Severance, Impairment And Other Charges

9 Months Ended

Mar. 31, 2017

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 have written off $295,000, net related to inventory 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 $3,546,000.

The charges recorded as Severance, Impairment and Other Charges for the three and nine months ended March 31, 2017 related to this restructuring plan are as follows (in thousands):



	Three Months Ended		Nine Months Ended
	March 31, 2017		March 31, 2017
Severance and Related Costs	$	105	$	280
Impairment		-		145
Inventory Write-Off		(102)		295
Total	$	3	$	720

Severance expense (income) for the three months ended March 31, 2017 was associated with an adjustment at our U.S. location (increase of $121,000) partially offset by an adjustment at our German location (decrease of $16,000). The decrease of the inventory write-off was due to settling outstanding purchase orders as well as finding other uses for some of the inventory originally designated as impaired.

Severance expense (income) for the nine months ended March 31, 2017 was associated with adjustments at our U.S. (expense of $292,000), Chinese (expense of $82,000) and German (income of $94,000) 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 nine months ended March 31, 2017 for the Restructuring Reserve (in thousands):



	Restructuring Reserve
Balance at July 1, 2016	$	814
Accruals - Severance Related		280
Payments		(880)
Balance at March 31, 2017	$	214

The accrued balance at March 31, 2017 mainly includes payments to be made related to our U.S. and China reductions in force and is expected to be paid within the next 6 months.