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 were completed as of the end of the third fiscal quarter of 2018.

Total expenses related to the plan were $17.2 million in the first three 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, all incurred in the first and second quarters of 2018, 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 streamlining facilities and discontinued products and $1.3 million of employee severance and related costs. Restructuring costs of $0.7 million incurred in the third quarter of 2018 were primarily related to the employee severance and related costs to a departed executive. Product portfolio reviews are complete as of the end of third quarter of 2018. The impacts of the decisions made in the portfolio reviews involve the use of certain estimates. Actual results could differ from those estimates and result in additional charges.

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



	Total Expected Costs for the Plan		Costs Recognized from inception of the plan through the Quarter ended Dec 30, 2017		Remaining Costs to be Recognized Subsequent to Dec 30, 2017
Employee severance and related personnel costs	$	4,872	$	4,872	$	—
Site closure costs	1,714		1,714		—
Current asset impairments and other gross profit charges⁽¹⁾	14,947		14,947		—
Non-current asset impairments	3,032		3,032		—
Other costs	239		239		—
Total	$	24,804	$	24,804	$	—

(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	1,284			824			13,278			1,657			175			17,218
Cash (payments) receipts	(3,788		)	(1,389		)	(1,750		)	32			(175		)	(7,070		)
Non-cash items	—			—			(10,876		)	(1,689		)	—			(12,565		)
Balance as of December 30, 2017	$	743		$	323		$	652		$	—		$	—		$	1,718

(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. Net restructuring costs related to these plans were $0.4 million in 2018 and $0.4 million in 2017. 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. The amounts payable of $0.9 million at December 30, 2017 are expected to be future cash outflows, primarily relating to facility costs to be paid through the end of calendar 2018. The Company does not expect to incur additional expenses related to these plans.

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	409
Restructuring & cost management amounts payable as of December 30, 2017	$	890

Overall restructuring reserve:

As of December 30, 2017, and April 1, 2017, the amount of unpaid restructuring costs included in accrued liabilities on the Consolidated Balance Sheets were $2.6 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.