Restructuring and Asset Impairment Charges

9 Months Ended

Sep. 29, 2019

Restructuring and Related Activities [Abstract]

Restructuring and Asset Impairment Charges

RESTRUCTURING AND ASSET IMPAIRMENT CHARGES

On December 29, 2018, the Company committed to a new restructuring plan in its continuing efforts to improve efficiencies and decrease costs across its worldwide operations, and more closely align its operating structure with its business strategy. The plan involves (i) a restructuring of its sales and administrative operations in the United Kingdom, (ii) a reduction of approximately 200 employees, primarily in the Europe and Asia-Pacific geographic regions, and (iii) the write-down of certain underutilized and impaired assets that include information technology assets and obsolete manufacturing equipment.

As a result of this plan, the Company recorded a pre-tax restructuring and asset impairment charge in the fourth quarter of 2018 of approximately $20.5 million.  The charge was comprised of severance expenses (approximately $10.8 million), impairment of assets (approximately $8.6 million) and other items (approximately $1.1 million).  The charge was expected to result in future cash expenditures of $12.0 million, primarily for severance payments (approximately $10.8 million).  The restructuring plan is expected to be substantially completed during 2019, and is expected to yield gross annual savings of approximately $12 million in fiscal 2019.  The Company expects to redeploy in 2019 essentially all of the anticipated savings toward the funding of sales and strategic growth initiatives, yielding negligible net savings on the Company’s income statement.

In the third quarter of 2019 the Company recorded $0.7 million of restructuring charges related to additional lease exit costs in connection with the restructuring plan announced on December 29, 2018.

A summary of these restructuring activities is presented below:

	Balance at Beginning of Year		Deductions 2019		Charged to Expenses 2019		Balance at September 29, 2019
	(in thousands)
Workforce Reduction	$	10,763	$	5,892	$	—	$	4,871
Other Exit Costs	1,144		370		672		1,446
Total	$	11,907	$	6,262	$	672	$	6,317