Restructuring and Other Charges

9 Months Ended

Oct. 02, 2011

Restructuring and Other Charges

Restructuring and Other Charges

5. Restructuring and Other Charges

The Company’s Board of Directors approves all major restructuring programs that involve the discontinuance of product lines or the shutdown of facilities.  From time to time, the Company takes additional restructuring actions, including involuntary terminations that are not part of a major program.  The Company accounts for these costs in the period that the individual employees are notified or the liability is incurred.  These costs are included in restructuring and other charges in the Company’s consolidated statements of operations.  The Company also includes as part of other charges, expenses associated with asset impairments. In 2011, the Board approved a restructuring program with respect to the Company’s operating facilities in Europe, which included the Company closure of a facility. The program is expected to include pre-tax costs of approximately $2.6 million, including costs for severance and shut down costs. The total net after-tax charge for this restructuring program is $1.8 million with costs being incurred through 2012.  See Note 4 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, for a detailed description of the 2010 Europe and North America restructuring actions.  Also, in 2011 the Board approved an integration program in association with the acquisition of Socla. The integration program was designed to eliminate certain redundancies with a total estimated pre-tax cost of $6.4 million with costs being incurred through 2012.  In September 2011, the Company announced a plan of termination that would result in a reduction of approximately 10% of North American non-direct payroll costs.  The Company recorded a charge of $1.1 million for severance in connection with the plan during the quarter ended October 2, 2011.  The Company expects to pay all severance before the end of 2011.

A summary of the pre-tax cost by restructuring program is as follows:

	Third Quarter Ended				Nine Months Ended
	October 2, 2011		October 3, 2010		October 2, 2011		October 3, 2010
	(in millions)
2009 Actions	$	—	$	0.2	$	—	$	1.3
2010 Actions	0.1		2.7		2.8		8.3
2011 Actions	0.7		—		4.3		—
Other Actions	1.1		0.1		1.1		0.3
Total restructuring charges	$	1.9	$	3.0	$	8.2	$	9.9
Other charges related to impairments	—		—		0.3		0.2
	$	1.9	$	3.0	$	8.5	$	10.1
Less: amounts included in cost of goods sold	—		—		—		1.3
Total restructuring and other charges	$	1.9	$	3.0	$	8.5	$	8.8

The Company recorded net pre-tax restructuring and other charges in its business segments as follows:

	Third Quarter Ended				Nine Months Ended
	October 2, 2011		October 3, 2010		October 2, 2011		October 3, 2010
	(in millions)
North America	$	1.1	$	2.1	$	1.2	$	3.1
Europe	0.8		0.9		7.1		6.7
China	—		—		0.2		0.3
Total	$	1.9	$	3.0	$	8.5	$	10.1

The Company does not expect to incur additional costs related to the 2009 restructuring plan, as the project is substantially complete.

2011 Actions

Socla Actions

The following table summarizes the total expected, incurred and remaining pre-tax costs for the 2011 Socla integration program:

Reportable Segment	Total Expected Costs		Incurred through October 2, 2011		Remaining Costs at October 2, 2011
	(in millions)
Europe	$	6.2	$	2.6	$	3.6
China	0.2		0.2		—
Total	$	6.4	$	2.8	$	3.6

Details of the Company’s 2011 Socla integration program reserve for the first nine months of 2011 are as follows:

	Severance			Facility exit and other		Total
				(in millions)
Balance at December 31, 2010	$	—		$	—	$	—
Net pre-tax restructuring charges	2.7			—		2.7
Utilization and foreign currency impact	(0.1		)	—		(0.1		)
Balance at July 3, 2011	$	2.6		$	—	$	2.6
Net pre-tax restructuring charges	0.1					0.1
Utilization and foreign currency impact	(1.2		)	—		(1.2		)
Balance at October 2, 2011	$	1.5		$	—	$	1.5

The Company expects to spend the remaining reserve by mid-2012.

