RESTRUCTURING AND RELATED COSTS

Fiscal Year 2018 Restructuring

In fiscal year 2018, we initiated a Test workforce reduction intended to simplify the organization and reduce the overall cost structure. As a result, during the fourth quarter of fiscal year 2018, we recorded $880 of pre-tax severance and related expense. These expenses will be paid in the first quarter of fiscal year 2019.

Fiscal Year 2017 Restructuring

In fiscal year 2017, we initiated a series of Test workforce reductions and facility closures intended to increase organizational effectiveness, gain manufacturing efficiencies and provide cost savings that can be reinvested in our growth initiatives. These actions include the transfer of certain production operations in China to a contract manufacturing partner throughout fiscal years 2018 and 2019. As a result, in fiscal year 2018, we recorded $1,550 of pre-tax severance and related expense and $269 of pre-tax facility closure costs. In fiscal year 2017, we recorded $2,899 of pre-tax severance and related expense and $23 of pre-tax facility closure costs. As of September 29, 2018, we have incurred a total of $4,741 of pre-tax expense, including $4,449 and $292 of pre-tax expense related to severance and facility closure costs, respectively. In fiscal year 2019 we expect to incur approximately $150 of additional pre-tax severance and related expense and facility closure costs related to these actions. The majority of the expenses are expected to be paid in the first half of fiscal year 2019.

During the fourth quarter of fiscal year 2017, in an effort to reduce costs and create economic efficiencies in Sensors, we initiated plans to close our Machida, Japan sales office in the second quarter of fiscal year 2018. As a result, in fiscal year 2018, we recorded $31 of severance and related pre-tax expense. As of September 29, 2018, we have incurred a total of $152 of pre-tax severance and related expense. We expect to incur additional pre-tax severance and related expense of approximately $15 in fiscal year 2019. Remaining expenses are expected to be paid during the first half of fiscal year 2019.

Fiscal Year 2016 Restructuring

During fiscal year 2016, we initiated plans to reduce costs in Sensors by closing our Machida, Japan manufacturing facility in the third quarter of fiscal year 2017. As of September 29, 2018, we have incurred a total of $1,964 of pre-tax expense, including $1,444 and $520 of pre-tax expense related to severance and facility closure costs, respectively. All severance and facility closure costs have been paid as of September 29, 2018.

During the third quarter of fiscal year 2016, we initiated restructuring actions to reduce our cost structure, primarily in our Corporate area and Test segment, through terminations, elimination of certain open positions as a result of employees leaving voluntarily throughout fiscal year 2016 and reductions in contractors. The restructuring activities resulted in severance and related pre-tax expense of $1,237 in fiscal year 2016. All severance and related costs had been paid as of September 30, 2017.

Fiscal Year 2014 Restructuring

During fiscal year 2014, we initiated workforce and other cost reduction actions at certain of our Test locations in the U.S. and Europe. No restructuring expenses were recognized during fiscal years 2018, 2017 or 2016 related to these restructuring actions.

Restructuring expense included in the Consolidated Statements of Income for all restructuring actions is as follows:



	Test		Sensors		Total
Fiscal year 2018
Cost of sales	$	1,622	$	—	$	1,622
Selling and marketing	236		31		267
General and administrative	317		—		317
Research and development	524		—		524
Total restructuring expense for fiscal year 2018	$	2,699	$	31	$	2,730

Fiscal year 2017
Cost of sales	$	2,439	$	701	$	3,140
Selling and marketing	112		203		315
General and administrative	371		253		624
Research and development	—		—		—
Total restructuring expense for fiscal year 2017	$	2,922	$	1,157	$	4,079

Fiscal year 2016
Cost of sales	$	299	$	762	$	1,061
Selling and marketing	129		155		284
General and administrative	414		401		815
Research and development	5		—		5
Total restructuring expense for fiscal year 2016	$	847	$	1,318	$	2,165

Restructuring expense accruals included in the Consolidated Balance Sheets for all restructuring actions are as follows:



	2018			2017						2016						2014
	Test			Test			Sensors			MTS			Sensors			Test			Total
Balance, October 1, 2016	$	—		$	—		$	—		$	308		$	935		$	1,053		$	2,296
Restructuring expense	—			2,922			121			—			1,036			—			4,079
Payments	—			—			—			(303		)	(1,652		)	(352		)	(2,307		)
Other adjustments	—			(23		)	—			—			—			—			(23		)
Currency translation	—			—			(1		)	(5		)	(110		)	33			(83		)
Balance, September 30, 2017	$	—		$	2,899		$	120		$	—		$	209		$	734		$	3,962
Restructuring expense	880			1,819			31			—			—			—			2,730
Payments	(67		)	(1,748		)	(92		)	—			(106		)	(386		)	(2,399		)
Other adjustments	238			(37		)	—			—			(106		)	3			98
Currency translation	—			—			(2		)	—			3			(1		)	—
Balance, September 29, 2018	$	1,051		$	2,933		$	57		$	—		$	—		$	350		$	4,391

Restructuring expense accruals included in the Consolidated Balance Sheets are as follows:



	2018		2017
Accrued payroll and related costs	$	4,267	$	3,485
Other accrued liabilities	—		98
Other long-term liabilities	124		379
Total severance and related costs	$	4,391	$	3,962