Note 8 - Restructuring Charges and Exit Costs

12 Months Ended

Mar. 30, 2014

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure [Text Block]

NOTE 8.    RESTRUCTURING CHARGES AND EXIT COSTS

2014 Restructuring Charges and Exit Costs

Restructuring expenses result from the execution of management approved restructuring plans that were generally developed to improve our cost structure and/or operations, often in conjunction with our acquisition integration strategies. Restructuring expenses consist of employee severance costs and may also include contract termination costs to improve our cost structure prospectively. In fiscal year 2014, we recorded $3.0 million of restructuring charges and exit costs. Of the total restructuring charges and exit costs recorded in fiscal year 2014, $0.2 million was reflected in cost of sales and $2.8 million was reflected in operating expenses within our consolidated statements of operations. 

2013 Restructuring Charges and Exit Costs

In the fourth quarter of fiscal year 2013, we recorded $0.3 million of restructuring charges and exit costs and released a $0.5 million liability related to the Industrial Research Assistance Program (“IRAP”) with Canadian governmental agency. In the third, second and first quarters of fiscal year 2013, we recorded restructuring charges and exit costs of $0.6 million, $0.3 million and $0.9 million, respectively. Of the total restructuring charges and exit costs recorded in fiscal year 2013, $0.3 million was reflected in cost of sales and $1.3 million was reflected in operating expenses within our consolidated statements of operations. 

2012 Restructuring Charges and Exit Costs

In fiscal year 2012, we incurred restructuring charges and exit costs totaling $14.2 million, of which $13.9 million was recorded in the fourth quarter and $0.3 million was recorded in the first quarter. Of the total restructuring charges and exit costs, $1.3 million was reflected in cost of sales and $12.9 million was reflected in operating expenses within our consolidated statements of operations.

During the fourth quarter of fiscal year 2012, we implemented and completed reductions in force of approximately 173 positions across of all company functions. This action was intended to align our cost structure with revenues, reduce spending in operations and to cease development of certain products. The reduction in headcount was primarily associated with offices located in Fremont, California; Hangzhou, China; Ottawa, Ontario, Canada; Minneapolis, Minnesota; Raleigh, North Carolina; and San Diego, California. As part of the reduction activity, we terminated our development efforts in connection with our pre-production OTN and de-duplication products. The market for our OTN product was modest and the outlook to achieve meaningful revenue and a return on this investment was considered unlikely. As a result of the reduction activity in the fourth quarter of fiscal year 2012, we recorded a total charge for restructuring and exit costs of $13.9 million, which included a one-time severance charge of $4.2 million, lease contract termination costs and other costs of $7.0 million, lease abandonment charges of $0.8 million and accelerated amortization and depreciation charges of $1.9 million. We paid $1.4 million of the $4.2 million one-time severance charges in fiscal year 2012.

The lease contract termination costs and other costs of $7.0 million include: (1) costs associated with the termination of certain electronic design automated license agreements consisting of the accrual of future payments of $3.9 million, and the write off of prepaid training, maintenance and license fees of $2.6 million; and (2) costs associated with a Canadian governmental agency related to IRAP tied to continued employment obligations of $0.5 million, which was waived as of March 31, 2013.

The lease abandonment charges of $0.8 million include future lease obligations, net of estimated rental income for vacated facilities in Ottawa, Canada, San Diego, California, Minneapolis, Minnesota and Raleigh, North Carolina, for leases that expire at various dates from June 2012 to January 2015.

The accelerated amortization and depreciation charges of $1.9 million include $1.7 million related to termination of OTN and de-duplication products (See “Note 10 – Goodwill and Intangible Assets”) and $0.2 million related to certain property and equipment.

During the first quarter of fiscal year 2012, we incurred restructuring charges and exit costs of $0.3 million, which included a one-time severance charge of $0.1 million, lease contract termination costs of $0.1 million, and inventory write-off costs of $0.1 million.

Our restructuring liabilities were included in the accounts payable, other current liabilities and other non-current obligations lines within our consolidated balance sheets. The following table summarizes the activities affecting the liabilities as of the dates indicated below (in thousands):

	March 30, 2014
	Beginning  balance		Additions/ adjustments		Non-cash charges			Payments			Ending balance
Lease termination and other costs	$	2,860	$	570	$	(57	)	$	(1,758	)	$	1,615
Severance		426		2,444		—			(2,116	)		754
Balance at March 30, 2014	$	3,286	$	3,014	$	(57	)	$	(3,874	)	$	2,369

	March 31, 2013
	Beginning balance		Additions/ adjustments		Non-cash charges			Payments			Ending balance
Lease termination costs and others	$	5,235	$	6	$	(56	)	$	(2,325	)	$	2,860
Severance		2,806		1,548		—			(3,928	)		426
Balance at March 31, 2013	$	8,041	$	1,554	$	(56	)	$	(6,253	)	$	3,286

See “Note 5—Balance Sheet Details” for current and long-term portion of restructuring charges and exit costs recorded in the consolidated balance sheets as of March 30, 2014 and March 31, 2013.