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Manufacturing Consolidation Project and Tax Strategy

9 Months Ended

Sep. 28, 2012

Manufacturing Consolidation Project and Tax Strategy Disclosure [Abstract]

Manufacturing Consolidation Project and Tax Strategy Disclosure [Text Block]

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 product development of part 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 2014, 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 $3.0 million to date. These expenses are included in “other general and administrative expenses” in consolidated statement of income for the period ended September 28, 2012. Expenses to date have largely consisted of professional fees to advisors and consultants, travel, salaries and severance accrual. The Company also expects to spend approximately $2.5 million in capital expenditures to consolidate its manufacturing.

A summary of the activity for these initiatives is presented below as of September 28, 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	$	665		$	1,315		$	1,980
Cash payments	$	(99	)	$	(1,270	)	$	(1,369	)
Liability at September 28, 2012	$	602		$	391		$	993

Total costs incurred to date	$	701		$	2,339		$	3,040
Total costs expected to be incurred	$	1,437		$	4,563		$	6,000