Note 13 - Restructuring Activity

12 Months Ended

Sep. 28, 2018

Restructuring and Related Activities Disclosure [Text Block]

13.

RESTRUCTURING ACTIVITY

September 2016,

we determined that

81%

of our Reston Town Center facility in Reston, Virginia (RTC) was

longer needed to conduct our business and, accordingly, we renewed efforts to sublease the surplus space at this facility. As a result, we recorded a restructuring charge of

$1.9

million for the estimated liability associated with future rentals of the surplus space due under the property lease as of the cease use date. The fair value of this liability at the cease use date was determined based on the remaining cash flows for lease rentals, and minimum lease payments, reduced by estimated sublease rentals, discounted using a credit adjusted risk-free rate. ASC

420,

Exit or Disposal Cost Obligation,

requires this liability to be adjusted for changes, if any, resulting from revisions to estimated cash flows after the cease-use date. In

March 2017,

we re-evaluated the estimated cash flows from the estimated sublease rentals and operating expenses. As a result, we recorded an additional

$0.4

million restructuring charge in our

second

quarter of fiscal year

2017.

In the

first

quarter of fiscal year

2018,

we adjusted the estimated cash flows due to an increase in real estate taxes and recorded an additional

$0.1

million restructuring charge. As of

September 28, 2018,

we have subleased

40%

of the surplus space.

December 21, 2017,

the Lease Amending Agreement Surrender Agreement (“Surrender Agreement”) entered into by Learning Tree International Inc. (“Learning Tree Canada”), the Canadian subsidiary of Learning Tree, and T.E.C. Leaseholds Limited became effective, which provided for the amendment and early termination of Learning Tree Canada’s lease agreement, dated

March 6, 2000,

as amended (“Lease Agreement”) for its Education Center located in Toronto, Ontario. The Surrender Agreement provided for the early termination of the Lease Agreement, which occurred on

March 31, 2018.

As a result, we recorded a

$0.2

million restructuring charge for surrender fees and commissions related to the surrender of the lease in the

first

quarter of fiscal year

2018.

Additionally, in

September 2018,

we recorded a

$0.1

million restructuring charge for rent, service charges and realtor fees related to the cease use and eventual surrender of the UK warehouse facility.

	Fiscal Year Ended
	September 28,			September 29,
	2018			2017

Balance at beginning of period	$	2,582		$	3,160

Additions:
RTC cease-use charge		104			386
Toronto surrender agreement		160			0
UK warehouse facility		91			0
Accretion expense		196			175
		551			561

Reductions:
Payment on Toronto surrender agreement		(160	)		0
Rent payments net of deferred rent		(915	)		(1,139	)
		(1,075	)		(1,139	)

Balance at end of period	$	2,058		$	2,582

	Fiscal Year Ended
	September 28,		September 29,
	2018		2017
Current	$	1,033	$	895
Long Term		1,025		1,687
	$	2,058	$	2,582

As of

September 28, 2018,

such restructuring liability is recorded as part of deferred facilities rent and other in the consolidated balance sheets.

LEARNING TREE INTERNATIONAL, INC. 10-K