NOTE

–

RESTRUCTURING

CHARGE

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 is comprised of severance expenses (approximately

$10.8

million), impairment of assets (approximately

$8.6

million) and other items (approximately

$1.1

million). The charge is 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 in the

first

half of

2019,

and is expected to yield gross annual savings of approximately

$12

million beginning 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.

A summary of these

2018

restructuring activities is presented below:

	Total Restructuring Charge		Costs Incurred in 2018		Balance at Dec. 30, 2018
	(in thousands)
Workforce Reduction	$	10,816	$	53	$	10,763
Asset Impairment		8,569		8,569		0
Other Exit Costs		1,144		0		1,144

In the

fourth

quarter of

2016,

the Company committed to a separate restructuring plan. The plan involved (i) a substantial restructuring of the FLOR business model that included closure of its headquarters office and most retail FLOR stores, (ii) a reduction of approximately

FLOR employees and a number of employees in the commercial carpet tile business, primarily in the Americas and Europe regions, and (iii) the write-down of certain underutilized and impaired assets that included information technology assets, intellectual property assets, and obsolete manufacturing, office and retail store equipment. As a result of this plan, the Company incurred pre-tax restructuring and asset impairment charges of

$19.8

million in the

fourth

quarter of

2016

and

$7.3

million in the

first

quarter of

2017.

A summary of these

2016

and

2017

restructuring activities is presented below:

	Total Restructuring Charge		Costs Incurred in 2016		Costs Incurred in 2017		Costs Incurred in 2018		Balance at Dec. 30, 2018
	(in thousands)
Workforce Reduction	$	10,652	$	1,451	$	6,633	$	2,568	$	0
Asset Impairment		11,319		8,019		3,300		0		0
Lease Exit Costs		5,116		27		5,089		0		0