Restructuring Charges

3 Months Ended

Feb. 29, 2020

Restructuring Charges

The following table provides a summary of activity for our restructuring actions, which are detailed further below (in thousands):



	Excess Facilities and Other Costs			Employee Severance and Related Benefits			Total
Balance, December 1, 2019	$	196		$	2,007		$	2,203
Costs incurred	1,010			30			1,040
Cash disbursements	(160		)	(1,269		)	(1,429		)
Translation adjustments and other	(24		)	—			(24		)
Balance, February 29, 2020	$	1,022		$	768		$	1,790

During the fourth quarter of fiscal year 2019, we announced the reduction of our ongoing spending level within our cognitive application product lines, which consist primarily of our DataRPM and Kinvey products. This restructuring resulted in a reduction in positions primarily within the product development function. In connection with this restructuring action, during the fourth quarter of fiscal year 2019, we evaluated the ongoing value of the intangible assets primarily associated with the technologies and trade names obtained in the acquisitions of DataRPM and Kinvey. As a result, we wrote down these assets to fair value, which resulted in a $22.7 million asset impairment charge (Note 4).

Restructuring expenses are related to employee costs, including severance, health benefits and outplacement services (but excluding stock-based compensation).

For the three months ended February 29, 2020, we incurred minimal expenses relating to this restructuring. The expenses are recorded as restructuring expenses in the condensed consolidated statements of operations.

A summary of activity for this restructuring action is as follows (in thousands):



	Excess Facilities and Other Costs		Employee Severance and Related Benefits			Total
Balance, December 1, 2019	$	—	$	1,460		$	1,460
Costs incurred	—		(9		)	(9		)
Cash disbursements	—		(844		)	(844		)
Translation adjustments and other	—		—			—
Balance, February 29, 2020	$	—	$	607		$	607

Cash disbursements for expenses incurred to date under this restructuring are expected to be made through fiscal year 2020. Accordingly, the balance of the restructuring reserve of $0.6 million is included in other accrued liabilities on the condensed consolidated balance sheet at February 29, 2020. We do not expect to incur additional material costs with respect to this restructuring.

During the second quarter of fiscal year 2019, we restructured our operations in connection with the acquisition of Ipswitch (Note 6). This restructuring resulted in a reduction in redundant positions, primarily within administrative functions of

Ipswitch. We expect to incur additional expenses as part of this action related to employee costs and facility closures as we consolidate offices in various locations during fiscal year 2020, but we do not expect these costs to be material.

For the three months ended February 29, 2020, we incurred expenses of $1.0 million relating to this restructuring. The expenses are recorded as restructuring expenses in the condensed consolidated statements of operations and include charges for the impairment of operating lease right-of-use assets of $0.9 million (Note 8).

A summary of activity for this restructuring action is as follows (in thousands):



	Excess Facilities and Other Costs			Employee Severance and Related Benefits			Total
Balance, December 1, 2019	$	5		$	547		$	552
Costs incurred	997			39			1,036
Cash disbursements	(123		)	(424		)	(547		)
Translation adjustments and other	(24		)	—			(24		)
Balance, February 29, 2020	$	855		$	162		$	1,017

Cash disbursements for expenses incurred to date under this restructuring are expected to be made through fiscal year 2020. Accordingly, the balance of the restructuring reserve of $1.0 million is included in current liabilities on the condensed consolidated balance sheet at February 29, 2020, with $0.8 million included in short-term operating lease liabilities and $0.2 million included in other accrued liabilities.