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Restructuring, Acquisition, and Related Costs
6 Months Ended
Jul. 02, 2021
Restructuring And Related Activities [Abstract]  
Restructuring, Acquisition, and Related Costs

13. Restructuring, Acquisition, and Related Costs

The following table summarizes restructuring, acquisition, and related costs in the accompanying consolidated statements of operations (in thousands):

 

Three Months Ended

 

 

Six Months Ended

 

 

July 2,

 

 

July 3,

 

 

July 2,

 

 

July 3,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

2020 restructuring

$

1,165

 

 

$

 

 

$

2,503

 

 

$

 

2019 restructuring

 

 

 

 

30

 

 

 

208

 

 

 

599

 

2018 restructuring

 

 

 

 

668

 

 

 

 

 

 

754

 

Total restructuring charges

 

1,165

 

 

 

698

 

 

 

2,711

 

 

 

1,353

 

Acquisition and related charges

 

3,469

 

 

 

1,545

 

 

 

5,654

 

 

 

2,551

 

Total restructuring, acquisition, and related costs

$

4,634

 

 

$

2,243

 

 

$

8,365

 

 

$

3,904

 

2020 Restructuring

As a result of the Company’s ongoing evaluations and efforts to reduce its operating costs, while improving efficiency and effectiveness, the Company initiated the 2020 restructuring program in the third quarter of 2020. This program is focused on reducing operating complexity in the Company, including reducing infrastructure costs and streamlining the Company’s operating model to better serve its customers. In addition, the program will be focused on cost reduction actions that improve gross margins for the overall company. During the three and six months ended July 2, 2021, the Company recorded $1.2 million and $2.5 million, respectively, in severance and other costs in connection with the 2020 restructuring program. As of July 2, 2021, the Company had incurred cumulative costs related to this restructuring plan totaling $5.2 million. The Company anticipates substantially completing the 2020 restructuring program in the fourth quarter of 2021 and expects to incur additional restructuring charges of $3.0 million to $4.0 million related to the 2020 restructuring program in the next twelve months.

The following table summarizes restructuring costs associated with the 2020 restructuring program by reportable segment (in thousands):

 

Three Months Ended

 

 

Six Months Ended

 

 

July 2,

 

 

July 3,

 

 

July 2,

 

 

July 3,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Photonics

$

195

 

 

$

 

 

$

490

 

 

$

 

Vision

 

275

 

 

 

 

 

 

697

 

 

 

 

Precision Motion

 

695

 

 

 

 

 

 

1,316

 

 

 

 

Unallocated Corporate and Shared Services

 

 

 

 

 

 

 

 

 

 

 

Total

$

1,165

 

 

$

 

 

$

2,503

 

 

$

 

2019 Restructuring

During the fourth quarter of 2018, the Company implemented a restructuring plan intended to realign operations, reduce costs, achieve operational efficiencies and focus resources on growth initiatives (the “2019 restructuring plan”). During the three months and six months ended July 2, 2021, the Company incurred $0 and $0.2 million, respectively, in severance and related costs in connection with the 2019 restructuring plan. As of July 2, 2021, the Company incurred cumulative costs related to this restructuring plan totaling $9.0 million. The 2019 restructuring program was completed in the first quarter of 2021.

Rollforward of Accrued Expenses Related to Restructuring

The following table summarizes the accrual activities, by component, related to the Company’s restructuring plans recorded in the accompanying consolidated balance sheets (in thousands):

 

Total

 

 

Severance

 

 

Facility

 

 

Other

 

Balance at December 31, 2020

$

1,800

 

 

$

1,681

 

 

$

116

 

 

$

3

 

Restructuring charges

 

2,711

 

 

 

1,926

 

 

 

602

 

 

 

183

 

Cash payments

 

(1,502

)

 

 

(1,204

)

 

 

(140

)

 

 

(158

)

Non-cash charges and other adjustments

 

(359

)

 

 

1

 

 

 

(360

)

 

 

 

Balance at July 2, 2021

$

2,650

 

 

$

2,404

 

 

$

218

 

 

$

28

 

Acquisition and Related Charges

Acquisition costs in connection with business combinations, including finders’ fees, legal, valuation, and other professional or consulting fees, totaled $1.6 million and $1.8 million for the three and six months ended July 2, 2021, respectively, and less than $0.1 million and $0.1 million for the three and six months ended July 3, 2020, respectively. During the three and six months ended July 2, 2021, the Company incurred $0.8 million and $1.8 million, respectively, in legal costs related to a dispute involving a company that was acquired in 2019. Acquisition and related costs recognized under earn-out agreements in connection with acquisitions totaled $0.9 million and $1.9 million for the three and six months ended July 2, 2021, respectively, and $0.9 million and $1.8 million for the three and six months ended July 3, 2020, respectively. The majority of acquisition and related costs for the three and six months ended July 2, 2021 were included in the Company’s Precision Motion, Vision and Unallocated Corporate and Shared Services reportable segments. The majority of acquisition and related costs for the three and six months ended July 3, 2020 were included in the Company’s Precision Motion and Vision reportable segments.