Restructuring and restructuring-related expenses

6 Months Ended

Jun. 28, 2025

Restructuring and Related Activities [Abstract]

Restructuring and restructuring-related expenses

Gates continues to undertake various restructuring and restructuring-related initiatives to drive increased productivity in all aspects of our operations. These actions include efforts to consolidate our manufacturing and distribution footprint, scale operations to current demand levels, streamline our SG&A back-office functions and relocate certain operations to lower cost locations.

Overall costs associated with our restructuring and other restructuring-related initiatives have been recognized in the condensed consolidated statements as set forth below. Expenses incurred in relation to certain of these actions qualify as restructuring expenses under U.S. GAAP.


	Three months ended				Six months ended
(dollars in millions)	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Restructuring expenses:
—Severance expense (income)	$	4.0	$	0.1	$	4.1	$	(0.5)
—Non-severance labor and benefit expenses	8.9		0.1		8.9		0.1
—Professional service fees	—		0.5		1.3		1.5
—Other net restructuring expenses	0.1		0.9		0.3		1.7
Total restructuring expenses	13.0		1.6		14.6		2.8

—Asset impairments related to restructuring	0.2		—		0.8		—





Total restructuring expenses and asset impairments	$	13.2	$	1.6	$	15.4	$	2.8

Other restructuring-related expenses:
—Severance and restructuring-related expenses included in cost of sales	1.2		—		2.4		—
—Severance and restructuring-related expenses included in SG&A	3.1		—		4.6		0.1

Total restructuring-related expenses	$	4.3	$	—	$	7.0	$	0.1

Restructuring and other restructuring-related expenses during each of the three and six months ended June 28, 2025 primarily included $12.6 million of severance and other labor and benefits expense related to a global cost reduction effort. Other restructuring and restructuring-related costs incurred during the three and six months ended June 28, 2025 included costs related to general severance, other labor and benefits, professional service fees, and costs related to relocation of production activities and reorganization of our operations in Mexico.

Restructuring and other restructuring-related expenses during the three and six months ended June 29, 2024 included $0.8 million and $1.6 million, respectively, of costs related to the relocation of certain production activities in Mexico. Other restructuring costs incurred during the three and six months ended June 29, 2024 included professional service fees, and costs associated with prior period facility closures or relocations in several countries.

Restructuring activities

As indicated above, restructuring expenses form a subset of our total expenses related to restructuring and other restructuring-related initiatives. Analyzed by segment, our restructuring expenses and restructuring-related asset impairments were as follows:


	Three months ended				Six months ended
(dollars in millions)	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Power Transmission	$	8.8	$	0.5	$	10.0	$	0.8
Fluid Power	4.4		1.1		5.4		2.0
Total restructuring expenses and asset impairments	$	13.2	$	1.6	$	15.4	$	2.8

The following summarizes the reserve for restructuring expenses for the six months ended June 28, 2025 and June 29, 2024, respectively:


	Six months ended
(dollars in millions)	June 28, 2025		June 29, 2024
Balance as of the beginning of the period	$	2.8	$	5.1
Utilized during the period	(4.3)		(5.4)
Charge for the period	14.7		3.5
Released during the period	(0.1)		(0.7)
Foreign currency translation	0.8		(0.1)
Balance as of the end of the period	$	13.9	$	2.4

Restructuring reserves, which are expected to be utilized during 2025 are included in the condensed consolidated balance sheet within the accrued expenses and other current liabilities line.