Restructuring and Cost Management Plans

2017 Corporate Restructuring:

In the fourth quarter of 2017, we initiated a restructuring plan to improve business effectiveness and streamline operations and achieving a stated target profit level for the Company as a whole. As a part of the restructuring plan, the management team has been reorganized from a business unit to a functional structure; we closed facilities in Montreal, Canada; Napa, California; and Sunnyvale, California; we discontinued certain products; and we made select reductions in headcount across the Company. We expect the actions under this plan to be largely completed by the end of June 2017, except facilities charges which may extend beyond that time. The original estimated completion date for the plan was the end of the first fiscal quarter of 2018 with a total estimated pre-tax cost of $6.5 million to $8.5 million.

Total expenses related to the plan were $7.6 million in 2017. Included in these expenses is approximately $1.7 million in cost of sales for inventory impairments. Inventory impairments are incremental to the original estimates as they were not estimable at that time those estimates were originally developed and are associated with products and materials that will be discontinued as a result of the restructuring actions. In operating expenses, restructuring costs of $5.9 million included employee severance and related costs, costs associated with leasehold improvement write-offs related to the abandoned facilities and other asset impairments. The current estimated completion date for the plan, excluding facilities costs, is the end of the first quarter of 2018, with an estimated future cost of $4.0 million to $6.5 million, of which approximately $0.7 million to $1.6 million is expected to be paid in cash. The table below shows the high end of this expectation range and includes restructuring actions taken after April 1, 2017 that are expected to impact future periods. The change in total estimated costs primarily relates to inventory write-offs stemming from the product portfolio program reviews.

The following table presents the total expected restructuring costs as of April 1, 2017 (in thousands):



	Total Expected Costs for the Plan		Costs Recognized During the Year Ended April 1, 2017		Remaining Costs to be Recognized Subsequent to April 1, 2017
Employee severance and related personnel costs	$	4,388	$	3,588	$	800
Site closure costs	1,688		888		800
Current asset impairments⁽¹⁾	6,069		1,669		4,400
Non-current asset impairments	1,876		1,376		500
Other Costs	66		66		—
Total	$	14,087	$	7,587	$	6,500

(1) Current asset impairments include inventory charges recorded in cost of sales.

The following table presents the amounts payable related to the 2017 Corporate Restructuring (in thousands):



	Employee severance and related personnel costs			Site closure costs		Current asset impairments⁽¹⁾			Non-current asset impairments			Other Costs			Total
Balance as of April 2, 2016	$	—		$	—	$	—		$	—		$	—		$	—
Costs incurred	3,588			888		1,669			1,376			66			7,587
Cash payments	(341		)	—		—			—			(66		)	(407		)
Non-cash items	—			—		(1,669		)	(1,376		)	—			(3,045		)
Balance as of April 1, 2017	$	3,247		$	888	$	—		$	—		$	—		$	4,135

(1) Asset and facilities costs include inventory charges recorded in cost of sales.

Chelmsford Restructuring:

In March 2015, as a part of the plan to streamline manufacturing and development activities, the Company initiated a restructuring plan that included the closure of the assembly plant and development center located in Chelmsford, Massachusetts. The original estimated completion date of the plan was the end of fiscal 2016 at a total estimated pre-tax cost of $5.5 million.

Net restructuring costs related to the Chelmsford restructuring plan were $0.4 million in 2017, $2.8 million in 2016 and $3.0 million in 2015. Due to a change in the estimate of amounts to be received from the sub-lease of the Chelmsford facility, the Company increased the accrual by $0.4 million in the fourth quarter of 2017 in recognition of the increased lease obligation.

Included in the costs incurred over the life of the plan were impairments of leasehold improvements associated with the abandoned manufacturing facility, employee severance and related payments, inventory impairments associated with discontinued products and other wind-down costs. In fiscal 2017, the Company paid out $0.3 million in cash related to this restructuring plan.

The following table presents the amounts related to restructuring and cost management amounts payable (in thousands):



Restructuring & cost management amounts payable as of March 29, 2014	$	1,050
Cash payments and other adjustments	(985		)
Costs incurred	1,932
Restructuring & cost management amounts payable as of March 28, 2015	1,997
Cash payments and other adjustments	(4,064		)
Costs incurred	2,824
Restructuring & cost management amounts payable as of April 2, 2016	757
Cash payments and other adjustments	(297		)
Costs incurred	401
Restructuring & cost management amounts payable as of April 1, 2017	$	861

Overall restructuring reserve:

As of April 1, 2017 and April 2, 2016, the amount of unpaid restructuring costs included in accrued liabilities on the Consolidated Balance Sheets were $5.0 million and $0.8 million, respectively. Included in the payable balance are amounts for severance and employee benefits, asset retirement obligation and net lease commitments.