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IMPAIRMENT, RESTRUCTURING AND OTHER CHARGES | 12 Months Ended
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Jun. 30, 2018
IMPAIRMENT, RESTRUCTURING AND OTHER CHARGES |
IMPAIRMENT, RESTRUCTURING AND OTHER CHARGES | 6. IMPAIRMENT, RESTRUCTURING AND OTHER CHARGES Impairment During fiscal 2018, we impaired (i) a product line in our Security division that became redundant as a result of the ETD acquisition, (ii) two product lines in our Healthcare division, and (iii) certain trademarks in our Optoelectronics and Manufacturing division that are no longer used. As a result, $7.8 million of assets, including intangible and fixed assets, were written off as we determined that these assets have no value and were permanently impaired. During fiscal 2017 we determined that certain idle assets related to our turnkey screening program in Mexico were permanently impaired. These costs included costs related to civil works for five sites that were relocated during the fourth quarter of fiscal 2017, whereby these civil works were determined to have no value; and civil works and equipment for other sites that were partially completed prior to the customer informing us that these sites would not be needed. The carrying value of these assets when they were impaired was $17.5 million. Also, during the year, two product lines in our Security division were abandoned, one of which was determined to be redundant with a similar product acquired as part of our acquisition of AS&E. As a result, $9.4 million of assets, including inventory and the intangible assets and fixed assets related to these products lines, were determined to be permanently impaired. Restructuring and Other Charges We endeavor to align our global capacity and infrastructure with demand by our customers as well as fully integrate acquisitions, thereby improving operational efficiency. The significant initiatives undertaken by us in fiscal year 2018 are further discussed below and a summary of all such activity is included in the succeeding tables. Acquisition and integration costs. Beginning in fiscal 2017 we incurred professional fees to complete the acquisition of ETD. Such costs totaled $2.2 million through June 30, 2018. Of this amount, $1.2 million was incurred during fiscal 2018. In addition, we incurred $0.3 million in other acquisition-related costs during fiscal year 2018. Facility consolidation / employee termination. During fiscal 2018, we incurred $0.5 million in costs associated with the consolidation of one facility in each of our Healthcare and Security divisions. Additionally, we incurred employee termination costs within our Security and Optoelectronics and Manufacturing divisions of $1.5 million and $0.6 million, respectively, as part of operational efficiency initiatives. Legal fees and settlement costs. During fiscal 2018, we accrued $19.4 million for estimated claims and settlements in our Healthcare division and $8.7 million in our Corporate division for certain legal fees related to class action litigation and government investigations, offset by a $5.0 million reduction related to resolution of the GSA matter as described in further detail in note 10. The following table summarizes restructuring and other charges for the periods set forth below (in thousands):
|  | 2016 |
|  | Security Division |  | Healthcare Division |  | Optoelectronics and Manufacturing Division |  | Corporate |  | Total |
Acquisition-related costs |  | $ | — |  | $ | — |  | $ | 220 |  | $ | 3,256 |  | $ | 3,476 |
Employee termination costs |  |  | 1,358 |  |  | 2,601 |  |  | 588 |  |  | — |  |  | 4,547 |
Facility closures/consolidation |  |  | 206 |  |  | 487 |  |  | — |  |  | — |  |  | 693 |
Legal settlement and related costs |  |  | 1,091 |  |  | — |  |  | 1,843 |  |  | — |  |  | 2,934 |
Other charges |  |  | 572 |  |  | — |  |  | 118 |  |  | — |  |  | 690 |
