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Impairment, restructuring and other charges | 9 Months Ended
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Mar. 31, 2017
Impairment, restructuring and other charges |
Impairment, restructuring and other charges | 5. Impairment, restructuring and other charges Impairment During the first quarter of fiscal 2017, the Company abandoned a product line in its Security division related to a technology the Company no longer supports. As a result, $5.4 million of assets, including the intangible and fixed assets associated with this product line, were fully written off as the Company determined that these assets have no value and were permanently impaired. During the second quarter of fiscal 2016, the Company determined that fixed assets to be used for turnkey screening solutions programs totaling $5.9 million were not going to be utilized and that they had no value. As such, this amount was impaired within the Company’s Security division. In addition, the Company determined that its minority interest investment of $2.8 million within its Optoelectronics and Manufacturing division was not recoverable and permanently impaired. Restructuring and Other Charges The Company endeavors to align its global capacity and infrastructure with demand by its customers as well as fully integrate acquisitions, thereby improving operational efficiency. The significant initiatives undertaken by the Company are further discussed below and a summary of all such activity is included in the succeeding tables. Acquisition and integration of AS&E. In conjunction with the acquisition of AS&E, beginning in fiscal 2016 the Company incurred financing costs and professional fees to complete the acquisition and employee separation costs and other costs related to the integration of AS&E into the Company’s Security division. Such costs accumulated to $14.4 million through March 31, 2017, including $8.0 million for the elimination of 50 employee positions. During the three months and nine months ended March 31, 2017, the Company incurred $0.4 million and $12.1 million, respectively, for these activities. Management is unable to estimate how much the total cost will be for these activities and what will be the total savings to the consolidated operations of OSI Systems. The integration of AS&E, including the merger of manufacturing facilities, employee terminations and streamlining of processes, is expected to be completed in fiscal 2019. Facility consolidation / employee termination. During the second quarter of fiscal 2017, the Healthcare division began the process of consolidating one of its research and development facilities. As of March 31, 2017, 86 positions have been eliminated and the Company incurred $1.0 million in employee termination costs and $0.7 million of other costs for these activities. During the three months and nine months ended March 31, 2017, $0.8 million and $1.7 million, respectively, were incurred. Management estimates the total cost of this initiative to be approximately $2.0 million, and it is expected to be completed by the end of fiscal 2017. The following table summarizes restructuring and other charges for the periods set forth below (in thousands):
|  | Three Months Ended March 31, 2016 |
|  | Security Division |  | Healthcare Division |  | Optoelectronics and Manufacturing Division |  | Corporate |  | Total |
Acquisition-related costs |  | $ | — |  | $ | — |  | $ | 384 |  | $ | 1,054 |  | $ | 1,438 |
Employee termination costs |  | 747 |  | 1,378 |  |  | 33 |  | — |  | 2,158 |
Legal settlement and related costs |  | — |  | — |  | 125 |  | — |  | 125 |
Other charges |  | 496 |  | 305 |  | 15 |  | — |  | 816 |
Total expensed |  | $ | 1,243 |  | $ | 1,683 |  | $ | 557 |  | $ | 1,054 |  | $ | 4,537 |
|  | Three Months Ended March 31, 2017 |
|  | Security Division |  | Healthcare Division |  | Optoelectronics and Manufacturing Division |  | Corporate |  | Total |
Acquisition-related costs |  | $ | — |  | $ | — |  | $ | — |  | $ | 140 |  | $ | 140 |
Employee termination costs |  | 345 |  | 182 |  | 52 |  | — |  | 579 |
Facility closures/consolidation |  | 650 |  | 634 |  | 194 |  | — |  | 1,478 |
Other charges (reversals) |  | — |  | 297 |  | 19 |  | (5 | ) | 311 |
Total expensed |  | $ | 995 |  | $ | 1,113 |  | $ | 265 |  | $ | 135 |  | $ | 2,508 |
|  | Nine Months Ended March 31, 2016 |
|  | Security Division |  | Healthcare Division |  | Optoelectronics and Manufacturing Division |  | Corporate |  | Total |
Acquisition-related costs |  | $ | — |  | $ | — |  | $ | 384 |  | $ | 1,054 |  | $ | 1,438 |
Employee termination costs |  | 1,083 |  | 1,378 |  | 239 |  | — |  | 2,700 |
Legal settlement and related costs |  | — |  | — |  | 1,843 |  | — |  | 1,843 |
Other charges |  | 572 |  | 305 |  | 35 |  | — |  | 912 |
Total expensed |  | $ | 1,655 |  | $ | 1,683 |  | $ | 2,501 |  | $ | 1,054 |  | $ | 6,893 |
|  | Nine Months Ended March 31, 2017 |
|  | Security Division |  | Healthcare Division |  | Optoelectronics and Manufacturing Division |  | Corporate |  | Total |
Acquisition-related costs |  | $ | 810 |  | $ | — |  | $ | — |  | $ | 3,353 |  | $ | 4,163 |
Employee termination costs |  | 8,152 |  | 1,262 |  | 383 |  | — |  | 9,797 |
Facility closures/consolidation |  | 829 |  | 703 |  | 218 |  | — |  | 1,750 |
Other charges (reversals) |  | 7 |  | 297 |  | (48 | ) | 501 |  | 757 |
Total expensed |  | $ | 9,798 |  | $ | 2,262 |  | $ | 553 |  | $ | 3,854 |  | $ | 16,467 |
The changes in the accrual for restructuring and other charges for the nine-month period ended March 31, 2017 were as follows (in thousands):
|  | Acquisition- related Costs |  | Employee Termination Costs |  | Facility Closure/ Consolidation Cost |  | Other Costs |  | Total |
Balance as of June 30, 2016 |  | $ | — |  | $ | 413 |  | $ | 126 |  | $ | — |  | $ | 539 |
Restructuring and other charges |  | 4,163 |  | 9,797 |  | 1,750 |  | 757 |  | 16,467 |
Payments and other adjustments |  | (4,163 | ) | (10,007 | ) | (1,531 | ) | (757 | ) | (16,458 | )
Balance as of March 31, 2017 |  | $ | — |  | $ | 203 |  | $ | 345 |  | $ | — |  | $ | 548 |

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- Definition The entire disclosure for impairment, restructuring and related activities. Description of impairment costs and 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. + References No definition available. + Details
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- References No definition available. + Details
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