Restructuring and Other Charges

Fiscal Year 2016 Activities

The Company recorded restructuring charges of $12.0 million during fiscal year 2016 related to severance costs which consisted primarily of $10.8 million of charges related to restructuring actions initiated during fiscal year 2016 and $1.3 million of charges related to restructuring actions initiated in prior periods.

Restructuring Actions Initiated During Fiscal Year 2016

The Company’s restructuring actions initiated during fiscal year 2016 resulted in total charges of $10.8 million, which included $3.1 million of costs attributable to the Brooks Life Science Systems segment, $1.8 million of costs attributable to the Brooks Semiconductor Solutions Group segment and $5.8 million of costs related to the company-wide restructuring action that benefited all segments.

Restructuring initiatives within the Brooks Life Science Systems segment are primarily related to streamlining the segment's management structure, integrating acquisitions and improving profitability. During fiscal year 2016, the Company initiated several actions within the Brooks Life Science Systems segment related to integrating BioStorage, streamlining management structure and closing the segment’s Spokane, Washington facility in March 2016 and Oberdiessbach, Switzerland facility in July 2016 upon selling the building and temporarily leasing a smaller size office space until December 2016. This restructuring initiative within the Brooks Life Science Systems segment may include additional actions in future periods subject to discretion and approval by the Company management. Total severance costs incurred in connection with these actions are $3.1 million which were recognized entirely during fiscal year 2016. Accrued restructuring costs of $0.5 million at September 30, 2016 from these actions are expected to be paid within the next twelve months with cash flows generated from operating activities.

During fiscal year 2016, the Company initiated a restructuring action to streamline its business operations as part of a company-wide initiative to improve profitability and competitiveness which is expected to benefit all segments. Total severance costs incurred in connection with this action were $5.8 million which were recognized entirely during fiscal year 2016. Severance costs were attributable to the elimination of positions across the Company, including certain senior management positions. This restructuring action was substantially completed by September 30, 2016 and is not expected to result in any additional restructuring charges in future periods. Accrued restructuring costs of $3.4 million at September 30, 2016 from these actions are expected to be paid within the next twelve months with cash flows generated from operating activities.

During fiscal year 2016, the Company initiated a restructuring action within the Brooks Semiconductor Solutions Group segment to consolidate its Jena, Germany repair facility into its Chelmsford, Massachusetts repair operation as a part of its strategy to reduce our global footprint and streamline the cost structure. The restructuring plan includes the elimination of 44 positions for employees within the service and administrative functions that are covered by a collective bargaining agreement with a German labor union which imposed a legal restriction on the Company's ability to complete the restructuring plan. During fiscal year 2016, the Company entered into the negotiations with the Workers Council concerning the amount of involuntary termination benefits payable to employees impacted by this restructuring action, timing of these payments and the related terms of this arrangement. As of September 30, 2016, the Company reached an agreement with the Workers Council regarding the terms of this action and has communicated termination benefit amounts to the majority of employees that will be impacted by the restructuring action along with their expected termination dates. Total severance costs expected to be incurred in connection with this action are $1.8 million which were recognized during fiscal year 2016. The restructuring action is expected to be completed by March 31, 2017. Accrued restructuring costs of $1.8 million at September 30, 2016 from this action are expected to be paid within the next twelve months with cash flows generated from operating activities.

Restructuring Actions Initiated Prior to Fiscal Year 2016

The Company's restructuring actions initiated in prior periods resulted in $1.2 million of costs attributable to the Brooks Semiconductor Solutions segment and less than $0.1 million of costs attributable to the Brooks Life Science Systems segment. These restructuring actions were primarily related to the integration of Contact, as well as the closure and transfer of the Mistelgau, Germany manufacturing operations to a contract manufacturer. Accrued restructuring costs of $0.2 million at September 30, 2016 from these actions are expected to be paid within the next twelve months with cash flows generated from operating activities.

Fiscal Year 2015 Activities

The Company recorded restructuring charges of $4.7 million in fiscal year 2015, which included severance costs of $3.4 million and facility-related costs of $1.3 million.

