Reorganization and Realignment Costs

6 Months Ended

Jun. 30, 2019

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure

Reorganization and Realignment Costs

The following is a summary of the initiatives included in “Reorganization and realignment costs:”

	Three Months Ended				Six Months Ended
	June 30, 2019		July 1, 2018		June 30, 2019		July 1, 2018
G&A realignment	$	3,517	$	3,120	$	4,299	$	5,746
System optimization initiative	53		4		69		4
Reorganization and realignment costs	$	3,570	$	3,124	$	4,368	$	5,750

General and Administrative (“G&A”) Realignment

In May 2017, the Company initiated a plan to further reduce its G&A expenses. Additionally, the Company announced in May 2019 changes to its leadership structure that includes the creation of two new positions, a President, U.S and Chief Commercial Officer and a President, International and Chief Development Officer, and the elimination of the Chief Operations Officer position. During the six months ended June 30, 2019 and July 1, 2018, the Company recognized costs related to the plan totaling $4,299 and $5,746, respectively, which primarily included severance and related employee costs and share-based compensation. The Company expects to incur additional costs aggregating approximately $1,700, comprised of (1) severance and related employee costs of approximately $100, (2) recruitment and relocation costs of approximately $1,000, (3) third-party and other costs of approximately $100 and (4) share-based compensation of approximately $500, the majority of which the Company expects to recognize during the remainder of 2019. The Company expects to incur total costs aggregating approximately $35,000 to $38,000 related to the plan.

As a result of the leadership changes described above, the Company is currently evaluating its management and operating structure and anticipates this evaluation will result in a change to its existing operating segment structure by the end of 2019.

The following is a summary of the activity recorded as a result of the G&A realignment plan:

	Three Months Ended				Six Months Ended				Total Incurred Since Inception
	June 30, 2019		July 1, 2018		June 30, 2019		July 1, 2018
Severance and related employee costs	$	2,130	$	1,052	$	2,602	$	3,111	$	21,355
Recruitment and relocation costs	482		360		596		508		2,162
Third-party and other costs	71		604		87		932		2,197
	2,683		2,016		3,285		4,551		25,714
Share-based compensation (a)	834		1,104		1,014		1,195		7,698
Termination of defined benefit plans	—		—		—		—		1,335
Total G&A realignment	$	3,517	$	3,120	$	4,299	$	5,746	$	34,747

_______________

(a) Primarily represents incremental share-based compensation resulting from the modification of stock options in connection with the termination of employees under our G&A realignment plan.

The accruals for our G&A realignment plan are included in “Accrued expenses and other current liabilities” and “Other liabilities” and totaled $4,835 and $607 as of June 30, 2019, respectively, and $7,985 and $2,107 as of July 1, 2018, respectively. The tables below present a rollforward of our accruals for the plan.

	Balance December 30, 2018		Charges		Payments			Balance June 30, 2019
Severance and related employee costs	$	7,241	$	2,602	$	(4,724	)	$	5,119
Recruitment and relocation costs	83		596		(356		)	323
Third-party and other costs	—		87		(87		)	—
	$	7,324	$	3,285	$	(5,167	)	$	5,442

	Balance December 31, 2017		Charges		Payments			Balance July 1, 2018
Severance and related employee costs	$	12,093	$	3,111	$	(5,326	)	$	9,878
Recruitment and relocation costs	177		508		(471		)	214
Third-party and other costs	—		932		(932		)	—
	$	12,270	$	4,551	$	(6,729	)	$	10,092

System Optimization Initiative

The Company recognizes costs related to acquisitions and dispositions under its system optimization initiative. The Company has incurred costs of $72,261 under the initiative since inception and expects to incur additional costs of approximately $500 during the remainder of 2019, which are primarily comprised of professional fees.