Interpace Biosciences®, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Facilities Realignment

Facilities Realignment

12 Months Ended

Dec. 31, 2011

Costs Associated with Exit or Disposal Activities or Restructurings, Policy


14.	Facilities Realignment

Saddle River, New Jersey Facility

Prior to December 2009, the Company's corporate headquarters were located in a three-floor facility in Saddle River, New Jersey. In 2007, the Company entered into a sublease for the second floor of its Saddle River, New Jersey facility through the end of the facility's lease term, January 2016. This sublease will not fully offset the Company's lease obligations for this space; therefore, the Company recorded a $1.0 million charge for facility realignment and related asset impairment for furniture and leasehold improvements in the office space.

In December 2009, the Company relocated its corporate headquarters from its Saddle River, New Jersey facility to a smaller office located in Parsippany, New Jersey. Due to the relocation, the Company recorded a facility realignment charge of approximately $3.9 million in December 2009 and a non-cash impairment charge of approximately $1.5 million related to furniture, leasehold improvements and office equipment in the office space. Effective September 1, 2009, the Company extended the sublease for the first floor of its Saddle River, New Jersey facility through the remainder of the facility lease term. The sublease is expected to provide approximately $2.3 million in sublease income through January 2016, but will not fully offset the Company's lease obligations for this space. As a result, the Company recorded a $0.8 million facility realignment charge in the third quarter of 2009. The Company also recorded a non-cash impairment charge of approximately $0.4 million related to furniture and leasehold improvements in the office space.

Due to continued adverse conditions in the real estate market in 2010, the Company adjusted its assumptions regarding its ability to sublease unoccupied space on the third floor of the Saddle River, New Jersey facility resulting in realignment charges of approximately $0.6 million and $1.4 million during the quarters ended June 30, 2010 and December 31, 2010, respectively. In September 2011, the Company secured a sublease for the approximately 47,000 square feet of remaining space in Saddle River, New Jersey. This sublease runs through the end of the facility's lease term, January 2016. The Company expects to receive approximately $2.2 million in lease payments over the life of the sublease.

Dresher, Pennsylvania Facility

During the year ended December 31, 2009, the Company continued to right size its operations in Dresher, Pennsylvania and recorded facility realignment charges of $1.4 million and non-cash impairments of furniture and leasehold improvements of $0.7 million. During 2010, the Company discontinued the operations of its TVG business unit and exited the remaining portion of space at the facility, thus recording additional restructuring charges of $0.3 million for facility realignment and $0.6 million for non-cash asset impairments of furniture and leasehold improvements in discontinued operations for the year ended December 31, 2010. See Note 18, Discontinued Operations, for further information regarding the discontinued operations of TVG.

In the first quarter of 2011, the Company entered into two separate agreements to sublease substantially all of the remaining space in Dresher, Pennsylvania. These subleases have lease terms that expire on November 30, 2016 in connection with the underlying facility lease.

Schaumburg, Illinois Facility

In December 2011, the Company sold certain assets of its Pharmakon business unit, vacated the business units' Schaumburg, Illinois facility and recorded a facility realignment charge of $0.4 million in discontinued operations. The sublease runs through February 2015 and the Company is currently seeking to sublease this 6,700 square feet of office space.

A summary of the significant components of the facility realignment charges for the years ended December 31, 2010 and 2011 by segment is as follows:



	Sales		Discontinued
2010	Services		Operations		Total
Facility lease obligations	$	1,999	$	314	$	2,313
Asset impairments	—		575		575
Related charges	—		16		16
Total facility realignment charge	$	1,999	$	905	$	2,904
2011
Facility lease obligations	$	—	$	392	$	392
Asset impairments	—		—		—
Related charges	—		—		—
Total facility realignment charge	$	—	$	392	$	392

The following table presents a reconciliation of the restructuring charges in 2011 and 2010 to the balances as of December 31, 2011 and 2010, which is included in other accrued expenses ($1.8 million and $2.9 million, respectively) and in long-term liabilities ($2.7 million and $3.4 million, respectively):



	Sales Services			Discontinued Operations			Total
Balance as of January 1, 2010	$	4,730		$	1,523		$	6,253
Accretion	113			34			147
Adjustments	1,999			312			2,311
Payments	(1,813		)	(596		)	(2,409		)
Balance as of December 31, 2010	5,029			1,272			6,301
Accretion	132			27			159
Adjustments	(158		)	364			206
Payments	(1,586		)	(591		)	(2,177		)
Balance as of December 31, 2011	$	3,417		$	1,072		$	4,489

- Definition

Disclosure of accounting policy for costs associated with exit or disposal activities or restructurings that do not involve an entity newly acquired in a business combination or a discontinued operation as defined by generally accepted accounting principles. Such costs include one-time termination benefits, costs to terminate an operating lease or other contract, and costs to consolidate or close facilities and relocate employees, but exclude costs associated ongoing benefit arrangements and costs associated with the retirement of a long-lived asset.

+ References + Details