Note 5 - Restructuring and Other Charges

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Restructuring, Impairment, and Other Activities Disclosure [Text Block]

(5) RESTRUCTURING AND OTHER CHARGES

EMS Segment Restructuring and Facility Consolidation

During the year ended December 31, 2021, we incurred $183 of charges associated with finalizing the consolidation of the manufacturing operations for certain of our Electronic Test segment’s products. The consolidation was announced in September 2020 and the majority of the costs were recognized in 2020. All of the charges were cash charges and are included in restructuring and other charges in our consolidated statement of operations. The integration of our EMS manufacturing operations took longer than originally anticipated, primarily as a result of the significant increase in our business activity during the first half of 2021 as we delayed some final integration activities and instead allocated our resources to meet customer demand for shipments of our products during this time. We completed the integration of the EMS manufacturing operations in the third quarter of 2021.

At the time of the consolidation of manufacturing operations, we intended to try to sublease the facility in Fremont, but we did not expect to sublet the facility for the full remaining term of the lease. On July 19, 2021, we executed a sublease for our facility in Fremont. The sublease commenced in August 2021 and ends November 30, 2025, which is the termination date of our lease for this facility. We entered into this sublease approximately 14 months earlier than we had estimated in December 2020. As a result, we will record approximately $350 of incremental sublease income above the level that we had estimated at the time that we recorded the impairment charge in December 2020. This income will be recorded ratably over the term of the sublease and will be included in other income in our consolidated statements of operations.

Executive Management Changes

Chief Financial Officer

On June 10, 2021, our Board of Directors (the “Board”) accepted the retirement of Hugh T. Regan, Jr. from the positions of Chief Financial Officer, Treasurer, and Secretary (the “Retirement”). In connection with the Retirement, we entered into a Separation and Consulting Agreement (the “Separation and Consulting Agreement”) with Mr. Regan effective June 11, 2021 pursuant to which Mr. Regan agreed to provide consulting services for three months, subject to an extension of up to an additional three months at our option. We did not extend the consulting services beyond the original three months. The Separation and Consulting Agreement also provided that Mr. Regan was entitled to a severance benefit of $120. In connection with the Retirement, we also agreed that certain options issued to Mr. Regan in March 2020 to purchase shares of our common stock that remained unvested on the date of the Retirement would continue to vest after the Retirement and expire one year from their respective vesting dates.

On June 10, 2021, the Board approved, effective as of June 14, 2021, the appointment of Duncan Gilmour to the position of Chief Financial Officer, Treasurer, and Secretary. Mr. Gilmour entered into a letter agreement, dated June 10, 2021, subject to his appointment as our Chief Financial Officer, Treasurer, and Secretary, which appointments were approved on June 10, 2021 and were effective as of June 14, 2021.

Total costs incurred during 2021 related to these executive management changes were $370, which consisted of $159 for consulting and legal fees related to the transition, $120 for severance paid to our former Chief Financial Officer (“CFO”) and $91 of stock-based compensation expense, primarily as a result of the modification of the March 2020 option awards issued to our former CFO, as discussed above. The $120 of severance is included in restructuring and other charges in our consolidated statement of operations. The balance of the costs is included in general and administrative expense in our consolidated statement of operations.

Other actions

During the year ended December 31, 2020, in connection with the transition of our Chief Executive Officer (which is discussed more fully in our Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission on March 23, 2022), we reduced the administrative footprint in our Mansfield, Massachusetts corporate office. At January 1, 2021, there was an accrual of $70 on our balance sheet related to this action.

Accrued Restructuring

The liability for accrued restructuring charges is included in other current liabilities on our consolidated balance sheet. Changes in the amount of the liability for accrued restructuring for the years ended December 31, 2022 and 2021 are as follows:

	Electronic Test Facility Consolidation			Executive Management Changes			Total
Balance - January 1, 2021	$	233		$	107		$	340
Accruals for severance and other one-time termination benefits		-			120			120
Accruals for other associated costs		183			-			183
Cash payments		(416	)		(157	)		(573	)
Balance - December 31, 2021		-			70			70
Adjustments to accruals for other associated costs		-			(63	)		(63	)
Cash payments		-			(7	)		(7	)
Balance - December 31, 2022	$	-		$	-		$	-