Headquarter Relocation

9 Months Ended

Sep. 30, 2016

(12) Business Realignment

The Company regularly evaluates the performance of its businesses and cost structures, including personnel, and makes necessary changes thereto in order to optimize its results. The Company also evaluates the required skill sets of its personnel and periodically makes strategic changes. As a consequence of these actions, the Company incurs severance related costs which are referred to as business realignment charges.

Business realignment charges by reportable segment were as follows:


		Three months ended				Nine months ended
		September 30,				September 30,
		2016		2015		2016		2015
Electronics (A)	$	-	$	317	$	1,180	$	317
PST (B)		211		403		1,242		403
Unallocated Corporate (C)		-		309		-		309
Total business realignment charges	$	211	$	1,029	$	2,422	$	1,029

(A) Severance costs for the nine months ended September 30, 2016 related to selling, general and administrative (“SG&A”) and design and development (“D&D”) were $196 and $984, respectively. Severance costs for both the three and nine months ended September 30, 2015 related to SG&A and D&D were $102 and $215, respectively.

(B) Severance costs for the three months ended September 30, 2016 related to cost of goods sold (“COGS”) and SG&A were $20 and $191, respectively. Severance costs for the nine months ended September 30, 2016 related to COGS, SG&A and D&D were $307, $819 and $116, respectively. Severance costs for both the three and nine months ended September 30, 2015 related to COGS, SG&A and D&D were $172, $117 and $114, respectively.

Business realignment charges classified by statement of operations line item were as follows:


		Three months ended				Nine months ended
		September 30,				September 30,
		2016		2015		2016		2015
Cost of goods sold	$	20	$	171	$	307	$	171
Selling, general and administrative		191		529		1,015		529
Design and development		-		329		1,100		329
Total business realignment charges	$	211	$	1,029	$	2,422	$	1,029

Headquarter Relocation [Member]

Headquarter Relocation

(11) Headquarter Relocation

In March 2016, the Company announced the relocation of its corporate headquarters from Warren, Ohio to Novi, Michigan which will primarily occur during the fourth quarter of 2016. As a result, the Company incurred relocation costs of $726 and $998 for the three and nine months ended September 2016, respectively. The relocation costs incurred included employee retention, relocation, severance, recruiting, duplicate wages and professional fees.

In April 2016, the Company entered into a long-term lease agreement for its new corporate headquarters. The Company establishes assets and liabilities for the estimated construction costs incurred under build-to-suit lease arrangements to the extent the Company was involved in the construction of structural improvements or takes construction risk prior to the commencement of a lease. As of September 30, 2016, the Company recorded a non-cash build-to-suit lease asset under construction of $4,322 (within Prepaid and other currents assets) and a corresponding obligation (within accrued expenses and other current liabilities) in the condensed consolidated balance sheet.

Also, the Company concluded that the Warren, Ohio headquarter building, which had a net book value of $481 at September 30, 2016 and is actively marketed for sale, met the criteria for held for sale accounting treatment. As such, it was reclassified from Property, plant and equipment, net to Prepaid and other current assets at September 30, 2016.