Cost Reduction Actions

12 Months Ended

Jul. 31, 2011

Cost Reduction Actions [Abstract]

Cost Reduction Actions

(7) Cost Reduction Actions

Fiscal 2011 Cost Reduction Actions

In fiscal 2011, we implemented certain cost reduction actions in all of our reportable operating segments. In our mobile data communications segment, we have been and continue to align staffing levels with expected future business activity. We have reduced our manufacturing headcount in our telecommunications transmission segment to align with the expected lower level of manufacturing of products for our mobile data communications segment. In our RF microwave amplifiers segment we have reduced headcount and have deferred certain merit raises. In our unallocated or corporate segment, we have reduced headcount and substantially reduced the use of outside consultants and have deferred certain merit raises.

The costs related to our 2011 cost reduction actions (including severance), which are included in our Consolidated Statement of Operations for the fiscal year ended July 31, 2011, were not material.

Fiscal 2010 Cost Reduction Actions

In August 2009, in connection with cost reduction actions we adopted in July 2009, we sold a small product line to a third party for $2,038,000.

Fiscal 2009 Radyne Acquisition-Related Restructuring Plan

In connection with our August 1, 2008 acquisition of Radyne, we immediately adopted a restructuring plan to achieve operating synergies for which we recorded $2,713,000 of estimated restructuring costs. Of this amount, $613,000 relates to severance for Radyne employees which was paid in fiscal 2009. The remaining estimated amounts relate to facility exit costs and were determined as follows:

	At August 1, 2008
Total non-cancelable lease obligations	$    12,741,000
Less:  Estimated sublease income	(8,600,000)
Total net estimated facility exit costs	4,141,000
Less:  Interest expense to be accreted	(2,041,000)
Present value of estimated facility exit costs	$      2,100,000

Our total non-cancelable lease obligations were based on the actual lease term which runs from November 1, 2008 through October 31, 2018. We estimated sublease income based on (i) the terms of a fully executed sublease agreement, whose lease term runs from November 1, 2008 through October 31, 2015 and (ii) our assessment of future uncertainties relating to the commercial real estate market. Based on our assessment of commercial real estate market conditions, we currently believe that it is not probable that we will be able to sublease the facility beyond the current sublease terms. As such, in accordance with grandfathered accounting standards that were not incorporated into the FASB's ASC, we recorded these costs, at fair value, as assumed liabilities as of August 1, 2008, with a corresponding increase to goodwill.

As of July 31, 2011, the amount of the acquisition-related restructuring reserve is as follows:

	Cumulative Activity Through July 31, 2011
Present value of estimated facility exit costs at August 1, 2008	$      2,100,000
Cash payments made	(3,296,000)
Cash payments received	3,284,000
Accreted interest recorded	430,000
Net liability as of July 31, 2011	2,518,000
Amount recorded as prepaid expenses in the Consolidated Balance Sheet	398,000
Amount recorded as other liabilities in the Consolidated Balance Sheet	$      2,916,000

As of July 31, 2010, the present value of the estimated facility exit costs was $2,136,000. During the fiscal year ended July 31, 2011, we made cash payments of $982,000 and we received cash payments of $1,203,000. Interest accreted for the fiscal years ended July 31, 2011, 2010 and 2009 was $161,000, $150,000 and $119,000, respectively, and is included in interest expense for each respective fiscal period.

As of July 31, 2011, future cash payments associated with our restructuring plan are summarized below:

	As of July 31, 2011
Future lease payments to be made in excess of anticipated sublease payments	$      2,916,000
Less net cash to be received in next twelve months	(398,000)
Interest expense to be accreted in future periods	1,610,000
Total remaining net cash payments	$      4,128,000