Employee Benefit Plans

12 Months Ended

Dec. 31, 2023

Retirement Benefits [Abstract]

Employee Benefit Plans

EMPLOYEE BENEFIT PLANS

Defined Contribution and Deferred Compensation Plans

The Company has a 401(k) retirement investment plan (“401(k) Plan”), which is open to all eligible U.S. employees with at least six months of service. The 401(k) Plan provides Company matching contributions on a sliding scale based on the level of the employee’s contribution. The Company may, at its discretion, make additional contributions to the 401(k) Plan based on the attainment of certain performance targets by its subsidiaries. The Company’s matching contributions are funded bi-monthly and totaled approximately $3.4 million, $3.3 million, and $3.0 million for the years 2023, 2022 and 2021, respectively. No discretionary contributions were made in 2023, 2022 or 2021.

Under the Company’s nonqualified savings plans (“NSPs”), the Company provides eligible employees the opportunity to enter into agreements for the deferral of a specified percentage of their compensation, as defined in the NSPs. The NSPs provide Company matching contributions on a sliding scale based on the level of the employee’s contribution. The obligations of the Company under such agreements to pay the deferred compensation in the future in accordance with the terms of the NSPs are unsecured general obligations of the Company. Participants have no right, interest or claim in the assets of the Company, except as unsecured general creditors. The Company has established a rabbi trust to hold, invest and reinvest deferrals and contributions under the NSPs. If a change in control of the Company occurs, as defined in the NSPs, the Company will contribute an amount to the rabbi trust sufficient to pay the obligation owed to each participant. The deferred compensation liability in connection with the NSPs totaled $28.2 million and $27.5 million at December 31, 2023 and January 1, 2023, respectively. The Company invests the deferrals in insurance instruments with readily determinable cash surrender values and in exchange traded mutual funds. The value of the insurance instruments was $19.2 million and $16.6 million as of December 31, 2023 and January 1, 2023, respectively. The fair value of the mutual fund investments at December 31, 2023 and January 1, 2023 was $9.2 million and $11.0 million, respectively.

Multiemployer Plan

On December 31, 2019, a plan amendment was executed to eliminate future service accruals in our defined benefit pension plan in the Netherlands (the “Dutch Plan”), which resulted in a curtailment of the plan. The Dutch Plan remains in existence and continues to pay vested benefits. Active participants no longer accrue benefits after December 31, 2019, and instead participate in the Industry-Wide Pension Fund (the “IWPF”) multi-employer plan beginning in fiscal year 2020. During 2023, 2022 and 2021, the Company recorded multi-employer pension expense related to multiemployer contributions of $2.7 million, $2.4 million and $2.6 million, respectively. The Company’s contributions into the IWPF are less than 5% of total plan contributions. The IWPF is more than 85% funded at the end of 2022, which is the latest date plan information is available. The IWPF multi-employer plan is not considered to be significant based on the funded status of the plan and our contributions.

Foreign Defined Benefit Plans

The Company has trusteed defined benefit retirement plans which cover many of its European employees. The benefits under these defined benefit retirement plans are generally based on years of service and the employee’s average monthly compensation. In connection with the nora acquisition in 2018, the Company acquired an additional defined benefit plan, which covers certain employees in Germany (the “nora Plan”). The nora plan has no plan assets. The Company uses a year-end measurement date for the plans, which is the closest practical date to the Company’s fiscal year end.

As described above, on December 31, 2019, a plan amendment was executed to eliminate future service accruals in the Dutch defined benefit plan. The Dutch Plan remains in existence and continues to pay vested benefits. The reduction in future benefit accruals resulted in a curtailment of the Dutch Plan. Participants in the Dutch Plan no longer accrue benefits under the plan after December 31, 2019, and participate in the IWPF beginning in fiscal year 2020. Although the Dutch Plan is frozen to new participants, vested benefits will continue to be accounted for in accordance with applicable accounting standards for defined benefit plans. The Dutch Plan is financed by assets held in an insurance contract. The guarantee provision included in the insurance contract, that existed to fund any shortfall between the fair value of plan investments and the benefit obligation, expired on December 31, 2019. The Company will fund the cost to guarantee vested benefits and this amount is recorded as an obligation on the Company’s consolidated balance sheets.

