Note 4 — Restructuring and other impairment charges

2014 European Restructuring Plan

On February 27, 2014, the Company committed to a restructuring plan (the “2014 European Restructuring Plan”), which impacts certain administrative functions in Europe and will involve the consolidation of operations and a related reduction in workforce at certain of the Company’s European facilities. The plan was developed to further enhance the Company’s competitive position.

The Company estimates that it will record pre-tax charges of approximately $9.0 million in connection with implementing the 2014 European Restructuring Plan. Substantially all of these charges are expected to involve employee termination benefits and will result in future cash outlays. The Company incurred $8.3 million in charges related to termination benefits in the three month period ended March 30, 2014. As of March 30, 2014, the Company had a reserve of $6.6 million in connection with this project. The Company expects to complete this program in 2014.

As the program progresses, management will reevaluate the estimated costs set forth above, and may revise its estimates and the accounting charges relating thereto, as appropriate, consistent with generally accepted accounting principles.

LMA Restructuring Program

In connection with the acquisition of substantially all of the assets of LMA International N.V. (the “LMA business”) in 2012, the Company formulated a plan related to the integration of the LMA business and the Company’s other businesses. The integration plan focuses on the closure of the LMA business’ corporate functions and the consolidation of manufacturing, sales, marketing, and distribution functions in North America, Europe and Asia.

A reconciliation of the changes in accrued liabilities associated with the LMA restructuring program from December 31, 2013 through March 30, 2014 is set forth in the following table:

	Termination Benefits			Facility Closure Costs			Contract Termination Costs			Other Restructuring Costs		Total
	(Dollars in thousands)
Balance at December 31, 2013	$	552		$	427		$	3,686		$	16	$	4,681
Subsequent accruals		—			42			(472	)		—		(430	)
Cash payments		(276	)		(81	)		(144	)		—		(501	)
Foreign currency translation		(1	)		—			(3	)		—		(4	)
Balance at March 30, 2014	$	275		$	388		$	3,067		$	16	$	3,746

During the three months ended March 30, 2014, the Company reversed approximately $0.5 million in contract termination costs related to a cancelled distributor agreement.

Aside from nominal facility closure costs anticipated in 2014, the Company does not expect to incur additional costs associated with this program. The Company expects to complete the program in 2014.

2013 Restructuring Charges

In 2013, the Company initiated programs to consolidate manufacturing facilities in North America and warehouse facilities in Europe and terminate certain European distributor agreements in an effort to reduce costs. As a result of these actions, the Company estimates that it will incur an aggregate of up to $11.0 million in restructuring and other impairment charges over the term of these restructuring programs, of which $10.4 million was incurred through March 30, 2014. These programs entail costs related to reductions in force, contract termination costs and charges related to post-closing obligations associated with its acquired businesses. As of March 30, 2014, the Company has a reserve of $1.8 million in connection with these programs. The Company expects to complete this program in 2015.

2012 Restructuring Charges

In 2012, the Company identified opportunities to improve its supply chain strategy by consolidating its three North American warehouses into one centralized warehouse; and lower costs and improve operating efficiencies through the termination of certain distributor agreements in Europe, the closure of certain North American facilities and workforce reductions. These projects entail costs related to reductions in force, contract terminations related distributor agreements and leases, and facility closure and other costs. As of March 30, 2014, the Company has a reserve of $0.7 million in connection with these projects. The Company expects to complete this program in 2015.

Impairment Charges

In the first quarter 2013, the Company recorded a $4.5 million in-process research and development (IPR&D) charge pertaining to a research and development project associated with the acquisition of the assets of Axiom Technology Partners LLP because technological feasibility had not yet been achieved and the Company determined that the subject technology had no future alternative use.

There were no impairment charges recorded for the three months ended March 30, 2014.

The restructuring and other impairment charges recognized for the three months ended March 30, 2014 and March 31, 2013 consisted of the following:

Three Months Ended March 30, 2014

(in thousands)	Termination Benefits			Facility Closure Costs		Contract Termination			Other		Total
LMA restructuring program	$	—		$	42	$	(472	)	$	—	$	(430	)
2014 European restructuring plan		8,318			—		—			—		8,318
2013 Restructuring charges		168			—		—			—		168
2012 Restructuring charges		(610	)		320		—			—		(290	)
2011 Restructuring plan		—			14		—			—		14
Total restructuring and other impairment charges	$	7,876		$	376	$	(472	)	$	—	$	7,780

Three Months Ended March 31, 2013

(in thousands)	Termination Benefits		Facility Closure Costs		Contract Termination		Other		Total
LMA restructuring program	$	2,024	$	81	$	442	$	108	$	2,655
2013 Restructuring charges		421		—		—		59		480
2012 Restructuring charges		1,450		—		—		—		1,450
2007 Arrow integration program		—		80		—		—		80
		3,895		161		442		167		4,665
Impairment charges		—		—		—		4,494		4,494
Total restructuring and other impairment charges	$	3,895	$	161	$	442	$	4,661	$	9,159

Termination benefits include employee severance and retention for terminated employees.

Facility closure costs include general operating costs incurred subsequent to production shut-down as well as equipment relocation and other associated costs.

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

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

In the first quarter 2014, the Company changed its reporting structure to six reportable segments: Vascular North America, Anesthesia/Respiratory North America, Surgical North America, EMEA, Asia and OEM. See Note 14 for additional information on the Company’s new reporting structure.

Restructuring and other impairment charges by reportable segment for the three months ended March 30, 2014 and March 31, 2013 are set forth in the following table:

	Three Months Ended
	March 30, 2014			March 31, 2013
	(Dollars in thousands)
Restructuring and other impairment charges
Vascular North America	$	14		$	497
Anesthesia/Respiratory North America		27			1,906
Surgical North America		—			4,494
EMEA		7,889			1,294
Asia		78			98
All other		(228	)		870
Total restructuring and other impairment charges	$	7,780		$	9,159