Quantum Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

RESTRUCTURING CHARGES

RESTRUCTURING CHARGES

12 Months Ended

Mar. 31, 2017

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 were completed by the second quarter of fiscal 2017. We incurred and paid $1.5 million of restructuring charges under this plan.

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 were completed by the first quarter of fiscal 2017, with the majority having occurred by December 31, 2015. The costs associated with these actions consist of restructuring charges related to severance and benefits. We incurred and paid $2.0 million of restructuring charges under this plan.

Restructuring expense for fiscal 2017, 2016 and 2015 was recorded in operating expense. The following summarizes the type of restructuring expense for fiscal 2017, 2016 and 2015 (in thousands):



	For the year ended March 31,
	2017		2016		2015
Severance and benefits	$	1,443	$	2,293	$	406
Facilities	620		1,713		1,260
	$	2,063	$	4,006	$	1,666

Fiscal 2017

Restructuring charges in fiscal 2017 were largely due to $1.4 million of severance and benefits and facilities costs incurred in the Plan period, included within the Fiscal 2017 April Restructuring Plan. The severance and benefits payments related to the Fiscal 2016 Restructuring Plan were completed in the first quarter of fiscal 2017. Additionally, we incurred $0.6 million of restructuring charges related to facilities costs primarily due to a change in estimate of sublease timing for our facilities previously used in manufacturing.

Fiscal 2016

Restructuring charges in fiscal 2016 were largely due to $2.3 million of severance and benefits costs primarily from the Fiscal 2016 Restructuring Plan. Additionally, we incurred $1.7 million of restructuring charges related to facilities costs primarily due to a change in estimate of sublease timing for our facilities previously used in manufacturing.

Fiscal 2015

Restructuring charges in fiscal 2015 were primarily due to facilities costs of $1.3 million as a result of further consolidating our facilities in the U.S.

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



	Severance and benefits			Facilities			Total
Balance as of March 31, 2014	$	1,574		$	6,724		$	8,298
Restructuring costs	749			1,680			2,429
Adjustments of prior estimates	(343		)	(430		)	(773		)
Cash payments	(1,791		)	(3,617		)	(5,408		)
Other non-cash	—			300			300
Balance as of March 31, 2015	189			4,657			4,846
Restructuring costs	2,266			656			2,922
Adjustments of prior estimates	27			1,057			1,084
Cash payments	(2,128		)	(4,087		)	(6,215		)
Other non-cash	—			100			100
Balance as of March 31, 2016	354			2,383			2,737
Restructuring costs	1,494			483			1,977
Adjustments of prior estimates	(52		)	137			85
Cash payments	(1,665		)	(1,907		)	(3,572		)
Other non-cash	—			124			124
Balance as of March 31, 2017	$	131		$	1,220		$	1,351



Estimated timing of future payouts:	Severance and benefits		Facilities		Total
Fiscal 2018	$	131	$	739	$	870
Fiscal 2019 to 2022	—		481		481
	$	131	$	1,220	$	1,351

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