13. EXIT ACTIVITY COSTS AND ASSET IMPAIRMENTS

The Company has focused on being the low-cost provider of its products by reducing operating costs and implementing lean manufacturing initiatives, which have in part led to the consolidation of its facilities and production lines. The Company consolidated two facilities in the three months ended March 31, 2012 and three facilities during 2011 in this effort. During this process, the Company has incurred exit activity costs, including contract termination costs, severance costs, and other moving and closing costs. These restructuring activities also resulted in $1,037,000 and $196,000 of asset impairment charges related to the facility consolidations during the three months ended March 31, 2012 and 2011, respectively.

As of March 31, 2012, the Company expects to incur approximately $1,000,000 of additional moving and severance costs related to a facility to be closed during 2012. Other than this facility, the Company has not specifically identified any other facilities to close or consolidate and, therefore does not expect to incur any other material exit activity costs for future restructuring activities. However, if future opportunities for cost savings are identified, other facility consolidations will be considered.

The following table provides a summary of where the exit activity costs and asset impairments were recorded in the statement of operations for the three months ended March 31 (in thousands):


		2012		2011
Cost of sales	$	1,766	$	858
Selling, general, and administrative expense		14		10
Total exit activity costs and asset impairments	$	1,780	$	868

The following table reconciles the beginning and ending liability for exit activity costs relating to the Company's facility consolidation efforts (in thousands):


		2012			2011
Balance as of December 31	$	2,315		$	2,069
Exit activity costs recognized		743			672
Cash payments		(1,294	)		(593	)
Balance as of March 31	$	1,764		$	2,148