As discussed above, the Company still has an obligation to pay vested benefits in the frozen Dutch Plan. As of December 31, 2023, the under-funded status of the Dutch Plan of $5.7 million is recorded on the consolidated balance sheet in other long-term liabilities.

Pension expense for our three European defined benefit plans was $1.3 million, $2.0 million, and $2.5 million for the years 2023, 2022 and 2021, respectively. Plan assets are primarily invested in insurance contracts and fixed income securities. As of December 31, 2023, for the European plans, the Company had a net liability recorded of $15.1 million, an amount equal to their under-funded status, and had recorded in accumulated other comprehensive loss an amount equal to $29.9 million (net of taxes of approximately $8.1 million) related to the future amounts to be recorded in net periodic benefit costs. In the next fiscal year, approximately $1.3 million will be reclassified from accumulated other comprehensive loss into net periodic benefit cost.

The tables presented below set forth the funded status of the Company’s significant foreign defined benefit plans and required disclosures in accordance with applicable accounting standards:

	Fiscal Year
	2023		2022
	(in thousands)
Change in benefit obligation:
Benefit obligation, beginning of year	$	195,440	$	324,408
Service cost	458		840
Interest cost	8,169		3,793
Benefits and expenses paid	(10,832)		(9,890)
Actuarial loss (gain)	12,760		(96,556)
Currency translation adjustment	8,433		(27,155)
Benefit obligation, end of year	$	214,428	$	195,440
Change in plan assets:
Plan assets, beginning of year	$	187,485	$	285,600
Actual return on assets	11,596		(66,759)
Company contributions	2,497		4,001
Benefits paid	(10,832)		(9,890)
Currency translation adjustment	8,602		(25,467)
Plan assets, end of year	$	199,348	$	187,485
Funded status	$	(15,080)	$	(7,955)
Amounts recognized in consolidated balance sheets:
Other assets	$	25,235	$	26,586
Current liabilities	(1,182)		(1,032)
Other long-term liabilities, net of current portion	(39,133)		(33,509)
Under-funded status at end of fiscal year	$	(15,080)	$	(7,955)
Amounts recognized in accumulated other comprehensive loss, after tax:
Unrecognized actuarial loss	$	29,918	$	23,737
Total amount recognized, end of year	$	29,918	$	23,737
Accumulated benefit obligation	$	214,428	$	195,440

The above disclosure represents the aggregation of information related to the Company’s three defined benefit plans which cover many of its European employees. The increase in the projected benefit obligation of $19.0 million for 2023 compared to prior year was primarily due to a decrease in the weighted average discount rate used to measure the obligation and the impact of foreign currency translation due to the strengthening of the Euro and British Pound sterling against the U.S. dollar in 2023. As of December 31, 2023, one of these plans, which primarily covers certain employees in the United Kingdom (the “UK Plan”), had assets in excess of the accumulated benefit obligation. The accumulated benefit obligation of the Dutch Plan exceeded plan assets as of December 31, 2023. The nora Plan is an unfunded defined benefit plan and the accumulated benefit obligation exceeded plan assets as of December 31, 2023. The following table summarizes this information as of December 31, 2023 and January 1, 2023.

	End of Fiscal Year
	2023		2022
	(in thousands)
UK Plan
Projected benefit obligation	$	108,424	$	98,730
Accumulated benefit obligation	108,424		98,730
Plan assets	133,658		125,315
Dutch Plan
Projected benefit obligation	$	71,422	$	67,689
Accumulated benefit obligation	71,422		67,689
Plan assets	65,690		62,170
nora Plan
Projected benefit obligation	$	34,582	$	29,021
Accumulated benefit obligation	34,582		29,021
Plan assets	—		—

	Fiscal Year
	2023		2022		2021
	(in thousands)
Components of net periodic benefit cost:
Service cost	$	458	$	840	$	1,087
Interest cost	8,169		3,793		2,687
Expected return on plan assets	(7,933)		(3,957)		(3,312)
Amortization of prior service cost	137		117		114
Amortization of net actuarial losses	468		1,201		1,968
Net periodic benefit cost	$	1,299	$	1,994	$	2,544

In accordance with applicable accounting standards, the service cost component of net periodic benefit costs is presented within operating income in the consolidated statements of operations, while all other components of net periodic benefit costs are presented within other expense, net, in the consolidated statements of operations.

