17. Restructuring and Cost Management Plans

2017 Corporate Restructuring:

In the fourth quarter of 2017, the Company initiated a restructuring plan to improve business effectiveness and streamline operations to achieve a stated target profit level for the Company as a whole. As a part of the restructuring plan, the management team was reorganized from a business unit to a functional structure; the Company closed facilities in Montreal, Canada; Napa, California; and Sunnyvale, California; the Company discontinued certain products; and the Company made select reductions in headcount across the Company. Actions under this plan are largely completed as of the end of the second fiscal quarter of 2018, except facilities charges and other costs which will extend beyond that time, with an estimated future cost of approximately $0.4 million and $0.2 million, of which the majority is expected to be paid in cash.

Total expenses related to the plan were $16.5 million in the first two quarters of 2018 and $7.6 million in the fourth quarter of 2017. Included in the 2018 expenses are approximately $13.3 million of charges impacting gross margins primarily related to impairment of other assets and inventory stemming from the product portfolio program reviews. Operating expense charges included $2.5 million of facilities and fixed assets charges related to abandoned facilities and discontinued products and $0.6 million of employee severance and related costs. The change in total estimated costs primarily related to inventory and other asset write-offs stemming from the product portfolio program reviews that occurred during the first two quarters of 2018. Product portfolio reviews are ongoing.

The following table presents the total expected restructuring costs as of September 30, 2017 (in thousands):



	Total Expected Costs for the Plan		Costs Recognized from inception of the plan through the Quarter ended Sep 30, 2017		Remaining Costs to be Recognized Subsequent to Sep 30, 2017
Employee severance and related personnel costs	$	4,165	$	4,165	$	—
Site closure costs	2,090		1,690		400
Current asset impairments and other gross profit charges⁽¹⁾	14,947		14,947		—
Non-current asset impairments	3,032		3,032		—
Other Costs	427		227		200
Total	$	24,661	$	24,061	$	600

(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 and other gross profit charges⁽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
Costs incurred	577			800			13,278			1,657			163			16,475
Cash (payments) receipts	(3,672		)	(863		)	(1,750		)	32			(163		)	(6,416		)
Non-cash items	—			—			(10,876		)	(1,689		)	—			(12,565		)
Balance as of September 30, 2017	$	152		$	825		$	652		$	—		$	—		$	1,629

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

Other restructuring plans:

The Company's previously disclosed restructuring plans are largely complete, except for facilities charges and legal entity closure charges which are expected to be incurred through the end of December 2018. Please see Note 26: Restructuring and Cost Management Plans to the Company’s financial statements included in its Annual Report on Form 10-K for the fiscal year ending April 1, 2017. Net restructuring costs related to these plans were $0.4 million in 2018 and $0.4 million in 2017. The Company does not expect to incur any future expenses on these plans. The amounts payable of $0.8 million at September 30, 2017 are expected to be future cash outflows, primarily relating to facility expenses.

The following table presents the amounts related to restructuring costs payable (in thousands):



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
Cash payments and other adjustments	(380		)
Costs incurred	356
Restructuring & cost management amounts payable as of September 30, 2017	$	837

Overall restructuring reserve:

As of September 30, 2017, and April 1, 2017, the amount of unpaid restructuring costs included in accrued liabilities on the Consolidated Balance Sheets were $2.5 million and $5.0 million, respectively. Included in the payable balance are amounts for severance and employee benefits, asset retirement obligation and net lease commitments.