Restructuring Plan

9 Months Ended

Mar. 31, 2013

M. Restructuring Plan

In the first quarter of fiscal 2013, the Company announced a restructuring plan (“2013 Plan”) affecting the MCE reportable segment. The 2013 Plan was implemented to cope with reduced defense revenues and the near term uncertainties in the defense industry driven by the potential for defense budget sequestration. The 2013 Plan primarily consisted of involuntary separation costs related to the reduction in force which eliminated 142 positions largely in engineering, manufacturing and administrative functions, as well as reductions associated with the first phase of integration of Micronetics. Restructuring expenses of $228 and $5,429 were recognized for the three and nine months ended March 31, 2013, respectively. Future restructuring expenses associated with the 2013 Plan are expected to be immaterial. These restructuring expenses affect the MCE reportable segment.

In the fourth quarter of fiscal 2012, the Company announced a restructuring plan (“2012 Plan”) affecting both the MCE and MDIS reportable segments. The 2012 Plan primarily consisted of involuntary separation costs related to the reduction in force which eliminated 41 positions largely in engineering and manufacturing functions; and facility costs related to outsourcing of certain manufacturing activities at the Company’s Huntsville, Alabama site. Future restructuring expenses of approximately $64 associated with the 2012 Plan are expected in the last quarter of fiscal 2013 as the Company continues transitioning the manufacturing activities formerly conducted at the Huntsville, Alabama facility. This restructuring expense will affect the MCE reportable segment.

All of the restructuring charges are classified as operating expenses in the consolidated statements of operations and comprehensive income (loss) and any remaining obligations are expected to be paid within the next twelve months. The remaining restructuring liability is classified as accrued expenses in the consolidated balance sheets.

The following table presents the detail of expenses by reportable segment for the Company’s restructuring plans:


	Severance & Related			Facilities & Other			Total
MCE restructuring charges	$	2,406		$	306		$	2,712
MDIS restructuring charges		109			—			109

Total 2012 provision		2,515			306			2,821
Cash paid		(2	)		(121	)		(123	)

Restructuring liability at June 30, 2012	$	2,513		$	185		$	2,698
MCE restructuring charges		5,478			409			5,887
Cash paid		(7,171	)		(308	)		(7,479	)
Reversals(*)		(458	)		—			(458	)

Restructuring liability at March 31, 2013	$	362		$	286		$	648

(*)	Reversals result from the finalization of severance agreements and unused outplacement services.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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