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

Quarterly report pursuant to Section 13 or 15(d)

RESTRUCTURING CHARGES

RESTRUCTURING CHARGES

3 Months Ended

Jun. 30, 2016

Restructuring and Related Activities [Abstract]

Fiscal 2017 April Restructuring Plan

In April 2016, we approved a plan ("Fiscal 2017 April Restructuring Plan") to eliminate 29 positions in the U.S. and internationally to reduce investments in various functions of our business to improve operational efficiencies. The costs associated with these actions consist of restructuring charges related to severance and benefits. These actions are expected to be completed by the second quarter of fiscal 2017, with the majority having occurred by June 30, 2016. For the first quarter of fiscal 2017, we incurred $1.5 million of restructuring charges under this plan, of which $0.8 million was paid to date. The ending balance for accrued severance restructuring charges under this plan is $0.7 million as of June 30, 2016.

Summary of Restructuring Expense

The types of restructuring expense for the three months ended June 30, 2016 and June 30, 2015 were (in thousands):



	Three Months Ended
	June 30, 2016		June 30, 2015
Severance and benefits	$	1,489	$	72
Facilities	563		186
Total	$	2,052	$	258

For the first quarter of fiscal 2017, restructuring charges were largely due to $1.5 million of severance and benefits costs incurred as a result of the Fiscal 2017 April Restructuring Plan. We also approved a plan to vacate certain leased space in the U.S. primarily used for administration and research and development. In connection with this activity, we recorded $0.4 million of restructuring charges related to facilities costs and had $0.4 million of accrued facility restructuring charges as of June 30, 2016. The accrued facility restructuring charges, net of estimated sublease amounts, will be paid in accordance with the facility lease terms through November 2018.

For the first quarter of fiscal 2016, restructuring charges were primarily due to facilities costs as a result of further consolidating our facilities in the U.S.

Accrued Restructuring Charges

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



	Three Months Ended June 30, 2016
	Severance and Benefits			Facilities			Total
Balance as of March 31, 2016	$	354		$	2,383		$	2,737
Restructuring costs	1,489			426			1,915
Adjustment of prior estimates	—			137			137
Cash payments	(1,029		)	(339		)	(1,368		)
Other non-cash	—			42			42
Balance as of June 30, 2016	$	814		$	2,649		$	3,463



	As of June 30, 2016
	Severance and Benefits		Facilities		Total
Estimated timing of future payouts:
Next twelve months	$	814	$	1,702	$	2,516
July 2017 through December 2021	—		947		947
	$	814	$	2,649	$	3,463

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