Reorganization and Realignment Costs

3 Months Ended

Mar. 31, 2024

Restructuring and Related Activities [Abstract]

Reorganization and Realignment Costs

Reorganization and Realignment Costs

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

	Three Months Ended
	March 31, 2024		April 2, 2023
Organizational redesign	$	5,622	$	6,737
Other reorganization and realignment plans	51		71
Reorganization and realignment costs	$	5,673	$	6,808

Organizational Redesign

In February 2023, the Board of Directors approved a plan to redesign the Company’s organizational structure to better support the execution of the Company’s long-term growth strategy by maximizing organizational efficiency and streamlining decision making (the “Organizational Redesign Plan”). As a result of the Organizational Redesign Plan, the Company held its general and administrative expense in 2023 relatively flat compared with 2022. Additionally, in January 2024, the Board of Directors announced the appointment of Kirk Tanner as the Company’s new President and Chief Executive Officer, effective February 5, 2024. Mr. Tanner succeeded Todd A. Penegor, the Company’s previous President and Chief Executive Officer, who departed from the Company in February 2024. The Company expects to incur total costs of approximately $17,000 to $19,000 related to the Organizational Redesign Plan, including costs related to the succession of the President and Chief Executive Officer role. During the three months ended March 31, 2024 and April 2, 2023, the Company recognized costs totaling $5,622 and $6,737, respectively, which primarily included severance and related employee costs. The Company expects to incur additional costs aggregating approximately $2,500 to $4,500, comprised of (1) severance and related employee costs of approximately $2,000, (2) recruitment and relocation costs of approximately $200 and (3) share-based compensation of approximately $1,500. The Company expects costs related to the Organizational Redesign Plan to continue into 2026.

The following is a summary of the costs recorded as a result of the Organizational Redesign Plan:

	Three Months Ended
	March 31, 2024		April 2, 2023		Total Incurred Since Inception
Severance and related employee costs	$	5,362	$	5,539	$	11,605
Recruitment and relocation costs	82		78		636
Third-party and other costs	50		345		1,046
	5,494		5,962		13,287
Share-based compensation (a)	128		775		1,399
Total organizational redesign	$	5,622	$	6,737	$	14,686

_______________

(a)Primarily represents the accelerated recognition of share-based compensation resulting from the termination of employees under the Organizational Redesign Plan.

As of March 31, 2024, the accruals for the Organizational Redesign Plan are included in “Accrued expenses and other current liabilities” and “Other liabilities” and totaled $3,816 and $2,261, respectively. The tables below present a rollforward of our accruals for the Organizational Redesign Plan.

	Balance December 31, 2023		Charges		Payments		Balance March 31, 2024
Severance and related employee costs	$	1,692	$	5,362	$	(977)	$	6,077
Recruitment and relocation costs	—		82		(82)		—
Third-party and other costs	—		50		(50)		—
	$	1,692	$	5,494	$	(1,109)	$	6,077

	Balance January 1, 2023		Charges		Payments		Balance April 2, 2023
Severance and related employee costs	$	—	$	5,539	$	(741)	$	4,798
Recruitment and relocation costs	—		78		(78)		—
Third-party and other costs	—		345		(62)		283
	$	—	$	5,962	$	(881)	$	5,081

Other Reorganization and Realignment Plans

Costs incurred under the Company’s other reorganization and realignment plans were not material during the three months ended March 31, 2024 and April 2, 2023. The Company does not expect to incur any material additional costs under these plans.