Annual report pursuant to Section 13 and 15(d)

Severance and Restructuring Costs

v3.19.1
Severance and Restructuring Costs
12 Months Ended
Jan. 31, 2019
Restructuring And Related Activities [Abstract]  
Severance and Restructuring Costs

7.       Severance and Restructuring Costs

Severance Costs

During fiscal 2019, we incurred additional severance charges not related to a restructuring plan of $0.8 million, primarily from the departure of 19 former employees.  During fiscal 2018, we incurred additional severance charges not related to a restructuring plan of $0.5 million, primarily from the departure of 14 former employees.

Restructuring Costs

During fiscal 2019, we incurred restructuring charges of $1.6 million, primarily for employee-related benefits for terminated employees.  In September 2018, we announced that we implemented cost-savings actions during the third quarter of fiscal 2019 (the “2019 Restructuring Program”). The primary element of this restructuring program was staff reductions across all of our functions and geographic areas and we expect the program to be completed by the end of the first fiscal quarter of 2020. Annualized cost savings are expected to be over $6 million once completed and severance and restructuring charges are expected to be approximately $2 million.

During fiscal 2018, we incurred restructuring charges of $4.2 million primarily from employee-related benefits for terminated employees and costs to close facilities related to our restructuring program implemented in fiscal 2017. During the third quarter of fiscal 2017, we implemented a restructuring program (the “2017 Restructuring Program”) with the purpose of reducing costs and assisting in restoring SeaChange to profitability and positive cash flow. This program included measures intended to allow us 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 2017 Restructuring Plan was substantially complete as of January 31, 2018. Since its implementation, we recognized $7.2 million in restructuring charges related to the 2017 Restructuring Program.    

The following table shows the change in balances of our accrued restructuring reported as a component of other accrued expenses on the consolidated balance sheets:  

 

 

Employee-Related Benefits

 

 

Closure of Leased Facilities

 

 

Other Restructuring

 

 

Total

 

 

 

(Amounts in thousands)

 

Accrual balance as of January 31, 2017

 

$

785

 

 

$

130

 

 

$

108

 

 

$

1,023

 

Restructuring charges incurred

 

 

2,973

 

 

 

796

 

 

 

387

 

 

 

4,156

 

Cash payments

 

 

(3,733

)

 

 

(783

)

 

 

(466

)

 

 

(4,982

)

Other charges

 

 

36

 

 

 

(8

)

 

 

 

 

 

28

 

Accrual balance as of January 31, 2018

 

 

61

 

 

 

135

 

 

 

29

 

 

 

225

 

Restructuring charges incurred

 

 

1,565

 

 

 

7

 

 

 

36

 

 

 

1,608

 

Cash payments

 

 

(965

)

 

 

(142

)

 

 

(65

)

 

 

(1,172

)

Other charges

 

 

(8

)

 

 

 

 

 

 

 

 

(8

)

Accrual balance as of January 31, 2019

 

$

653

 

 

$

 

 

$

 

 

$

653