XML 45 R9.htm IDEA: XBRL DOCUMENT v3.19.3
RESTRUCTURING
 6 Months Ended
Sep. 28, 2019
Restructuring and Related Activities [Abstract]  
RESTRUCTURING
3. RESTRUCTURING

On an ongoing basis, the Company reviews the global economy, the healthcare industry, and the markets in which it competes to identify opportunities for efficiencies, enhance commercial capabilities, align its resources and offer its customers better solutions. In order to realize these opportunities, the Company undertakes restructuring-type activities to transform its business.

In July 2019, the Board of Directors of the Company approved a new Operational Excellence Program (the "2020 Program") and delegated authority to the Company's management to determine the detail of the initiatives that will comprise the program. The 2020 Program is designed to improve operational performance and reduce cost principally in our manufacturing and supply chain operations. The Company estimates that it will incur aggregate charges between $60 million and $70 million in connection with the 2020 Program. These charges, the majority of which will result in cash outlays, including severance and other employee costs, will be incurred as the specific actions required to execute these initiatives are identified and approved and are expected to be substantially completed by the end of fiscal 2023. During both the three and six months ended September 28, 2019, the Company incurred $2.9 million of restructuring and turnaround costs under this program. Total cumulative charges under this program are $2.9 million.

During fiscal 2018, the Company launched a Complexity Reduction Initiative (the "2018 Program"), a company-wide restructuring program designed to improve operational performance and reduce cost, freeing up resources to invest in accelerated growth. During the three and six months ended September 28, 2019, the Company incurred $0.9 million and $2.9 million, respectively, of restructuring and turnaround costs under this program. During the three and six months ended September 29, 2018, the Company incurred $1.9 million and $5.3 million, respectively, of restructuring and turnaround costs under this program. Total cumulative charges under this program are $55.2 million.

The following table summarizes the activity for restructuring reserves for the six months ended September 28, 2019, substantially all of which relates to employee severance and other employee costs:
(In thousands)
 
2020 Program
 
2018 Program and Prior Programs
Balance at March 30, 2019
 
$
—

 
$
7,479

Costs incurred, net of reversals
 
1,179

 
1,133

Payments
 
(596
)
 
(5,024
)
Balance at September 28, 2019
 
$
583

 
$
3,588



As of September 28, 2019, the Company had a restructuring liability of $4.2 million, of which $3.7 million is payable within the next twelve months.

The following presents the restructuring costs by line item within our accompanying condensed consolidated statements of income:
 
Three Months Ended
 
Six Months Ended
(In thousands)
September 28,
2019
 
September 29,
2018
 
September 28,
2019
 
September 29,
2018
Cost of goods sold
$
283

 
$
—

 
$
442

 
$
—

Research and development
555

 
34

 
569

 
56

Selling, general and administrative expenses
505

 
(67
)
 
1,301

 
(381
)
 
$
1,343

 
$
(33
)
 
$
2,312

 
$
(325
)


In addition to the restructuring costs included in the table above, the Company also incurred costs that do not constitute restructuring under ASC 420, Exit and Disposal Cost Obligations, which the Company refers to as turnaround costs. These costs, substantially all of which have been included as a component of selling, general and administrative expenses in the accompanying condensed consolidated statements of income, consist primarily of expenditures directly related to the restructuring actions and include program management costs associated with the implementation of outsourcing initiatives and recent accounting standards.

The tables below present restructuring and turnaround costs by the Company's three reportable segments as well as the Company's other corporate restructuring and turnaround costs:
Restructuring costs
Three Months Ended
 
Six Months Ended
(In thousands)
September 28, 2019

September 29, 2018
 
September 28, 2019

September 29, 2018
Plasma
$
395

 
$
(44
)
 
$
548

 
$
(83
)
Blood Center
94

 
77

 
136

 
45

Hospital
34

 
(229
)
 
237

 
(223
)
Corporate
820

 
163

 
1,391

 
(64
)
Total
$
1,343

 
$
(33
)
 
$
2,312

 
$
(325
)
 
 
 
 
 
 
 
 
Turnaround costs
Three Months Ended
 
Six Months Ended
(In thousands)
September 28, 2019

September 29, 2018
 
September 28, 2019

September 29, 2018
Plasma
$
31

 
$
31

 
$
79

 
$
43

Blood Center
—

 
—

 
—

 
—

Hospital
—

 
(68
)
 
—

 
(139
)
Corporate
2,383

 
2,188

 
3,393

 
5,888

Total
$
2,414

 
$
2,151

 
$
3,472

 
$
5,792

 
 
 
 
 

 
 
Total restructuring and turnaround costs
$
3,757

 
$
2,118

 
$
5,784

 
$
5,467