| Restructuring |
17. Restructuring
Canadian Restructuring Plan
During fiscal 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 completed restructuring related activities in our Canada segment in 2021. Charges incurred in part of the Canada Restructuring Plan included:
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Year Ended |
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Year Ended |
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Year Ended |
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December 25, 2021 |
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December 26, 2020 |
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December 28, 2019 |
Facility consolidation(1) |
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|
|
|
|
|
|
Inventory valuation adjustments |
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$ |
— |
|
$ |
596 |
|
$ |
3,799 |
Labor expense |
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|
— |
|
|
682 |
|
|
1,751 |
Consulting and legal fees |
|
|
26 |
|
|
192 |
|
|
225 |
Other expense |
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|
5 |
|
|
1,118 |
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|
2,126 |
Rent and related charges |
|
|
— |
|
|
1,535 |
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|
584 |
Severance |
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|
466 |
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|
707 |
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|
617 |
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|
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|
|
Exit of certain lines of business(2) |
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|
Inventory valuation adjustments |
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— |
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— |
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|
535 |
Gain on disposal of assets |
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— |
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— |
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(458) |
Other expense |
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— |
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— |
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|
488 |
Total |
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$ |
497 |
|
$ |
4,830 |
|
$ |
9,667 |
| (1) |
Facility consolidation includes inventory valuation adjustments associated with SKU rationalization, labor expense related to organizing inventory and equipment in preparation for the facility consolidation, consulting and legal fees related to the project, 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 Loss. The inventory valuation adjustments were included in cost of sales on the Consolidated Statement of Comprehensive 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 Loss, respectively. |
The following represents the roll forward of restructuring reserves for the year ended December 25, 2021:
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Severance and |
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|
related expense |
Balance as of December 28, 2019 |
|
$ |
1,121 |
Restructuring charges |
|
|
707 |
Cash paid |
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|
(1,519) |
Balance as of December 26, 2020 |
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$ |
309 |
Restructuring charges |
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|
466 |
Cash paid |
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(436) |
Balance as of December 25, 2021 |
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$ |
339 |
During the year ended December 25, 2021, the Company paid approximately $436 in severance and related expense related to the Canada Restructuring Plan.
United States Restructuring Plan
During fiscal 2019, the Company implemented a plan to restructure the management and operations within the United States to achieve synergies and cost savings associated with the recent acquisitions described in Note 6 - Acquisitions. This restructuring includes management realignment, integration of sales and operating functions, and strategic review of the Company’s product offerings. This plan was finalized during the fourth quarter of fiscal year 2019. The Company incurred additional charges in fiscal
2021 related to the consolidation of two of our distribution centers. Charges incurred in part of the United States Restructuring Plan included:
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Year Ended |
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Year Ended |
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December 25, 2021 |
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December 26, 2020 |
Management realignment & integration |
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Severance |
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$ |
111 |
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$ |
886 |
Inventory valuation adjustments |
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— |
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|
— |
Facility closures |
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Severance |
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— |
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|
903 |
Inventory valuation adjustments |
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— |
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|
1,568 |
Other |
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|
319 |
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1,422 |
Total |
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$ |
430 |
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$ |
4,779 |
The following represents a roll forward of the restructuring reserves for the year ended December 25, 2021:
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Severance and |
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related expense |
Balance as of December 29, 2019 |
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$ |
3,286 |
Restructuring charges |
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|
1,789 |
Cash paid |
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(4,250) |
Balance as of December 26, 2020 |
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$ |
825 |
Restructuring charges |
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|
111 |
Cash paid |
|
|
(936) |
Balance as of December 25, 2021 |
|
$ |
— |
During the year ended December 25, 2021, the Company paid approximately $936 in severance and related expense related to the United States Restructuring Plan.
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