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SEC Filings

10-Q
HEARTWARE INTERNATIONAL, INC. filed this Form 10-Q on 11/02/2015
Entire Document
 


Table of Contents

Accrued Restructuring Costs

The following table summarizes changes in our accrued restructuring costs for the nine months ended September 30, 2015:

 

     Facility Leases      Severance and
Related
     Contract
Termination
     Total  
     (in thousands)  

Beginning balance

   $ 1,266       $ —          $ —          $ 1,266   

Restructuring charges

     139         598         340         1,077   

Payments

     (689      (598      (340      (1,627

Adjustments to estimated obligations

     403         —            —            403   

Change in fair value

     33         —            —            33   
  

 

 

    

 

 

    

 

 

    

 

 

 

Ending balance

   $ 1,152       $ —          $ —          $ 1,152   
  

 

 

    

 

 

    

 

 

    

 

 

 

The restructuring obligations reflected above resulted from the following actions:

    Facility Closures

In the first quarter of 2015, we ceased activities at our facility in Aachen, Germany, which was subject to an operating lease that runs through October 2017. In connection with this action, we recorded a $0.1 million charge equal to the lease termination payment that was negotiated with the landlord. This amount is included in research and development expenses in our condensed consolidated statements of operations.

In the first quarter of 2014, we ceased the use of CircuLite’s former headquarters in Teaneck, New Jersey, which is subject to an operating lease that runs through the end of 2020. In connection with this action, we recorded a $1.7 million liability equal to the estimated fair value of the remaining lease obligation as of the cease-use date. In the first quarter of 2015, this liability was increased by $0.5 million as a result of a change in our estimated sublease start date (see Note 4). These amounts are included in selling, general and administrative expenses in our condensed consolidated statements of operations.

In the first quarter of 2014, we also relocated our corporate headquarters and ceased activities at our former headquarters in Framingham, Massachusetts. In connection with this action, we recorded a $0.5 million liability equal to the aggregate of the remaining payments on the lease for our former headquarters as of the cease-use date. This amount is included in selling, general and administrative expenses in our condensed consolidated statements of operations.

    Severance Agreements

In the first quarter of 2015, we incurred severance costs aggregating $0.6 million in connection with our decision to cease activities at our facility in Aachen, Germany. This amount is included in research and development expenses in our condensed consolidated statements of operations.

In the first quarter of 2014, we incurred various costs related to the integration of CircuLite’s operations, including severance costs aggregating $0.6 million. We recorded $0.4 million in research and development expenses and the remaining $0.2 million in selling, general and administrative expenses in our condensed consolidated statements of operations.

    Contract Termination

As a result of our decision to cease activities at our facility in Aachen, Germany, we terminated supply agreements with vendors for the purchase of supplies. In connection with the termination of these supply agreements, we recorded a charge of $0.3 million in the first quarter of 2015, which is included in research and development expenses in our condensed consolidated statements of operations.

 

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