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Special Charges
6 Months Ended
Sep. 27, 2015
Restructuring And Related Activities [Abstract]  
Special Charges

Note 5. Special Charges

A summary of the special charges recorded during the three and six months ended September 27, 2015 and September 28, 2014, respectively, including the costs associated with all of the restructuring plans discussed below, is as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

September 27,

2015

 

 

September 28, 2014

 

 

September 27,

2015

 

 

September 28, 2014

 

 

 

(In thousands)

 

Exit costs

 

$

6,917

 

 

$

2,259

 

 

$

7,996

 

 

$

3,292

 

Asset impairments

 

 

1,237

 

 

 

 

 

 

1,237

 

 

 

1,011

 

Other charges

 

 

 

 

 

 

 

 

 

 

 

500

 

 

 

$

8,154

 

 

$

2,259

 

 

$

9,233

 

 

$

4,803

 

 

September 2015 Initiative

In September 2015, the Company commenced a restructuring plan (September 2015 Initiative) designed to align its future operating expenses with its revenue expectations.  The restructuring plan includes a workforce reduction and the consolidation and elimination of certain engineering activities.  

During the three and six months ended September 27, 2015, the Company recorded special charges of $8.1 million related to the September 2015 Initiative, consisting of $6.9 million of exit costs and $1.2 million of asset impairment charges related to property and equipment.  The exit costs consisted entirely of severance and related costs associated with involuntarily terminated employees.  The Company expects to record between $1 million and $2 million of additional charges related to the September 2015 Initiative during fiscal 2016 and expects to substantially complete the related restructuring actions during fiscal 2016.

Activity and liability balances related to the September 2015 Initiative are as follows:

 

 

 

Workforce

Reduction

 

 

 

(In thousands)

 

Charged to costs and expenses

 

$

6,869

 

Payments

 

 

(2,042

)

Balance as of September 27, 2015

 

$

4,827

 

The unpaid exit costs related to the September 2015 Initiative are expected to be paid during fiscal 2016.

May 2015 Initiative

In May 2015, the Company commenced a restructuring plan (May 2015 Initiative) designed to streamline business operations and recorded special charges of $0.7 million during the three months ended June 28, 2015. The special charges consisted entirely of exit costs associated with severance benefits for the involuntarily terminated employees. The Company completed these restructuring activities and all amounts were paid as of September 27, 2015.

March 2014 Initiative

In March 2014, the Company commenced a restructuring plan (March 2014 Initiative) primarily designed to consolidate its Ethernet product roadmap following the acquisition of certain Ethernet controller-related assets. This restructuring plan primarily consisted of a workforce reduction and the consolidation and elimination of certain engineering activities. The Company completed these restructuring activities and all amounts were paid as of March 29, 2015.

During the three and six months ended September 28, 2014, the Company recorded special charges of $2.0 million and $3.7 million, respectively, in connection with the March 2014 Initiative. Special charges for the three months ended September 28, 2014 consisted entirely of exit costs.  Special charges for the six months ended September 28, 2014 consisted of $2.7 million of exit costs and $1.0 million of asset impairment charges related to abandoned property and equipment. The exit costs include severance and related costs associated with involuntarily terminated employees.

June 2013 Initiative

In June 2013, the Company commenced a restructuring plan (June 2013 Initiative) designed to enhance product focus and streamline business operations. The restructuring plan includes a workforce reduction and the consolidation and elimination of certain engineering activities. In connection with this plan, the Company ceased development of future application-specific integrated circuits for switch products.

In connection with the June 2013 Initiative, the Company recorded special charges of $0.1 million and $0.5 million during the three and six months ended September 27, 2015, respectively, and $0.3 million and $0.6 million for the three and six months ended September 28, 2014, respectively.  Special charges for all periods consisted entirely of exit costs associated with severance and related costs for involuntarily terminated employees. Certain employees that were notified of their termination are required to provide future services for varying periods in excess of statutory notice periods. Severance costs related to these services are recognized ratably over the estimated requisite service period. The Company expects to incur approximately $1 million of additional severance costs in connection with these employees over the requisite service period.

The aggregate amount of the special charges recorded in connection with the June 2013 Initiative is $25.5 million and consisted of $15.1 million of severance and related costs associated with involuntarily terminated employees, $5.9 million of facilities and other costs and $4.5 million of asset impairment charges primarily related to abandoned property and equipment.

Activity and liability balances for exit costs related to the June 2013 Initiative are as follows:

 

 

 

Workforce

Reduction

 

 

Facilities

and Other

 

 

Total

 

 

 

(In thousands)

 

Balance as of March 29, 2015

 

$

2,476

 

 

$

7,576

 

 

$

10,052

 

Charged to costs and expenses

 

 

479

 

 

 

 

 

 

479

 

Payments

 

 

(984

)

 

 

(1,040

)

 

 

(2,024

)

Balance as of September 27, 2015

 

$

1,971

 

 

$

6,536

 

 

$

8,507

 

 

The total unpaid exit costs related to the June 2013 Initiative are expected to be paid over the terms of the related agreements through fiscal 2018.

A summary of the total unpaid exit costs for all restructuring plans, by classification, included in the condensed consolidated balance sheets is as follows:

 

 

 

September 27,

2015

 

 

March 29,

2015

 

 

 

(In thousands)

 

Other current liabilities

 

$

7,590

 

 

$

3,664

 

Other liabilities

 

 

5,744

 

 

 

7,553

 

 

 

$

13,334

 

 

$

11,217