Restructuring Charges
The Company recognizes restructuring costs related to asset impairment and exit or disposal activities. Costs relating to facilities closure or lease commitments are recognized when the facility has been exited. Termination costs are recognized when the costs are deemed both probable and estimable.
December 2012 Restructuring Program
The Company implemented a restructuring program during December 2012 to reorganize its operations and reduce its workforce and related operating expenses. The plan includes eliminating job redundancies and reducing the Company's current workforce by approximately 70 employees. As a result, the Company recorded a charge of $1.7 million for employee severance expenses and $4.7 million for an asset impairment. The asset impairment related to the impairment of the unamortized value of a software intellectual property license, which the Company no longer intends to use to develop new products.
April 2011 Restructuring Program
The April 2011 restructuring program was implemented as part of the Company’s ongoing cost reduction efforts and to better align its global operations to achieve greater efficiencies. The Company moved more of its functions offshore, which would allow it to be closer and more connected to its customers' third party subcontract manufacturers. The April 2011 restructuring plan included eliminating or relocating 25 positions. As a result of the April 2011 restructuring program, the Company recorded a charge of $0.9 million for employee severances for the fiscal year ended March 31, 2012.
A combined summary of the recent activity of the restructuring programs initiated by the Company is as follows (in thousands):
|
| | | | | | | | | | | |
| Workforce
Reduction | | Asset Impairment | | Total |
Liability, March 31, 2011 | $ | — |
| | $ | — |
| | $ | — |
|
Restructuring charges | 913 |
| | — |
| | 913 |
|
Cash payments | (875 | ) | | — |
| | (875 | ) |
Reductions to estimated liability | (38 | ) | | — |
| | (38 | ) |
Liability, March 31, 2012 | $ | — |
| | $ | — |
| | $ | — |
|
Restructuring charges | $ | 1,716 |
| | $ | 4,719 |
| | $ | 6,435 |
|
Cash payments | (1,168 | ) | | — |
| | (1,168 | ) |
Reductions to estimated liability | — |
| | (4,719 | ) | | (4,719 | ) |
Liability, March 31, 2013 | $ | 548 |
| | $ | — |
| | $ | 548 |
|
