Note 9 – Restructuring, Impairments and Other Costs

During the three months ended June 26, 2016 and June 28, 2015, we recorded restructuring, impairment and other costs, net of releases and gains of $0.6 million and $4.2 million, respectively. During the six months ended June 26, 2016 and June 28, 2015, we recorded restructuring, impairment and other costs, net of releases and gains of $(10.3) million and $8.9 million, respectively. The detail of the charges for the three and six months ended June 26, 2016 is presented in the summary table below.

2015 Operating Expense Reduction Program

In the third quarter of 2015, we announced a program to reduce operating expenses by approximately $30.0 million to $34.0 million annually. This is a structural change to the operating expense level of the company and the anticipated savings contain no temporary measures. We recorded $12.9 million of employee separation expense in 2015, which represents the full cost of this program. This program is substantially complete as of June 26, 2016.

Prior Year Infrastructure Realignment Programs

The 2014 Infrastructure Realignment Program consists of product line and sales organizational changes, costs associated with streamlining operations creating greater manufacturing flexibility and having a more balanced internal versus external production mix, and other related costs mainly associated with product qualification activities. In 2014, we announced our 2014 Manufacturing Footprint Consolidation Plan. We eliminated our internal 5-inch and significantly reduced 6-inch wafer fabrication lines and rationalized our assembly and test capacity, resulting in the closure of our manufacturing and assembly facilities in West Jordan, Utah and Penang, Malaysia, as well as the remaining 5-inch wafer fabrication lines in Bucheon, South Korea. We ended production at these sites during the third quarter of fiscal year 2015. In the first quarter of 2016, we sold the facility in Penang, Malaysia for a gain of $12.3 million, which is reflected in the table below within the asset disposal (gain) loss caption.

In addition to the amounts recorded in the summary below, we expect to incur an additional $1 million in site closure costs to complete this program in fiscal year 2016.


	Accrual Balance at December 27, 2015		Restructuring Charges			Other Charges		Reserve Release			Cash (Paid) Received			Net Book Value Assets Disposed			Accrual Balance at March 27, 2016
	(In millions)
2014 Infrastructure Realignment Program:
Employee separation costs	$	3.3	$	—		$	—	$	(0.1	)	$	(2.2	)	$	—		$	1.0
Asset disposal (gain) loss		—		(12.5	)		—		—			15.4			(2.9	)		—
Factory closure costs		1.2		0.9			—		—			(2.1	)		—			—
Qualification costs		—		—			1.0		—			(1.0	)		—			—
2015 Operating Expense Reduction Program:
Employee separation costs		3.0		0.1			—		(0.3	)		(2.1	)		—			0.7

	$	7.5	$	(11.5	)	$	1.0	$	(0.4	)	$	8.0		$	(2.9	)	$	1.7


	Accrual Balance at March 27, 2016		Restructuring Charges			Other Charges		Reserve Release			Cash (Paid) Received			Net Book Value Assets Disposed			Accrual Balance at June 26, 2016
	(In millions)
2014 Infrastructure Realignment Program:
Employee separation costs	$	1.0	$	—		$	—	$	—		$	(0.5	)	$	—		$	0.5
Asset disposal (gain) loss		—		(0.2	)		—		—			0.5			(0.3	)		—
Factory closure costs		—		0.4			—		—			(0.4	)		—			—
Qualification costs		—		—			0.5		—			(0.5	)		—			—
2015 Operating Expense Reduction Program:
Employee separation costs		0.7		—			—		(0.1	)		(0.3	)		—			0.3

	$	1.7	$	0.2		$	0.5	$	(0.1	)	$	(1.2	)	$	(0.3	)	$	0.8