Restructuring and Exit Costs

2017 Restructuring Plan

On February 28, 2017, the Board of Directors of the Company approved a comprehensive restructuring plan that includes a wide range of organizational efficiency initiatives and other cost reduction opportunities. Total charges for the 2017 restructuring plan are approximately $1.0 million, substantially all of which were incurred in the first quarter of 2017. These charges consist of employee severance costs which will all be incurred in cash.

For the three months ended March 31, 2017, the Company recorded net charges related to its 2017 restructuring plan of $1.0 million within “restructuring and exit costs” in the condensed consolidated statements of operations.

The following table summarizes the changes in the Company’s 2017 restructuring plan liability, which is recorded in “accrued employee compensation” in the Company’s condensed consolidated balance sheet, for the three months ended March 31, 2017 (in thousands):



	Employee Severance Costs
Restructuring liability as of December 31, 2016	$	—
Costs incurred	997
Amounts paid	(308		)
Restructuring liability as of March 31, 2017	$	689

2015 Restructuring Plan

In 2015, the Company initiated a restructuring plan to consolidate U.S. manufacturing operations and to reduce headcount and operating expenses in order to align the Company’s cost structure with the current business forecast and to improve operational efficiency. The plan also included the disposition of the Company’s microelectronics product line which was completed in April 2016. The restructuring plan was otherwise substantially completed in the first quarter of 2016. Total restructuring and exit costs were $2.8 million, which included $1.3 million in facilities costs related to the consolidation of manufacturing operations, $1.2 million in employee severance costs and $0.3 million in other exit costs. The Company also incurred $0.6 million in accelerated equipment depreciation expense related to the consolidation of manufacturing operations. Total cash expenditures related to restructuring activities were approximately $1.5 million.

In June 2015, the Company ceased use of approximately 60,000 square feet of its Peoria, AZ manufacturing facility, and determined this leased space would have no future economic benefit to the Company based on the current business forecast. As a result, the Company has recorded a liability for the future rent obligation associated with this space, net of estimated sublease income, in accordance with ASC Topic 420. As of March 31, 2017 and December 31, 2016, lease obligation liabilities related to this leased space of $0.7 million and $0.8 million, respectively, were included in “accounts payable and accrued liabilities” and “other long term liabilities” in the condensed consolidated balance sheets.

As the 2015 restructuring plan was completed in 2016, there were no restructuring charges or cash payments related to this plan during the three months ended March 31, 2017. For the three months ended March 31, 2016, the Company recorded net charges related to its 2015 restructuring plan of $0.2 million within “restructuring and exit costs” and also recorded $0.1 million of accelerated depreciation expense within “cost of revenue” in the condensed consolidated statements of operations. During the three months ended March 31, 2016, cash payments in connection with the 2015 restructuring plan were $0.2 million, primarily related to employee severance costs.