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RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES | 3 Months Ended
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Jun. 30, 2023
Restructuring and Related Activities [Abstract] |
RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES | RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES: Restructuring activities result in various costs, including asset write-offs, right of use ("ROU") asset group impairments, exit charges including severance, contract termination fees, and decommissioning and other costs. A reconciliation of the beginning and ending restructuring liabilities is shown below for the three months ended June 30, 2023. The restructuring charges and adjustments are included in gains, losses and other items, net in the condensed consolidated statements of operations. The reserve balances are included in other accrued expenses and other liabilities in the condensed consolidated balance sheets (dollars in thousands).
|  | Employee-related reserves |  | Lease accruals |  | Total
Balances at March 31, 2023 |  | $ | 759 |  |  | $ | 4,873 |  |  | $ | 5,632 |
Restructuring charges and adjustments |  | 88 |  |  | — |  |  | 88 |
Payments |  | (686) |  |  | (917) |  |  | (1,603) |
Balances at June 30, 2023 |  | $ | 161 |  |  | $ | 3,956 |  |  | $ | 4,117 |
Employee-related Restructuring Plans During the three months ended June 30, 2023, the Company recorded a total of $0.1 million in employee-related restructuring charges and adjustments. The expense included adjustments to the fiscal 2021 associate-related restructuring plans for associates in the United States and Europe. In fiscal 2023, the Company recorded a total of $7.8 million in employee-related restructuring charges and adjustments. The expense included severance and other employee-related charges primarily in the United States. Of the $7.8 million employee-related charges, $0.1 million remained accrued as of June 30, 2023 and are expected to be paid out during fiscal 2024. In fiscal 2021, the Company recorded a total of $1.7 million in employee-related restructuring charges and adjustments. The expense included severance and other employee-related charges in the United States and Europe. Of the associate-related charges of $1.7 million, $0.1 million remained accrued as of June 30, 2023 and are expected to be paid out during fiscal 2024. Lease-related Impairments and Restructuring Plans In fiscal 2023, the Company initiated a restructuring plan to lower its operating expenses by reducing its global real estate footprint. As part of this plan, we exited a total of eight leased office spaces. Of that, five were in the United States: one located in Boston, one located in Philadelphia, one located in Phoenix, and two floors of leased office space in San Francisco. The three remaining spaces were in Europe: one located in the Netherlands, one floor of leased office space in London, England, and one floor of leased office space in Paris, France. Based on a comparison of undiscounted cash flows to the ROU asset group of each exited lease, the Company determined that each of the ROU asset groups was impaired, driven largely by the difference between the existing lease terms and rates on the Company’s leases and the expected sublease terms and rates available in the market. This resulted in impairment charges totaling $24.6 million during the second, third, and fourth quarters of fiscal 2023, reflecting the excess of the ROU asset group book value over its fair value, which was determined based on estimates of future discounted cash flows and is classified as Level 3 in the fair value hierarchy. The lease impairment charges included impairments of the operating lease ROU assets of $20.5 million, and the associated furniture, equipment, and leasehold improvements of $4.1 million. Additionally, the Company recorded $2.9 million in lease-related restructuring charges and adjustments that covered other obligations related to the leased office spaces in San Francisco and Phoenix. Of the $2.9 million lease-related charges, $2.1 million remained accrued as of June 30, 2023 and will be satisfied over the remainder of the San Francisco lease terms, which continues through April 2029. In fiscal 2017, the Company made the strategic decision to exit and sub-lease a certain leased office facility under a staggered-exit plan. The full exit was completed in fiscal 2019. We intend to continue subleasing the facility to the extent possible. The liability will be satisfied over the remainder of the leased property's term, which continues through November 2025. Any future changes in the estimates or in the actual sublease income may require future adjustments to the liabilities, which would impact net earnings (loss) in the period the adjustment is recorded. Through June 30, 2023, the Company has recorded a total of $7.3 million of restructuring charges and adjustments related to this lease. Of the amount accrued for this facility lease, $1.9 million remained accrued at June 30, 2023. Gains, Losses and Other Items, Net The following table summarizes the activity included in gains, losses and other items, net in the condensed consolidated statements of operations for each of the periods presented (dollars in thousands):
|  | Three Months Ended June 30, |  |
|  | 2023 |  | 2022 |  |  |  |  |  |
Employee-related restructuring plan charges and adjustments |  | $ | 88 |  |  | $ | 739 |  |  |  |  |  |  |
Lease termination adjustments |  | 28 |  |  | — |  |  |  |  |  |  |
|  | $ | 116 |  |  | $ | 739 |  |  |  |  |  |  |

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- Definition The entire disclosure for restructuring and related activities. Description of 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 Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482017/420-10-50-1 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482017/420-10-50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//420/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482017/420-10-50-1 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4(e)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479823/420-10-S99-2 + Details
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