Restructuring

In August 2015, the Company approved a restructuring initiative to better position the Company to operate in current market conditions and more closely align operating expenses with revenues, which included employee severance costs and facility exit related costs. In the fourth quarter of 2015, the Company commenced certain initiatives relating to the reorganization of executive level management (collectively, the “2015 Initiatives”). The Company continued these initiatives in 2016 with a reduction-in-force and the completion of the closure of its facility in Richardson, TX. The 2015 Initiatives are expected to cost a total of approximately $5.4 million and be completed when the Richardson, TX lease expires in June 2020.

In February and June 2017, the Company commenced certain restructuring initiatives intended to continue to improve its strategic focus on its most profitable business lines and consolidate operations of its subsidiaries with those of the Company, including reductions-in-force, further reorganization of executive level management and the consolidation of certain of its facilities (the “2017 Initiatives”). The 2017 Initiatives are expected to cost a total of approximately $3.3 million and be completed when the San Diego, CA lease expires in December 2019.

The following table sets forth activity in the restructuring liability for the six months ended June 30, 2017 (in thousands):



	Balance at December 31, 2016		Costs Incurred		Payments			Balance at June 30, 2017		Cumulative Costs Incurred to Date
2015 Initiatives
Employee Severance Costs	$	455	$	—	$	(277	)	$	178	$	4,130
Facility Exit Related Costs	588		431		(227		)	792		1,297

2017 Initiatives
Employee Severance Costs	—		1,652		(1,085		)	567		1,652
Other Related Costs	—		169		—			169		169
Total	$	1,043	$	2,252	$	(1,589	)	$	1,706	$	7,248

The balance of the restructuring liability at June 30, 2017 consists of approximately $1.3 million in current liabilities and $0.4 million in long-term liabilities.

In the second quarter of 2017, the Company wrote down the value of certain inventory by approximately $1.4 million, net of recoveries from a related legal settlement, related to the abandonment of certain product lines that management decided to exit. The Company accounted for the adjustment in accordance with the ASC 330, Inventory, and included the adjustment in impairment of abandoned product line, net of recoveries, within cost of net revenues in the unaudited condensed consolidated statements of operations.