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9. Restructuring
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. The Company expects to incur increased restructuring related charges and capital expenditures in our Canada segment over the next year as plans are finalized and implemented. The following is a summary of the charges incurred:
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Thirteen Weeks Ended
September 28, 2019 |
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Thirteen Weeks Ended
September 29, 2018 |
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Thirty-nine Weeks Ended
September 28, 2019 |
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Thirty-nine Weeks Ended
September 29, 2018 |
Facility consolidation (1)
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Labor expense |
$ |
451 |
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$ |
243 |
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$ |
962 |
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$ |
334 |
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Inventory valuation adjustments |
446 |
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— |
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446 |
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— |
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Consulting and legal fees |
57 |
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87 |
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173 |
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242 |
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Other |
626 |
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6 |
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1,302 |
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11 |
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Exit of certain lines of business (2)
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Inventory valuation adjustments |
285 |
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1,152 |
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294 |
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1,152 |
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Loss (gain) on disposal of assets |
(61 |
) |
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796 |
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(458 |
) |
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796 |
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Severance |
— |
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239 |
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— |
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239 |
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Other |
70 |
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— |
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392 |
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— |
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Total |
$ |
1,874 |
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$ |
2,523 |
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$ |
3,111 |
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$ |
2,774 |
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(1) |
Facility consolidation includes labor expense related to organizing inventory and equipment in preparation for the facility consolation, consulting and legal fees related to the project, and other expenses. These expenses were included in SG&A on the Condensed Consolidated Statement of Comprehensive Loss. |
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(2) |
As part of the restructuring, the Company is exiting a manufacturing business line. Related charges included gains and losses on disposals of assets, and other expenses, which were included other income and expense, and SG&A on the Condensed Consolidated Statement of Comprehensive Loss, respectively. |
The following represents the roll forward of restructuring reserves for the current period:
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Balance at December 29, 2018 |
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Impact to Earnings |
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Cash Paid |
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Balance at September 28, 2019 |
Severance and related |
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$ |
1,537 |
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— |
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(1,033 |
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$ |
504 |
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