The following table summarizes expected, incurred and remaining costs for 2011 Socla integration actions by type:

	Severance			Facility exit and other		Total
	(in millions)
Expected costs	$	5.4		$	1.0	$	6.4
Costs incurred — quarter ended July 3, 2011	(2.7		)	—		(2.7		)
Costs incurred — quarter ended October 2, 2011	(0.1		)	—		(0.1		)
Remaining costs at October 2, 2011	$	2.6		$	1.0	$	3.6

Europe Actions

The following table summarizes the total expected, incurred and remaining pre-tax costs for the 2011 Europe restructuring program:

Reportable Segment	Total Expected Costs		Incurred through October 2, 2011		Remaining Costs at October 2, 2011
	(in millions)
Europe	$	2.6	$	1.5	$	1.1

Details of the Company’s 2011 Europe restructuring reserve for the first nine months of 2011 are as follows:

	Severance			Facility exit and other			Total
	(in millions)
Balance at December 31, 2010	$	—		$	—		$	—
Net pre-tax restructuring charges	0.1			0.1			0.2
Utilization and foreign currency impact	(0.1		)	(0.1		)	(0.2		)
Balance at April 3, 2011	$	—		$	—		$	—
Net pre-tax restructuring charges	0.7			—			0.7
Utilization and foreign currency impact	(0.3		)	—			(0.3		)
Balance at July 3, 2011	$	0.4		$	—		$	0.4
Net pre-tax restructuring charges	0.6			—			0.6
Utilization and foreign currency impact	(0.8		)	—			(0.8		)
Balance at October 2, 2011	$	0.2		$	—		$	0.2

The following table summarizes expected, incurred and remaining costs for 2011 Europe restructuring actions by type:

	Severance			Facility exit and other			Total
	(in millions)
Expected costs	$	2.4		$	0.2		$	2.6
Costs incurred — quarter ended April 3, 2011	(0.1		)	(0.1		)	(0.2		)
Costs incurred — quarter ended July 3, 2011	(0.7		)	—			(0.7		)
Costs incurred — quarter ended October 2, 2011	(0.6		)	—			(0.6		)
Remaining costs at October 2, 2011	$	1.0		$	0.1		$	1.1

2010 Actions

Europe Actions

The following table summarizes the total expected, incurred and remaining pre-tax costs for the 2010 Europe footprint consolidation-restructuring program:

Reportable Segment	Total Expected Costs		Incurred through October 2, 2011		Remaining Costs at October 2, 2011
	(in millions)
Europe	$	16.4	$	16.4	$	—

Details of the Company’s 2010 Europe footprint consolidation-restructuring program reserve for the first nine months of 2011 are as follows:

	Severance			Asset write- downs		Facility exit and other			Total
	(in millions)
Balance at December 31, 2010	$	5.4		$	—	$	—		$	5.4
Net pre-tax restructuring charges	0.2			—		0.6			0.8
Utilization and foreign currency impact	(1.2		)	—		(0.6		)	(1.8		)
Balance at April 3, 2011	$	4.4		$	—	$	—		$	4.4
Net pre-tax restructuring charges	1.5			—		0.3			1.8
Utilization and foreign currency impact	(1.7		)	—		(0.3		)	(2.0		)
Balance at July 3, 2011	$	4.2		$	—	$	—		$	4.2
Net pre-tax restructuring charges	0.1			—		—			0.1
Utilization and foreign currency impact	(1.4		)	—		—			(1.4		)
Balance at October 2, 2011	$	2.9		$	—	$	—		$	2.9

The Company expects to spend the remaining reserve by mid-2012.

The following table summarizes expected, incurred and remaining costs for 2010 Europe footprint consolidation- restructuring actions by type:

	Severance			Asset write- downs			Facility exit and other			Total
	(in millions)
Expected costs	$	8.9		$	1.7		$	5.8		$	16.4
Costs incurred —2009	(4.2		)	—			(0.4		)	(4.6		)
Costs incurred —2010	(2.9		)	(1.7		)	(4.5		)	(9.1		)
Costs incurred — quarter ended April 3, 2011	(0.2		)	—			(0.6		)	(0.8		)
Costs incurred — quarter ended July 3, 2011	(1.5		)	—			(0.3		)	(1.8		)
Costs incurred — quarter ended October 2, 2011	(0.1		)	—			—			(0.1		)
Remaining costs at October 2, 2011	$	—		$	—		$	—		$	—

The Company does not expect to incur additional costs related to the 2010 Europe footprint consolidation- restructuring plan, as the project is substantially complete.

