Restructuring Activities

6 Months Ended

Jul. 01, 2023

Restructuring and Related Activities [Abstract]

Summary of 2022 Restructuring Plan

In April 2022, management approved and commenced a restructuring plan that will better position us for stronger performance. The restructuring plan will mainly reduce headcount and consolidate facilities. As a result of this restructuring plan, we analyzed the need to write-down inventory and impair long-lived assets, including operating lease right-of-use assets. During the three and six months ended July 1, 2023, we recorded total charges of $4.8 million and $8.9 million, respectively. Cumulative through the six months ended July 1, 2023, we recorded aggregate total charges of $15.6 million ($0.5 million of which was recorded as cost of sales). As of July 1, 2023, we estimate the remaining amount of charges related to this initiative will be $5.0 million to $8.0 million in total pre-tax restructuring charges through 2023. Of these charges, we estimate $4.0 million to $6.0 million to be cash payments for employee separation and other facility consolidation related expenses, and $1.0 million to $2.0 million to be non-cash charges for impairment of long-lived assets.

In the Electronics Systems segment, we recorded charges (reversals) of $2.4 million, zero, and $(0.2) million during the three months ended July 1, 2023, for severance and benefits that were classified as restructuring charges, accelerated depreciation of property and equipment that was classified as restructuring charges, and other restructuring reversals, respectively. We recorded charges (reversals) of $4.1 million, $0.1 million, and $(0.1) million during the six months ended July 1, 2023, for severance and benefits that were classified as restructuring charges, accelerated depreciation of property and equipment that was classified as restructuring charges, and other restructuring (reversals), respectively. Cumulative through the six months ended July 1, 2023, we recorded total charges for severance and benefits that were classified as restructuring charges, accelerated depreciation of property and equipment that was classified as restructuring charges, and other restructuring reversals of $7.6 million, $0.4 million, and $(0.1) million, respectively.

In the Structural Systems segment, we recorded $1.6 million, $0.4 million, and $0.5 million during the three months ended July 1, 2023 for severance and benefits that were classified as restructuring charges, accelerated depreciation of property and equipment that was classified as restructuring charges, and other restructuring charges, respectively. We recorded $3.3 million, $0.7 million, and $0.8 million during the six months ended July 1, 2023, for severance and benefits that were classified as restructuring charges, accelerated depreciation of property and equipment that was classified as restructuring charges, and other restructuring charges, respectively. Cumulative through the six months ended July 1, 2023, we recorded total charges for inventory write down that was classified as cost of sales, severance and benefits that were classified as restructuring charges, accelerated depreciation of property and equipment that was classified as restructuring charges, impairment of property and equipment that was classified as restructuring charges, and other restructuring charges of $0.5 million, $4.9 million, $1.2 million, $0.3 million, and $0.8 million, respectively.

Our restructuring activities during the six months ended July 1, 2023 were as follows (in thousands):


	December 31, 2022		Six Months Ended July 1, 2023								July 1, 2023
	Balance		Charges		Cash Payments		Non-Cash Payments		Change in Estimates		Balance
Severance and benefits	$	2,799	$	7,402	$	(5,184)	$	—	$	—	$	5,017

Property and equipment accelerated depreciation due to restructuring	—		844		—		(844)		—		—

Other	—		693		(693)		—		—		—
Ending balance	$	2,799	$	8,939	$	(5,877)	$	(844)	$	—	$	5,017

The restructuring activities accrual for severance and benefits of $5.0 million as of July 1, 2023 was included as part of accrued and other liabilities.