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Impairment, Restructuring and Other Charges

6 Months Ended

Dec. 31, 2020

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 three months ended December 31, 2020, we recognized a net benefit of $0.5 million for reimbursements from our insurance carriers for covered legal charges, partially offset by additional legal fees related to class action litigation and government investigations. This net benefit was partially offset by charges of $0.1 million for employee terminations from operational efficiency activities and $0.2 million for acquisition-related activities.

During the six months ended December 31, 2020, we incurred $7.2 million for exit activities associated with an expired turnkey contract in Mexico. Such exit costs commenced in the first quarter of the fiscal year and 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. We also incurred costs of $1.2 million for employee terminations and facility closure costs for operational efficiency activities and $0.3 million for acquisition-related activities, partially offset by a net benefit of $0.5 million for reimbursements from our insurance carriers for covered legal charges.

During the three and six months ended December 31, 2019, we recognized a net benefit of $1.4 and $3.5 million, respectively, primarily related to reimbursements from our insurance carriers for covered legal charges, partially offset by additional legal fees related to class action litigation and government investigations. These were partially offset by operational efficiency activites during the three and six months ended December 31, 2019, which included employee termination costs of $0.4 million and $0.5 million, respectively.

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


	Three Months Ended December 31, 2019
					Optoelectronics and
			Healthcare		Manufacturing
	Security Division		Division		Division		Corporate		Total
Employee termination costs	$	406	$	—	$	30	$	—	$	436
Legal recoveries, net		—		—		—		(1,365)		(1,365)
Total expensed (benefit), net	$	406	$	—	$	30	$	(1,365)	$	(929)


	Three Months Ended December 31, 2020
					Optoelectronics and
			Healthcare		Manufacturing
	Security Division		Division		Division		Corporate		Total
Acquisition-related costs	$	139	$	27	$	—	$	—	$	166
Employee termination costs		147		—		—		—		147
Facility closures/consolidation costs (benefit)		(17)		—		—		—		(17)
Legal recoveries, net		—		—		—		(458)		(458)
Total expensed (benefit), net	$	269	$	27	$	—	$	(458)	$	(162)


	Six Months Ended December 31, 2019
					Optoelectronics and
			Healthcare		Manufacturing
	Security Division		Division		Division		Corporate		Total
Employee termination costs	$	406	$	—	$	17	$	71	$	494
Legal recoveries, net		—		—		—		(3,522)		(3,522)
Total expensed (benefit), net	$	406	$	—	$	17	$	(3,451)	$	(3,028)


	Six Months Ended December 31, 2020
					Optoelectronics and
			Healthcare		Manufacturing
	Security Division		Division		Division		Corporate		Total
Impairment charges	$	552	$	—	$	—	$	—	$	552
Acquisition-related costs		227		27		—		—		254
Employee termination costs		3,797		—		146		—		3,943
Mexico transaction costs		2,691		—				—		2,691
Facility closures/consolidation costs		1,255		—		—		—		1,255
Legal recoveries, net		—		—		—		(498)		(498)
Total expensed (benefit), net	$	8,522	$	27	$	146	$	(498)	$	8,197

The accrued liability for restructuring and other charges is included in other accrued expenses and current liabilities in the condensed consolidated balance sheet. The changes in the accrued liability for restructuring and other charges for the six-month period ended December 31, 2020 were as follows (in thousands):



			Facility
	Employee		Closure/
	Termination		Consolidation		Acquisition-		Legal Costs and
	Costs		Cost		Related Costs		Settlements		Total
Balance as of June 30, 2020	$	545	$	201	$	—	$	1,882	$	2,628
Restructuring and other charges (benefit), net		3,943		1,255		254		(498)		4,954
Payments, adjustments and reimbursements, net		(4,383)		(1,211)		(254)		(6)		(5,854)
Balance as of December 31, 2020	$	105	$	245	$	—	$	1,378	$	1,728