Costs Associated with LED Business Restructuring Costs Associated with LED Business Restructuring

12 Months Ended

Jun. 26, 2016

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure

Costs Associated with LED Business Restructuring

In June 2015, our Board of Directors approved a plan to restructure the LED Products business. The restructuring reduced excess capacity and overhead in order to improve the cost structure moving forward. The primary components of the restructuring include the planned sale or abandonment of certain manufacturing equipment, facility consolidation and the elimination of certain positions. The restructuring activity ended in the second quarter of fiscal 2016. During fiscal 2016, the company realized$18.8 million in LED restructuring charges which were partially offset by a $1.1 million gain on the sale of long-lived assets related to the restructuring which were sold for a value in excess of their estimated net realizable value during fiscal 2016.

The following table summarizes the actual charges incurred (in thousands):



Capacity and overhead cost reductions	Amounts incurred through June 28, 2015		Amounts incurred during fiscal year 2016		Cumulative amounts incurred through June 26, 2016		Affected Line Item in the Consolidated Statements of (Loss)Income
Loss on disposal or impairment of long-lived assets	$	42,716	$	15,506	$	58,222	Loss on disposal or impairment of long-lived assets
Severance expense	2,019		264		2,283		Sales, general and administrative expenses
Lease termination and facility consolidation costs	1,246		3,079		4,325		Sales, general and administrative expenses
Increase in channel inventory reserves	26,479		—		26,479		Revenue, net
Increase in inventory reserves	11,091		—		11,091		Cost of revenue, net
Total restructuring charges	$	83,551	$	18,849	$	102,400

In the table above, the lease termination costs relate to the relocation of certain manufacturing operations from a leased facility in Huizhou, China to a company-owned facility which is also in Huizhou, China. In June 2015, the Company ceased using the leased facility and recognized a $0.5 million charge for the lease contract termination cost.

In the table above, the severance expense relates to a reduction in manufacturing and support positions. There is not a significant retention period for impacted employees.

The following table presents the changes in the severance liability under the LED Products restructuring plan (in thousands):



Severance liability at June 30, 2014	$	—
Severance expense	2,019
Severance payments	—
Severance liability at June 28, 2015	$	2,019
Severance charge	264
Severance payments	(2,283		)
Severance liability at June 26, 2016	$	—