During 2023, other comprehensive loss was impacted by a total net loss of approximately $6.3 million (net of $2.1 million of tax), comprised of actuarial loss of approximately $6.6 million (net of $2.3 million of tax) and amortization of loss of $0.3 million (net of $0.2 million of tax). 

	Fiscal Year
	2023		2022		2021
Weighted average assumptions used to determine net periodic benefit cost:
Discount rate	4.1	%	1.4	%	0.9	%
Expected return on plan assets	4.6	%	3.0	%	1.5	%
Weighted average assumptions used to determine benefit obligations:
Discount rate	4.1	%	4.4	%	1.6	%

The expected long-term rate of return on plan assets assumption is based on weighted average expected returns for each asset class. Expected returns reflect a combination of historical performance analysis and the forward-looking views of the financial markets, and include input from actuaries, investment service firms and investment managers.

The investment objectives of the foreign defined benefit plans are to maximize the return on the investments to ensure that the assets are sufficient to exceed minimum funding requirements, and to achieve a favorable return against performance expectations based on historical and projected rates of return over the short term. The goal is to optimize the long-term return on plan assets at a moderate level of risk, by balancing higher-returning assets, such as equity securities, with less volatile assets, such as fixed income securities. The assets are managed by professional investment firms and performance is evaluated periodically against specific benchmarks. The plans’ net assets did not include the Company’s own stock at December 31, 2023 or January 1, 2023.

Dutch Plan Assets and Indexation Benefit

As is common in Dutch pension plans, the Dutch Plan includes a provision for discretionary benefit increases termed “indexation.” The indexation benefit is meant to adjust pension benefits for cost-of-living increases, similar to U.S. consumer price index-based cost-of-living adjustments for U.S. retirement plans. The indexation benefit is not guaranteed, and is only provided for and paid out if sufficient assets are available due to favorable asset returns.

Both the vested benefit amounts as well as amounts related to the discretionary indexation benefits under the Dutch Plan are paid pursuant to an insurance contract with a private insurer (the “Contract”). The Dutch Plan itself is financed by investment assets held within the Contract. Prior to December 31, 2019, the Contract guaranteed payment of vested benefits, regardless of whether Dutch Plan assets held through the Contract were ultimately sufficient to pay vested amounts, and also provided for payment of the indexation amount on a contingent basis if the actual return on Dutch Plan assets were sufficient to pay it. This type of insurance arrangement is common in The Netherlands, although not necessarily common in other jurisdictions. After the Dutch Plan curtailment on December 31, 2019, any shortfall in plan assets to pay vested benefits will be funded by the Company. The assets under the Dutch Plan, including any indexation benefit, are identified as level 3 assets under the fair value hierarchy.

Under the express terms of the Contract, contract value is the greater of (i) the value of the discounted vested benefits of the Dutch Plan and (ii) the fair value of the underlying investment assets held by the insurance company under the Contract. As between those two values, the former was the greater for 2023 and 2022. Because the Company will fund the cost to guarantee vested benefits, the Company has recorded a provision, which reduces the Dutch Plan assets, that consists of the net present value of the expected future guarantee payments due to the insurance company pursuant to the Company’s guarantee.

As explained above, the Contract also will pay the indexation benefit if sufficient assets are available, which the Company believes not to be probable as of the end of 2023 based on recent returns. The indexation benefit for 2023 and 2022 is not significant.

