Headquarter Relocation

12 Months Ended

Dec. 31, 2016

12. Restructuring and Business Realignment

On October 29, 2007, the Company announced a restructuring initiative to improve manufacturing efficiency and cost position by ceasing manufacturing operations at its Mitcheldean, United Kingdom (Electronics reportable segment) location. In 2010, the Company continued restructuring initiatives within the Electronics reportable segment and recorded amounts related to its terminated property lease in Mitcheldean, United Kingdom. During the third quarter of 2012, the Company finalized a settlement agreement to modify the terms of and the obligation associated with the property consistent with previous estimates.

In connection with the Electronics segment restructuring initiative, the Company recorded lease related restructuring charges during the years ended December 31, 2016, 2015 and 2014 of $59, $183 and $494, respectively, as part of selling, general and administrative expense. At December 31, 2016 and 2015, the only remaining restructuring related accrual relates to the terminated property lease in Mitcheldean, United Kingdom, for which the Company has accrued $273 and $458, respectively, on the consolidated balance sheets of which $0 and $313, respectively, is a component of other long-term liabilities.

The expenses for the restructuring activities that relate to the Electronics reportable segment include the following:



		2016		2015		2014
Accrued balance at January 1	$	458	$	733	$	780
Charge to expense		59		183		494
Foreign currency translation		(69)		3		(45)
Cash payments, net		(175)		(461)		(496)
Accrued balance at December 31	$	273	$	458	$	733

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:


Years ended December 31		2016		2015		2014
Electronics (A)	$	1,180	$	317	$	-
PST (B)		1,437		403		1,578
Unallocated Corporate (C)		-		309		-
Total business realignment charges	$	2,617	$	1,029	$	1,578

(A) Severance costs for the year ended December 31, 2016 related to selling, general and administrative (“SG&A”) and design and development (“D&D”) were $196 and $984, respectively. Severance costs for the year ended December 31, 2015 related to SG&A and D&D were $102 and $215, respectively.

(B) Severance costs for the year ended December 31, 2016 related to cost of goods sold (“COGS”), SG&A and D&D were $437, $884 and $116, respectively. Severance costs for the year ended December 31, 2015 related to COGS, SG&A and D&D were $172, $117 and $114, respectively. Severance costs for year ended December 31, 2014 related to COGS, SG&A and D&D were $847, $559 and $172, respectively.

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


Years ended December 31		2016		2015		2014
Cost of goods sold	$	437	$	172	$	847
Selling, general and administrative		1,080		528		559
Design and development		1,100		329		172
Total business realignment charges	$	2,617	$	1,029	$	1,578

There were no significant restructuring or business realignment expenses related to the Control Devices reportable segment during the years ended December 31, 2016, 2015 or 2014.

Headquarter Relocation [Member]

Headquarter Relocation

11. Headquarter Relocation and Consolidation

During the fourth quarter of 2016, the Company relocated its corporate headquarters from Warren, Ohio to Novi, Michigan and consolidated its other corporate functions into one location. As a result, the Company incurred relocation costs, which included employee retention, relocation, severance, recruiting, duplicate wages and professional fees, of $1,769 for the year then ended December 31, 2016.

During 2016, 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 consolidated balance sheet. On October 31, 2016 the construction was completed. Based on the Company’s evaluation of the lease, sale and leaseback accounting treatment was deemed to be appropriate and as such the Company removed the build-to-suit lease asset and corresponding obligation. Also, the incremental cost of the tenant improvements incurred and paid by the Lessor of $1,104 were capitalized as a right of use asset and corresponding liability as of October 31, 2016. The right of use asset and corresponding liability will be amortized on a straight line basis to rent expense over the 10 lease year term.