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, 2017

Restructuring and Related Activities [Abstract]

Fiscal 2018 Restructuring Plan

During the first quarter of fiscal 2018, we approved a plan (“Fiscal 2018 Restructuring Plan”) to eliminate 49 positions in the U.S. and internationally to align our workforce within various functions of our business in order to meet the Company’s strategic plans. The costs associated with these actions consist of restructuring charges related to severance and benefits. We incurred $1.6 million of restructuring charges under this plan during the quarter, and as of June 30, 2017, we paid $0.5 million under this plan with the remaining amounts to be paid during the remainder of fiscal 2018.

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.

Summary of Restructuring Expense

The following summarizes the type of restructuring costs, included in operating expense, for the three months ended June 30, 2017 and June 30, 2016 (in thousands):



	Three Months Ended
	June 30, 2017		June 30, 2016
Severance and benefits	$	1,570	$	1,489
Facilities	756		563
Other	9		—
	$	2,335	$	2,052

Restructuring charges for the first three months of fiscal 2018 included $1.6 million of severance and benefits costs incurred as a result of the Fiscal 2018 Restructuring Plan. Additionally, we incurred $0.8 million of facilities restructuring charges in the first three months of fiscal 2018 due to a change in estimate of sublease timing and related expenses for our facilities previously used in manufacturing.

Restructuring charges for the first three months of fiscal 2017 were largely due to $1.5 million of severance and benefits costs incurred as a result of the Fiscal 2017 Restructuring Plan. 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.

Accrued Restructuring

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




	Three Months Ended June 30, 2017
	Severance and Benefits			Facilities			Total
Balance as of March 31, 2017	$	130		$	1,220		$	1,350
Restructuring costs	1,570			—			1,570
Adjustment of prior estimates	—			756			756
Cash payments	(472		)	(411		)	(883		)
Balance as of June 30, 2017	$	1,228		$	1,565		$	2,793




	Three Months Ended June 30, 2017
	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	—			179			179
Cash payments	(1,029		)	(339		)	(1,368		)
Balance as of June 30, 2016	$	814		$	2,649		$	3,463



	As of June 30, 2017
	Severance and Benefits		Facilities		Total
Estimated timing of future payouts:
Next twelve months	$	1,228	$	1,022	$	2,250
July 2018 through June 2022	—		543		543
	$	1,228	$	1,565	$	2,793

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