13. Restructuring Charges

Three Months Ended June 30, 2017

During the three months ended June 30, 2017, the Company recorded restructuring charges of $0.8 million related to severance attributable primarily to the Brooks Semiconductor Solutions Group segment. Such costs included $0.6 million of charges related to the actions initiated during fiscal year 2017 and $0.2 million of charges related to the actions initiated prior to fiscal year 2017. During fiscal year 2017, the Company initiated a restructuring action to streamline service operations in order to optimize the cost structure and improve productivity. Total severance costs expected to be incurred in connection with this action are $1.5 million, of which $0.9 million were recognized prior to the third quarter of fiscal year 2017 and $0.6 million were recognized during the three months ended June 30, 2017. This restructuring action has been substantially completed as of June 30, 2017. Accrued restructuring costs related to this action were $0.8 million at June 30, 2017 and are expected to be paid within the next twelve months from cash flows generated from operating activities. Prior to fiscal year 2017, the Company initiated a restructuring action within the Brooks Semiconductor Solutions Group segment to consolidate the Company’s Jena, Germany repair facility into the Chelmsford, Massachusetts repair operation as a part of the Company’s strategy to reduce global footprint and streamline the cost structure. Total severance costs expected to be incurred in connection with this action are $2.5 million, of which: (i) $1.8 million were recognized prior to fiscal year 2017, (ii) $0.5 million were recognized during fiscal year 2017, including $0.2 million during the three months ended June 30, 2017, and (iii) $0.2 million are expected to be recognized in future periods. This restructuring action has been substantially completed as of June 30, 2017. Accrued restructuring costs related to this action were $0.9 million at June 30, 2017 and are expected to be paid within the next twelve months from cash flows generated from operating activities. Please refer to Note 17, "Restructuring and Other Charges" to the Company’s consolidated financial statements included in the 2016 Annual Report on Form 10‑K for further information on this restructuring initiative.

Nine Months Ended June 30, 2017

During the nine months ended June 30, 2017, the Company recorded restructuring charges of $2.7 million related to severance, of which $2.2 million were attributable to the Brooks Semiconductor Solutions Group segment, $0.2 million were attributable to the Brooks Life Science Systems segment and $0.3 million were attributable to the company-wide restructuring action initiated prior to fiscal year 2017.

The restructuring charges of $2.2 million attributable to the Brooks Semiconductor Solutions Group segment consisted of $1.5 million of charges related to the actions initiated during fiscal year 2017 to streamline service operations, as described above, and $0.7 million of charges related to the actions initiated prior to fiscal year 2017. Restructuring charges of $0.7 million consisted of $0.5 million attributable to the consolidation of the Jena, Germany repair facility into the Chelmsford, Massachusetts repair operation, as described above, and $0.2 million related to the integration of Contact Co., Ltd. ("Contact") after its acquisition by the Company, including the closure and transfer of its Mistelgau, Germany manufacturing operations to a contract manufacturer, and other cost reductions to improve profitability and competitiveness. Total restructuring costs incurred in connection with this action are approximately $3.2 million, of which approximately $3.0 million were recognized prior to fiscal year 2017 and $0.2 million were recognized during the nine months ended June 30, 2017. This restructuring action was substantially completed as of June 30, 2017 and is not expected to result in any significant additional restructuring charges in future periods. There were no accrued restructuring costs from this action at June 30, 2017.

Prior to fiscal year 2017, the Company initiated a restructuring action to streamline its business operations as part of a company-wide initiative to improve profitability and competitiveness which is expected to benefit both segments. Total severance costs incurred in connection with this action were $6.1 million, of which $5.8 million were recognized prior to fiscal year 2017 and $0.3 million were recognized during the nine months ended June, 30, 2017. Severance costs incurred in connection with this action were attributable to the elimination of positions across the Company, including certain senior management positions. This restructuring action was substantially completed as of June 30, 2017 and is not expected to result in any additional restructuring charges in future periods. There were no accrued restructuring costs related to this action at June 30, 2017.

Three Months Ended June 30, 2016

During the three months ended June 30, 2016, the Company recorded restructuring charges of $1.0 million related to severance which were attributable to actions initiated prior to the third quarter of fiscal year 2016. Such charges were comprised of $0.3 million of costs attributable to the Brooks Life Science Systems segment and $0.6 million of costs related to the Company-wide restructuring actions, as described above. The Brooks Life Science Systems restructuring initiatives included several actions that were primarily related to streamlining the segment’s management structure, integrating BioStorage, and the closure of the segment’s Spokane, Washington facility in March 2016. Total severance costs incurred in connection with these initiatives were $2.8 million, of which $2.4 million was recognized prior to the third quarter of fiscal year 2016, and $0.3 million were recognized during the three months ended June 30, 2016. There were no accrued restructuring costs from these initiatives at June 30, 2017.

Nine Months Ended June 30, 2016

During the nine months ended June 30, 2016, the Company recorded restructuring charges of $9.8 million related to severance, which consisted of $8.5 million of charges related to restructuring actions initiated during the nine months ended June 30, 2016 and $1.2 million of charges related to restructuring actions intiated prior to fiscal year 2016. The charges of $8.5 million were comprised primarily of $2.8 million of costs attributable to the restructuring initiatives within the Brooks Life Science Systems segment and $5.8 million of costs related to the company-wide restructuring action, as described above. The charges of $1.2 million were attributable to the Brooks Semiconductor Solutions Group segment and related to the integration of Contact, as well as closure and transfer of the Mistelgau, Germany manufacturing operations to a contract manufacturer, as described above.

The following is a summary of activity related to the Company’s restructuring charges for the three and nine months ended June 30, 2017 and 2016 (in thousands):


	Activity -Three Months Ended June 30, 2017
	Balance						Balance
	March 31,						June 30,
	2017		Expenses		Payments		2017
Total restructuring liabilities related to workforce termination benefits	$	2,044	$	828	$	(1,182)	$	1,690


	Activity -Three Months Ended June 30, 2016
	Balance						Balance
	March 31,						June 30,
	2016		Expenses		Payments		2016
Facility and other contract termination costs	$	96	$	—	$	(96)	$	—
Workforce-related termination benefits		7,293		996		(2,500)		5,789
Total restructuring liabilities	$	7,389	$	996	$	(2,596)	$	5,789


	Activity -Nine Months Ended June 30, 2017
	Balance						Balance
	September 30,						June 30,
	2016		Expenses		Payments		2017
Total restructuring liabilities related to workforce termination benefits	$	5,939	$	2,663	$	(6,912)	$	1,690


	Activity -Nine Months Ended June 30, 2016
	Balance						Balance
	September 30,						June 30,
	2015		Expenses		Payments		2016
Facility and other contract termination costs	$	433	$	25	$	(458)	$	—
Workforce-related termination benefits		1,640		9,782		(5,633)		5,789
Total restructuring liabilities	$	2,073	$	9,807	$	(6,091)	$	5,789

Accrued restructuring costs of $1.7 million at June 30, 2017 are expected to be paid within the next twelve months.