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Note 3 - Restructuring and Other Charges | 12 Months Ended
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Dec. 31, 2020
Notes to Financial Statements |
Restructuring, Impairment, and Other Activities Disclosure [Text Block] |
( 3 ) | RESTRUCTURING AND OTHER CHARGES
EMS Segment Restructuring and Facility Consolidation On September 21, 2020, we notified employees in our Fremont, California facility of a plan to consolidate all manufacturing for our EMS segment into our manufacturing operations located in Mt. Laurel, New Jersey. The consolidation was substantially completed during the fourth quarter of 2020 and resulted in the termination of certain employees at the Fremont location. Prior to the consolidation, our interface products were manufactured in the Fremont facility, and our manipulator and docking hardware products were manufactured in the Mt. Laurel facility. The consolidation was undertaken to better serve customers through streamlined operations and reduce the fixed annual operating costs for the EMS segment. A small engineering and sales office will be maintained in northern California. As a result of this action, we incurred charges for severance and other one -time termination benefits, other associated costs, including moving and production start-up costs, and charges related to exiting the facility, including an impairment charge related to the ROU asset for the lease of the Fremont facility. The total costs incurred in 2020 related to this action were $903. We expect to incur additional charges in the first half of 2021 as we finalize the integration of the manufacturing operations. These additional costs are expected to range from $100 to $150. We intend to try to sublease our facility located in Fremont, California. When manufacturing operations ceased in the Fremont facility on December 28, 2020, we recorded a non-cash impairment charge of $522 related to the ROU asset for the lease of the Fremont facility as we do not currently expect to sublet the facility for the full remaining term of the lease. As of December 31, 2020, after recording the impairment charge, the ROU asset related to this facility totaled $597. Details of the cash and non-cash charges recorded during the year ended December 31, 2020 related to the EMS segment restructuring and facility consolidation are below. These costs are included in restructuring and other charges on our consolidated statement of operations for the year ended December 31. 2020.
|  | Cash Charges |  |  | Non-Cash Charges |  |  | Total Charges |
Severance and other one-time termination benefits |  | $ | 69 |  |  | $ | - |  |  | $ | 69 |
Other associated costs |  |  | 159 |  |  |  | - |  |  |  | 159 |
Impairment of ROU asset |  |  | - |  |  |  | 522 |  |  |  | 522 |
Costs related to subletting the Fremont, CA facility |  |  | 153 |  |  |  | - |  |  |  | 153 |
Total |  | $ | 381 |  |  | $ | 522 |  |  | $ | 903 |
Executive Management Changes On August 6, 2020, James Pelrin resigned as President and Chief Executive Officer (“CEO”) and as a director. In connection with his resignation, we entered into a Separation and Consulting Agreement (the “Separation Agreement”) with Mr. Pelrin dated August 6, 2020 pursuant to which Mr. Pelrin agreed to provide consulting services for three months, subject to an extension of up to an additional three months at our option. The Separation Agreement also provides that Mr. Pelrin is entitled to severance and other benefits. The Separation Agreement is included as Exhibit 10.1 to our Current Report on Form 8 -K ( “8 -K”) filed on August 11, 2020 with the SEC. On August 6, 2020, our Board of Directors approved, effective as of August 24, 2020 ( the “Start Date”), the appointment of Richard N. Grant, Jr. to the position of President and CEO and to fill the vacancy on our Board of Directors left by Mr. Pelrin's resignation. We entered into a letter agreement with Mr. Grant, subject to his appointment as our President, CEO and a director, which appointments occurred on August 6, 2020 and became effective as of the Start Date. The letter agreement is included as Exhibit 10.2 to our 8 -K filed on August 11, 2020 with the SEC. Total costs incurred during the year ended December 31, 2020 related to these executive management changes were $514, which consisted of fees for the executive management search firm, legal fees related to the transition, and severance and consulting fees paid to our former CEO. These costs were partially offset by the reversal of $117 of expense related to stock-based compensation awards forfeited at his termination date by our former CEO. In addition, in connection with these actions, we have reduced the administrative footprint in our Mansfield, Massachusetts corporate office associated with the reestablishment of the Mt. Laurel, New Jersey office as our corporate headquarters. We recorded a non-cash impairment charge of $90 during the fourth quarter of 2020 related to the ROU asset associated with the lease of the corporate space in Mansfield and a cash charge of $99 for other costs related to reducing the size of this facility. We intend to try to sublease this space, but we do not currently expect to sublet it for the full remaining term of the lease. As of December 31, 2020, after recording the impairment charge, the ROU asset related to this space totaled $139. We do not expect to incur any additional costs related to these actions after December 31, 2020. Details of the cash and non-cash charges recorded during the year ended December 31, 2020 related to these actions are below. These severance and one -time termination benefits, the impairment charge and the costs associated with subletting the facility in Mansfield are included in restructuring and other charges on our consolidated statement of operations for the year ended December 31. 2020. The other associated costs in the table below are included in general and administrative expense on our consolidated statement of operations for the year ended December 31, 2020.
|  | Cash Charges |  |  | Non-Cash Charges |  |  | Total Charges |
Severance and other one-time termination benefits |  | $ | 133 |  |  | $ | - |  |  | $ | 133 |
Other associated costs |  |  | 381 |  |  |  | - |  |  |  | 381 |
Impairment of ROU asset |  |  | - |  |  |  | 90 |  |  |  | 90 |
Costs related to subletting the Mansfield, MA facility |  |  | 99 |  |  |  | - |  |  |  | 99 |
Total |  | $ | 613 |  |  | $ | 90 |  |  | $ | 703 |
Other Charges In addition to the charges discussed above, during 2020, we recorded cash charges for severance and other one -time termination benefits of $46 and other costs of $14 related to headcount reductions and employee relocation. The headcount reductions were primarily in our Thermal segment as a result of a slow-down in business activity early in the year. These costs are included in restructuring and other charges on our consolidated statement of operations for the year ended December 31. 2020. Consolidation of Ambrell ' s European Operations During the year ended December 31, 2019, we recorded $240 of restructuring and other charges which were primarily related to the consolidation of Ambrell's European operations. These costs included severance and other one -time termination benefits of $137 and other costs related to the consolidation of $103. Accrued Restructuring The liability for accrued restructuring charges is included in other current liabilities on our consolidated balance sheet. Changes in the amount of the liability for accrued restructuring for the years ended December 31, 2020 and 2019 are as follows:
Balance - January 1, 2019 |  | $ | - |
Accruals for severance and other one-time termination benefits |  |  | 137 |
Accruals for costs related to the consolidation of Ambrell's European operations |  |  | 103 |
Cash payments |  |  | (240 | )
Balance - December 31, 2019 |  |  | - |
Accruals for severance and other one-time termination benefits |  |  | 248 |
Accruals for costs related to subletting the Fremont, CA facility |  |  | 153 |
Accruals for costs related to subletting the Mansfield, MA facility |  |  | 98 |
Cash payments |  |  | (159 | )
Balance - December 31, 2020 |  | $ | 340 |

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