Restructuring, Integration, and Other

9 Months Ended

Sep. 28, 2024

Restructuring, Integration, and Other

Restructuring, Integration, and Other

Note I – Restructuring, Integration, and Other

Restructuring initiatives and integration costs are due to the company's continued efforts to lower costs, drive operational efficiency, integrate acquired businesses, and the consolidation of certain operations, as necessary.

The following table presents the components of the restructuring, integration, and other:

	Quarter Ended				Nine Months Ended
	September 28,		September 30,		September 28,		September 30,
(thousands)	2024		2023		2024		2023
Restructuring and integration charges	$	741	$	1,528	$	841	$	9,869
Other charges		33,725		29,831		121,018		34,383
	$	34,466	$	31,359	$	121,859	$	44,252

On October 31, 2024, in response to evolving business needs and as part of an initiative to optimize operating expenses, the company announced a multi-year restructuring plan (the “Operating Expense Efficiency Plan” or “the Plan”). The Plan is designed to improve operational efficiency through the following measures: (i) reorganizing and consolidating certain areas of the company’s operations to centralize functions and streamline resources, with a focus on more cost-efficient regions; (ii) enhancing warehouse and logistics operations; (iii) investing in information technology to support automation and process improvements; (iv) consolidating the company’s global real estate footprint; (v) reducing third-party spending; and (vi) winding down certain non-core businesses that are not aligned with the company’s strategic objectives. Under the Plan, the company expects to incur pre-tax restructuring charges of approximately $185.0 million, consisting of approximately $110.0 million of employee severance and other personnel cash expenditures; approximately $50.0 million of non-cash asset impairments, accelerated depreciation and inventory write-downs related to the wind-down of certain business operations; and approximately $25.0 million of other related cash expenditures. The company expects to substantially complete the Plan by the end of fiscal year 2026, subject to, among other things, local legal and consultation requirements.

The estimate of the charges that the company expects to incur in connection with the Plan, and the timing thereof, are subject to a number of assumptions, including local legal requirements in various jurisdictions, and actual amounts may differ materially from estimates. In addition, the company may incur other charges not currently contemplated due to unanticipated events that may occur, including in connection with the implementation of the Plan.

Other Charges

For the third quarter and the first nine months of 2024, other charges included the following:

● charges of $20.3 million and $80.8 million for the third quarter and the first nine months of 2024, respectively, related to the termination of personnel as a part of operating expense reduction initiatives not related to exit or disposal activities. As of September 28, 2024, the accrued liabilities related to the operating expense reduction initiatives totaled $45.8 million and substantially all accrued amounts are expected to be spent in cash within one year;

● consulting costs of $11.2 million and $25.3 million for the third quarter and the first nine months of 2024, respectively, related to ongoing cost reduction initiatives; and

● charges of $0.3 million and $6.8 million related to early lease terminations and related asset impairments.

For the third quarter and first nine months of 2023, other charges include $20.9 million and $23.3 million, respectively, related to an increase in environmental liabilities (Refer to the heading “Environmental matters” in Note L).