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