Note 4 - Restructuring Charges

3 Months Ended

Mar. 30, 2019

Notes to Financial Statements

Restructuring and Related Activities Disclosure [Text Block]

4. Restructuring Charges

Subsequent to the acquisition of Xcerra on

October 1

st

, during the

fourth

quarter of

2018,

we began a strategic restructuring program designed to reposition our organization and improve our cost structure as part of our targeted integration plan regarding the recently acquired Xcerra (“Integration Program”). See Note

2,

“Business Acquisitions, Goodwill and Purchased Intangible Assets” for additional information regarding the acquisition of Xcerra. As part of the Integration Program we will consolidate our global handler and contactor manufacturing operations and expect to close our manufacturing operations in Penang, Malaysia and Fontana, California by the end of calendar year

2019.

Relating to the facility consolidation actions, we notified certain impacted employees of a reduction in force program. The facility consolidation and reduction in force programs are being implemented as part of a comprehensive review of our operations and are intended to streamline and reduce our operating cost structure and capitalize on acquisition synergies.

As a result of the activities described above, we recognized total pretax charges of

$1.3

 million for the

three

months ended

March 30, 2019,

that are within the scope of ASC

420,

Exit or Disposal Cost Obligations

(“ASC

420”

). All costs of the Integration Program were, and are expected to be, incurred by our Semiconductor Test & Inspection segment.

Costs associated with restructuring activities are presented in our consolidated statements of operations as restructuring charges, except for certain costs associated with inventory charges related to the decision to end manufacturing of certain of Xcerra’s semiconductor test handler products, which are classified within cost of sales. Other restructuring costs include expenses for professional fees associated with employee severance and impairments of fixed assets.

The following table summarizes the activity within the restructuring related accounts for the Integration Program during the

three

months ended

March 30, 2019

(in thousands)

:

	Severance and				Other Exit
	Other Payroll				Costs			Total
Balance, December 29, 2018	$	4,026		$	-		$	4026
Costs accrued		753			608			1361
Amounts paid or charged		(1,029	)		(608	)		(1637	)
Impact of currency exchange		4			-			4
Balance, March 30, 2019	$	3,754		$	0		$	3,754

At

March 30, 2019,

our total accrual for restructuring related items is reflected within current liabilities of our consolidated balance sheets as these amounts are expected to be paid out in

2019.

The estimated costs associated with the employee severance and facility consolidation actions will be paid predominantly in cash, with the exception of the amortization of leasehold improvements which is non-cash. All amounts accrued related to inventory will remain in our consolidated balance sheet until they are scrapped.