Note L - Restructuring of Operations

3 Months Ended

Sep. 24, 2021

Notes to Financial Statements

Restructuring, Impairment, and Other Activities Disclosure [Text Block]

L. Restructuring of Operations

Restructuring expenses

The Company has implemented various restructuring programs in response to unfavorable macroeconomic trends in certain of the Company’s markets since the fourth quarter of fiscal 2015. These programs primarily involved the reduction of workforce in several of the Company’s manufacturing locations, under a combination of voluntary and involuntary programs. During the fourth quarter of fiscal 2021, the Company undertook a series of steps to accelerate its focus on its core competencies, improve its fixed cost structure, and monetize some of its under-utilized assets.

With regard to its Belgian operations, on June 30, 2021, the Company announced a new phase in its restructuring plans. Under this plan, the Belgian operation’s workforce will be reduced by 23 employees. This reduction in force resulted in an initial accrual of $2,200, pertaining to the Company’s current estimate for the payment of severance benefits, which is expected to be completed by December 2022. The action was taken to allow the Belgian operation to focus resources on core manufacturing processes, while allowing for savings on the outsourcing of non-core processes. The Company anticipates annual pre-tax savings upon completion of the restructuring of approximately $1,600.

In October 2021, the Company and the union representing certain of the employees affected by the restructuring of the Belgian operations came to an agreement on a final settlement amount of $3,200. The Company plans to book the additional $1,000 in restructuring charges during the 2nd quarter of fiscal 2022.

Total restructuring charges relating to streamlining operations totaled to $48 and $405 in the quarters ending September 24, 2021 and September 25, 2020, respectively. Restructuring activities since June 2015 have resulted in the elimination of 257 full-time employees in the manufacturing segment. Accumulated costs to date under these programs within the manufacturing segment through September 24, 2021 were $15,563.

The following is a roll-forward of restructuring activity:         

Accrued restructuring liability, June 30, 2021	$	2,352
Additions		48
Payments, adjustments and write-offs during the year		(172	)
Accrued restructuring liability, September 24, 2021	$	2,228

Assets held for sale

To improve its fixed cost structure and monetize some of its under-utilized assets, the Company commenced the active marketing of three of its real estate properties, namely, its corporate headquarters in Racine, its propeller machining plant and office in Switzerland, and a spare warehouse in Italy during the fourth quarter of fiscal 2021. During the first quarter of fiscal 2022, the Company completed the sale of its propeller machining plant and office in Switzerland and received $9,138 in proceeds, net of fees and local taxes and recorded a gain of $2,939 in other operating income in the condensed consolidated statements of operations and comprehensive income.