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Total expensed |  | $ | 3,227 |  | $ | 3,088 |  | $ | 2,769 |  | $ | 3,256 |  | $ | 12,340 |
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|  | 2017 |
|  | Security Division |  | Healthcare Division |  | Optoelectronics and Manufacturing Division |  | Corporate |  | Total |
Acquisition-related costs |  | $ | 810 |  | $ | — |  | $ | — |  | $ | 4,877 |  | $ | 5,687 |
Employee termination costs |  |  | 8,256 |  |  | 1,760 |  |  | 631 |  |  | — |  |  | 10,647 |
Facility closures/consolidation |  |  | 967 |  |  | 1,095 |  |  | 444 |  |  | — |  |  | 2,506 |
Other charges (reversals) |  |  | 7 |  |  | 374 |  |  | (70 | ) |  | 500 |  |  | 811 |
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Total expensed |  | $ | 10,040 |  | $ | 3,229 |  | $ | 1,005 |  | $ | 5,377 |  | $ | 19,651 |
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|  | 2018 |
|  | Security Division |  | Healthcare Division |  | Optoelectronics and Manufacturing Division |  | Corporate |  | Total |
Acquisition-related costs |  | $ | — |  | $ | — |  | $ | — |  | $ | 1,541 |  | $ | 1,541 |
Employee termination costs |  |  | 1,485 |  |  | 16 |  |  | 610 |  |  | — |  |  | 2,111 |
Facility closures/consolidation |  |  | 213 |  |  | 263 |  |  | 26 |  |  | — |  |  | 502 |
Legal and accrued settlement costs |  |  | — |  |  | 19,364 |  |  | — |  |  | 3,650 |  |  | 23,014 |
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Total expensed |  | $ | 1,698 |  | $ | 19,643 |  | $ | 636 |  | $ | 5,191 |  | $ | 27,168 |
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The changes in the accrual for restructuring and other charges for fiscal 2017 and 2018 were as follows (in thousands):
|  | Acquisition- related Costs |  | Employee Termination Costs |  | Facility Closure/ Consolidation Cost |  | Legal Settlements and Related Costs |  | Total |
Balance as of June 30, 2016 |  | $ | — |  | $ | 413 |  | $ | 126 |  | $ | — |  | $ | 539 |
Restructuring and other charges |  |  | 5,687 |  |  | 10,647 |  |  | 2,506 |  |  | 811 |  |  | 19,651 |
Payments and other adjustments |  |  | (5,687 | ) |  | (10,885 | ) |  | (2,341 | ) |  | (811 | ) |  | (19,724 | )
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Balance as of June 30, 2017 |  | $ | — |  | $ | 175 |  | $ | 291 |  | $ | — |  | $ | 466 |
Restructuring and other charges |  |  | 1,541 |  |  | 2,111 |  |  | 502 |  |  | 23,014 |  |  | 27,168 |
Payments and other adjustments |  |  | (1,541 | ) |  | (1,449 | ) |  | (394 | ) |  | (8,949 | ) |  | (12,333 | )
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Balance as of June 30, 2018 |  | $ | — |  | $ | 837 |  | $ | 399 |  | $ | 14,065 |  | $ | 15,301 |
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The following table summarizes the impairment, restructuring and other charges for fiscal 2016, 2017 and 2018 (in thousands):
|  | 2016 |  | 2017 |  | 2018 |
Impairment of assets |  | $ | 6,821 |  | $ | 27,047 |  | $ | 7,795 |
Impairment of minority interest investment |  |  | 2,853 |  |  | — |  |  | — |
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Total impairment charges |  |  | 9,674 |  |  | 27,047 |  |  | 7,795 |
Debt restructuring |  |  | — |  |  | 489 |  |  | — |
Facility closure / consolidations |  |  | 693 |  |  | 2,506 |  |  | 502 |
Employee termination costs |  |  | 4,547 |  |  | 10,647 |  |  | 2,111 |
Charges related to government contract issues |  |  | 496 |  |  | — |  |  | — |
Legal fees, settlements and related costs |  |  | 2,934 |  |  | — |  |  | 23,014 |
Acquisition-related costs |  |  | 3,476 |  |  | 5,687 |  |  | 1,541 |
Other |  |  | 194 |  |  | 322 |  |  | — |
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Total impairment, restructuring and other charges |  | $ | 22,014 |  | $ | 46,698 |  | $ | 34,963 |
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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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