Restructuring and impairment charges (credits)

6 Months Ended

Jun. 30, 2019

Restructuring and Related Activities [Abstract]

Restructuring and impairment charges (credits)

Restructuring and impairment charges (credits)

The following tables provide information regarding restructuring and impairment charges recognized by the Company for the three and six months ended June 30, 2019 and July 1, 2018: 

Three Months Ended June 30, 2019
	Termination benefits			Other costs (1)		Total
	(Dollars in thousands)
2019 Footprint realignment plan	$	(459	)	$	30	$	(429	)
2018 Footprint realignment plan	(2,275		)	134		$	(2,141	)
Other restructuring programs (2)	62			312		374
Restructuring charges (credits)	(2,672		)	476		(2,196		)
Asset impairment charges	—			3,881		3,881
Restructuring and impairment charges (credits)	$	(2,672	)	$	4,357	$	1,685

Three Months Ended July 1, 2018
	Termination benefits		Other costs (1)		Total
	(Dollars in thousands)
2018 Footprint realignment plan	$	52,345	$	129	$	52,474
Other restructuring programs (4)	574		440		1,014
Restructuring charges	52,919		569		53,488
Asset impairment charges	—		1,865		1,865
Restructuring and impairment charges	$	52,919	$	2,434	$	55,353

Six Months Ended June 30, 2019
	Termination Benefits			Other costs (1)		Total
	(Dollars in thousands)
2019 Footprint realignment plan	$	12,516		$	30	$	12,546
2018 Footprint realignment plan	(1,838		)	708		(1,130		)
Other restructuring programs (2)	188			565		753
Restructuring charges	10,866			1,303		12,169
Asset impairment charges	—			6,911		6,911
Restructuring and impairment charges	$	10,866		$	8,214	$	19,080

Six Months Ended July 1, 2018
	Termination Benefits		Other costs (1)		Total
	(Dollars in thousands)
2018 Footprint realignment plan	$	52,345	$	129	$	52,474
2016 Footprint realignment plan (3)	2,199		291		2,490
Other restructuring programs (4)	1,032		555		1,587
Restructuring charges	55,576		975		56,551
Asset impairment charges	—		1,865		1,865
Restructuring and impairment charges	$	55,576	$	2,840	$	58,416

(1) Other restructuring costs include facility closure, contract termination and other exit costs.

(2) Includes the Vascular Solutions integration program (initiated in 2017) as well as the 2016 and 2014 Footprint realignment plans.

(3) The 2016 Footprint realignment plan involved the relocation of certain manufacturing operations, the relocation and outsourcing of certain distribution operations and a related workforce reduction at certain of the Company's facilities. The program is substantially complete and the Company expects future restructuring expenses associated with the program, if any, to be immaterial.

(4) Includes the 2014 Footprint realignment plan, the Vascular Solutions integration program and the EMEA restructuring program (initiated in 2017).

2019 Footprint Realignment Plan

In February 2019, the Company initiated a restructuring plan primarily involving the relocation of certain manufacturing operations to existing lower-cost locations and related workforce reductions (the "2019 Footprint realignment plan"). These actions are expected to be substantially completed during 2022. The following table provides a summary of the Company’s cost estimates by major type of expense associated with the 2019 Footprint realignment plan:

Type of expense	Total estimated amount expected to be incurred
Termination benefits	$19 million to $23 million
Other exit costs (1)	$1 million to $2 million
Restructuring charges	$20 million to $25 million
Restructuring related charges (2)	$36 million to $45 million
Total restructuring and restructuring related charges	$56 million to $70 million

(1) Includes facility closure, employee relocation, equipment relocation and outplacement costs.

(2) Restructuring related charges represent costs that are directly related to the 2019 Footprint realignment plan and principally constitute costs to transfer manufacturing operations to existing lower-cost locations, project management costs and accelerated depreciation. Most of these charges are expected to be recognized within cost of goods sold.

In addition to the restructuring charges shown in the tables above, the Company recorded restructuring related charges with respect to the 2019 Footprint realignment plan of $1.0 million and $1.7 million for the three and six months ended June 30, 2019 within cost of goods sold.

As of June 30, 2019, the Company has a restructuring reserve of $11.8 million in connection with this plan, all of which relate to termination benefits.

2018 Footprint Realignment Plan

On May 1, 2018, the Company initiated a restructuring plan involving the relocation of certain European manufacturing operations to existing lower-cost locations, the outsourcing of certain of the Company’s European distribution operations and related workforce reductions (the “2018 Footprint realignment plan"). These actions are expected to be substantially completed by the end of 2024.

In addition to the restructuring charges shown in the tables above, the Company recorded restructuring related charges with respect to the 2018 Footprint realignment plan of $0.7 million and $1.3 million for the three and six months ended June 30, 2019 and July 1, 2018, respectively and $1.0 million for each of the three and six months ended July 1, 2018. The restructuring related charges were included within cost of goods sold. The majority of the restructuring related charges in both periods constituted costs arising from the transfer of manufacturing operations to new locations.

The Company estimates that is will incur aggregate pre-tax restructuring and restructuring related charges in connection with the 2018 Footprint realignment plan of approximately $102 million to $133 million. As of June 30, 2019, the Company has incurred aggregate restructuring charges in connection with the 2018 Footprint realignment plan of $53.9 million. In addition, as of June 30, 2019, the Company has incurred aggregate restructuring related charges of $5.4 million with respect to the 2018 Footprint realignment plan, consisting of accelerated depreciation and certain other costs that principally resulted from the transfer of manufacturing operations to new locations. The restructuring related charges primarily were included in cost of goods sold. As of June 30, 2019, the Company has a restructuring reserve of $45.0 million in connection with this plan, all of which related to termination benefits.

2014 Footprint Realignment Plan

In 2014, the Company initiated a restructuring plan (“the 2014 Footprint realignment plan”) involving the consolidation of operations and a related reduction in workforce at certain facilities, and the relocation of manufacturing

operations from certain higher-cost locations to existing lower-cost locations. These actions commenced in the second quarter 2014 and are expected to be substantially completed by the end of 2020.

The Company recorded restructuring related charges with respect to the 2014 Footprint realignment plan of $0.7 million and $1.3 million for the three and six months ended June 30, 2019, respectively, and $0.6 million and $1.0 million for the three and six months ended July 1, 2018, respectively. The majority of these restructuring related charges in both periods constituted costs arising from the transfer of manufacturing operations to new locations.

The Company estimates that it will incur aggregate pre-tax restructuring and restructuring related charges in connection with the 2014 Footprint realignment plan of $47 million to $52 million. As of June 30, 2019, the Company has incurred aggregate restructuring charges of $12.8 million in connection with the 2014 Footprint realignment plan. Additionally, as of June 30, 2019, the Company has incurred aggregate restructuring related charges of $30.5 million in connection with the 2014 Footprint realignment plan, consisting of accelerated depreciation and certain other costs that principally resulted from the transfer of manufacturing operations from the existing locations to new locations. These restructuring related charges primarily were included in cost of goods sold. As of June 30, 2019, the Company has a restructuring reserve of $3.8 million in connection with the plan, all of which related to termination benefits.

As the restructuring programs progress, management will reevaluate the estimated expenses and charges set forth above, and may revise its estimates, as appropriate, consistent with GAAP. For additional information related to the Company's restructuring programs, see Note 5 to the Company's consolidated financial statements included in its annual report on Form 10-K for the year ended December 31, 2018.