Note 6 - Restructuring

9 Months Ended

Sep. 26, 2020

Notes to Financial Statements

Restructuring and Related Activities Disclosure [Text Block]

In March 2020, our management approved and executed an internal restructuring plan (the “Q1 2020 Plan”), which included a workforce reduction in order to reduce our operating cost structure by leveraging our low-cost regions as well as enhancing efficiency. Under the Q1 2020 Plan, we incurred restructuring expense of approximately $0.6 million during the third quarter of fiscal 2020 associated with additional headcount related costs. A total of $2.0 million has been incurred through September 26, 2020, and we believe this amount substantially approximates the total costs under the Q1 2020 Plan.

Under the Q2 2019 Sales Plan, which is described in the 2019 10-K, we incurred charges of less than $0.1 million during both the third quarter of fiscal 2020 and the nine months ended September 26, 2020. We recorded a net credit adjustment of approximately $0.1 million during the third quarter of fiscal 2019 and expenses of approximately $2.3 million during the nine months ended September 28, 2019. Approximately $2.0 million of net expense has been incurred through September 26, 2020 under the Q2 2019 Sales Plan. Substantially all actions planned under the Q2 2019 Sales Plan have been implemented.

Under the June 2017 Plan, which is described in the 2019 10-K, we incurred approximately $1.9 million of incremental restructuring costs in the third quarter of fiscal 2020 related to our partially vacated facility in San Jose, California due to changes in the estimated timing of subleasing the vacated space. Including these charges, we incurred expenses of approximately $2.0 million during the third quarter of fiscal 2020 and approximately $2.1 million during the nine months ended September 26, 2020. We incurred expenses of approximately $0.4 million and $2.4 million, respectively, during the third quarter of fiscal 2019 and during the nine months ended September 28, 2019. We have incurred approximately $21.2 million of total expense through September 26, 2020 under the June 2017 Plan, and all planned actions have been implemented. We expect the total cost of the June 2017 Plan to be approximately $22.0 million to $23.5 million as expenses related to our partially vacated facility in San Jose, California will be incurred over the remaining lease term.

These expenses were recorded to Restructuring charges on our Consolidated Statements of Operations. The restructuring accrual balance is presented in Accounts payable and accrued expenses and in Other long-term liabilities on our Consolidated Balance Sheets. The following table displays the activity related to our restructuring plans:

 

(In thousands)	Severance & Related (1)			Lease Termination & Fixed Assets			Software Contracts & Engineering Tools (2)			Other (3)			Total
Accrued Restructuring at December 28, 2019	$	160		$	6,585		$	—		$	865		$	7,610
Restructuring charges		1,733			2,132			—			313			4,178
Costs paid or otherwise settled		(1,254	)		(1,275	)		—			(526	)		(3,055	)
Accrued Restructuring at September 26, 2020	$	639		$	7,442		$	—		$	652		$	8,733
Accrued Restructuring at December 29, 2018	$	1,814		$	8,630		$	218		$	18		$	10,680
Restructuring charges		625			2,482			—			1,612			4,719
Costs paid or otherwise settled		(2,279	)		(3,714	)		(218	)		(96	)		(6,307	)
Accrued Restructuring at September 28, 2019	$	160		$	7,398		$	-		$	1,534		$	9,092

(1)	Includes employee relocation and outplacement costs
(2)	Includes cancellation of contracts, asset impairments, and accelerated depreciation on certain enterprise resource planning and customer relationship management systems
(3)	Beginning in the second quarter of fiscal 2019, "Other" included termination fees on the cancellation of certain contracts under the Q2 2019 Sales Plan