Quarterly report pursuant to Section 13 or 15(d)

Restructuring Charges

v3.20.2
Restructuring Charges
 6 Months Ended
Jun. 27, 2020
Restructuring and Related Activities [Abstract]  
Restructuring Charges Restructuring Charges
In the fourth quarter of 2019, in an effort to reduce the significant operating losses at our AeroSat business, we initiated a restructuring plan to reduce costs and minimize losses of our AeroSat antenna business. The plan narrows the initiatives for the AeroSat business to focus primarily on near-term opportunities pertaining to business jet connectivity. The plan has a downsized manufacturing operation remaining in New Hampshire, with significantly reduced personnel and operating expenses. Impairments and restructuring charges were recorded in 2019 as a result of the restructuring plan.
The Company incurred $0.1 million and $0.4 million in additional restructuring charges associated with severance at AeroSat during the three and six months ended June 27, 2020.
In the second quarter of 2020, the COVID-19 pandemic has significantly impacted the global economy, and particularly the aerospace industry, resulting in reduced expectations of the Company’s future operating results. As a result, the Company executed restructuring activities in the form of workforce reduction to align capacity with expected demand. Additional restructuring charges of $4.8 million and $5.0 million in severance expense associated primarily with the Aerospace segment was recorded in the three and six months ended June 27, 2020.
The following table reconciles the beginning and ending liability for restructuring charges relating to the Company’s restructuring plan described above:
Restructuring Charges in the
six months ended June 27, 2020
(In thousands) Accrual as of December 31, 2019 Cost of Products Sold Selling, General and Administrative Cash Paid Accrual as of
June 27, 2020
Accrued Expenses and Other Current Liabilities $ 613    $ 280    $ 5,129    $ (1,236)   $ 4,786   
Other Liabilities 4,577    —    —    —    4,577   
$ 5,190    $ 280    $ 5,129    $ (1,236)   $ 9,363   
The charge to Accrued Expenses and Other Current Liabilities is comprised of employee termination benefits expected to be paid within the next 12 months as well as the current portions of payments to be made under AeroSat’s non-cancelable inventory purchase commitments. The charge to Other Liabilities represents the non-current portions of payments to be made under AeroSat’s non-cancelable inventory purchase commitments. The non-cancelable purchase commitments are for inventory in the future which is not expected to be purchased prior to the expiration date of such agreements as a result of the restructuring plan.