Restructuring Charge

9 Months Ended

Sep. 30, 2014

Restructuring and Related Activities [Abstract]

RESTRUCTURING CHARGE

In July 2012 we restructured our operations in order to focus our resources on our clinical development programs related to our synthetic retinoid, QLT091001, for the treatment of certain inherited retinal diseases. Following the sale of Visudyne to Valeant, we further reduced our workforce to better align the Company’s resources with our corporate objectives. Approximately 180 employees were affected by the restructuring. Severance and support provisions were made to assist these employees with outplacement. During the three and nine months ended September 30, 2014, we recorded charges of nil and $ 0.7 million (three months ended September 30, 2013 – $0.4 million, nine months ended September 30, 2013 - $1.8 million), respectively, related to this restructuring. The cumulative cost of the restructuring to date is $19.6 million (December 31, 2013 – $18.9 million).

Effective December 18, 2013, we entered into a letter agreement with Alexander R. Lussow, the Company’s Senior Vice President, Business Development and Commercial Operations, in which we, among other things, agreed to terminate him on either March 31, 2014, April 30, 2014 or May 31, 2014, at the Company’s discretion. Effective May 31, 2014, Alexander R. Lussow’s employment with QLT was terminated. The cost of his severance and termination benefits was $0.8 million, which was fully paid out on May 30, 2014.

The details of our restructuring accrual and activity are as follows:


(In thousands of U. S. dollars)	Employee Termination Costs⁽¹⁾			Asset Write-downs			Contract Termination Costs⁽²⁾			Other			Total

Balance at January 1, 2013	$	1,354		$	—		$	579		$	—		$	1,933

Restructuring charge		1,542			—			266			223			2,031

Cash payments		(2,880	)		—			(942	)		(223	)		(4,045	)

Discontinued operations		114			(304	)		97			—			(93	)

Non-cash portion					304			—			—			304


Balance at December 31, 2013		130			—			—			—			130

Restructuring charge		494			—			78			—			572

Foreign exchange		(5	)		—			—			—			(5	)

Cash payments		(9	)		—			(78	)		—			(87	)


Balance at March 31, 2014		610			—			—			—			610

Restructuring charge		172			—			—			—			172

Cash payments		(782	)		—			—			—			(782	)


Balance at June 30, 2014	$	—		$	—		$	—		$	—		$	—


Balance at September 30, 2014	$	—		$	—		$	—		$	—		$	—

⁽¹⁾	Costs include severance, termination benefits, and outplacement support.

⁽²⁾	Costs include lease costs related to excess office space and certain property, plant and equipment.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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