Restructuring Charges

6 Months Ended

Jun. 30, 2014

N. Restructuring Charges

On May 27, 2014, the Company's management initiated a plan for further realignment of its sales, general and administrative activities as part of its ongoing efforts to restore sustainable profitability and improve its competitive position as a niche design and manufacturing company of highly-engineered electronics components and subsystems within a dynamic market environment. Implementation of this plan for realignment is expected to be substantially completed within the third quarter of 2014. Management continues to evaluate opportunities to improve the Company's operating leverage and position for improved results. As a result of this plan for realignment, the Company incurred restructuring charges during the quarter ended June 30, 2014, of $397,000. These restructuring charges consisted of approximately $334,000 of employee separation costs and $63,000 of other office closure-related costs.

The charges for employee separation costs consisted of severance pay and other benefits. The costs related to these restructuring activities were recorded in the consolidated statements of operations as restructuring charges.

A reconciliation of the Company's restructuring liability, included as a component of other accrued expenses, is as follows:

	Employee Related			Other			Total
Beginning balance, May 27, 2014	$	334,000		$	63,000		$	397,000
Less: Cash payments		(42,000	)		(8,000	)		(50,000	)
Ending balance, June 30, 2014	$	292,000		$	55,000		$	347,000

On October 17, 2013, the Company's management initiated a restructuring plan to realign its customer support operations across all of the Company's locations and to reduce structural costs in an effort to gain efficiencies in providing customer support.

A reconciliation of the Company's restructuring liability, included as a component of other accrued expenses, is as follows:

	Employee Related			Other			Total
Ending balance, December 31, 2013	$	19,000		$	51,000		$	70,000
Less: Cash payments		(19,000	)		(48,000	)		(67,000	)
Ending balance, June 30, 2014	$	-		$	3,000		$	3,000

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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