Note N - Restructuring Activities

9 Months Ended

Sep. 30, 2021

Notes to Financial Statements

Restructuring and Related Activities Disclosure [Text Block]

Note N — Restructuring Activities

Our management team continuously reviews and adjusts our cost structure and operating footprint, optimize our operations, and invest in improved technology.  During 2020, in an effort to right-size our operating footprint, we terminated leases in Wilkes Barre (PA) and Grand Prairie (TX) and exited our last direct mail facility in Jacksonville (FL).  We completed the migration of our fulfillment business from the Grand Prairie operations into a new 300,000 square foot facility in Kansas City in December 2020.  In the first quarter of 2021, we completed the migration of our Shawnee operations to Kansas City.  The Shawnee facility lease expired on  April 30, 2021.  The new Kansas City location is now our primary facility in the Midwest. In 2020, we successfully reduced the footprint of our Customer Care business by reducing our Austin office location by approximately 50,000 square feet in addition to exiting one of our two Manila offices since the business is operating effectively in a work-from-home environment. 

In the three months ended September 30, 2021 and 2020 we recorded restructuring charges of $0.9 million and $1.4 million respectively.  The charges for the three months ended September 30, 2021 included $0.1 million of severance charges, $0.4 million in lease impairment expense and $0.4 million of facility related and other expenses.  The charges for the three months ended September 30, 2020 included $0.6 million of severance charges, $0.6 million of facility related and other expenses, and $0.2 million in capital losses from the asset disposal associated with the Summit deal. 

In the nine months ended September 30, 2021 and 2020 we recorded restructuring charges of $4.9 million and $8.0 million respectively.  The charges for the nine months ended September 30, 2021 included $1.5 million of severance charges, $0.7 million in lease impairment expense and $2.6 million of facility related and other expenses.  The charges for the nine months ended September 30, 2020 included $3.0 million of lease impairment charges related to the exit from our direct mail facilities, $2.0 million of severance charges, $1.3 million in capital losses from the asset disposal associated with the sale of assets to Summit and $2.0 million of facility related and other expenses. 

The following table summarizes the restructuring charges which are recorded in “Restructuring Expense” in the Condensed Consolidated Statements of Comprehensive Income (Loss).

	Three Months Ended September 30,					Nine Months Ended September 30,
In thousands	2021			2020		2021			2020
Adjustment to Contract termination fee		—			—		—			(306	)
Severance	$	116		$	641	$	1,530		$	2,053
Facility, asset impairment and other expense
Lease impairment and termination expense		425			—		718			2,974
Fixed Asset disposal and impairment charges		(8	)		154		(2	)		1,294
Facility and other expenses		404			624		2,634			1,990
Total facility, asset impairment and other expense		821			778		3,350			6,258
Total	$	937		$	1,419	$	4,880		$	8,005

The following table summarizes the changes in liabilities related to restructuring activities:

In thousands	Three Months Ended September 30, 2021
	Contract Termination Fee		Severance			Facility, asset impairment and other expense			Total
Beginning Balance:	$	—	$	937		$	21		$	958
Additions		—		113			(16	)		97
Payments and adjustments		—		(421	)		—			(421	)
Ending Balance:	$	—	$	629		$	5		$	634

In thousands	Nine Months Ended September 30, 2021
	Contract Termination Fee		Severance			Facility, asset impairment and other expense		Total
Beginning balance:	$	—	$	549		$	4	$	553
Additions		—		1,527			1		1,528
Payments and adjustments		—		(1,447	)		—		(1,447	)
Ending balance:	$	—	$	629		$	5	$	634

In thousands	Three Months Ended September 30, 2020
	Contract Termination Fee			Severance			Facility, asset impairment and other expense			Total
Beginning Balance:	$	695		$	775		$	2		$	1,472
Additions		—			611			576			1,187
Payments		(695	)		(608	)		(570	)		(1,873	)
Ending Balance:	$	—		$	778		$	8		$	786

	For the Nine Months Ended September 30, 2020
	Contract Termination Fee			Severance			Facility, asset impairment and other expense			Total
Beginning Balance:	$	1,491		$	360		$	70		$	1,921
Additions		—			2,022			3,145			5,167
Payments		(1,491	)		(1,604	)		(3,207	)		(6,302	)
Ending Balance:	$	—		$	778		$	8		$	786

We expect that in connection with our cost-saving and restructuring initiatives, we will incur total restructuring charges of approximately $27.1 million through the end of 2021. We have recognized $26.1 million of restructuring charges to date, and we expect to incur an additional $1.0 million of restructuring charges through the end of 2021.