Restructuring Charges

6 Months Ended

Apr. 03, 2021

Restructuring and Related Activities [Abstract]

Restructuring charges

RESTRUCTURING CHARGESIn June 2019, we announced our plans to exit a portion of our high power fiber laser ("HPFL") business and consolidate all HPFL manufacturing and engineering functions in our Tampere, Finland facility by transferring certain HPFL activities

from our Hamburg, Germany facility. We recorded charges in the first and second quarters of fiscal 2020 of $0.6 million and $0.5 million, respectively, primarily related to accelerated depreciation and project management consulting.

We also vacated our leased facility in Santa Clara at the end of the lease term on July 31, 2020 and combined operations into our owned Santa Clara headquarters. We incurred costs in the second quarter of fiscal 2021 and first and second quarters of fiscal 2020 of $0.1 million, $0.2 million and $0.6 million, respectively, related to this project. We also incurred costs in the first quarter of fiscal 2020 of $0.1 million for other projects.

In the fourth quarter of fiscal 2020, we began a restructuring program in our ILS segment which includes management reorganizations, the planned closure of certain manufacturing sites, and the right-sizing of global sales, service, order admin, marketing communication and certain administrative functions, among others. In the first and second quarters of fiscal 2021, we incurred costs of $5.4 million and $3.6 million, respectively, primarily related to write-offs of excess inventory and accruals for vendor commitments, which are recorded in cost of sales, estimated severance and accelerated depreciation.

The following table presents our current liability as accrued on our balance sheets for restructuring charges. The table sets forth an analysis of the components of the restructuring charges and payments and other deductions made against the accrual for the quarters of fiscal 2021 and 2020 (in thousands):

	Severance Related		Asset Write-Offs		Other		Total
Balances, October 3, 2020	$	2,611	$	—	$	230	$	2,841
Provision	819		3,509		1,055		5,383
Payments and other	(555)		(3,509)		(281)		(4,345)
Balances, January 2, 2021	2,875		—		1,004		3,879
Provision	2,775		558		325		3,658
Payments and other	(2,032)		(558)		(623)		(3,213)
Balances, April 3, 2021	$	3,618	$	—	$	706	$	4,324

	Severance Related		Asset Write-Offs		Other		Total
Balances, September 28, 2019	$	8,279	$	—	$	215	$	8,494
Provision	54		599		280		933
Payments and other	(658)		(599)		(275)		(1,532)
Balances, December 28, 2019	7,675		—		220		7,895
Provision	85		915		79		1,079
Payments and other	(3,715)		(915)		(87)		(4,717)
Balances, April 4, 2020	$	4,045	$	—	$	212	$	4,257

At April 3, 2021, $4.3 million of accrued severance related and other costs were included in other current liabilities. The severance, asset write-offs for inventory, accruals for vendor commitments, accelerated depreciation and other costs in the first and second quarters of fiscal 2021 primarily related to the restructuring program that began in the fourth quarter of fiscal 2020. The asset write-offs for accelerated depreciation and other costs in the first and second quarters of fiscal 2020 primarily related to the exit of a portion of our HPFL business in Hamburg, Germany, and costs to vacate our leased facility in Santa Clara and combine operations into our owned Santa Clara headquarters.

By segment, $3.6 million and $8.9 million of restructuring costs were incurred in the ILS segment and $0.1 million and $0.1 million were incurred in the OLS segment in the three and six months ended April 3, 2021, respectively. In the three and six months ended April 4, 2020, $0.6 million and $1.3 million of the restructuring costs were incurred in the ILS segment and $0.5 million and $0.7 million were incurred in the OLS segment, respectively. Restructuring charges are recorded in cost of sales, research and development and selling, general and administrative expenses in our condensed consolidated statements of operations.