NOTE 4 - BUSINESS RESTRUCTURING

9 Months Ended

Sep. 30, 2013

Restructuring and Related Activities [Abstract]

NOTE - 4. BUSINESS RESTRUCTURING

As a result of the business downturn we experienced in the second half of 2011 and in 2012, as well as the uncertain business outlook at the time, we took restructuring actions in September 2012 to reduce quarterly operating expenses and production costs.  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 net restructuring charge in 2012 associated with these actions was $207,000 and was primarily related to severance.  The remaining 2012 restructuring actions were completely paid out during the first quarter of 2013. 

During the second quarter of 2013, we took additional restructuring actions to reduce our excess office space and eliminate certain job positions.  These actions resulted in restructuring costs of $642,000 for the second quarter.  The positions eliminated will allow us to have the flexibility to add other critical positions or change fixed to variable costs through outsourcing.

The $1,000 change in the third quarter of 2013 represents the change in exchange rate impact on the previous quarter’s accrued expense.  The portion of the reserve expected to be paid over the next twelve months is $235,000.  The long term portion is $196,000 and relates to the lease abandonment payments that are due in over one year.

An analysis of the business restructuring is as follows:

	Reserve Balance Dec 31, 2011	2012 Expense	2012 Payments/ Write-Offs	Reserve Balance Dec 31, 2012	2013 Expense	2013 Payments/ Write-Offs	Reserve Balance Sep 30, 2013
(in thousands)
Downsizing US operations:
Employee severance	$0	$103	$103	$0	$302	$161	$141
Other costs	-	4	4	-	273	20	253
Downsizing foreign operations:
Employee severance	-	57	32	25	20	45	-
Other costs	-	43	43	-	47	10	37
Total	$0	$207	$182	$25	$642	$236	$431