Restructuring Charges

KEMET’s restructuring plans are focused on making the Company more competitive by reducing excess capacity, relocating production to lower cost locations and eliminating unnecessary costs throughout the Company.

A summary of the expenses aggregated in the Condensed Consolidated Statements of Operations line item “Restructuring charges” in the quarters and six-month periods ended September 30, 2017 and 2016, is as follows (amounts in thousands):



	Quarters Ended September 30,				Six-Month Periods Ended September 30,
	2017		2016		2017		2016
Personnel reduction costs	$	873	$	1,432	$	1,111	$	2,079
Relocation and exit costs	520		2,566		1,895		2,607
Restructuring charges	$	1,393	$	3,998	$	3,006	$	4,686

Quarter Ended September 30, 2017

The Company incurred $1.4 million in restructuring charges in the quarter ended September 30, 2017 comprised of $0.9 million in personnel reduction costs and $0.5 million in manufacturing relocation and exit costs.

The personnel reduction costs of $0.9 million are due to U.S. headcount reductions related to the relocation of global marketing, finance and accounting, and information technology functions to the Company’s Fort Lauderdale, Florida office from Simpsonville, South Carolina.

The manufacturing relocation and exit costs of $0.5 million primarily consist of $0.4 million in expenses related to the relocation of the K-Salt operations to the existing Matamoros, Mexico plant and $0.1 million in exit costs related to the shut-down of operations for KFM in Knoxville, Tennessee.

Six-Month Period Ended September 30, 2017

The Company incurred $3.0 million in restructuring charges in the six-month period ended September 30, 2017 comprised of $1.1 million in personnel reduction costs and $1.9 million in manufacturing relocation and exit costs.

The personnel reduction costs of $1.1 million are due to U.S. headcount reductions related to the relocation of global marketing, finance and accounting, and information technology functions to the Company’s Fort Lauderdale, Florida office from Simpsonville, South Carolina.

The manufacturing relocation and exit costs of $1.9 million primarily consist of $0.9 million in lease termination penalties related to the relocation of global marketing, finance and accounting, and information technology functions to the Company’s Fort Lauderdale, Florida office, $0.6 million in expenses related to the relocation of the K-Salt operations to the existing Matamoros, Mexico plant, $0.3 million in exit costs related to the shut-down of operations for KFM, and $0.1 million related to the transfer of certain Tantalum production from Simpsonville, South Carolina to Victoria, Mexico.

Quarter Ended September 30, 2016

The Company incurred $4.0 million in restructuring charges in the quarter ended September 30, 2016 including $1.4 million in personnel reduction costs and $2.6 million in manufacturing relocation and exit costs.

The personnel reduction costs of $1.4 million consist of $0.4 million in headcount reductions related to the shut-down of operations for KFM in Knoxville, Tennessee, $0.4 million related to the consolidation of certain Solid Capacitor manufacturing in Matamoros, Mexico, $0.3 million in U.S. headcount reductions related to the relocation of global marketing functions to the Company’s Fort Lauderdale, Florida office, $0.2 million related to overhead reductions corresponding with the relocation of research and development (“R&D”) operations from Weymouth, England to Evora, Portugal, and $0.1 million in manufacturing headcount reductions related to the relocation of the K-Salt operations to the existing Matamoros, Mexico plant.

The manufacturing relocation costs of $2.6 million primarily consist of $2.2 million related to contract termination costs related to the shut-down of operations for KFM, $0.3 million related to transfers of Film and Electrolytic production lines and R&D functions to lower cost regions, and $0.1 million related to the transfer of certain Tantalum production from Simpsonville, South Carolina to Victoria, Mexico.

Six-Month Period Ended September 30, 2016

The Company incurred $4.7 million in restructuring charges in the six-month period ended September 30, 2016 comprised of $2.1 million in personnel reduction costs and $2.6 million in manufacturing relocation and exit costs.

The personnel reduction costs of $2.1 million consist of $0.4 million in headcount reductions related to the shut-down of operations for KFM in Knoxville, Tennessee, $0.5 million related to the consolidation of certain Solid Capacitor manufacturing in Matamoros, Mexico, $0.3 million for overhead reductions in Sweden, $0.3 million in U.S. headcount reductions related to the relocation of global marketing functions to the Company’s Fort Lauderdale, Florida office, $0.2 million related to overhead reductions as we relocate the R&D operations from Weymouth, England to Evora, Portugal, $0.2 million related to headcount reductions in Europe (primarily Italy and Landsberg, Germany) corresponding with the relocation of certain production lines and laboratories to lower cost regions, and $0.1 million in manufacturing headcount reductions related to the relocation of the K-Salt operations to the existing Matamoros, Mexico plant.

Reconciliation of Restructuring Liability

A reconciliation of the beginning and ending liability balances for restructuring charges included in the line items “Accrued expenses” and “Other non-current obligations” on the Condensed Consolidated Balance Sheets for the quarters and six-month periods ended September 30, 2017 and 2016 is as follows (amounts in thousands):



	Quarter Ended September 30, 2017						Quarter Ended September 30, 2016
	Personnel Reductions			Manufacturing Relocations			Personnel Reductions			Manufacturing Relocations
Beginning of period	$	798		$	314		$	1,079		$	—
Costs charged to expense	873			520			1,432			2,566
Costs paid or settled	(179		)	(520		)	(408		)	(584		)
Change in foreign exchange	2			(2		)	(2		)	—
End of period	$	1,494		$	312		$	2,101		$	1,982



	Six-Month Period Ended September 30, 2017						Six-Month Period Ended September 30, 2016
	Personnel Reductions			Manufacturing Relocations			Personnel Reductions			Manufacturing Relocations
Beginning of period	$	999		$	406		$	976		$	—
TOKIN opening balance	—			314			—			—
Costs charged to expense	1,111			1,895			2,079			2,607
Costs paid or settled	(636		)	(2,301		)	(931		)	(625		)
Change in foreign exchange	20			(2		)	(23		)	—
End of period	$	1,494		$	312		$	2,101		$	1,982