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IMPAIRMENT, RESTRUCTURING AND OTHER CHARGES

12 Months Ended

Jun. 30, 2021

IMPAIRMENT, RESTRUCTURING AND OTHER CHARGES

IMPAIRMENT, RESTRUCTURING AND OTHER CHARGES

7. IMPAIRMENT, RESTRUCTURING AND OTHER CHARGES

We endeavor to align our global capacity and infrastructure with demand by our customers as well as fully integrate acquisitions and thereby improve operational efficiency.

During the year ended June 30, 2021, we incurred $7.2 million for exit activities associated with an expired turnkey contract in Mexico. Such exit costs include $2.8 million for employee terminations, $1.1 million for facility closure and other exit costs, direct

transaction costs of $2.7 million, and $0.6 million for right-of-use asset impairment for a leased facility. We also incurred costs of $1.6 million for other employee terminations and $0.5 million for other facility closure costs for operational efficiency activities, $0.3 million for acquisition-related activities, and $0.5 million for certain legal charges, net of insurance reimbursements.

During fiscal 2020, we incurred $0.4 million in costs for professional fees relating to acquisitions, $4.0 million in employee termination costs as part of operational efficiency initiatives, and $0.2 million in costs associated with the consolidation of facilities in our Security division. Additionally, legal fees and settlement costs resulted in a net recovery of $3.6 million as a result of insurance reimbursements of certain legal costs. During the year ended June 30, 2020, we also impaired an intangible asset for IPR&D in the Security division due to a strategic shift in the direction of the project and abandoned a non-core product line in our Healthcare division which resulted in the write-off of assets, including intangible and fixed assets. As a result, $5.5 million of assets, including intangible and fixed assets, were written off as we determined that these assets had no value and were permanently impaired. These impairment charges were included in impairment, restructuring and other charges in our consolidated statements of operations.

The following tables summarize impairment, restructuring and other charges for the periods set forth below (in thousands):


	2019
					Optoelectronics
					and
	Security		Healthcare		Manufacturing
	Division		Division		Division		Corporate		Total
Acquisition-related costs	$	—	$	—	$	287	$	1,021	$	1,308
Employee termination costs		132		1,629		687		—		2,448
Facility closures/consolidation		—		1,918		84		—		2,002
Legal costs (recoveries), net		—		—		—		(1,931)		(1,931)
Total expensed	$	132	$	3,547	$	1,058	$	(910)	$	3,827


	2020
					Optoelectronics
					and
	Security		Healthcare		Manufacturing
	Division		Division		Division		Corporate		Total
Impairment charges	$	2,200	$	3,258	$	—	$	—	$	5,458
Acquisition-related costs		309		—		41		—		350
Employee termination costs		2,748		466		618		184		4,016
Facility closures/consolidation		231		—		—		—		231
Legal costs (recoveries), net		—		—		—		(3,572)		(3,572)
Total expensed	$	5,488	$	3,724	$	659	$	(3,388)	$	6,483


	2021
					Optoelectronics
					and
	Security		Healthcare		Manufacturing
	Division		Division		Division		Corporate		Total
Impairment charges	$	552	$	—	$	—	$	—	$	552
Acquisition-related costs		249		27		—		—		276
Employee termination costs		4,130		—		315		—		4,445
Mexico transaction costs		2,691		—		—		—		2,691
Facility closures/consolidation		1,675		—		—		—		1,675
Legal costs (recoveries), net		—		—		—		465		465
Total expensed	$	9,297	$	27	$	315	$	465	$	10,104

The accrued liability for restructuring and other charges is included in other accrued expenses and current liabilities in the consolidated balance sheet. The changes in the accrued liability for restructuring and other charges for fiscal 2020 and 2021 were as follows (in thousands):


					Facility
	Acquisition-		Employee		Closure /		Legal
	Related		Termination		Consolidation		Costs and
	Costs		Costs		Cost		Settlements		Total
Balance as of June 30, 2019	$	—	$	432	$	—	$	6,331	$	6,763
Restructuring and other charges (benefit), net		350		4,016		231		(3,572)		1,025
Payments, adjustments and reimbursements, net		(350)		(3,903)		(30)		(877)		(5,160)
Balance as of June 30, 2020	$	—	$	545	$	201	$	1,882	$	2,628
Restructuring and other charges, net		276		4,368		1,675		3,156		9,475
Payments, adjustments and reimbursements, net		(276)		(4,663)		(1,490)		(2,266)		(8,695)
Balance as of June 30, 2021	$	—	$	250	$	386	$	2,772	$	3,408