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Manufacturing Consolidation Project and Tax Strategy

12 Months Ended

Dec. 28, 2012

Manufacturing Consolidation Project and Tax Strategy Disclosure [Abstract]

Manufacturing Consolidation Project and Tax Strategy Disclosure [Text Block]

Note 20 — Manufacturing Consolidation Project and Tax Strategy

During 2011 and 2012 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 these strategies is to further improve upon gross profit margin by streamlining operations, thereby reducing costs and to increase profits in the U.S. to enable the Company to utilize its $122.5 million in net operating loss carryforwards and at the same time, reduce income taxes in foreign jurisdictions where it pays tax. STAAR currently manufactures its products in four facilities worldwide. It has developed a plan to methodically consolidate its manufacturing in a single site at its Monrovia, California location by the end of 2013.

The Company expects these initiatives to cost approximately $6 million over a three-year period, of which it incurred approximately $2.6 million during 2012. These expenses are included in the other general and administrative expenses in the consolidated statement of operations for the year ended December 28, 2012. Expenditures to date have largely consisted of severance, employee costs, professional fees to advisors and consultants. 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 December 28, 2012 (in thousands):

	Termination Benefits			Other Associated Costs			Total
Liability at December 30, 2011	$	36		$	346		$	382
Costs incurred and charged to expense		864			1,772			2,636
Cash payments		(396	)		(1,825	)		(2,221	)
Liability at December 28, 2012	$	504		$	293		$	797

Total costs incurred to date	$	900		$	2,796		$	3,696
Total costs expected to be incurred	$	1,410		$	4,590		$	6,000