Restructuring Charges

9 Months Ended

Sep. 28, 2024

Restructuring and Related Activities [Abstract]

13.	Restructuring Charges

During the third quarter of fiscal 2023, Intevac substantially completed implementation of a cost reduction plan (the “2023 Cost Reduction Plan”), which was intended to reduce expenses by reducing our workforce by 23 percent including employees and contractors. Intevac incurred restructuring costs of $1.9 million in severance, $2,000 in stock-based compensation associated with the modification of certain stock-based awards and other employee-related expenses associated with the 2023 Cost Reduction Plan. Additionally, as part of the 2023 Cost Reduction Plan the Company incurred a benefit of $462,000 related to the stock-based compensation forfeitures related to the employees affected by the reduction in workforce. Substantially all cash outlays in connection with the 2023 Cost Reduction Plan occurred in the third quarter of fiscal 2023. Implementation of the 2023 Cost Reduction Plan is expected to reduce salary, wages and other employee-related expenses and contractor payments by approximately $4.6 million on an annual basis.

The changes in restructuring reserves, which resulted from cash-based severance payments and other employee-related costs, associat

d with the 2023 Cost Reduction Plan for the three and nine months ended September 30, 2023 were as follows:


	Employee Termination Costs
	(In thousands)
Balance at July 1, 2023	$	—
Provision for restructuring charges under the 2023 Cost Reduction Plan		1,950
Cash payments made		(1,948	)
Non-cash utilization (a)		(2	)

Balance at September 30, 2023	$	—

(a) Acceleration of equity awards.

During the fourth quarter of fiscal 2021, the Company recorded asset impairment and restructuring charges associated with the sale of the Photonics division including $665,000 in accruals for common area charges associated with an unused space commitment to EOTECH. In consideration of EOTECH’s assumption of certain lease obligations related to the Company’s Santa Clara, California campus, which assumed lease obligations pertain in part to excess space beyond that required by EOTECH’s anticipated operation of the Photonics division, the Company agreed to pay EOTECH the amount of $2.1 million, which was payable in (i) one initial installment of $308,000 on January 10, 2022 and (ii) seven equal quarterly installments of $259,000. The final installment was paid on October 9, 2023.

The changes in restructuring reserves, which resulted from other exit costs associated with the Photonics divestiture for the three and nine months ended September 30, 2023 were as follows:


	Other Exit Costs
	(In thousands)
Balance at December 31, 2022	$	318
Provision for restructuring charges associated with Photonics divestiture		3
Cash payments made		(81	)

Balance at April 1, 2023	$	240
Provision for restructuring charges associated with Photonics divestiture		2
Cash payments made		(80	)

Balance at July 1, 2023	$	162
Provision for restructuring charges associated with Photonics divestiture		2
Cash payments made		(80	)

Balance at September 30, 2023	$	84