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Restructuring Charges

9 Months Ended

Oct. 31, 2019

Restructuring Charges [Abstract]

Restructuring Charges

Note 13:  Restructuring Charges

In October 2019, the Company approved a restructuring plan designed to better align resources around its long-term business strategy. The restructuring provided for the discontinuation of Ooma Smart Cam, given the increased level of competition in the market, accompanied with a small reduction-in-force.

For the three months ended October 31, 2019, the Company recorded aggregate restructuring charges of $3.1 million in its condensed consolidated statement of operations, which consisted of the following major components (in thousands):

		Employee Severance				Excess Inventory and Purchase Commitments (1)				Other Assets (2)				Other Charges				Total
Cost of service revenue		$	75			$	—			$	—			$	93			$	168
Cost of product revenue			—				1,375				694				45				2,114
Sales and marketing			170				—				—				5				175
Research and development			475				—				42				111				628
General and administrative			—				—				—				—				—
Total restructuring charges		$	720			$	1,375			$	736			$	254			$	3,085

⁽¹⁾ Includes charges for excess Smart Cam product inventory and non-cancelable purchase commitments.

⁽²⁾ Includes impairment charges for abandoned intangible assets associated with Smart Cam as well as other long-lived assets.

The following provides a reconciliation of the Company’s restructuring liability, which was recorded as a component of accrued expenses on the condensed consolidated balance sheet (in thousands):

Restructuring liability, July 31, 2019						$	—
Restructuring charges (1)							1,504
Cash paid							—
Restructuring liability, October 31, 2019						$	1,504

⁽¹⁾ Includes accrued expenses for employee severance, non-cancelable purchase commitments and other cash-based charges. Asset impairment charges were recorded against the respective assets, including inventory and intangible assets.

The actions associated with the restructuring are expected to be substantially completed in the fourth quarter of fiscal 2020, including the pay-out of all restructuring liabilities. The Company does not expect any material adjustments to the aggregate charges recorded.   

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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://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 420
-URI http://asc.fasb.org/topic&trid=2175745

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- References

No definition available.

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