Quarterly report pursuant to Section 13 or 15(d)

Restructuring Charges

v3.19.3.a.u2
Restructuring Charges
9 Months Ended
Dec. 31, 2019
Restructuring and Related Activities [Abstract]  
Restructuring Charges Restructuring Charges
The Company has implemented restructuring plans, which include programs to increase competitiveness by removing excess capacity, relocating production to lower cost locations, and eliminating unnecessary costs throughout the Company. Significant restructuring plans in progress as of December 31, 2019 are summarized below (amounts in thousands):
 
 
Total expected to be incurred
 
Incurred during quarter ended December 31, 2019
 
Cumulative incurred to date
Restructuring Plan
Segment
Personnel Reduction Costs
Relocation & Exit Costs
 
Personnel Reduction Costs
Relocation & Exit Costs
 
Personnel Reduction Costs
Relocation & Exit Costs
Tantalum powder facility relocation (1)
Solid Capacitors
$
897

$
2,098

 
$
109

$
(130
)
 
$
674

$
2,730

Axial electrolytic production relocation from Granna to Evora
Film and Electrolytic
732

4,242

 
13


 
732

4,242

MnO2 product line headcount reduction
Solid Capacitors
4,076


 
149


 
3,097


 __________________
(1) Total expected relocation and exit costs is less than cumulative relocation and exit costs incurred to date due to the expected recovery of costs related to the sale of tantalum that is expected to be reclaimed (“tantalum reclaim”) as part of the plant exit activities.
A summary of the expenses aggregated in the Condensed Consolidated Statements of Operations line item “Restructuring charges” in the three and nine months ended December 31, 2019 and 2018, is as follows (amounts in thousands):
 
Three Months Ended December 31,
 
Nine Months Ended December 31,
 
2019
 
2018
 
2019
 
2018
Personnel reduction costs
$
962

 
$
961

 
$
4,587

 
$
877

Relocation and exit costs
(160
)
 
757

 
1,343

 
745

Restructuring charges
$
802

 
$
1,718

 
$
5,930

 
$
1,622


Three Months Ended December 31, 2019
The Company incurred $0.8 million in restructuring charges in the three months ended December 31, 2019 comprised of $1.0 million in personnel reduction costs and a $0.2 million credit in relocation and exit costs.
The personnel reduction costs of $1.0 million were primarily due to $0.5 million in severance charges related to a reduction of the Ceramics product line workforce in Mexico due to a decline in sales, $0.1 million in severance charges related to headcount reductions in the Tantalum product line due to a decline in MnO2 sales, $0.1 million in severance charges resulting from the closing of the tantalum powder facility in Carson City, Nevada, and $0.1 million in severance charges related to personnel reductions resulting from a reorganization of Film and Electrolytic's management structure.
The credit for relocation and exit costs of $0.2 million primarily related to tantalum reclaim at the tantalum powder facility in Carson City, Nevada.
Nine Months Ended December 31, 2019
The Company incurred $5.9 million in restructuring charges in the nine months ended December 31, 2019 comprised of $4.6 million in personnel reduction costs and $1.3 million in relocation and exit costs.
The personnel reduction costs of $4.6 million were primarily due to $1.5 million in severance charges related to headcount reductions in the Tantalum product line due to a decline in MnO2 sales, $0.7 million in severance charges resulting from the closing of the Granna, Sweden manufacturing plant as axial electrolytic production was moved to the plant in Evora, Portugal, $0.7 million in corporate severance charges related to headcount reductions in TOKIN Japan, $0.7 million in severance charges resulting from the closing of the tantalum powder facility in Carson City, Nevada, $0.5 million in severance charges related to a reduction of the Ceramics product line workforce in Mexico due to a decline in sales, and $0.3 million in severance costs related to personnel reductions resulting from a reorganization of Film and Electrolytic's management structure.
The relocation and exit costs of $1.3 million were primarily related to $1.9 million in costs resulting from the relocation of axial electrolytic production equipment from the Company's plant in Granna, Sweden to its plant in Evora, Portugal. Relocation and exit costs were benefited by a $0.6 million credit related to tantalum reclaim at the tantalum powder facility in Carson City, Nevada.
Three Months Ended December 31, 2018
The Company incurred $1.7 million in restructuring charges in the three months ended December 31, 2018 comprised of $1.0 million in personnel reduction costs and $0.8 million in relocation and exit costs.
The personnel reduction costs of $1.0 million were related to $0.7 million in costs related to headcount reductions in the TOKIN legacy group across various internal and operational functions and $0.3 million in severance charges related to personnel reductions in the Film and Electrolytic segment resulting from a reorganization of the segment's management structure.
The relocation and exit costs of $0.8 million related to the relocation of axial electrolytic production equipment from the plant in Granna, Sweden to the Company's plant in Evora, Portugal as the Company was in the process of shutting down operations at the Granna plant.
Nine Months Ended December 31, 2018
The Company incurred $1.6 million in restructuring charges in the nine months ended December 31, 2018 comprised of $0.9 million in personnel reduction costs and $0.7 million in relocation and exit costs.
The personnel reduction costs of $0.9 million were primarily related to $0.7 million in costs related to headcount reductions in the TOKIN legacy group across various internal and operational functions and $0.3 million in severance charges related to personnel reductions in the Film and Electrolytic segment resulting from a reorganization of the segment's management structure.
The relocation and exit costs of $0.7 million were primarily related to the relocation of axial electrolytic production equipment from the plant in Granna, Sweden to the Company's plant in Evora, Portugal.
Reconciliation of Restructuring Liability
A reconciliation of the beginning and ending liability balances for restructuring charges included in the line items “Accrued expenses” and “Other non-current obligations” on the Condensed Consolidated Balance Sheets for the three and nine months ended December 31, 2019 and 2018 is as follows (amounts in thousands):
 
Three Months Ended December 31, 2019
 
Three Months Ended December 31, 2018
 
Personnel 
Reductions
 
Relocation and Exit Costs
 
Personnel
 Reductions
 
Relocation and Exit Costs
Beginning of period
$
1,515

 
$
325

 
$
2,837

 
$
310

Costs charged to expense
962

 
(160
)
 
961

 
757

Costs paid or settled
(1,252
)
 
160

 
(1,258
)
 
(757
)
Change in foreign exchange
2

 
(2
)
 
16

 
9

End of period
$
1,227

 
$
323

 
$
2,556

 
$
319

 
Nine Months Ended December 31, 2019
 
Nine Months Ended December 31, 2018
 
Personnel 
Reductions
 
Relocation and Exit Costs
 
Personnel
 Reductions
 
Relocation and Exit Costs
Beginning of period
$
1,865

 
$
316

 
$
9,629

 
$
330

Costs charged to expense
4,587

 
1,343

 
877

 
745

Costs paid or settled
(5,229
)
 
(1,342
)
 
(7,702
)
 
(745
)
Change in foreign exchange
4

 
6

 
(248
)
 
(11
)
End of period
$
1,227

 
$
323

 
$
2,556

 
$
319