Restructuring Charges

3 Months Ended

Dec. 28, 2012

8. Restructuring Charges

The Company has, and may in the future, commit to restructuring plans to help manage the costs of the Company or to help implement strategic initiatives, among other reasons.

Fourth Quarter of Fiscal 2012 Restructuring Plan – In the fourth quarter of fiscal 2012, the Company committed to the implementation of a restructuring plan, which consisted primarily of a headcount reduction in the Company’s research and development functions and selling, general and administrative functions. The restructuring plan is expected to be substantially completed during the fourth quarter of fiscal 2013. The Company made the decision to implement the restructuring in furtherance of its efforts to reduce operating expenses and cash consumption. Approximately $2.3 million in charges were incurred through the first quarter of fiscal 2013 related to this plan. Of the amounts incurred, $2.1 million related to severance costs for affected employees and approximately $206,000 related to contractual obligations on vacated office space. The Company currently expects to incur total charges ranging from approximately $4.0 million to $5.0 million, including cash expenditures ranging from approximately $3.5 million to $4.5 million, each primarily related to severance costs for affected employees.

Activity and liability balances related to the Company’s fourth quarter of fiscal 2012 restructuring plan from September 28, 2012 through December 28, 2012 were as follows:


	Workforce			Facilities
	Reductions			and Other			Total
	(in thousands)			(in thousands)			(in thousands)
Restructuring balance, September 28, 2012	$	382		$	—		$	382
Charges to costs and expenses		1,362			210			1,572
Cash payments		(993	)		—			(993	)
Non-cash adjustments		(97	)		(4	)		(101	)

Restructuring balance, December 28, 2012	$	654		$	206		$	860

The remaining accrued restructuring balance principally represents employee severance costs and contractual obligations on vacated office space. The Company expects to pay these remaining employee severance obligations through the fourth quarter of fiscal 2013 and the remaining contractual obligations on vacated office space through the second quarter of fiscal 2015, the end of the related lease term.

Fourth Quarter of Fiscal 2011 Restructuring Plan – In the fourth quarter of fiscal 2011, the Company implemented a restructuring plan, which consisted primarily of a targeted headcount reduction in the selling, general and administrative functions and WAN product line, which is new part of the communications processors product line. The Company incurred $1.2 million of charges related to severance costs for the affected employees. The restructuring plan was substantially completed during the fourth quarter of fiscal 2011.

Activity and liability balances related to the Company’s fourth quarter of fiscal 2011 restructuring plan from September 28, 2012 through December 28, 2012 were as follows:


	Workforce
	Reductions
	(in thousands)
Restructuring balance, September 28, 2012	$	45
Cash payments		(13	)

Restructuring balance, December 28, 2012	$	32

The remaining accrued restructuring balance principally represents employee severance costs. The Company expects to pay these remaining obligations through the third quarter of fiscal 2013.

- 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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