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Impairment, Restructuring and Other Charges

9 Months Ended

Mar. 31, 2022

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 March 31, 2022, we recognized $1.5 million in restructuring and other charges, which included $0.8 million in legal charges primarily related to class action litigation and government investigations, $0.4 million for employee terminations, and $0.3 million in acquisition related costs. During the three months ended March 31, 2021, we recognized a total net benefit of ($0.3) million which included a net benefit of ($0.7) million for reimbursements from our insurance carriers for covered legal charges. We also incurred charges of $0.2 million for employee terminations and $0.2 million for facility closure and operational efficiency activities.

During the nine months ended March 31, 2022, we recognized $4.8 million in restructuring and other charges, which included $1.0 million in employee terminations, $0.3 million in acquisition related costs, and $3.5 million in legal charges primarily related to class action litigation and government investigations. During the nine months ended March 31, 2021, we incurred a total net expense of $7.9 million which included $7.2 million for exit activities associated with an expired turnkey contract in Mexico. Such exit costs included $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 facility closure costs for operational efficiency activities and $0.3 million for acquisition-related activities.We also recognized a net benefit of ($1.2) million for reimbursements from our insurance carriers for covered legal charges.

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


	Three Months Ended March 31, 2021
					Optoelectronics and
			Healthcare		Manufacturing
	Security Division		Division		Division		Corporate		Total
Acquisition-related costs	$	22	$	—	$	—	$	—	$	22
Employee termination costs		213		—		—		—		213
Facility closures/consolidation costs		166		—		—		—		166
Legal costs (recoveries), net		—		—		—		(686)		(686)
Total expensed (benefit), net	$	401	$	—	$	—	$	(686)	$	(285)


	Three Months Ended March 31, 2022
					Optoelectronics and
			Healthcare		Manufacturing
	Security Division		Division		Division		Corporate		Total
Acquisition-related costs	$	221	$	—	$	—	$	56	$	277
Employee termination costs		409		—		—		—		409
Facility closures/consolidation		3		—		—		—		3
Legal costs, net		—		—		—		780		780
Total expensed	$	633	$	—	$	—	$	836	$	1,469


	Nine Months Ended March 31, 2021
					Optoelectronics and
			Healthcare		Manufacturing
	Security Division		Division		Division		Corporate		Total
Impairment charges	$	552	$	—	$	—	$	—	$	552
Acquisition-related costs		250		27		—		—		277
Employee termination costs		4,010		—		146		—		4,156
Mexico transaction costs		2,691		—		—		—		2,691
Facility closures/consolidation costs		1,420		—		—		—		1,420
Legal costs (recoveries), net		—		—		—		(1,184)		(1,184)
Total expensed (benefit), net	$	8,923	$	27	$	146	$	(1,184)	$	7,912


	Nine Months Ended March 31, 2022
					Optoelectronics and
			Healthcare		Manufacturing
	Security Division		Division		Division		Corporate		Total
Acquisition-related costs	$	221	$	—	$	—	$	56	$	277
Employee termination costs		1,077		—		—		—		1,077
Facility closures/consolidation		(37)		—		—		—		(37)
Legal costs, net		—		—		—		3,493		3,493
Total expensed	$	1,261	$	—	$	—	$	3,549	$	4,810

The accrued liability for restructuring and other charges is included in other accrued expenses and current liabilities in the condensed consolidated balance sheets. The changes in the accrued liability for restructuring and other charges for the nine-month period ended March 31, 2022 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, 2021	$	—	$	250	$	386	$	2,772	$	3,408
Restructuring and other charges (benefits), net		277		1,077		(37)		3,493		4,810
Payments, adjustments and reimbursements, net		(119)		(1,160)		(241)		(3,263)		(4,783)
Balance as of March 31, 2022	$	158	$	167	$	108	$	3,002	$	3,435