Quarterly report pursuant to Section 13 or 15(d)

Note 5 - Restructuring

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Note 5 - Restructuring
6 Months Ended
Jun. 30, 2017
Restructuring and Related Activities [Abstract]  
Restructuring

As part of an effort to better focus and align the Company’s resources toward profitable growth, on August 24, 2015, the Board authorized the Company to undertake steps to commence a restructuring of the business and operations, which concluded during the third quarter of 2016. The Company closed certain facilities, reduced headcount, discontinued products and renegotiated certain contracts. For the three months ended June 30, 2016, the Company recorded a credit in restructuring and other charges of $4.8 million comprised of the release of restructuring accrual of $7.0 million, offset by the cash payment of $2.2 million related to a settlement agreement. For the six months ended June 30, 2016, this credit was offset by additional restructuring expenses resulting in a net credit of $4.2 million.

 

For the three and six months ended June 30, 2016, the Company recorded restructuring charges in “Cost of revenue” of $0.5 million and $2.2 million, respectively, related to the write-down of inventory identified for discontinued products in the restructuring plan.

 

The following table illustrates the provision of the restructuring charges and the accrued restructuring charges balance as of June 30, 2017 (in thousands):

 

   

 

Contract Termination Costs

    Purchase Commitment of Discontinued Inventories Not Yet Received    

 

Abandoned Lease Facilities

   

 

Total

 
Balance as of December 31, 2016   $ 308     $ 175     $ 339     $ 822  
Expensed                        
Cash payments                 (73 )     (73 )
Balance as of June 30, 2017   $ 308     $ 175     $ 266     $ 749  

 

The total future payments under the restructuring plan as of June 30, 2017 are as follows (in thousands):

 

    For the Year Ending December 31,  
Outstanding Payments   Remainder of 2017     2018     2019     2020     2021     Total  
Contract termination costs   $ 308     $     $     $     $     $ 308  
Purchase commitment of discontinued inventories not yet received     175                               175  
Abandoned leased facilities     58       92       91       25             266  
Total future payments   $ 541     $ 92     $ 91     $ 25     $     $ 749