Logitech 2014 Annual Report Download - page 179

Impairment of Goodwill and Other Assets
There was no impairment of goodwill and other assets for fiscal year 2014. We recorded an impairment
charge of goodwill and other assets of $216.7 million primarily related to the Lifesize business in fiscal year 2013.
While performing our annual goodwill impairment analysis of each of our reporting units as of December 31,
2012, we determined that our video conferencing reporting unit’s estimated fair value was less than its carrying
value, thus requiring a Step 2 assessment of this reporting unit. This impairment primarily resulted from a decrease
in our expected CAGR during the assessment forecast period based on greater evidence of the overall enterprise
video conferencing industry experiencing a slowdown in recent quarters, combined with lower demand related to
new product launches, increased competition in fiscal year 2013 and other market data. The Step 2 test required us
to fair value all assets and liabilities of our video conferencing reporting unit to determine the implied fair value
of this reporting unit’s goodwill. We were unable to complete the Step 2 analysis prior to filing of our Form 10-Q
for the quarterly period ended December 31, 2012 due to the complexities of determining the implied fair value
of goodwill of our video conferencing reporting unit. Based on our work performed during the third quarter of
fiscal year 2013, we initially recorded an estimated goodwill impairment charge of $211.0 million. During the
fourth quarter of fiscal year 2013, we completed this goodwill impairment assessment and recorded an additional
$3.5 million in goodwill impairment charge related to our video conferencing reporting unit. During the fourth
quarter of fiscal year 2013, we also recorded impairment charges of $2.1 million related to our digital video security
product line, included within our retail video product category, which we plan to divest.
Restructuring Charges
Our restructuring activities were mainly attributable to the peripherals operating segment. The following
table summarizes restructuring-related activities during the years ended March 31, 2014 and 2013 (in thousands):
Restructuring
Termination
Benefits
Lease Exit
Costs Other Total
March 31, 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ — $ —
Charges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,088 1,308 1,308 43,704
Cash payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27,768) (1,233) (1,322) (30,323)
Foreign exchange impact . . . . . . . . . . . . . . . . . . . . . . . . 63 — 14 77
March 31, 2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,383 75 — 13,458
Charges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,463 7,348 — 13,811
Adjustment for deferred rent . . . . . . . . . . . . . . . . . . . . . — 1,450 — 1,450
Cash payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19,534) (1,454) — (20,988)
Foreign exchange impact . . . . . . . . . . . . . . . . . . . . . . . . (170) — — (170)
March 31, 2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 142 $ 7,419 $ — $ 7,561
During the second quarter of fiscal year 2014, we implemented a restructuring plan solely affecting our video
conferencing operating segment to align its organization to its strategic priorities of increasing focus on a tighter
range of products, expanding cloud-based video conferencing services and improving profitability. Restructuring
charges under this plan primarily consist of severance and other one-time termination benefits. During fiscal year
2014, restructuring charges under this plan included $5.0 million in termination benefits and $0.6 million in lease
exit costs. We substantially completed this restructuring plan by March 31, 2014.
During the fourth quarter of fiscal year 2013, we implemented a restructuring plan to align our organization
to our strategic priorities of increasing focus on mobility products, improving profitability in PC-related products
and enhancing global operational efficiencies. As part of this restructuring plan, we reduced our worldwide
non-direct labor workforce. Restructuring charges under this plan primarily consisted of severance and other
one-time termination benefits. During fiscal year 2014, restructuring charges under this plan included $1.5 million
in termination benefits and $6.7 million in lease exit costs, $5.4 million of which pertains to the consolidation our
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