Restructuring and Related Charges

3 Months Ended

Mar. 29, 2024

Restructuring and Related Activities [Abstract]


4.			Restructuring and Related Charges

The Company, from time to time, seeks more cost-effective means to improve profitability and to respond to changes in its markets. As such, the Company may incur restructuring costs as a component of the Company’s operating costs. During fiscal 2021 (Predecessor) and 2018 (Predecessor), the Company’s predecessor board of directors approved restructuring programs, neither of which has pre-determined actions or a specified time period. Charges of $50.0 million to $100.0 million were authorized for under the 2021 program and $100.0 million to $125.0 million were authorized for under the 2018 program. The 2021 program commenced upon substantial completion of the 2018 program, which occurred during the first quarter of 2024.

During the first quarter of 2024, the Company committed to a plan to cease commercialization and clinical development, and wind down production of StrataGraft® (“StrataGraft”). As a result, the Company recorded restructuring and related charges, net, within the Specialty Brands segment related to StrataGraft of $10.2 million, which include (i) $4.6 million of one-time termination benefits and (ii) $5.6 million in contract termination costs.

Additionally, the Company recorded a $2.5 million net gain within SG&A, which included a $5.1 million non-cash gain related to the write-off of a lease liability, offset by a $2.6 million lease termination cash penalty. The termination penalty is currently recorded in accrued and other current liabilities on the unaudited condensed consolidated balance sheet as of March 29, 2024 (Successor).

These actions began in the first quarter of 2024 and are expected to be completed in the first quarter of 2025. The Company currently expects to incur approximately $2.0 million of additional one-time termination benefits within the Specialty Brands segment through the first quarter of 2025. The exact timing to complete all actions and final costs associated will depend on a number of factors and are subject to change.

Net restructuring and related charges by segment were as follows:


	Successor		Predecessor
	Three Months Ended March 29, 2024		Three Months Ended March 31, 2023
Specialty Brands	$	10.2	$	—

Corporate	—		1.9
Restructuring and related charges, net	10.2		1.9
Less: accelerated depreciation	—		(0.7)
Restructuring charges, net	$	10.2	$	1.2

Net restructuring and related charges by program were comprised of the following:


	Successor		Predecessor
	Three Months Ended March 29, 2024		Three Months Ended March 31, 2023
2021 Program	$	10.2	$	—
2018 Program	—		1.9
Less: non-cash charges, including accelerated depreciation	—		(0.8)
Total charges expected to be settled in cash	$	10.2	$	1.1

The following table summarizes the restructuring reserves, which are included in accrued and other current liabilities on the Company's unaudited condensed consolidated balance sheet:


	2021 Program
	Severance		Contract Costs		Total
Balance as of December 29, 2023 (Successor)	$	—	$	—	$	—
Charges from continuing operations	4.6		5.6		10.2

Cash payments	(2.8)		(3.2)		(6.0)
Balance as of March 29, 2024 (Successor)	$	1.8	$	2.4	$	4.2

Cumulative net restructuring and related charges incurred for the 2021 and 2018 Programs were as follows as of March 29, 2024 (Successor):


	2021 Program		2018 Program
Specialty Brands	$	10.2	$	3.1
Specialty Generics	—		19.3
Corporate	—		96.9
	$	10.2	$	119.3