The Company’s actual weighted average asset allocations for 2023 and 2022, and the targeted asset allocation for 2024, of the foreign defined benefit plans by asset category, are as follows:

	Fiscal Year
	2024			2023	2022
Asset Category	Target Allocation			Percentage of Plan Assets at Year End
Equity securities	—%	—	—%	—%	—%
Debt and debt securities	65%	—	70%	59%	53%
Short-term investments	—%	—	2%	8%	13%
Other investments	30%	—	35%	33%	34%
	100%			100%	100%

The following table sets forth by level within the fair value hierarchy the foreign defined benefit plans’ assets at fair value, as of December 31, 2023 and January 1, 2023. The nora plan is currently unfunded. As required by accounting standards, assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. As noted above, the Dutch Plan assets as represented by the insurance contract are classified as a level 3 asset and included in the “Other” asset category.

	Pension Plan Assets by Category as of December 31, 2023
	Dutch Plan		UK Plan		Total
	(in thousands)
Level 1	$	—	$	16,232	$	16,232
Level 2	—		92,200		92,200
Level 3	65,690		25,226		90,916
Total	$	65,690	$	133,658	$	199,348

	Pension Plan Assets by Category as of January 1, 2023
	Dutch Plan		UK Plan		Total
	(in thousands)
Level 1	$	—	$	44,335	$	44,335
Level 2	—		53,286		53,286
Level 3	62,170		27,694		89,864
Total	$	62,170	$	125,315	$	187,485

The tables below detail the foreign defined benefit plans’ assets by asset allocation and fair value hierarchy:

	End of Fiscal Year 2023
Asset Category	Level 1		Level 2		Level 3
			(in thousands)
Debt and debt securities	$	—	$	92,200	$	24,325
Short-term investments (1)	16,232		—		—
Other investments (2)	—		—		66,591
	$	16,232	$	92,200	$	90,916

	End of Fiscal Year 2022
Asset Category	Level 1		Level 2		Level 3
	(in thousands)
Debt and debt securities	$	19,614	$	53,286	$	26,778
Short-term investments (1)	24,721		—		—
Other investments (2)	—		—		63,086
	$	44,335	$	53,286	$	89,864

(1) Short-term investments are generally invested in interest-bearing accounts.

(2) Other investments are comprised of insurance contracts.

Assets identified as level 2 above pertain to corporate bonds and other debt securities. The fair values of these assets are calculated based on quoted market prices for similar assets.

With the exception of the Dutch Plan assets as discussed above, the assets identified as level 3 above in 2023 and 2022 relate to insured annuities and direct lending assets held by the UK Plan. The fair value of these assets was calculated using the present value of the future cash flows due under the insurance annuities, and for the direct lending assets the value is based on the asset value from the latest available valuation with adjustments for any drawdowns and distribution payments made between the valuation date and the reporting date. The range of discount rates used in the fair value calculation of level 3 assets held by the Dutch Plan and the UK Plan were 3.30% to 4.50% for 2023, and 3.70% to 4.75% for 2022. The weighted average discount rates were 3.32% and 3.72% for 2023 and 2022, respectively. These amounts are weighted based on the fair value of level 3 plan assets subject to fluctuations in the discount rate. Any changes in these variables will impact the fair value of level 3 assets.

The table below indicates the change in value related to these level 3 assets during 2023 and 2022:

	Fiscal Year
	2023		2022
	(in thousands)
Balance of level 3 assets, beginning of year	$	89,864	$	121,126
Actual return on plan assets (1)	3,429		(21,968)
Purchases, sales and settlements, net	(5,734)		389
Assets transferred from level 3	—		(710)
Currency translation adjustment	3,357		(8,973)
Balance of level 3 assets, end of year	$	90,916	$	89,864

(1) Includes $2.7 million and $(22.2) million for 2023 and 2022, respectively, of unrealized gains / (losses) recognized during the period in other comprehensive income (loss) for assets held at year end.

