Restructuring and Related Costs

The following table shows the provision of the restructuring charges and the remaining liabilities as of April 1, 2018:



				Others (Continuing Operations)
(in thousands)	HSC (Discontinued Operations)			Cost of Revenues			Operating Expenses			Total
Severance and related charges:
Balance as of March 29, 2015	$	10,217		$	—		$	295		$	10,512
Provision	—			435			11,197			11,632
Cash payments	(8,877		)	(128		)	(10,533		)	(19,538		)
Foreign exchange impact	194			—			16			210
Balance as of April 3, 2016	1,534			307			975			2,816
Provision	—			2,605			13,804			16,409
Cash payments	(83		)	(2,709		)	(11,092		)	(13,884		)
Foreign exchange impact	(24		)	(2		)	(474		)	(500		)
Balance as of April 2, 2017	1,427			201			3,213			4,841
Provision	—			416			7,431			7,847
Cash payments	(867		)	(370		)	(6,960		)	(8,197		)
Foreign exchange impact	66			—			82			148
Balance as of April 1, 2018	$	626		$	247		$	3,766		$	4,639
Facility and related charges:
Balance as of April 2, 2017	$	—		$	—		$	—		$	—
Provision and adjustments	—			—			2,818			2,818
Payments	—			—			(537		)	(537		)
Balance as of April 1, 2018	$	—		$	—		$	2,281		$	2,281
Asset impairment charges:
Asset impairment	$	—		$	5,460		$	2,386		$	7,846

As part of an effort to streamline operations with changing market conditions and to create a more efficient organization, the Company has undertaken restructuring actions to reduce its workforce and consolidate facilities. The Company’s restructuring expenses consist primarily of severance and termination benefit costs related to the reduction of its workforce, asset impairment charges and lease obligation charges related to a facility that is no longer used.

Integration-related Restructuring Plans

During fiscal 2018, the Company implemented planned cost reduction and restructuring activities in connection with the acquisition of GigPeak. Accordingly, the Company reduced headcount by 46 and recorded severance costs of approximately $2.7 million, of which $2.1 million was paid during fiscal 2018 and the remaining $0.6 million will be paid by the first quarter of fiscal 2019.

In connection with the GigPeak integration, the Company recorded $2.8 million in fiscal 2018 for lease obligation charges related to a facility that the Company had determined to meet the cease-use date criteria. The fair value of this liability at the cease-use date was determined based on the remaining cash flows for lease rentals, and minimum lease payments, reduced by estimated sublease rentals, discounted using a credit adjusted risk free rate in accordance with ASC 420, Exit or Disposal Cost Obligations. As of April 1, 2018, the total accrued balance for the lease obligation was $2.3 million, of which $1.6 million was classified as other long-term liabilities and the remaining $0.7 million was recorded as other accrued liabilities on the Consolidated Balance Sheets.

In fiscal 2017, the Company prepared a workforce-reduction plan with respect to employees of its Automotive and Industrial business (formerly ZMDI) in Germany. The plan which required consultation with the German Works Council, was approved by the German Works Council. Also, the details of the plan were communicated to the affected employees. The plan identified the number of employees to be terminated, their job classification or function, their location and the date that the plan is expected to be completed. The plan also established the terms of the benefit arrangement in sufficient detail to enable the employees to determine the type and amount of benefits that they would receive if terminated. In addition, the actions required to complete the plan indicated that it was unlikely that substantial changes to the plan would be made after communication of the employees. Accordingly, the Company accrued restructuring charges in accordance with ASC 420, Exit and Disposal Cost Obligations. The restructuring charges recorded in the Consolidated Statements of Operations, in connection with the workforce-reduction plan, were approximately $5.0 million for fiscal 2017, for a total 49 employees. Approximately $4.9 million of the $5.0 million was paid in fiscal 2017 and the remaining $0.1 million was paid during fiscal 2018.

In fiscal 2016, the Company implemented cost reduction plans and restructuring activities in connection with the acquisition of ZMDI. The Company recorded charges of approximately $6.9 million of employee termination cost for two former executives of ZMDI and 36 employees during fiscal 2016. Approximately $5.7 million of the $6.9 million of employee termination cost was paid in fiscal 2016 and the remaining $1.2 million was paid in fiscal 2017.

Other Restructuring Plans

During fiscal 2018, the Company exited certain non-strategic businesses and reduced headcount by 63. The Company recorded employee severance costs of approximately $5.1 million, of which $2.3 million was paid during fiscal 2018 and the remaining $2.8 million will be paid by the first quarter of fiscal 2019. In addition, the Company recorded impairment charge of $7.8 million on certain assets comprised of intangibles, equipment and prepaid licenses, which were determined to be specifically used in these non-strategic businesses and had no alternative use. The impairment charge was calculated as the excess of assets’ carrying value over their fair value which was based on the anticipated cash flows discounted at a rate commensurate with the risk involved. Impairment charges of $5.4 million and $2.4 million, were included in Cost of Revenues and Research and Development Expenses, respectively in the Consolidated Statements of Operations.

In fiscal 2017, the Company prepared a workforce-reduction plan with respect to employees and closed our remaining business in France. The Company recorded in the Consolidated Statement of Operations approximately $7.5 million of severance benefits, for a total of 13 employees in fiscal 2017. The Company paid $4.2 million and $2.5 million in fiscal 2017 and 2018, respectively. As of April 1, 2018, the total accrued balance for employee severance costs related to this action was $0.8 million. The Company expects to complete this action by the second quarter of fiscal 2019.

In addition to the above, in fiscal 2017, the Company recorded charges of $4.0 million and reduced headcount by 59 employees. Approximately $3.6 million of the $4.0 million of employee termination cost was paid in fiscal 2017 and the remaining $0.4 million was paid during fiscal 2018.

In fiscal 2016, the Company recorded charges of $4.7 million and reduced headcount by 48 employees. Approximately $4.6 million of the $4.7 million of employee termination cost was paid in fiscal 2016 and the remaining $0.1 million was paid in fiscal 2017.

In fiscal 2015, the Company prepared a workforce-reduction plan with respect to employees of its HSC business in France and the Netherlands. The restructuring charges recorded to discontinued operations in the Consolidated Statement of Operations were approximately $18.3 million for the fiscal year ended March 29, 2015, for a total of 53 employees in France and the Netherlands combined. The Company has substantially completed payments of these termination benefits and the total accrued balance related to this action was $0.5 million as of April 1, 2018. The Company expects to complete this action by the second quarter of fiscal 2019.