Restructuring and integration expense

3 Months Ended

Mar. 31, 2022

Restructuring and Related Activities [Abstract]

Restructuring and integration expense consists of costs related to the consolidation and migration of certain applications and processes, including our financial and sales management systems. It also includes costs related to the integration of acquired businesses into our systems and processes. These costs consist primarily of information technology consulting, project management services and internal labor, as well as other costs associated with our initiatives, such as training, travel, relocation and costs associated with facility closures. In addition, we recorded employee severance costs related to these initiatives, as well as our ongoing cost reduction initiatives across functional areas. We are currently pursuing several initiatives designed to support our growth strategy and to increase our efficiency. Restructuring and integration expense is not allocated to our reportable business segments.

Restructuring and integration expense is reflected on the consolidated statements of comprehensive income as follows:


	Quarter Ended March 31,
(in thousands)	2022		2021
Total cost of revenue	$	59	$	899
Operating expenses	16,244		14,313
Restructuring and integration expense	$	16,303	$	15,212

Restructuring and integration expense for each period was comprised of the following:


	Quarter Ended March 31,
(in thousands)	2022		2021
External consulting fees	$	7,859	$	7,383
Internal labor	1,696		2,041
Employee severance benefits	1,125		857
Other	5,623		4,931
Restructuring and integration expense	$	16,303	$	15,212

Our restructuring and integration accruals are included in accrued liabilities on the consolidated balance sheets and represent expected cash payments required to satisfy the remaining severance obligations to those employees already terminated and those expected to be terminated under our various initiatives. The majority of the employee reductions and the related severance payments are expected to be completed by mid-2022.

Changes in our restructuring and integration accruals were as follows:


(in thousands)	Employee severance benefits
Balance, December 31, 2021	$	5,672
Charges	1,629
Reversals	(504)
Payments	(3,759)
Balance, March 31, 2022	$	3,038

The charges and reversals presented in the rollforward of our restructuring and integration accruals do not include items charged directly to expense as incurred, as those items are not reflected in accrued liabilities on the consolidated balance sheets.