Note 3 — Restructuring charges

2016 Manufacturing Footprint Realignment Plan

On February 23, 2016, the Board of Directors of the Company approved a restructuring plan (the “2016 Plan") designed to reduce costs, improve operating efficiencies and enhance the Company’s long term competitive position. The 2016 Plan, which was developed in response to continuing cost pressures in the healthcare industry, involves the consolidation of operations and a related workforce reduction at certain of the Company’s facilities, and will primarily involve the relocation of certain manufacturing operations and relocation and outsourcing of certain distribution operations. These actions commenced in the quarter ended March 27, 2016 and are expected to be substantially completed by the end of 2018.

The Company estimates that it will incur aggregate pre-tax charges in connection with the 2016 Plan of between approximately $34 million to $44 million, of which an estimated $27 million to $31 million are expected to result in future cash outlays. Most of these charges, and the related cash outlays, are expected to be made prior to the end of 2018.

The following table provides a summary of the Company's current cost estimates for each major expense category associated with the 2016 Plan:



Type of expense	Total estimated amount expected to be incurred

Employee termination benefits	$14 million to $18 million
Facility closure and other exit costs (1)	$2 million to $3 million
Accelerated depreciation charges	$10 million to $13 million
Other (2)	$8 million to $10 million
	$34 million to $44 million

(1) Includes costs to transfer product lines among facilities, legal, outplacement and employee relocation costs.

(2) Consists of other costs directly related to the 2016 Plan, including project management and other regulatory costs.

The Company recorded charges of $1.8 million during the three months ended June 26, 2016 related to the 2016 Plan consisting of accelerated depreciation and other costs, which primarily were recorded as cost of goods sold.

The Company recorded $12.8 million during the six months ended June 26, 2016 related to the 2016 Plan, of which $10.4 million related to employee termination benefits and was recorded as restructuring expense, and $2.4 million, related to accelerated depreciation and other costs, which primarily were recorded as cost of goods sold.

As the 2016 Plan progresses, management will reevaluate the estimated expenses set forth above, and may revise its estimates, as appropriate, consistent with GAAP.

2015 Restructuring Programs

During 2015, the Company committed to programs associated with the reorganization of certain of its businesses and the consolidation of certain of its facilities in North America. As of June 26, 2016, the Company has incurred net aggregate restructuring charges related to the plan of $6.3 million. As of June 26, 2016, the Company has a reserve of $0.8 million related to these programs.

2014 Manufacturing Footprint Realignment Plan

In April 2014, the Board of Directors approved a restructuring plan (the “2014 Manufacturing Footprint Realignment Plan”) involving the consolidation of operations and a related reduction in workforce at certain of the Company’s facilities, and the relocation of manufacturing operations from certain higher-cost locations to existing lower-cost locations.

The Company recorded charges of $2.4 million and $4.0 million for the three and six months ended June 26, 2016, respectively, related to the 2014 Manufacturing Footprint Realignment Plan. Of this amount, $2.3 million and $4.4 million for the three and six months ended June 26, 2016, respectively, were recorded in costs of goods sold, and related to accelerated depreciation and certain other costs. For the three month ended June 26, 2016, the charges also included $0.1 million in restructuring expense. During the six months ended June 26, 2016, the Company recorded a net reversal of restructuring expense of $0.4 million. As of June 26, 2016, the Company has incurred net aggregate restructuring charges related to the plan of $10.5 million. Additionally, as of June 26, 2016, the Company has incurred net aggregate accelerated depreciation and certain other costs in connection with the plan of $18.8 million, which were primarily included in cost of goods sold. As of June 26, 2016, the Company has a restructuring reserve of $6.3 million in connection with the plan, all of which relates to termination benefits.

For additional information on the Company's restructuring programs, see Note 4 to the Company's consolidated financial statements included in its annual report on Form 10-K for the year ended December 31, 2015.

The restructuring charges recognized for the three and six months ended June 26, 2016 and June 28, 2015 consisted of the following:




Three Months Ended June 26, 2016
(in thousands)	Termination Benefits			Facility Closure Costs		Contract Termination Costs		Other Exit Costs		Total
2016 Manufacturing footprint realignment plan	$	(279	)	$	—	$	—	$	286	$	7
2015 Restructuring programs	(442		)	55		115		25		(247		)
2014 Manufacturing footprint realignment plan	112			—		—		9		121
Total restructuring charges	$	(609	)	$	55	$	115	$	320	$	(119	)




Three Months Ended June 28, 2015
(in thousands)	Termination Benefits			Facility Closure Costs		Contract Termination Costs		Other Exit Costs		Total

2015 Restructuring programs	$	9		$	63	$	24	$	46	$	142
2014 Manufacturing footprint realignment plan	75			204		228		—		507
Other restructuring programs - prior years (1)	(96		)	—		9		18		(69		)
Total restructuring charges	$	(12	)	$	267	$	261	$	64	$	580



Six Months Ended June 26, 2016
(in thousands)	Termination Benefits			Facility Closure Costs		Contract Termination Costs			Other Exit Costs		Total
2016 Manufacturing footprint realignment plan	$	10,068		$	—	$	—		$	286	$	10,354
2015 Restructuring programs	(399		)	178		93			118		(10		)
2014 Manufacturing footprint realignment plan	(426		)	—		—			11		(415		)
Other restructuring programs - prior years (1)	—			—		(86		)	6		(80		)
Total restructuring charges	$	9,243		$	178	$	7		$	421	$	9,849



Six Months Ended June 28, 2015
(in thousands)	Termination Benefits			Facility Closure Costs		Contract Termination Costs		Other Exit Costs		Total
2015 Restructuring programs	$	3,559		$	129	$	645	$	47	$	4,380
2014 Manufacturing footprint realignment	212			230		228		—		670
Other restructuring programs - prior years (1)	(85		)	—		28		35		(22		)
Total restructuring charges	$	3,686		$	359	$	901	82		$	5,028


(1)	Other restructuring programs - prior years includes the 2014 European Restructuring Plan, the Other 2014 restructuring programs, the 2013 Restructuring programs and the LMA restructuring program. For a description of these plans, see Note 4 to the Company’s consolidated financial statements included in its annual report on Form 10-K for the year ended December 31, 2015.

Termination benefits include estimated employee retention, severance and benefit payments for terminated employees.

Facility closure costs include general operating costs incurred subsequent to production shutdown as well as legal costs, equipment relocation and other associated costs.

Contract termination costs include costs associated with terminating existing leases and distributor agreements.

Other costs include outplacement and employee relocation costs and other employee-related costs.

Restructuring charges by reportable operating segment for the three and six months ended June 26, 2016 and June 28, 2015 are set forth in the following table:



	Three Months Ended						Six Months Ended
	June 26, 2016			June 28, 2015			June 26, 2016			June 28, 2015
	(Dollars in thousands)						(Dollars in thousands)
Restructuring charges
Vascular North America	$	351		$	520		$	4,514		$	2,783
Anesthesia North America	364			(2		)	2,239			534
Surgical North America	—			—			(20		)	246
EMEA	(949		)	(43		)	2,923			(75		)
Asia	(2		)	1			—			1
OEM	(1		)	—			4			—
All other	118			104			189			1,539
Total restructuring charges	$	(119	)	$	580		$	9,849		$	5,028