Kontoor Brands, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

RESTRUCTURING

RESTRUCTURING

3 Months Ended

Mar. 28, 2020

Restructuring and Related Activities [Abstract]

The Company incurs restructuring charges related to cost optimization of business activities, primarily related to severance and employee-related benefits. Of the $5.8 million of restructuring charges recognized during the three months ended March 2020, $5.3 million was reflected within "selling, general and administrative expenses" and $0.5 million within "cost of goods sold." Of the $22.8 million of restructuring charges recognized during the three months ended March 2019, $12.0 million was reflected within "selling, general and administrative expenses" and $10.8 million within "cost of goods sold."

All of the $6.5 million total restructuring accrual reported in the Company's balance sheet at March 2020 is expected to be paid out within the next 12 months and is classified within "accrued liabilities." All of the $2.2 million total restructuring accrual reported in the Company's balance sheet at December 2019 was classified within "accrued liabilities."

The following table presents the components of restructuring charges:



(In thousands)	Three Months Ended March 2020		Three Months Ended March 2019
Severance and employee-related benefits	$	5,795	$	13,157
Asset impairments	—		1,596
Inventory write-downs	—		4,403
Other	—		3,660
Total restructuring charges	$	5,795	$	22,816

The following table presents the restructuring costs by business segment:



(In thousands)	Three Months Ended March 2020		Three Months Ended March 2019
Wrangler	$	3,178	$	16,422
Lee	2,617		6,224
Other	—		170
Total	$	5,795	$	22,816

The following table presents activity in the restructuring accrual for the three-month period ended March 2020:



(In thousands)	Total
(In thousands)
Accrual at December 2019	$	2,172
Charges	5,795
Cash payments	(1,371		)
Adjustments to accruals	(110		)
Accrual at March 2020	$	6,486