Restructuring, Impairment and Other Charges

6 Months Ended

Jun. 30, 2014

Restructuring And Related Activities [Abstract]

Restructuring, Impairment and Other Charges

6. RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES

During the six month period ended June 30, 2014, Lionbridge recorded $1.2 million of restructuring, and other charges, which included restructuring charges of $1.0 million for workforce reductions in Europe, Asia and North America consisting of 13 technical staff and 1 sales staff. $0.1 million of restructuring charges representing additional costs recorded for a previously vacated facility in order to reflect changes in initial estimates of a sublease arrangement due to current economic conditions, acquisition costs of $0.2 million and $0.1 million of accretion related to the contingent consideration from the VSI acquisition in 2012. These charges were offset by reductions in expense related to changes in the estimated fair value of contingent consideration of $0.1 million from the E5 acquisition in 2013 and deferred consideration of $0.1 million from the acquisition of PRI in 2012. All facility charges, $0.6 million of workforce charges, acquisition costs and the change in fair value of PRI deferred consideration relate to the Company’s GLC segment. Workforce charges of $0.3 million, the VSI contingent consideration accretion and the change in fair value of the E5 contingent consideration relate to the Company’s GES segment. The Company made $1.2 million of cash payments in the six month period ended June 30, 2014, which related to the GLC and GES segments.

During the six-month period ended June 30, 2013, Lionbridge recorded $2.0 million of restructuring and other charges. The $1.1 million of restructuring charges recorded in the six-month period ended June 30, 2013 included $0.9 million for workforce reductions in Europe, the Americas and Asia consisting of 12 technical staff, 7 administrative staff and 8 sales staff, and $0.2 million of additional costs recorded for a previously vacated facility in order to reflect changes in initial estimates of a sublease arrangement due to current economic conditions. The Company made $1.7 million of cash payments in the six-month period ended June 30, 2013 all of which related to the GLC operating segments. The remaining $0.9 million of other charges recorded in the six months ended June 30, 2013 relate to the Company’s engagement in strategic initiatives and a true-up of the contingent acquisition liability fair value from the VSI acquisition.

The following table summarizes the restructuring accrual activity for the six months ended June 30, 2014 and 2013, respectively, by category (in thousands):

	2014			2013
Beginning balance, January 1	$	2,807		$	3,794
Employee severance:
Restructuring charges recorded		930			872
Cash payments related to liabilities recorded on exit or disposal activities		(1,029	)		(1,399	)
Net employee severance activity		(99	)		(527	)
Vacated facility/Lease termination:
Restructuring charges recorded		—			—
Revision of estimated liabilities		138			212
Cash payments related to liabilities recorded on exit or disposal activities		(123	)		(284	)
Net vacated facility/lease termination activity		15			(72	)
Ending balance, June 30	$	2,723		$	3,195

At June 30, 2014, the Company’s condensed consolidated balance sheet includes accruals totaling $2.7 million primarily related to employee termination costs and vacated facilities. Lionbridge currently anticipates that $1.2 million of these will be fully paid within twelve months. The remaining $1.5 million relates to lease obligations on unused facilities expiring through 2026 and is included in other long-term liabilities in the Company’s condensed consolidated balance sheet.