RESTRUCTURING AND IMPAIRMENT CHARGES

12 Months Ended

Dec. 31, 2019

Property, Plant and Equipment [Abstract]

RESTRUCTURING AND IMPAIRMENT CHARGES

RESTRUCTURING AND IMPAIRMENT CHARGES:

While performing the review for impairment for the fourth quarter of 2017, the Company noted an impairment indicator associated with the potential sale or discontinuation of the 1550nm silicon photonics line of business. As a result, the Company recorded $12.0 million of impairment charges for the year ended December 31, 2017, of which $7.7 million was related to property and equipment and $4.3 million was related to intangible assets.

The impairment charges were calculated based on the differences between the net book values of the related assets and their estimated fair values. The Company primarily used the market approach to determine the estimated fair values of the property and equipment. Under this approach we considered various factors, including secondary market comparables, replacement costs, age

and condition of the assets and estimated selling costs. The impaired intangible assets represent obsolete technologies that were deemed to have no value, and therefore were fully written off.

In connection with the discontinuation of its 1550nm silicon photonics development activities, the Company initiated a restructuring plan in the first quarter of 2018 to wind down the business operations related to these activities, which primarily included terminating employees, exiting contracts with vendors, selling assets, and exiting facilities. The Company recorded $3.5 million, $3.4 million, and $2.4 million of employee separation and severance costs, contract exit costs, and impairment charges and losses on disposal of assets, respectively, during the year ended December 31, 2018.

There was also a $0.9 million impairment charge on fixed assets not related to the discontinuation of the 1550nm silicon photonics development activities recorded during the year ended December 31, 2018.

During the year ended December 31, 2019, the Company recorded impairment charges and a net loss on disposal of assets of $1.5 million. The Company does not expect any significant restructuring charges in the future.