Annual report pursuant to Section 13 and 15(d)

Restructuring

v3.20.1
Restructuring
12 Months Ended
Dec. 28, 2019
Restructuring and Related Activities [Abstract]  
Restructuring
Canadian Restructuring Plan
During 2018, the Company initiated plans to restructure the operations of the Canada segment. The restructuring seeks to streamline operations in the greater Toronto area by consolidating facilities, exiting certain lines of business, and rationalizing stock keeping units (“SKUs”). The intended result of the Canada restructuring will be a more streamlined and scalable operation focused on delivering optimal service and a broad offering of products across the Company's core categories. Plans were finalized during the fourth quarter of 2018. The Company expects to incur restructuring related charges and capital expenditures in our Canada segment over the next year as plans are finalized. Charges incurred in the current year include: 
 
Year Ended
December 28, 2019
 
Year Ended
December 29, 2018
Facility consolidation (1)
 
 
 
Inventory valuation adjustments
$
3,799

 
$
8,694

Labor expense
1,751

 
503

Consulting and legal fees
225

 
314

Other
2,710

 
116

Gain on sale of building

 
(6,104
)
Severance
617

 

 
 
 
 
Exit of certain lines of business (2)
 
 
 
Inventory valuation adjustments
535

 
1,152

Asset impairments
(458
)
 
837

Severance

 
2,749

Other
488

 

Total
$
9,667

 
$
8,261

(1)
Facility consolidation includes inventory valuation adjustments associated with SKU rationalization, labor expense related to organizing inventory and equipment in preparation for the facility consolation, consulting and legal fees related to the project, the gain on the sale of an existing building, and other expenses. The labor, consulting, and legal expenses were included in selling, general and administrative expense ("SG&A") on the Consolidated Statement of Comprehensive Income (Loss). The inventory valuation adjustments were included in cost of sales on the Consolidated Statement of Comprehensive Income (Loss).
(2)
As part of the restructuring, the Company is exiting a manufacturing business line. Related charges included adjustments to write inventory down to net realizable value, asset impairment charges, and employee severance, which were included in cost of sales, other income and expense, and SG&A on the Consolidated Statement of Comprehensive Income (Loss), respectively.
The following represents the roll forward of restructuring reserves for the year ended December 28, 2019:
 
Balance as of December 29, 2018
 
Impact to Earnings
 
Cash Paid
 
Balance as of December 28, 2019
Severance and related expense
$
1,537

 
$
617

 
$
(1,033
)
 
$
1,121


During the year ended December 28, 2019, the Company paid approximately $1,033 in severance and related expense related to the Canada Restructuring Plan.
United States Restructuring Plan
During fiscal 2019, the Company began implementing a plan to restructure the management and operations within the United States to achieve synergies and cost savings associated with the recent acquisitions described in Note 5 - Acquisitions. This restructuring includes management realignment, integration of sales and operating functions, and strategic review of the Company's product offerings. This plan was finalized during the fourth quarter of fiscal 2019. The Company expects to incur restructuring related charges in the Fastening, Hardware, and Personal Protective Solutions segment and in the Consumer Connected Solutions segment over the next fiscal year as the plans are implemented. Charges incurred in the current year include:
 
 
Year Ended
December 28, 2019
Inventory valuation adjustments
 
$
5,707

Severance
 
3,820

Total
 
$
9,527


The following represents a roll forward of the restructuring reserves for the year ended December 28, 2019:
 
Balance as of December 29, 2018
 
Impact to Earnings
 
Cash Paid
 
Balance as of December 28, 2019
Severance and related expense
$

 
$
3,820

 
$
(534
)
 
$
3,286


During the year ended December 28, 2019, the Company paid approximately $534 in severance and related expense related to the United States Restructuring Plan.