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RESTRUCTURING CHARGES
6 Months Ended
Aug. 31, 2020
Restructuring And Related Activities [Abstract]  
RESTRUCTURING CHARGES

NOTE 7 – RESTRUCTURING CHARGES

Beginning in fiscal 2019, we commenced a plan to capture certain synergies and cost savings related to streamlining our global operations and sales organization, as well as rationalize certain leased properties that are not fully occupied. Our plan is aligned with our strategy to integrate the global sales organization and further outsource manufacturing functions in order to drive operational efficiency, increase supplier geographic diversity, and reduce operating expenses. To date, total restructuring charges were $14.9 million, comprised of $9.1 million in severance and employee related costs, and $5.8 million for vacant office and manufacturing facility space. Restructuring charges related to vacant office and manufacturing facility space were due primarily to the vacancy in Canton, Massachusetts of $3.3 million, which was sub-leased starting in May 2020. The anticipated rent payments for the ceased-use leased facilities will be made through December 2025. Substantially all charges related to severance and employee costs were under the Telematics Products and LoJack U.S. SVR Products reportable segments. As a result of the adoption of ASC 842, effective March 1, 2019, the balance of the restructuring liability related to certain facility leases has been reclassified as a reduction of the Operating lease right-of-use assets in our condensed consolidated balance sheet.

For the three and six months ended August 31, 2020, total restructuring charges were $0.6 million and $2.5 million, respectively. Total restructuring charges incurred to date in fiscal 2021 were comprised of $2.3 million in severance and employee related costs, which included $0.9 million stock-based compensation, and $0.2 million for vacant facilities. The restructuring liabilities related to personnel were included in Accrued payroll and employee benefits in our condensed consolidated balance sheets as of August 31, 2020 and February 29, 2020.

 

The following table summarizes the charges resulting from the implementation of the restructuring plan (in thousands):

 

 

Three months ended August 31, 2020

 

 

Three months ended August 31, 2019

 

 

Personnel

 

 

Facilities

 

 

Total

 

 

Personnel

 

 

Facilities

 

 

Total

 

Cost of revenue

$

397

 

 

$

71

 

 

$

468

 

 

$

349

 

 

$

1,210

 

 

$

1,559

 

Selling and marketing

 

-

 

 

 

-

 

 

 

-

 

 

 

447

 

 

 

-

 

 

 

447

 

General and administrative

 

83

 

 

 

-

 

 

 

83

 

 

 

266

 

 

 

-

 

 

 

266

 

Total

$

480

 

 

$

71

 

 

$

551

 

 

$

1,062

 

 

$

1,210

 

 

$

2,272

 

 

 

Six months ended August 31, 2020

 

 

Six months ended August 31, 2019

 

 

Personnel

 

 

Facilities

 

 

Total

 

 

Personnel

 

 

Facilities

 

 

Total

 

Cost of revenue

$

273

 

 

$

174

 

 

$

447

 

 

$

349

 

 

$

1,210

 

 

$

1,559

 

Selling and marketing

 

30

 

 

 

-

 

 

 

30

 

 

 

447

 

 

 

-

 

 

 

447

 

General and administrative

 

1,982

 

 

 

-

 

 

 

1,982

 

 

 

266

 

 

 

-

 

 

 

266

 

Total

$

2,285

 

 

$

174

 

 

$

2,459

 

 

$

1,062

 

 

$

1,210

 

 

$

2,272

 

 

The following table summarizes the activity resulting from the implementation of the restructuring plan within other current and non-current liabilities (in thousands):

 

 

Personnel

 

 

Facilities

 

 

Total

 

Restructuring liabilities as of February 29, 2020

$

2,383

 

 

$

359

 

 

$

2,742

 

Charges

 

2,285

 

 

 

174

 

 

 

2,459

 

Payments

 

(1,848

)

 

 

(448

)

 

 

(2,296

)

Restructuring liabilities as of August 31, 2020

$

2,820

 

 

$

85

 

 

$

2,905