RESTRUCTURING CHARGES

9 Months Ended

Sep. 30, 2012

RESTRUCTURING CHARGES

In December 2011, we initiated a cost reduction plan ("2011 Restructuring Plan") as part of our broader cost reduction initiatives, which included consolidation of our manufacturing and research and development facilities, moving a portion of our outsourced spare parts logistics operations in-house, and workforce reductions.

We expect that our cost reduction initiatives including the 2011 Restructuring Plan will provide a reduction of over $20.0 million in annual operating expenses beginning in 2013. We expect to incur a total of approximately $6.0 million to $7.0 million in restructuring charges under the 2011 Restructuring Plan. As of September 30, 2012, we have incurred $3.8 million in restructuring charges under the 2011 Restructuring Plan and expect to incur an additional $2.0 million to $3.0 million, of which the majority is expected to be incurred by the end of the first quarter of 2013.

In addition to our 2011 Restructuring Plan, we also expect to incur approximately $1.0 million in capital expenditures in the fourth quarter of 2012 to support product research development and prototype production of the Millios system into our German facility and consolidation of global manufacturing in the Fremont facility.

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 September 30, 2012, we expensed $0.5 million in employee severance and other expenses, paid $0.4 million of employee severance and other expenses, and paid $0.2 million of contract termination costs under the 2011 Restructuring Plan. During the nine months ended September 30, 2012 we recorded $2.0 million of employee severance and other expenses. We paid $1.9 million in employee severance and other expenses and paid $1.1 million in contract termination costs related to the 2011 restructuring plan. To date, we have recorded $3.8 million related to the 2011 Restructuring Plan.

The following table summarizes changes in the restructuring accrual for the three and nine months ended September 30, 2012 (in thousands):



	Three Months Ended September 30, 2012												Nine Months Ended September 30, 2012
	Employee Severance Costs			Contract Termination Costs			Other Costs			Total			Employee Severance Costs			Contract Termination Costs			Other Costs			Total

Beginning balance	$	150		$	1,707		$	—		$	1,857		$	82		$	2,661		$	—		$	2,743
Expensed	286			—			167			453			1,601			—			402			2,004
Payments	(206		)	(162		)	(167		)	(535		)	(1,500		)	(1,091		)	(402		)	(2,993		)
Reserve adjustments	6			—			—			6			59			(14		)	—			45
Foreign currency changes	(9		)	9			—			—			(15		)	(3		)	—			(18		)
Ending balance	$	227		$	1,554		$	—		$	1,781		$	227		$	1,554		$	—		$	1,781

As of September 30, 2012, $1.4 million of the restructuring accrual was classified as short-term and recorded within accrued liabilities in the Condensed Consolidated Balance Sheets, and the remaining $0.4 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.

+ References+ Details