Restructuring and Exit Costs

2017 Restructuring Plans

In September 2017, the Company initiated a restructuring plan to optimize headcount in connection with the acquisition and integration of the assets and business of Nesscap, as well as to implement additional organizational efficiencies. Total charges for the September 2017 restructuring plan were approximately $1.2 million, all of which were incurred in the third quarter of 2017.

In February 2017, the Company implemented a comprehensive restructuring plan that included a wide range of organizational efficiency initiatives and other cost reduction opportunities. Total charges for the nine months ended September 30, 2017 for the February 2017 restructuring plan were approximately $0.9 million, which included a reversal of expense of $0.1 million in the three months ended September 30, 2017.

The charges related to both of the 2017 restructuring plans consist of employee severance costs and have been or will be paid in cash. The charges were recorded within “restructuring and exit costs” in the condensed consolidated statements of operations.

The following table summarizes the changes in the liabilities for each of the 2017 restructuring plans, which are recorded in “accrued employee compensation” in the Company’s condensed consolidated balance sheet for the nine months ended September 30, 2017 (in thousands):



	February 2017 Plan			September 2017 Plan
	Employee Severance Costs
Restructuring liability as of December 31, 2016	$	—		$	—
Costs incurred	997			1,195
Amounts paid	(855		)	(58		)
Accruals released	(142		)	—
Restructuring liability as of September 30, 2017	$	—		$	1,137

2015 Restructuring Plan

In 2015, the Company initiated a restructuring plan to consolidate U.S. manufacturing operations and to reduce headcount and operating expenses in order to align the Company’s cost structure with the current business forecast and to improve operational efficiency. The plan also included the disposition of the Company’s microelectronics product line which was completed in April 2016. The restructuring plan was otherwise substantially completed in the first quarter of 2016. Total restructuring and exit costs were $2.8 million, which included $1.3 million in facilities costs related to the consolidation of manufacturing operations, $1.2 million in employee severance costs and $0.3 million in other exit costs. The Company also incurred $0.6 million in accelerated equipment depreciation expense related to the consolidation of manufacturing operations. Total cash expenditures related to restructuring activities were approximately $1.5 million.

As the 2015 restructuring plan was completed in 2016, there were no restructuring charges or cash payments related to this plan during the three and nine months ended September 30, 2017. For the nine months ended September 30, 2016, the Company recorded net charges related to the 2015 restructuring plan of $0.3 million, within “restructuring and exit costs” and $0.1 million of accelerated depreciation expense within “cost of revenue” in the condensed consolidated statements of operations. No restructuring charges related to this plan were recorded during the three months ended September 30, 2016. During the three and nine months ended September 30, 2016, cash payments in connection with the 2015 restructuring plan were $26,000 and $0.5 million, respectively, primarily related to employee severance and other exit costs.

Adjustment to Lease Liability

In connection with the 2015 restructuring plan, in June 2015, the Company ceased use of approximately 60,000 square feet of its Peoria, AZ manufacturing facility, and determined this leased space would have no future economic benefit to the Company based on the current business forecast. In the third quarter of 2017, we recognized additional facilities costs of $0.2 million as restructuring charges to record an adjustment to the sublease income assumption included in the estimated future rent obligation of this leased space.

The Company has recorded a liability for the future rent obligation associated with this space, net of estimated sublease income, in accordance with ASC Topic 420. As of September 30, 2017 and December 31, 2016, lease obligation liabilities related to this leased space of $0.7 million and $0.8 million, respectively, were included in “accounts payable and accrued liabilities” and “other long term liabilities” in the condensed consolidated balance sheets.