RESTRUCTURING CHARGES

6 Months Ended

Jul. 01, 2012

RESTRUCTURING CHARGES

In December 2011, we initiated a cost reduction plan ("2011 Restructuring Plan"), which included the transition of our operations in Canada to our German facility, moving a portion of our outsourced spare parts logistics operations in-house, workforce reductions, elimination of certain contractors, and renegotiating certain contracts. In the first quarter of 2012, we initiated a second phase of the 2011 Restructuring Plan, which includes a reduction in force; lower level of investments in customer evaluation systems; renegotiating key contracts with outside service providers; production material cost savings; additional reduction in outside contractors; and reduced spending in discretionary areas. Total estimated one-time costs for the first two phases are $3.5 million to $4.5 million with an estimated remaining range of $0.4 million to $1.0 million to be incurred in the second half of 2012.

In addition, we will continue to address the near term weakness in our sector by focusing on additional cost reductions throughout the remainder of 2012. These reductions will be implemented throughout the third and fourth quarters and will entail a broader reduction in force and a global restructuring that will consolidate certain functions to enable better leverage of the corporate infrastructure and the optimization of our business model. The estimated restructuring costs for these activities are still under evaluation while the related restructuring plans are finalized.

The beginning restructuring reserve balance includes $0.9 million of contract termination costs established prior to 2011, which related to future rent obligations associated with two vacated leased facilities net of sublease income. During the three months ended July1, 2012, we expensed $0.8 million in employee severance and other expenses, paid $0.9 million of employee severance and other expenses, and paid $0.4 million of contract termination costs under the 2011 Restructuring Plan. During the six months ended July 1, 2012 we recorded $1.6 million of employee severance and other expenses. We paid $1.5 million in employee severance and other expenses and paid $0.9 million in contract termination costs related to the 2011 restructuring plan. To date, we have recorded $3.3 million related to this plan.

The following table summarizes changes in the restructuring accrual for the three and six months ended July 1, 2012 (in thousands):



	Three Months Ended July 1, 2012												Six Months Ended July 1, 2012
	Employee Severance Costs			Contract Termination Costs			Other Costs			Total			Employee Severance Costs			Contract Termination Costs			Other Costs			Total

Beginning balance	$	264		$	2,148		$	—		$	2,412		$	82		$	2,661		$	—		$	2,743
Expensed	729			—			102			831			1,315			—			236			1,551
Payments	(833		)	(420		)	(102		)	(1,355		)	(1,295		)	(929		)	(236		)	(2,460		)
Reserve adjustments	(10		)	—			—			(10		)	53			(14		)	—			39
Foreign currency changes	—			(21		)	—			(21		)	(5		)	(11		)	—			(16		)
Ending balance	$	150		$	1,707		$	—		$	1,857		$	150		$	1,707		$	—		$	1,857

As of July 1, 2012, $1.3 million of the restructuring accrual was classified as short-term and recorded within accrued liabilities in the Condensed Consolidated Balance Sheets, and the remaining $0.6 million of the restructuring accrual was classified as long-term and recorded within other liabilities in the Condensed Consolidated Balance Sheets.

- 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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