Restructuring and Other Charges, Net

6 Months Ended

Jun. 26, 2022

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 26,		June 27,		June 26,		June 27,
	2022		2021		2022		2021
	(in millions)
Restructuring costs:
2021 France Actions	$	1.3	$	18.0	$	2.3	$	18.0
Other Actions		0.4		(1.0)		0.4		(0.7)
Total restructuring charges	$	1.7	$	17.0	$	2.7	$	17.3

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

	Second Quarter Ended				Six Months Ended
	June 26,		June 27,		June 26,		June 27,
	2022		2021		2022		2021
	(in millions)
Americas	$	0.4	$	(0.7)	$	0.5	$	(0.7)
Europe		1.3		17.9		2.3		17.9
APMEA		—		(0.2)		(0.1)		0.1
Total	$	1.7	$	17.0	$	2.7	$	17.3

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 includes 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 total pre-tax restructuring charges associated with the program were initially estimated to be approximately $26.3 million. As of June 26, 2022, the Company reduced its total expected pre-tax charges for the program to approximately $22.9 million, of which $22.0 million was incurred program-to-date. The reduction in total expected charges primarily related to lower severance and outplacement costs than initially estimated. The total expected charges include costs for employee severance, relocation of equipment, clean-up of the facility and certain asset write-downs, and resulted 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 was approximately 40 positions. Total net after-tax charges for this restructuring program are expected to be approximately $17.0 million (including approximately $1.5 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 spent approximately $0.6 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 — 2021	$	16.9	$	0.9	$	0.9	$	1.0	$	19.7
Costs incurred—first quarter 2022		0.2		0.1		0.4		0.3		1.0
Costs incurred—second quarter 2022		0.6		0.1		0.4		0.2		1.3
Remaining costs to be incurred		0.9		—		—		—		0.9
Total expected restructuring costs	$	18.6	$	1.1	$	1.7	$	1.5	$	22.9

Details of the restructuring reserve activity for the Company’s 2021 France Actions for the period ended June 26, 2022 are as follows:

							Facility
			Legal and		Asset		exit
	Severance		consultancy		write-downs		and other		Total
	(in millions)
Balance at December 31, 2021	$	9.9	$	0.2	$	—	$	0.5	$	10.6
Net pre-tax restructuring charges		0.2		0.1		0.4		0.3		1.0
Utilization and foreign currency impact		(4.7)		(0.1)		(0.4)		(0.3)		(5.5)
Balance at March 27, 2022	$	5.4	$	0.2	$	—	$	0.5	$	6.1
Net pre-tax restructuring charges		0.6		0.1		0.4		0.2		1.3
Utilization and foreign currency impact		(2.0)		(0.2)		(0.4)		(0.5)		(3.1)
Balance at June 26, 2022	$	4.0	$	0.1	$	—	$	0.2	$	4.3

Other Actions

The Company periodically initiates other actions which are not part of a major program. Included in “Other Actions” for the second quarter and six months ended June 26, 2022 were immaterial actions primarily taken in the Americas segment. An additional $1.1 million of facility exit charges related to the decommissioning of machinery at one of the Company’s facilities in the Americas is expected to be incurred in the third and fourth quarters of 2022.