Restructuring and Other Charges, Net

6 Months Ended

Jun. 27, 2021

Restructuring and Other Charges, Net

Restructuring and Other Charges, Net

6. Restructuring and Other Charges, Net

The Company’s Board of Directors approves all major restructuring programs that may involve the discontinuance of significant product lines or the shutdown of significant 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 in which the liability is incurred. These costs are included in restructuring charges in the Company’s consolidated statements of operations.

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

	Second Quarter Ended				Six Months Ended
	June 27,		June 28,		June 27,		June 28,
	2021		2020		2021		2020
	(in millions)
Restructuring costs:
2021 France Actions	$	18.0	$	—	$	18.0	$	—
Other Actions		(1.0)		5.3		(0.7)		5.3
Total restructuring charges	$	17.0	$	5.3	$	17.3	$	5.3

The Company recorded pre-tax restructuring costs in its business segments as follows:

	Second Quarter Ended				Six Months Ended
	June 27,		June 28,		June 27,		June 28,
	2021		2020		2021		2020
	(in millions)
Americas	$	(0.7)	$	4.6	$	(0.7)	$	4.6
Europe		17.9		(0.3)		17.9		(0.3)
APMEA		(0.2)		0.9		0.1		0.9
Corporate		—		0.1		—		0.1
Total	$	17.0	$	5.3	$	17.3	$	5.3

2021 France Actions

On June 25, 2021, the Board of Directors approved a restructuring program with respect to the Company’s operating facilities in France, within its Europe operating segment. The restructuring program is expected to include the shutdown of the Company’s manufacturing facility in Méry, France and the consolidation of that facility’s operations primarily into the Company’s facilities in Virey-le-Grand and Hautvillers, France. The program is expected to include pre-tax charges totaling approximately $26.3 million, including costs for severance, relocation, clean-up and certain asset write-downs, and result in the elimination of approximately 80 positions at the Méry, France facility. As a result of the facility consolidations, the net headcount reduction in France is expected to be approximately 50 positions. Total net after-tax charges for this restructuring program are expected to be approximately $19.0 million (including approximately $2.0 million in non-cash charges), with costs being incurred through the second half of 2022, at which time the restructuring program is expected to be completed. The Company expects to spend approximately $1.0 million in capital expenditures to consolidate operations. Annual cash savings, net of tax, are estimated to be approximately $3.0 million, which the Company expects to fully realize by 2023.

The following table summarizes by type, the total expected, incurred and remaining pre-tax restructuring costs for the Company’s restructuring program related to the 2021 France Actions:

							Facility
			Legal and		Asset		exit
	Severance		consultancy		write-downs		and other		Total
	(in millions)
Costs incurred — second quarter 2021	$	16.9	$	0.6	$	—	$	0.5	$	18.0
Remaining costs to be incurred		4.6		—		2.2		1.5		8.3
Total expected restructuring costs	$	21.5	$	0.6	$	2.2	$	2.0	$	26.3

Details of the restructuring reserve activity for the Company’s 2021 France Actions for the period ended June 27, 2021 are as follows:

							Facility
			Legal and		Asset		exit
	Severance		consultancy		write-downs		and other		Total
	(in millions)
Balance at March 28, 2021	$	—	$	—	$	—	$	—	$	—
Net pre-tax restructuring charges		16.9		0.6		—		0.5		18.0
Utilization and foreign currency impact		(0.3)		(0.2)		—		—		(0.5)
Balance at June 27, 2021	$	16.6	$	0.4	$	—	$	0.5	$	17.5

Other Actions

The Company periodically initiates other actions which are not part of a major program. Included in “Other Actions” for the second quarter ended June 28, 2020, were actions taken in the Americas, Europe and APMEA segments and Corporate primarily in response to the COVID-19 pandemic. During the second quarter ended June 27, 2021, total pre-tax charges for the 2020 Other Actions were reduced by approximately $1.0 million due to revised estimates for severance costs, health benefits and outplacement support. This resulted in total expected program restructuring charges of approximately $9.9 million, of which $9.6 million had been expensed through the period ended June 27, 2021. The remaining expected costs relate to facility exit and other exit costs and are expected to be completed in the second half of 2021. The restructuring reserve associated with these actions as of June 27, 2021 was approximately $2.0 million and primarily related to severance benefits.