Quarterly report pursuant to Section 13 or 15(d)

Restructuring Charges

v3.10.0.1
Restructuring Charges
6 Months Ended
Sep. 30, 2018
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, relocating corporate functions to the new headquarters, and eliminating unnecessary costs throughout the Company. Significant restructuring plans which include personnel reduction costs during the three months ended September 30, 2018 are summarized below (amounts in thousands):
 
 
Total expected to be incurred
 
Incurred during quarter ended September 30, 2018
 
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
US overhead function relocation to Fort Lauderdale, FL
Corporate
$
2,655

$
909

 
$

$

 
$
2,655

$
909

Tantalum powder facility relocation
Solid Capacitors
897

2,098

 


 


A summary of the expenses aggregated in the Condensed Consolidated Statements of Operations line item “Restructuring charges” in the three and six months ended September 30, 2018 and 2017, is as follows (amounts in thousands):
 
Three Months Ended September 30,
 
Six Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Personnel reduction costs
$

 
$
873

 
$
(84
)
 
$
1,111

Relocation and exit costs

 
520

 
(12
)
 
1,895

Restructuring charges
$

 
$
1,393

 
$
(96
)
 
$
3,006


Three Months Ended September 30, 2017
The Company incurred $1.4 million in restructuring charges in the three months ended September 30, 2017 comprised of $0.9 million in personnel reduction costs and $0.5 million in manufacturing relocation and exit costs.
The personnel reduction costs of $0.9 million were due to severance charges across various overhead functions in the Simpsonville, South Carolina office as these functions were relocated to the Company's new corporate headquarters in Fort Lauderdale, Florida.
The manufacturing relocation and exit costs of $0.5 million primarily consisted of $0.4 million in expenses related to the relocation of the K-Salt operations to the existing Matamoros, Mexico plant and $0.1 million in exit costs related to the shut-down of operations for KEMET Foil Manufacturing, LLC (“KFM”) in Knoxville, Tennessee.
Six Months Ended September 30, 2017
The Company incurred $3.0 million in restructuring charges in the six months ended September 30, 2017 comprised of $1.1 million in personnel reduction costs and $1.9 million in manufacturing relocation and exit costs.
The personnel reduction costs of $1.1 million were due to severance charges across various overhead functions in the Simpsonville, South Carolina office as these functions were relocated to the Company's new corporate headquarters in Fort Lauderdale, Florida.
The manufacturing relocation and exit costs of $1.9 million primarily consisted of $0.9 million in lease termination penalties related to the relocation of global marketing, finance and accounting, and information technology functions to the Company's Fort Lauderdale, Florida office, $0.6 million in expenses related to the relocation of the K-Salt operations to the existing Matamoros, Mexico plant, $0.3 million in exit costs related to the shut-down of operations for KFM, and $0.1 million related to the transfer of certain Tantalum production from Simpsonville, South Carolina to Victoria, Mexico.
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 six months ended September 30, 2018 and 2017 is as follows (amounts in thousands):
 
Three Months Ended September 30, 2018
 
Three Months Ended September 30, 2017
 
Personnel 
Reductions
 
Manufacturing 
Relocations
 
Personnel
 Reductions
 
Manufacturing 
Relocations
Beginning of period
$
4,170

 
$
317

 
$
798

 
$
314

Costs charged to expense

 

 
873

 
520

Costs paid or settled
(1,313
)
 

 
(179
)
 
(520
)
Change in foreign exchange
(20
)
 
(7
)
 
2

 
(2
)
End of period
$
2,837

 
$
310

 
$
1,494

 
$
312

 
Six Months Ended September 30, 2018
 
Six Months Ended September 30, 2017
 
Personnel 
Reductions
 
Manufacturing 
Relocations
 
Personnel
 Reductions
 
Manufacturing 
Relocations
Beginning of period
$
9,629

 
$
330

 
$
999

 
$
406

TOKIN opening balance

 

 

 
314

Costs charged to expense
(79
)
 

 
1,111

 
1,895

Costs paid or settled
(6,449
)
 

 
(636
)
 
(2,301
)
Change in foreign exchange
(264
)
 
(20
)
 
20

 
(2
)
End of period
$
2,837

 
$
310

 
$
1,494

 
$
312