Severance costs of $3.4 million consisted of $2.2 million of charges attributable to the Brooks Semiconductor Solutions segment and $1.3 million of costs attributable to the Brooks Life Science Systems segment. Restructuring actions within the Brooks Semiconductor Solutions Group segment were related to the integration of Dynamic Micro Systems Semiconductor Equipment GmbH (the "DMS") with the Company's operations and the transition of manufacturing of certain products from the Company's facility in Mistelgau, Germany to a third party contract manufacturer. Restructuring actions within the Brooks Life Science Systems segment were related to the closure of the Poway, California facility and transition of product sub-assembly manufacturing operations to the third party contract manufacturers. These restructuring plans were substantially completed on December 31, 2015.

Facility exit costs of $1.3 million were attributable to Brooks Semiconductor Solutions Group segment were related to the outsourcing of manufacturing certain of the Company’s line of Polycold cryochillers and compressors within the United States to a third party contract manufacturer. The facility exit costs represented future lease payments and expected operating costs to be paid until the termination of the facility lease. The Company terminated the lease on October 27, 2015 and fully paid the related restructuring liability during the first quarter of fiscal year 2016.

Fiscal Year 2014 Activities

The Company recorded restructuring charges of $6.3 million in fiscal year 2014. These charges were related primarily to the Company's decision to discontinue certain product lines in the Brooks Life Science Systems and Brooks Product Solutions segments, the on-going transition of manufacturing cryochillers and compressors within the Company's Polycold product line to a third party contract manufacturer and other global programs designed to improve the Company’s cost structure.

Restructuring charges of $6.3 million recorded in fiscal year 2014 consisted of $5.7 million of severance costs and $0.6 million of facility-related costs.

Severance costs of $5.7 million included charges related to the outsourcing of the Polycold manufacturing operation and workforce-related charges resulting from reductions of approximately 70 positions. Severance charges incurred during fiscal year 2014 by the Brooks Product Solutions segment, the Brooks Global Services segment and the Brooks Life Science Systems segment amounted to $2.4 million, $0.4 million and $1.6 million, respectively. In addition to these severance charges, the Brooks Life Science Systems segment recorded a charge of $1.3 million related to the reduction of positions within the corporate and sales functions. Total severance charges related to the outsourcing of the Polycold manufacturing operation were $1.2 million and consisted of severance and retention fees. The charge for this program was recorded ratably over the period from notification of the closing in October 2012 to the actual service end date in September 2014.

Facility-related costs of $0.6 million consisted of lease payments and fixed asset write-offs associated with the Company's efforts to reduce the space used in its operations.

In addition to the workforce and facility-related charges described above, the Company recorded $0.3 million of inventory write-offs associated with discontinuing certain product lines. Inventory write-offs are included in cost of revenue in the accompanying Consolidated Statements of Operations.

The following is a summary of activity related to the Company’s restructuring and other charges, excluding amounts related to the discontinued operations, for the fiscal years ended September 30, 2016, 2015 and 2014 (in thousands):



	Fiscal Year 2016 Activity
	Balance September 30, 2015		Expenses		Payments			Balance September 30, 2016
Facility and other contract termination costs	$	433	$	25	$	(458	)	$	—
Workforce-related termination benefits	1,640		12,014		(7,715		)	5,939
	$	2,073	$	12,039	$	(8,173	)	$	5,939

	Fiscal Year 2015 Activity
	Balance September 30, 2014		Expenses		Payments			Balance September 30, 2015
Facility and other contract termination costs	$	71	$	1,204	$	(842	)	$	433
Workforce-related termination benefits	3,404		3,213		(4,977		)	1,640
	$	3,475	$	4,417	$	(5,819	)	$	2,073

	Fiscal Year 2014 Activity
	Balance September 30, 2013		Expenses		Payments			Balance September 30, 2014
Facility and other contract termination costs	$	155	$	583	$	(667	)	$	71
Workforce-related termination benefits	$	1,257	$	5,706	$	(3,559	)	3,404
	$	1,412	$	6,289	$	(4,226	)	$	3,475

Accrued restructuring costs of $5.9 million as of September 30, 2016 are expected to be paid during fiscal year 2017.