North America Actions

The following table summarizes the total expected, incurred and remaining pre-tax costs for the 2010 North America footprint consolidation-restructuring program:

Reportable Segment	Total Expected Costs		Incurred through October 2, 2011		Remaining Costs at October 2, 2011
	(in millions)
North America	$	2.5	$	2.1	$	0.4

In September 2011, the Company revised its estimate from $3.3 million to $2.5 million on the North America footprint consolidation-restructuring program as the total costs to shut down and relocate equipment were lower than anticipated.

Details of the Company’s 2010 North America footprint consolidation-restructuring program reserve for the first nine months of 2011 are as follows:

	Severance			Asset write- downs			Facility exit and other			Total
	(in millions)
Balance at December 31, 2010	$	2.0		$	—		$	—		$	2.0
Net pre-tax restructuring charges	—			—			0.1			0.1
Utilization	(0.2		)	—			(0.1		)	(0.3		)
Balance at April 3, 2011	$	1.8		$	—		$	—		$	1.8
Net pre-tax restructuring charges	—			—			—			—
Utilization	(0.4		)	—			—			(0.4		)
Balance at July 3, 2011	$	1.4		$	—		$	—		$	1.4
Net pre-tax restructuring charges	—			0.2			—			0.2
Utilization	(0.8		)	(0.2		)	—			(1.0		)
Balance at October 2, 2011	$	0.6		$	—		$	—		$	0.6

The Company expects to spend the remaining reserve by mid-2012.

The following table summarizes expected, incurred and remaining costs for the Company’s 2010 North America footprint consolidation-restructuring actions by type:

	Severance			Asset write- downs			Facility exit and other			Total
	(in millions)
Expected costs	$	1.8		$	0.2		$	0.5		$	2.5
Costs incurred — 2010	(2.0		)	—			—			(2.0		)
Costs incurred — quarter ended April 3, 2011	—			—			(0.1		)	(0.1		)
Costs incurred — quarter ended July 3, 2011	—			—			—			—
Costs incurred — quarter ended October 2, 2011	0.2			(0.2		)	—			—
Remaining costs at October 2, 2011	$	—		$	—		$	0.4		$	0.4

The third quarter charge for 2010 of $3.0 million consisted of approximately $1.9 million related to involuntary termination benefits, and $0.8 million for other costs associated with the 2010 actions.  Additionally, the Company recorded $0.2 million related to involuntary termination benefits with the 2009 actions.  The remaining costs of approximately $0.1 million related to involuntary termination benefits which were not part of a previously announced restructuring plan.

The first nine months charges for 2010 of $10.1 million consisted of approximately $5.2 million related to involuntary termination benefits, $1.3 million for accelerated depreciation for manufacturing operations, which was charged to cost of sales, and $1.8 million for other costs all associated with the 2010 actions.  Additionally, the Company recorded $0.7 million related to involuntary termination benefits and $0.6 million for relocation expenses associated with the 2009 actions.  The remaining costs of approximately $0.3 million related to involuntary termination benefits which were not part of a previously announced restructuring plan.  Additionally, the Company recorded $0.2 million in the first nine months of 2010 for charges associated with impairments.

In addition, in 2010, the Company recorded a tax charge of approximately $1.5 million in connection with the expected sale of TWVC. The Company expects the sale of TWVC to be finalized in the fourth quarter of 2011, subject to final agreements with the buyer. The Company expects to receive net proceeds of approximately $5.5 million from the sale. The Company also expects to record a net gain of approximately $7.5 million after-tax, primarily to recognize the cumulative currency translation adjustment related to TWVC. Further, the Company will recognize a net gain of $3.3 million to reverse a tax provision upon completion of the sale.