Restructuring and integration expense

3 Months Ended

Mar. 31, 2025

Restructuring and Related Activities [Abstract]


NOTE 8:			RESTRUCTURING AND INTEGRATION EXPENSE

Restructuring and integration expense consists of costs related to initiatives aimed at driving earnings and cash flow growth, including costs related to the consolidation and migration of certain applications and processes. These costs consist primarily of consulting, project management services, internal labor, and other items such as facility closure and consolidation costs. Additionally, we have recorded employee severance costs across functional areas. Restructuring and integration expense is not allocated to our reportable business segments.

We are currently pursuing several initiatives designed to support our growth strategy and to increase our efficiency, including several initiatives that we collectively refer to as our North Star program. The goal of this program is to enhance shareholder value by (1) accelerating our adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) growth, (2) increasing cash flow, (3) reducing debt, and (4) improving our leverage ratio. North Star is a comprehensive, multi-year plan that balances cost reduction and growth opportunities. On the cost side, we are focused on refining our organizational structure and transforming our infrastructure and operations. We have successfully completed the material elements of our organizational redesign, which included consolidating similar roles, reducing hierarchical layers, and expanding spans of control. We are also leveraging technology and process automation to digitize and streamline our operations. Additionally, we are scaling our operations by consolidating back-office functions and tapping into the global labor market. The associated restructuring and integration expense, which consisted primarily of consulting and employee severance costs, was approximately $8,000 during the quarter ended March 31, 2025 and $12,000 during the quarter ended March 31, 2024. To date, we have incurred expense of approximately $103,000, and we anticipate that we will incur approximately $7,000 of additional North Star restructuring and integration expense in 2025.

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


	Quarter Ended March 31,
(in thousands)	2025		2024
Total cost of revenue	$	752	$	933
Operating expenses	7,668		13,804
Restructuring and integration expense	$	8,420	$	14,737

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


	Quarter Ended March 31,
(in thousands)	2025		2024
Employee severance benefits	$	4,453	$	1,972
External consulting and other costs	2,523		7,969
Internal labor	988		838
Other	456		3,958
Restructuring and integration expense	$	8,420	$	14,737

Our restructuring and integration accruals are included in accrued liabilities on the consolidated balance sheets. These accruals represent the anticipated cash payments necessary to fulfill the remaining severance obligations for employees who have already been terminated, as well as those expected to be terminated under our various initiatives. We expect that the majority of employee reductions and the associated severance payments will be completed by the end of 2025.

Changes in our restructuring and integration accruals were as follows:


(in thousands)	Employee severance benefits
Balance, December 31, 2024	$	3,755
Charges	4,644
Reversals	(191)
Payments	(1,845)
Balance, March 31, 2025	$	6,363

The charges and reversals shown in the rollforward of our restructuring and integration accruals exclude items that are expensed as incurred, as these items are not included in accrued liabilities on the consolidated balance sheets.