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Note 5 - Restructuring and Other Charges | 12 Months Ended
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Dec. 31, 2021
Notes to Financial Statements |
Restructuring, Impairment, and Other Activities Disclosure [Text Block] |
(5) | 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 of manufacturing operations resulted in the closure of the Fremont facility and the termination of certain employees at that location. As a result of the consolidation, we incurred charges for severance and other one-time termination benefits of $69, other associated costs, including moving and production start-up costs, of $159 and charges related to exiting the facility of $675, which included a non-cash impairment charge related to the ROU asset for the lease of the Fremont facility of $522. The total costs incurred in 2020 related to this action were $903 and are included in restructuring and other charges in our consolidated statement of operations. During 2021, we incurred $183 of additional charges associated with finalizing the integration of the manufacturing operations. All of these charges were cash charges and are included in restructuring and other charges in our consolidated statement of operations. The integration of our EMS manufacturing operations took longer than originally anticipated, primarily as a result of the significant increase in our business activity during the first half of 2021 as we delayed some final integration activities and instead allocated our resources to meet customer demand for shipments of our products during this time. We completed the integration of the EMS manufacturing operations in the third quarter of 2021. At the time of the consolidation of manufacturing operations, we intended to try to sublease the facility in Fremont, but we did not expect to sublet the facility for the full remaining term of the lease. On July 19, 2021, we executed a sublease for our facility in Fremont. The sublease commenced in August 2021 and ends November 30, 2025, which is the termination date of our lease for this facility. We entered into this sublease approximately 14 months earlier than we had estimated in December 2020. As a result, we will record approximately $350 of incremental sublease income above the level that we had estimated at the time that we recorded the impairment charge in December 2020. This income will be recorded ratably over the term of the sublease and will be included in other income in our consolidated statements of operations. Executive Management Changes Chief Financial Officer On June 10, 2021, our Board of Directors (the “Board”) accepted the retirement of Hugh T. Regan, Jr. from the positions of Chief Financial Officer, Treasurer, and Secretary (the “Retirement”). In connection with the Retirement, we entered into a Separation and Consulting Agreement (the “Separation and Consulting Agreement”) with Mr. Regan effective June 11, 2021 pursuant to which Mr. Regan agreed to provide consulting services for three months, subject to an extension of up to an additional three months at our option. We did not extend the consulting services beyond the original three months. The Separation and Consulting Agreement also provided that Mr. Regan was entitled to a severance benefit of $120. In connection with the Retirement, we also agreed that certain options issued to Mr. Regan in March 2020 to purchase shares of our common stock that remained unvested on the date of the Retirement would continue to vest after the Retirement and expire one year from their respective vesting dates. On June 10, 2021, the Board approved, effective as of June 14, 2021, the appointment of Duncan Gilmour to the position of Chief Financial Officer, Treasurer, and Secretary. Mr. Gilmour entered into a letter agreement, dated June 10, 2021, subject to his appointment as our Chief Financial Officer, Treasurer, and Secretary, which appointments were approved on June 10, 2021 and were effective as of June 14, 2021. Total costs incurred during 2021 related to these executive management changes were $370, which consisted of $159 for consulting and legal fees related to the transition, $120 for severance paid to our former Chief Financial Officer (“CFO”) and $91 of stock-based compensation expense, primarily as a result of the modification of the March 2020 option awards issued to our former CFO, as discussed above. The $120 of severance is included in restructuring and other charges in our consolidated statement of operations. The balance of the costs is included in general and administrative expense in our consolidated statement of operations. Chief Executive Officer 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. We did not extend the consulting services beyond the original three months. The Separation Agreement also provided that Mr. Pelrin was entitled to severance and other benefits. On August 6, 2020, the Board approved, effective as of August 24, 2020, the appointment of Richard N. Grant, Jr. to the position of President and CEO and to fill the vacancy on the Board 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 August 24, 2020. Total costs incurred during the year ended December 31, 2020 related to these executive management changes were $514, which consisted of $381 for executive management search firm fees, legal fees related to the transition, and consulting fees paid to our former CEO and $133 for severance and other one-time termination benefits 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. The severance and one-time termination benefits are included in restructuring and other charges on our consolidated statement of operations for the year ended December 31. 2020. The other associated costs, net of the reversal of stock-based compensation expense, are included in general and administrative expense on our consolidated statement of operations for the year ended December 31, 2020. In addition, in connection with these actions, we 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. These costs are included in restructuring and other charges on our consolidated statement of operations for the year ended December 31. 2020. 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. 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, 2021 and 2020 are as follows:
|  | EMS Facility Consolidation |  |  | Executive Management Changes |  |  | Other Charges |  |  | Total |
Balance - January 1, 2020 |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
Accruals for severance and other one-time termination benefits |  |  | 69 |  |  |  | 133 |  |  |  | 46 |  |  |  | 248 |
Accruals for other associated costs |  |  | 159 |  |  |  | - |  |  |  | 14 |  |  |  | 173 |
Accruals for costs related to subletting the Fremont, CA facility |  |  | 153 |  |  |  | - |  |  |  | - |  |  |  | 153 |
Accruals for costs related to subletting the Mansfield, MA facility |  |  | - |  |  |  | 99 |  |  |  | - |  |  |  | 99 |
Cash payments |  |  | (148 | ) |  |  | (125 | ) |  |  | (60 | ) |  |  | (333 | )
Balance - December 31, 2020 |  |  | 233 |  |  |  | 107 |  |  |  | - |  |  |  | 340 |
Accruals for severance and other one-time termination benefits |  |  | - |  |  |  | 120 |  |  |  | - |  |  |  | 120 |
Accruals for other associated costs |  |  | 183 |  |  |  | - |  |  |  | - |  |  |  | 183 |
Cash payments |  |  | (416 | ) |  |  | (157 | ) |  |  | - |  |  |  | (573 | )
Balance - December 31, 2021 |  | $ | - |  |  | $ | 70 |  |  | $ | - |  |  | $ | 70 |

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