Severance, Impairment And Other Charges

6 Months Ended

Dec. 31, 2016

Severance, Impairment And Other Charges [Abstract]

10.Severance, Impairment and Other Charges

During the third quarter of fiscal 2016, we announced a financial improvement plan that resulted in a reduction in global headcount of approximately 11%. This plan was implemented to re-align our fixed costs with our near-to mid-term expectations for our business. In addition, during the first quarter of fiscal 2017, we decided to terminate production and marketing of a specific product line due to limitations in its design. As a result of this decision, we wrote-off related inventory of $397,000 and impaired certain customer receivable balances in the amount of $145,000. Total pre-tax cash and non-cash charges related to the original restructuring plan as well as the additional charges from the terminated product line are expected to be up to $4.0 million; to date we have incurred $3,543,000.

The charges recorded as Severance, Impairment and Other Charges for the three and six months ended December 31, 2016 related to this restructuring plan are as follows (in thousands):



	Three Months Ended		Six Months Ended
	December 31, 2016		December 31, 2016
Severance and Related Costs	$	61	$	175
Impairment		-		145
Inventory Write-Off		-		397
Total	$	61	$	717

Severance expense for the three months ended December 31, 2016 was associated with an adjustment at our U.S. location.

Severance expense (income) for the six months ended December 31, 2016 was associated with adjustments at our U.S. (expense of $171,000), Chinese (expense of $82,000) and German (income of $78,000) locations, primarily as we reached final settlements related to several individuals impacted by the reduction in force.

The following table reconciles the activity for the six months ended December 31, 2016 for the Restructuring Reserve (in thousands):



	Restructuring Reserve
Balance at July 1, 2016	$	814
Accruals - Severance Related		175
Payments		(676)
Balance at December 31, 2016	$	313

The accrued balance at December 31, 2016 mainly includes payments to be made related to our U.S., China and Germany reductions in force and is expected to be paid within the next 3 months.