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Restructuring and Related Costs
6 Months Ended
Jun. 30, 2018
Restructuring and Related Activities [Abstract]  
Restructuring and Related Costs
Restructuring and Related Costs
In the fourth quarter of 2017, the Company implemented the 2017 Restructuring Plan in order to reduce expenses and establish a more cost-effective structure that better aligns the Company's operations with its long-term strategies. As part of the 2017 Restructuring Plan, the Company implemented several changes that it believes will help its research and development efficiency, with consolidation of its development sites, including closure of its Beijing, China design center, process changes to more broadly leverage the Company's engineering resources across regions and product line development, and prioritization of research and development initiatives. Outside of engineering, the Company also made changes to allow it to operate more efficiently as it scales the business, including reducing the Company's facilities footprint and writing off certain equipment that will not be utilized in the future. Finally, the Company realigned its inventory levels to match its new technology cadence and go to market strategies. As of December 30, 2017, the 2017 Restructuring Plan had been substantially completed and the Company does not expect to record significant future charges under this plan in 2018. During the six months ended June 30, 2018, the Company revised the estimates to its facilities-related and severance expenses, and recorded an impairment on term license agreements, as described further below.
The following table presents restructuring and related costs (credits) included in cost of revenue and operating expenses in the accompanying consolidated statements of operations under the 2017 Restructuring Plan (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 30, 2018
 
June 30, 2018
 
Cost of Revenue
 
Operating Expenses
 
Cost of Revenue
 
Operating Expenses
Severance and related expenses
$
26

 
$
900

 
$
43

 
$
1,845

Facilities

 
47

 

 
(1,037
)
Asset impairment

 
(50
)
 

 
(74
)
License impairment

 
783

 

 
783

Total
$
26

 
$
1,680

 
$
43

 
$
1,517


Restructuring liabilities are reported within accrued expenses and other long-term liabilities in the accompanying consolidated balance sheets (in thousands):
 
 
December 30, 2017
 
Charges (Credits)
 
Cash
 
Non-cash Settlements and Other
 
June 30, 2018
 
 
Severance and related expenses
$
3,672

 
$
1,888

 
$
(4,029
)
 
$

 
$
1,531

 
Facilities
6,947

 
(1,037
)
 
(998
)
 
(40
)
 
4,872

 
Asset impairment

 
(74
)
 

 
74

 

 
License impairment

 
783

 

 
(96
)
 
687

 
Total
$
10,619

 
$
1,560

 
$
(5,027
)
 
$
(62
)
 
$
7,090


During the first half of 2018, the Company revised its estimates related to its facilities closures due to the sublease of two restructured facilities and also recorded severance costs for additional impacted employees. Additionally, the Company recorded an impairment of $0.8 million related to term license agreements that were determined to have no future use. The Company expects the payments related to these term license agreements to be fully paid by the third quarter of 2019. As of June 30, 2018, the Company's restructuring liability was comprised of $4.9 million related to facility closures, with leases through January 2022, and $1.5 million of severance and related expenses, which are expected to be substantially paid by the second quarter of 2019