Quarterly report pursuant to Section 13 or 15(d)

Severance and Other Restructuring Costs

v3.10.0.1
Severance and Other Restructuring Costs
6 Months Ended
Jul. 31, 2018
Restructuring And Related Activities [Abstract]  
Severance and Other Restructuring Costs

7.

Severance and Other Restructuring Costs

Restructuring Costs

During the six months ended July 31, 2018, we incurred some immaterial restructuring charges, primarily for employee-related benefits for terminated employees offset by the reversal of certain accruals from fiscal 2018 for costs related to the restructuring.  

The following table shows the activity in accrued restructuring reported as a component of other accrued expenses on the consolidated balance sheet as of July 31, 2018 (amounts in thousands):

 

 

 

Employee-Related

 

 

Closure of Leased

 

 

Other

 

 

 

 

 

 

 

Benefits

 

 

Facilities

 

 

Restructuring

 

 

Total

 

Accrual balance as of January 31, 2018

 

$

61

 

 

$

135

 

 

$

29

 

 

$

225

 

Restructuring charges incurred

 

 

22

 

 

 

(7

)

 

 

(29

)

 

 

(14

)

Cash payments

 

 

(83

)

 

 

(128

)

 

 

 

 

 

(211

)

Other charges

 

 

 

 

 

 

 

 

 

 

 

 

Accrual balance as of July 31, 2018

 

$

 

 

$

 

 

$

 

 

$

 

During the third quarter of fiscal 2017, we implemented a restructuring program (“Restructuring Plan”) with the purpose of reducing costs and assisting in restoring SeaChange to profitability and positive cash flow. This program included measures intended to allow the Company to more efficiently operate in a leaner, more direct cost structure. These measures included reductions in workforce, consolidation of facilities, transfers of certain business processes to lower cost regions and reduction in third-party service costs. The Restructuring Plan was substantially complete as of January 31, 2018. However, we incurred a small charge for employee-related benefits during the first quarter of fiscal 2019 and reversed any remaining estimates to severance and other restructuring charges in our consolidated statements of operations and comprehensive loss in April 2018. Since its implementation, we recognized $7.1 million in restructuring charges related to the Restructuring Plan.

In September 2018, in order to return the Company to profitability by the end of fiscal 2019, we announced that we are implementing cost-savings actions during the third quarter of fiscal 2019 for our worldwide operations with the implementation of a restructuring program. The primary element of this program will be staff reductions across all of our functions and geographic areas and we expect the program to be completed by the end of the third quarter of fiscal 2019.  Annualized cost savings will be approximately $6 million once completed and other restructuring and severance charges will be approximately $1 million.

 

 

Severance Costs

During the three and six months ended July 31, 2018, we incurred additional severance charges not related to a restructuring plan of $0.5 million and $0.7 million, respectively, primarily from the departure of 12 employees. Severance costs during each of the three and six months ended July 31, 2017 were $0.2 million.