Quantum Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

RESTRUCTURING CHARGES

RESTRUCTURING CHARGES

9 Months Ended

Dec. 31, 2015

Restructuring and Related Activities [Abstract]

Fiscal 2016 Restructuring Plan

In November 2015, we approved a plan ("Fiscal 2016 Restructuring Plan") to eliminate approximately 65 positions in the U.S. and internationally, primarily in research and development and sales and marketing functions, in order to improve our cost structure and align spending with continuing operations plans. These actions are expected to be completed by March 31, 2016, with the majority having occured by December 31, 2015. The costs associated with these actions consist of restructuring charges related to severance and benefits. We expect to incur aggregate restructuring charges of approximately $2.0 million under this plan. For the third quarter and first nine months of fiscal 2016, we incurred $1.7 million of restructuring charges under this plan, of which $1.2 million was paid. The ending balance for accrued restructuring charges for the Fiscal 2016 Restructuring Plan is $0.5 million as of December 31, 2015.

Summary of Restructuring Expense

The types of restructuring expense for the three and nine months ended December 31, 2015 and December 31, 2014 were (in thousands):



	Three Months Ended					Nine Months Ended
	December 31, 2015		December 31, 2014			December 31, 2015		December 31, 2014
Severance and benefits	$	1,685	$	279		$	1,912	$	384
Facilities	210		(92		)	628		1,282
Other	—		—			—		10
Total	$	1,895	$	187		$	2,540	$	1,676

For the third quarter and first nine months of fiscal 2016, restructuring charges were largely due to $1.7 million of severance and benefits costs incurred as a result of the Fiscal 2016 Restructuring Plan. Additionally, for the first nine months of fiscal 2016, we incurred restructuring charges related to facilities costs as a result of further consolidating our facilities in the U.S.

For the first nine months of fiscal 2015, restructuring charges were primarily due to facilities costs as a result of further consolidating our facilities in the U.S.

Accrued Restructuring

The following tables show the activity and the estimated timing of future payouts for accrued restructuring (in thousands):



	Three Months Ended December 31, 2015
	Severance and Benefits			Facilities			Total
Balance as of September 30, 2015	$	257		$	2,572		$	2,829
Restructuring costs	1,690			210			1,900
Adjustment of prior estimates	(5		)	—			(5		)
Cash payments	(1,171		)	(1,022		)	(2,193		)
Other non-cash	—			57			57
Balance as of December 31, 2015	$	771		$	1,817		$	2,588



	Nine Months Ended December 31, 2015
	Severance and Benefits			Facilities			Total
Balance as of March 31, 2015	$	189		$	4,657		$	4,846
Restructuring costs	1,913			604			2,517
Adjustment of prior estimates	(1		)	24			23
Cash payments	(1,330		)	(3,568		)	(4,898		)
Other non-cash	—			100			100
Balance as of December 31, 2015	$	771		$	1,817		$	2,588



	As of December 31, 2015
	Severance and Benefits		Facilities		Total
Estimated timing of future payouts:
Next twelve months	$	639	$	1,118	$	1,757
January 2017 through December 2021	132		699		831
	$	771	$	1,817	$	2,588

Facility restructuring accruals will be paid in accordance with the respective facility lease terms and amounts above are net of estimated sublease amounts.