Restructuring and Other Charges |
3 Months Ended |
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Mar. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Charges | (9) Restructuring and Other Charges In 2021, the Company made the strategic decision to relocate manufacturing functions of DZS GmbH and Optelian to Seminole, Florida and to transition the above subsidiaries to sales and research and development centers. For the three months ended March 31, 2022, the Company recorded $0.4 million of related restructuring costs. The restructuring of DZS GmbH and Optelian was completed in 2022 and no related restructuring costs were recorded for the three months ended March 31, 2023. On September 17, 2022, DZS signed an agreement with Fabrinet, a third-party provider of electro-mechanical and electronic manufacturing and distribution services, to transition the sourcing, procurement, order-fulfillment, manufacturing and return merchandise authorization activities in the Company's Seminole, Florida facility to Fabrinet. The transition to Fabrinet began in October 2022 and substantially completed in the beginning of 2023. Post transition, the DZS Seminole, Florida-based operations, supply chain and manufacturing workforce will be reduced by approximately two-thirds and the remaining team is expected to be relocated to an appropriately sized facility. For the three months ended March 31, 2023, the Company recorded $3.5 million of restructuring related costs, consisting of freight and expedite fees of $1.0 million, facility and labor costs of $0.8 million, accelerated depreciation of manufacturing related assets of $0.4 million, termination-related benefits of $0.3 million, inventory write-off of $0.5 million, and other costs of $0.5 million. The Company accounted for the one-time employee termination benefits in accordance with ASC 420, Exit or Disposal Cost Obligations, and recognized the respective liability when the final terms of the benefit arrangement were communicated to the affected employees. As of March 31, 2023, the Company had $0.6 million liability related to termination benefits associated with Seminole restructuring. For the three months ended March 31, 2023, the Company also included in restructuring and other charges approximately $0.3 million of facility costs related to impaired facilities and $0.4 million of non-capitalizable implementation costs related to replacement of the Company’s legacy enterprise resource planning and reporting software.
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