RESTRUCTURING

3 Months Ended

Jun. 29, 2024

Restructuring and Related Activities [Abstract]

5. RESTRUCTURING

On an ongoing basis, the Company reviews the global economy, the healthcare industry, and the markets in which it competes to identify opportunities for efficiencies, enhance commercial capabilities, align its resources and offer its customers better solutions. In order to realize these opportunities, the Company undertakes restructuring-type activities to transform its business.

Operating Excellence Program

In July 2019, the Board of Directors of the Company approved the Operational Excellence Program (the “2020 Program”) and delegated authority to the Company’s management to determine the detail of the initiatives that will comprise the program. During fiscal 2022, the Company revised the program to improve product and service quality, reduce cost principally in its manufacturing and supply chain operations and ensure sustainability while helping to offset impacts from a previously announced customer loss, rising inflationary pressures and effects of the COVID-19 pandemic. The Company expects to incur aggregate charges between $85 million and $95 million by the end of fiscal 2025 under the program. The majority of charges will result in cash outlays, including severance and other employee costs, and will be incurred as the specific actions required to execute these initiatives are identified and approved. During the three months ended June 29, 2024 and July 1, 2023 the Company incurred $2.4 million and $2.2 million of restructuring and restructuring related costs under this program, respectively. Total cumulative charges under this program are $79.4 million.

Portfolio Rationalization Initiatives

In November 2023, the Company announced its plans to end of life the ClotPro analyzer system within the Hospital business unit and certain products within the Blood Center business unit, primarily in Whole Blood, including the associated manufacturing operations and closure of certain other facilities. In the three months ended June 29, 2024, the Company incurred $4.8 million of restructuring and restructuring related costs related to portfolio rationalization initiatives.

The following table summarizes the activity for restructuring reserves related to portfolio rationalization initiatives and the 2020 Program for the three months ended June 29, 2024, which relates to employee severance, other employee costs and inventory reserves:


(In thousands)	Portfolio Rationalization		2020 Program		Total
Balance at March 30, 2024	$	11,309	$	485	$	11,794
Costs incurred, net of reversals	4,531		91		4,622
Payments	(2,769)		(389)		(3,158)
Balance at June 29, 2024	$	13,071	$	187	$	13,258

The following presents the restructuring costs by line item within our accompanying unaudited Condensed Consolidated Statements of Income and Comprehensive Income:


	Three Months Ended
(In thousands)	June 29, 2024		July 1, 2023
Cost of goods sold	$	4,366	$	206
Research and development	(12)		—
Selling, general and administrative expenses	268		(217)
Total	$	4,622	$	(11)

As of June 29, 2024, the Company had a restructuring liability of $13.3 million, all of which is payable within the next twelve months.

In addition to the restructuring expenses included in the table above, the Company also incurred costs that do not constitute restructuring costs under ASC 420, Exit and Disposal Cost Obligations, and which the Company instead refers to as restructuring related costs. These costs consist primarily of expenditures directly related to the restructuring actions.

The tables below present restructuring and restructuring related costs by reportable segment:


Restructuring costs	Three Months Ended
(In thousands)	June 29, 2024		July 1, 2023
Plasma	$	63	$	(256)
Blood Center	1,163		—
Hospital	297		242
Corporate	3,099		3
Total	$	4,622	$	(11)

Restructuring related costs	Three Months Ended
(In thousands)	June 29, 2024		July 1, 2023
Plasma	$	175	$	169
Blood Center	43		45
Hospital	108		49
Corporate	2,192		1,941
Total	$	2,518	$	2,204

Total restructuring and restructuring related costs	$	7,140	$	2,193