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 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 year ended December 31, 2017 for the February 2017 restructuring plan were approximately $0.9 million.

The Company accounts for charges resulting from restructuring and exit activities in accordance with ASC Topic 420, Exit or Disposal Cost Obligations (“ASC 420”), and ASC Topic 712, Compensation-Nonretirement Postemployment Benefits, for employee termination benefits to be paid in accordance with its ongoing employee termination benefit arrangement.

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 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 year ended December 31, 2017 (in thousands):



	February 2017 Plan			September 2017 Plan
	Employee Severance Costs
Restructuring plans liability as of December 31, 2016	$	—		$	—
Costs incurred	997			1,275
Amounts paid	(855		)	(431		)
Accruals released	(142		)	(27		)
Restructuring liability as of December 31, 2017	$	—		$	817

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 2015 plan also included the disposition of the Company’s microelectronics product line which was completed in April 2016. With the exception of lease assumption revisions described below, the plan was completed in 2016. Total restructuring and exit costs for the 2015 plan were $3.0 million, which included $1.5 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, excluding lease payments, related to the 2015 restructuring plan activities were approximately $1.5 million.

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. As a result, in June 2015, the Company recorded a liability for the future rent obligation associated with this space, net of estimated sublease income, in accordance with ASC Topic 420. For the year ended December 31, 2015, the expense related to the exit of this leased space was $1.2 million, before tax, and was recorded as a component of total restructuring and exit costs. During the years ended December 31, 2017 and 2016, the Company recorded additional restructuring and exit costs of $0.2 million and $0.1 million, respectively, related to revisions to the sublease income assumption.

For the years ended December 31, 2017, 2016 and 2015, the Company recorded total charges related to its 2015 restructuring plan of $0.2 million, $0.3 million and $2.5 million, respectively, within “restructuring and exit costs” in the consolidated statements of operations. Additionally, for the years ended December 31, 2016 and 2015, the Company recorded $0.1 million and $0.4 million, respectively, of accelerated depreciation expense within “cost of revenue” in the consolidated statements of operations.

As of December 31, 2017, the Company’s consolidated balance sheet includes restructuring liability associated with lease obligation costs of $0.3 million in “accounts payable and accrued liabilities” and $0.4 million in “other long term liabilities.”

The following table summarizes restructuring and exit costs related to the 2015 restructuring plan for the years ended December 31, 2017, 2016 and 2015 (in thousands):



	Employee Severance Costs			Lease Obligation Costs			Other Exit Costs			Total
Restructuring liability as of December 31, 2014	$	—		$	—		$	—		$	—
Costs incurred	1,439			1,208			—			2,647
Restructuring cash payments	(1,010		)	—			—			(1,010		)
Accruals released	(135		)	—			—			(135		)
Lease payments and accretion	—			(165		)	—			(165		)
Restructuring liability as of December 31, 2015	294			1,043			—			1,337
Costs incurred	67			86			298			451
Restructuring cash payments	(207		)	—			(246		)	(453		)
Accruals released	(154		)	—			—			(154		)
Lease payments and accretion	—			(327		)	(52		)	(379		)
Restructuring liability as of December 31, 2016	—			802			—			802
Costs incurred	—			179			—			179
Lease payments and accretion	—			(311		)	—			(311		)
Restructuring liability as of December 31, 2017	$	—		$	670		$	—		$	670