DSL Service Assurance Hardware Exit

6 Months Ended

Jun. 30, 2012

Costs Associated With Exit [Abstract]

DSL Service Assurance Hardware Exit. In January 2012, our Board of Directors approved the shutdown of our DSL service assurance hardware product line. We will continue to build and ship DSL service assurance hardware products to fulfill customer orders that were received as of the date of the shutdown notice. DSL hardware revenue and expenses will continue in 2012 until we complete the shutdown, which we currently anticipate will be during the third quarter of 2012.

We estimate that exiting this product line will produce a small amount of operating income in the first nine months of 2012. This estimated income consists of revenue from final hardware shipments less the following costs: i) cost of goods sold, ii) engineering and sales expenses to support final product shipments, and iii) one-time costs related to the shutdown of approximately $282,000, the majority of which are severance and employee-related costs. In the three and six months ended June 30, 2012, we incurred approximately $181,000 and $101,000 of shutdown costs, respectively. In the three and six months ended June 30, 2012, a total of $282,000 of shutdown costs were included in the following lines of the statement of comprehensive income: i) cost of product sales; ii) research and development; and iii) general and administrative.

Exit cost activities for the three month periods ended March 31, 2012 and June 30, 2012 were as follows (in thousands):

	Balance						Balance						Balance
	December						March						June
	31, 2011		Expense		Utilization		31, 2012		Expense		Utilization		30, 2012

Exit costs	$	0	$	181	$	104	$	77	$	101		-	$	178