Severance, Restructuring, and Acquisition Integration Activities

9 Months Ended

Oct. 03, 2021

Restructuring and Related Activities [Abstract]

Severance, Restructuring, and Acquisition Integration Activities

Severance, Restructuring, and Acquisition Integration Activities

Cost Reduction Program

We have executed a cost reduction program to streamline the organizational structure and invest in technology to drive productivity. We recognized $0.0 million and $3.5 million of severance and other restructuring costs for this program during the three and nine months ended October 3, 2021, respectively, and $0.2 million and $3.2 million during the three and nine months ended September 27, 2020, respectively. These costs were incurred by both the Enterprise Solutions and Industrial Solutions segments. The cost reduction program is substantially complete and has delivered a reduction in selling, general, and administrative expenses of approximately $60 million on an annual basis. We expect to recognize costs of approximately $5 million for this program during the fourth quarter of 2021.

Acquisition Integration Program

We are integrating our recent acquisitions such as OTN Systems, SPC, and Opterna with our existing businesses. The restructuring and integration activities are focused on achieving desired cost savings by consolidating existing and acquired facilities and other support functions. We recognized $0.8 million and $3.2 million of severance and other restructuring costs for this program during the three and nine months ended October 3, 2021, respectively. We recognized $0.9 million and $4.0 million of severance and other restructuring costs for this program during the three and nine months ended September 27, 2020, respectively. These costs were incurred by both the Enterprise Solutions and Industrial Solutions segments. We do not expect to incur significant incremental costs for this program in 2021.

The following table summarizes the costs by segment of the programs described above as well as other immaterial programs and acquisition integration activities during the three and nine months ended October 3, 2021 and September 27, 2020:

	Severance		Other Restructuring and Integration Costs		Total Costs
Three Months Ended October 3, 2021	(In thousands)
Enterprise Solutions	$	(77)	$	3,458	$	3,381
Industrial Solutions	(51)		998		947
Total	$	(128)	$	4,456	$	4,328
Three Months Ended September 27, 2020
Enterprise Solutions	$	327	$	1,010	$	1,337
Industrial Solutions	314		(294)		20
Total	$	641	$	716	$	1,357
Nine Months Ended October 3, 2021
Enterprise Solutions	$	1,031	$	6,725	$	7,756
Industrial Solutions	1,651		3,132		4,783
Total	$	2,682	$	9,857	$	12,539
Nine Months Ended September 27, 2020
Enterprise Solutions	$	1,162	$	5,148	$	6,310
Industrial Solutions	1,132		2,006		3,138
Total	$	2,294	$	7,154	$	9,448

The other restructuring and integration costs primarily consisted of equipment transfer, costs to consolidate operating and support facilities, retention bonuses, relocation, travel, legal, and other costs. The majority of the other restructuring and integration costs related to these actions were paid as incurred or are payable within the next 60 days.  

The following table summarizes the costs of the various programs described above as well as other immaterial programs and acquisition integration activities by financial statement line item in the Condensed Consolidated Statement of Operations:

	Three Months Ended				Nine Months Ended
	October 3, 2021		September 27, 2020		October 3, 2021		September 27, 2020
	(In thousands)
Cost of sales	$	2,943	$	85	$	4,306	$	222
Selling, general and administrative expenses	1,385		1,272		8,233		9,226
Total	$	4,328	$	1,357	$	12,539	$	9,448

Accrued Severance

The table below summarizes severance activity, included in accrued liabilities, for the Cost Reduction Program and the Acquisition Integration Program discussed above for the three and nine months ended October 3, 2021 and September 27, 2020, respectively.

	2021		2020
	(In thousands)
Beginning year balance	$	7,085	$	19,575
New charges	2,060		2,529
Cash payments	(1,798)		(4,483)
Foreign currency translation	49		(89)
Other adjustments	—		(4,147)
Balance at the end of Q1	7,396		13,385
New charges	458		4,660
Cash payments	(1,023)		(4,795)
Foreign currency translation	(4)		(132)
Other adjustments	(59)		(1,420)
Balance at the end of Q2	$	6,768	$	11,698
New charges	63		2,060
Cash payments	(941)		(3,968)
Foreign currency translation	(2)		(156)
Other adjustments	(197)		(1,541)
Balance at the end of Q3	$	5,691	$	8,093

The other adjustments were the result of changes in estimates. We experienced higher than expected voluntary turnover, and as a result, certain approved severance actions were not taken.