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Note O - Restructuring Activities

6 Months Ended

Jun. 30, 2021

Notes to Financial Statements

Restructuring and Related Activities Disclosure [Text Block]

Note O — Restructuring Activities

Our management team continues to review and adjust our cost structure and operating footprint, optimize our operations, and invest in improved technology. During 2020, in an effort to right-size our operating footprint, we terminated leases in Wilkes Barre (PA) and Grand Prairie (TX) and exited our last direct mail facility in Jacksonville (FL). We completed the migration of our fulfillment business from the Grand Prairie operations into a new 300,000 square foot facility in Kansas City in December 2020. In the first quarter of 2021, we completed the migration of our Shawnee operations to Kansas City. The Shawnee facility lease expired on April 30, 2021. The new Kansas City location is now our primary facility in the Midwest. In 2020, we successfully reduced the footprint of our Customer Care business by reducing our Austin office location by approximately 50,000 square feet in addition to exiting one of our two Manila offices since the business is operating effectively in a work-from-home environment.

In the three months ended June 30, 2021 and 2020 we recorded restructuring charges of $1.7 million and $5.2 million respectively. The charges for the three months ended June 30, 2021 included $1.2 million of severance charges and $0.5 million of facility related and other expenses. The charges for the three months ended June 30, 2020 included $2.6 million of lease impairment and termination charges related to our exit of direct mail facilities and $1.2 million in capital losses from asset disposal associated with the Summit deal as well as $1.0 million of severance charges.

In the six months ended June 30, 2021 and 2020 we recorded restructuring charges of $3.9 million and $6.6 million respectively. The charges for the six months ended June 30, 2021 included $1.4 million of severance charges, $0.3 million in lease impairment expense and $2.2 million of facility related and other expenses. The charges for the six months ended June 30, 2020 included $3.0 million of lease impairment charges related to our exit of direct mail facilities and $1.1 million in capital losses from asset disposal associated with the Summit deal as well as $1.4 million of severance charges and $1.1 million of facility related and other expenses.

The following table summarizes the restructuring charges which are recorded in “Restructuring Expense” in the Condensed Consolidated Statements of Comprehensive Income (Loss).

		*Three Months Ended June 30,*								*Six Months Ended June 30,*
In thousands		*2021*				*2020*				*2021*				*2020*
Severance		$	1,209			$	997			$	1,413			$	1,411
Facility, asset impairment and other expense
Lease impairment and termination expense			—				2,626				294				2,974
Fixed Asset disposal and impairment charges			(4	)			1,160				6				1,140
Facility and other expenses			539				436				2,229				1,060
Total facility, asset impairment and other expense			535				4,222				2,529				5,174

Total		$	1,744			$	5,219			$	3,942			$	6,585

The following table summarizes the changes in liabilities related to restructuring activities:

In thousands		*Three Months Ended June 30, 2021*
		Contract Termination Fee				Severance				Facility, asset impairment and other expense				Total
Beginning Balance:		$	—			$	350			$	8			$	358
Additions			—				1,209				13				1,222
Payments and adjustments			—				(622	)			—				(622	)
Ending Balance:		$	—			$	937			$	21			$	958

In thousands		*Six Months Ended June 30, 2021*
		Contract Termination Fee				Severance				Facility, asset impairment and other expense				Total
Beginning balance:		$	—			$	549			$	4			$	553
Additions			—				1,413				17				1,430
Payments and adjustments			—				(1,025	)			—				(1,025	)
Ending balance:		$	—			$	937			$	21			$	958

In thousands		*Three Months Ended June 30, 2020*
		Contract Termination Fee				Severance				Facility, asset impairment and other expense				Total
Beginning Balance:		$	1,491			$	460			$	7			$	1,958
Additions			—				997				1,887				2,884
Payments			(796	)			(682	)			(1,892	)			(3,370	)
Ending Balance:		$	695			$	775			$	2			$	1,472

		*For the Six Months Ended June 30, 2020*
		Contract Termination Fee				Severance				Facility, asset impairment and other expense				Total
Beginning Balance:		$	1,491			$	360			$	70			$	1,921
Additions			—				1,411				2,568				3,979
Payments			(796	)			(996	)			(2,636	)			(4,428	)
Ending Balance:		$	695			$	775			$	2			$	1,472

We expect that in connection with our cost-saving and restructuring initiatives, we will incur total restructuring charges of approximately $26.8 million through the end of 2021. We have recognized $25.1 million of restructuring charges to date and we expect to incur an additional $1.7 million of restructuring charges through the end of 2021.