NOTE 2 - PROVISION FOR BUSINESS RESTRUCTURING

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements

NOTE 2 - PROVISION FOR BUSINESS RESTRUCTURING

Restructure reserve amounts at the start of 2011 relate to 2009 restructure actions which included abandoning a portion of the lease on our headquarter building.  A lease amendment in 2011 incorporated this space reduction and no amounts remained accrued at December 31, 2011.

As a result of the business downturn we experienced this year and the uncertain business outlook, we took restructuring actions in September 2012 to reduce quarterly operating expenses and production costs.  Restructuring actions reduced these costs  in 2012 by $350,000.  These actions included reductions in personnel and the use of contractors, professionals, and consultants, as well as focusing our development efforts on a smaller number of projects.

The restructuring charge associated with these actions was $207,000 and is primarily related to severance.  The restructuring actions were substantially completed during the fourth quarter of 2012.  Restructure amounts totaling $25,000 remain accrued at December 31, 2012 and will be paid out during the first quarter of 2013.

An analysis of the restructuring is as follows:

Restructuring	Reserve Balance Dec 31, 2010		2011 Expense		2011 Payments/ Write-Offs		Reserve Balance Dec 31, 2011		2012 Expense		2012 Payments/ Write-Offs		Reserve Balance Dec 31, 2012
(in thousands)
Downsizing US operations:
Employee severance	$	-	$	-	$	-	$	-	$	103	$	103	$	-
Other costs		58		-		58		-		4		4		-
Downsizing foreign operations:
Employee severance		-		-		-		-		57		32		25
Other costs		-		-		-		-		43		43		-
Total	$	58	$	-	$	58	$	-	$	207	$	182	$	25