Restructuring Activities

6 Months Ended

Jun. 29, 2024

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 June 29, 2024, we recorded total charges of $2.1 million ($0.9 million of which was recorded as cost of sales) and $3.5 million ($0.9 million of which was recorded as cost of sales), respectively. Cumulative through the six months ended June 29, 2024, we recorded aggregate total charges of $25.0 million ($1.7 million of which was recorded as cost of sales). As of June 29, 2024, we estimate the remaining amount of charges related to this initiative will be $3.0 million to $4.0 million in total pre-tax restructuring charges through early 2025 for employee separation and other facility consolidation related expenses.

In the Electronics Systems segment, we recorded no restructuring charges during the three months ended June 29, 2024. We recorded charges of $0.3 million and $0.2 million during the six months ended June 29, 2024, for severance and benefits that were classified as restructuring charges, and other restructuring charges, respectively. Cumulative through the six months ended June 29, 2024, 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, charges for inventory write down that was classified as cost of sales, and other restructuring of $9.9 million, $0.3 million, $0.3 million, and $0.3 million, respectively.

In the Structural Systems segment, we recorded $0.8 million and $0.4 million during the three months ended June 29, 2024 for severance and benefits that were classified as restructuring charges and other restructuring charges, respectively. We recorded charges of $1.0 million and $1.1 million during the six months ended June 29, 2024, for severance and benefits that were classified as restructuring charges, and other restructuring charges, respectively. Cumulative through the six months ended June 29, 2024, we recorded total charges for severance and benefits that were classified as restructuring charges, accelerated depreciation of property and equipment/impairment of property and equipment that was classified as restructuring charges, charges for inventory write down that was classified as cost of sales, and other restructuring of $6.9 million, $2.0 million, $1.4 million, and $3.9 million, respectively.

Our restructuring activities during the six months ended June 29, 2024 were as follows (in thousands):


	December 31, 2023		Six Months Ended June 29, 2024								June 29, 2024
	Balance		Charges		Cash Payments		Non-Cash Payments		Change in Estimates		Balance
Severance and benefits	$	5,389	$	1,342	$	(2,244)	$	—	$	—	$	4,487

Property and equipment accelerated depreciation due to restructuring	—		—		—		—		—		—

Inventory write down	—		857		—		(857)				—
Other	—		1,282		(1,282)		—		—		—
Ending balance	$	5,389	$	3,481	$	(3,526)	$	(857)	$	—	$	4,487

The restructuring activities accrual for severance and benefits of $4.5 million as of June 29, 2024 was included as part of accrued and other liabilities and is expected to be paid out through 2024.