affected employees of approximately $0.9-1.5 million, and other related costs of approximately $0.6-1.8 million all of which are cash expenditures. It is estimated that approximately $2.7-3.1 million of cash expenditures will be paid out in 2013, and the remaining cash expenditures will be paid in future years.

The amounts stated above are preliminary and subject to change as we finalize our assessment of the charges and costs associated with the above items. These charges and cash expenditures do not take into consideration any potential cost savings associated with the plan of restructuring.

In February 2012, we undertook a restructuring that included a 7-8% reduction of headcount and other cost reductions that resulted in annualized savings of approximately $7.0M. One-time employee termination and other costs resulted in restructuring expenses of $0.3 million recorded in the period ended March 31, 2012. For the three month period ended June 30, 2012, we returned to profit $0.1 million of the restructuring reserve as a result of lower one-time employee termination benefits and relocation expenses.

The following is the activity in our restructuring liability account which is included in the accrued liabilities line item on the balance sheet for the period ended June 30, 2013 (in thousands):

	December 31, 2012										June 30, 2013
	Balance		Provision-net		Usage			Reclass			Balance
One-time employee termination benefits	$	8	$	-	$	-		$	(4	)	$	4
Lease/rental terminations		-		-		-			-			-
Relocation, move, other expenses		-		-		(4	)		4			-
Total	$	8	$	-	$	(4	)	$	-		$	4

The remaining balance in the restructuring reserve is estimated to be used by the end of the fiscal year ending December 31, 2013.