During 2024, the Company expects to contribute $2.7 million to the foreign defined benefit plans. It is anticipated that future benefit payments for the foreign defined benefit plans will be as follows:

Fiscal Year	Expected Payments
	(in thousands)
2024	$	11,145
2025	11,214
2026	11,360
2027	11,484
2028	11,782
2029-2033	59,800

Domestic Defined Benefit Plan

The Company maintains a domestic nonqualified salary continuation plan (“SCP”), which is designed to induce selected officers of the Company to remain in the employ of the Company by providing them with retirement, disability and death benefits in addition to those which they may receive under the Company’s other retirement plans and benefit programs. The SCP entitles participants to: (i) retirement benefits upon normal retirement at age 65 (or early retirement as early as age 55) after completing at least 15 years of service with the Company (unless otherwise provided in the SCP), payable for the remainder of their lives (or, if elected by a participant, a reduced benefit is payable for the remainder of the participant’s life and any surviving spouse’s life) and in no event less than 10 years under the death benefit feature; (ii) disability benefits payable for the period of any total disability; and (iii) death benefits payable to the designated beneficiary of the participant for a period of up to 10 years. Benefits are determined according to one of three formulas contained in the SCP, and the SCP is administered by the Compensation Committee of the Company’s Board of Directors, which has full discretion in choosing participants and the benefit formula applicable to each. The Company’s obligations under the SCP are currently unfunded (although the Company uses insurance instruments to hedge its exposure thereunder). The Company is required to contribute the present value of its obligations thereunder to an irrevocable grantor trust in the event of a change in control as defined in the SCP. The Company uses a year-end measurement date for the domestic SCP.

The tables presented below set forth the required disclosures in accordance with applicable accounting standards, and amounts recognized in the consolidated financial statements related to the domestic SCP. There is no service cost component in the change in benefit obligation in 2023 and 2022 as there are no longer any participants accruing benefits in the plan.

	Fiscal Year
	2023		2022
	(in thousands)
Change in benefit obligation:
Benefit obligation, beginning of year	$	22,731	$	30,053
Interest cost	1,134		771
Benefits paid	(1,873)		(1,873)
Actuarial loss (gain)	667		(6,220)
Benefit obligation, end of year	$	22,659	$	22,731

The amounts recognized in the consolidated balance sheets are as follows:

	End of Fiscal Year
	2023		2022
	(in thousands)
Current liabilities	$	1,873	$	1,873
Non-current liabilities	20,786		20,858
Total benefit obligation	$	22,659	$	22,731

The components of the amounts in accumulated other comprehensive loss, after tax, are as follows:

	Fiscal Year
	2023		2022
	(in thousands)
Unrecognized actuarial loss	$	4,098	$	3,811

The accumulated benefit obligation related to the SCP was $22.7 million as of both December 31, 2023 and January 1, 2023. The SCP is currently unfunded; as such, the benefit obligations disclosed are also the benefit obligations in excess of the plan assets. The Company uses insurance instruments to help limit its exposure under the SCP.

	Fiscal Year
	2023			2022			2021
	(in thousands, except for assumptions)
Assumptions used to determine net periodic benefit cost:
Discount rate	5.20		%	2.65		%	2.15		%
Assumptions used to determine benefit obligations:
Discount rate	4.90		%	5.20		%	2.65		%
Components of net periodic benefit cost:
Interest cost	$	1,134		$	771		$	706
Amortizations	195			557			743
Net periodic benefit cost	$	1,329		$	1,328		$	1,449

In accordance with applicable accounting standards, all components of net periodic benefit cost associated with the SCP are presented within other expense, net, in the consolidated statements of operations.

The change in other comprehensive loss during 2023 related to the SCP as a result of plan activity was a net loss of approximately $0.4 million (net of $0.1 million of tax), primarily comprised of a net loss during the period of $0.5 million (net of $0.2 million of tax) and amortization of loss of $0.1 million (net of $0.1 million of tax).

During 2023, the Company contributed $1.9 million in the form of direct benefit payments for its domestic SCP. It is anticipated that future benefit payments for the SCP will be as follows:

Fiscal Year	Expected Payments
	(in thousands)
2024	$	1,873
2025	1,873
2026	1,873
2027	1,873
2028	1,851
2029-2033	8,670