Restructuring and Other Charges

12 Months Ended

Jan. 03, 2021

Restructuring and Related Activities [Abstract]

RESTRUCTURING AND OTHER CHARGES

A summary of restructuring activities for the 2018 and 2019 restructuring plans is presented below:


	Workforce Reduction				Other Exit Costs
	2019 Plan		2018 Plan		2019 Plan		2018 Plan		Total
	(in thousands)
Balance, at December 31, 2017	$	—	$	—	$	—	$	—	$	—
Charged to expenses	—		10,816		—		1,144		11,960
Deductions	—		53		—		—		53
Balance, at December 30, 2018	—		10,763		—		1,144		11,907
Charged to expenses	8,827		(1,743)		188		672		7,944
Deductions	193		7,122		—		1,042		8,357
Charged to other accounts	—		—		49		—		49
Balance, at December 29, 2019	8,634		1,898		139		774		11,445
Charged to expenses	(3,704)		(223)		—		(699)		(4,626)
Deductions	3,866		1,675		139		75		5,755
Balance, at January 3, 2021	$	1,064	$	—	$	—	$	—	$	1,064

For fiscal year 2020, the Company recorded a reduction of $4.6 million of previously recognized restructuring charges due to changes in expected cash payments. For fiscal years 2019 and 2018, the Company recorded restructuring, asset impairment, and other charges of $12.9 million and $20.5 million, respectively, in the consolidated statements of operations. The 2019 and 2018 charges include other non-cash charges not included in the above table as further described below. As of January 3, 2021 the total restructuring reserve was $1.1 million for the 2019 restructuring plan. The 2018 restructuring plan was completed as of January 3, 2021.

Other Non-Cash Charges

On December 29, 2018, the Company recorded other non-cash charges of approximately $8.6 million as part of the 2018 restructuring plan primarily related to the write-down of certain underutilized and impaired assets that include information technology assets and obsolete manufacturing equipment. These charges are recorded in restructuring, asset impairment and other charges in the 2018 consolidated statement of operations.

On December 23, 2019, unrelated to the restructuring activity presented in the table above, the Company recorded other non-cash charges of approximately $5.0 million primarily related to adjusting the carrying value of certain insurance related assets. These charges are recorded in restructuring, asset impairment and other charges in the 2019 consolidated statement of operations.

2019 Restructuring Plan

On December 23, 2019, the Company committed to a restructuring plan that continues to focus on efforts to improve efficiencies and decrease costs across its worldwide operations, and more closely align its operating structure with its business strategy. The plan involved a reduction of approximately 105 employees and early termination of two office leases. As a result of this plan, the Company recorded a pre-tax restructuring charge in the fourth quarter of 2019 of approximately $9.0 million. The charge is comprised of severance expenses ($8.8 million) and lease exit costs ($0.2 million). The plan was expected to result in future cash expenditures of approximately $9.0 million for the payment of employee severance and lease exit costs.

In 2020, the Company recorded a reduction of $3.7 million of the previously recognized charges due to changes in expected cash payments for employee severance. The plan was substantially completed at the end of fiscal year 2020, and the Company expects the plan to yield annualized savings of approximately $6.0 million. A portion of the annualized savings was realized on the income statement in fiscal year 2020, with the remaining portion of the annualized savings expected to be realized in fiscal year 2021.

2018 Restructuring Plan

On December 29, 2018, the Company committed to a restructuring plan in its continuing efforts to improve efficiencies and decrease costs across its worldwide operations, and more closely align its operating structure with its business strategy. The plan involved (i) a restructuring of its sales and administrative operations in the United Kingdom, (ii) a reduction of approximately 200 employees, primarily in the Europe and Asia-Pacific geographic regions, and (iii) the write-down of certain underutilized and impaired assets that included information technology assets and obsolete manufacturing equipment.

As a result of this plan, the Company recorded a pre-tax restructuring and asset impairment charge in the fourth quarter of 2018 of approximately $20.5 million. The charge was comprised of severance expenses (approximately $10.8 million), impairment of assets (approximately $8.6 million) and other items (approximately $1.1 million). The charge was expected to result in future cash expenditures of $12.0 million, primarily for severance payments (approximately $10.8 million). The restructuring plan was substantially completed at the end of fiscal year 2019.

In the third quarter of 2019, the Company recorded $0.7 million of restructuring charges related to additional lease exit costs in connection with the restructuring plan announced on December 29, 2018. In the fourth quarter of 2019, the Company adjusted its previously recorded severance expenses in connection with the 2018 restructuring plan and recognized a reduction in restructuring costs of $1.7 million in 2019. In 2020, the Company further adjusted its previously recorded severance expenses and other exit costs and recognized a reduction in restructuring costs of $0.9 million. The restructuring plan was completed as of January 3, 2021.