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Manufacturing Consolidation Project and Tax Strategy

3 Months Ended

Mar. 30, 2012

Manufacturing Consolidation Project and Tax Strategy

Note 13 — Manufacturing Consolidation Project and Tax Strategy

Since 2011 the Company devoted significant resources to two initiatives: a project to consolidate global manufacturing, and development of a strategy to optimize its global organization for tax purposes. The goal of both of these strategies is to continue the Company’s improvement in gross profit margin by reducing costs and to position the Company for future growth. STAAR currently manufactures its products in four facilities worldwide. It has developed a plan to consolidate its manufacturing in a single site at its Monrovia, California location by the end of 2013, which is expected subsequently to yield significant savings in cost of goods and to lower its global administrative and regulatory costs and reduce income taxes.

The Company expects these initiatives to cost approximately $6 million over a three-year period, of which it has incurred approximately $1.6 million to date. These expenses are included in “other general and administrative expenses” in consolidated statement of income for the period ended March 30, 2012. Expenditures to date have largely consisted of professional fees to advisors and consultants, salaries, severance, asset retirement obligation and other. The Company also expects to spend approximately $2.4 million in capital expenditures to consolidate its manufacturing.

A summary of the activity for these initiatives is presented below as of March 30, 2012 (in thousands):

		Termination Benefits				Other Associated Costs				Total
Liability at December 31, 2010		$	—			$	—			$	—
Costs incurred and charged to expense			36				1,024				1,060
Cash payments			—				(678	)			(678	)
Liability at December 30, 2011		$	36			$	346			$	382
Costs incurred and charged to expense		$	229			$	326			$	555
Cash payments		$	—			$	(284	)		$	(284	)
Liability at March 30, 2012		$	265			$	388			$	653
Total costs incurred to date		$	265			$	1,350			$	1,615
Total costs expected to be incurred		$	1,474			$	4,526			$	6,000

X

- Definition

The entire disclosure for other income or other expense items (both operating and nonoperating). Sources of nonoperating income or nonoperating expense that may be disclosed, include amounts earned from dividends, interest on securities, profits (losses) on securities, net and miscellaneous other income or income deductions.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Article 5

-Section 03

-Paragraph 3, 6, 7, 9



Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 225

-SubTopic 10

-Section S99

-Paragraph 2

-Subparagraph (SX 210.5-03.3,6,7,9)

-URI http://asc.fasb.org/extlink&oid=6880815&loc=d3e20235-122688

+ Details

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