Restructuring and Lease Charges, Net | 9 Months Ended |
Sep. 28, 2014 |
Restructuring and Related Activities [Abstract] | ' |
Restructuring and Lease Charges, Net | ' |
Restructuring and Contract Termination Charges, Net |
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The Company has undertaken a series of restructuring actions related to the impact of acquisitions and divestitures, alignment with the Company’s growth strategy, the integration of its business units and productivity initiatives. The current portion of restructuring and contract termination charges is recorded in accrued restructuring and contract termination charges and the long-term portion of restructuring and contract termination charges is recorded in long-term liabilities. The activities associated with these plans have been reported as restructuring and contract termination charges, net, and are included as a component of operating expenses from continuing operations. |
A description of the restructuring plans and the activity recorded for the nine months ended September 28, 2014 is listed below. Details of the plans initiated in previous years, particularly those listed under “Previous Restructuring and Integration Plans,” are discussed more fully in Note 4 to the audited consolidated financial statements in the 2013 Form 10-K. |
The restructuring plan for the third quarter of fiscal year 2014 was principally intended to realign resources to emphasize growth initiatives. The restructuring plans for the first and second quarters of fiscal year 2014 and the first quarter of fiscal year 2013 were principally intended to focus resources on higher growth end markets. The restructuring plans for the fourth and third quarters of fiscal year 2013 were principally intended to shift certain of the Company's research and development resources into a newly opened Center for Innovation. The restructuring plan for the second quarter of fiscal year 2013 was principally intended to shift certain of the Company's operations into a newly established shared service center as well as realign operations, research and development resources and production resources as a result of previous acquisitions. |
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A description of the restructuring plans and the activity recorded are as follows: |
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Q3 2014 Restructuring Plan |
During the third quarter of fiscal year 2014, the Company’s management approved a plan principally intended to realign resources to emphasize growth initiatives (the “Q3 2014 Plan”). As a result of the Q3 2014 Plan, the Company recognized pre-tax restructuring charges of $6.9 million in the Human Health segment and $6.2 million in the Environmental Health segment related to workforce reductions from reorganization activities. As part of the Q3 2014 Plan, the Company reduced headcount by 152 employees. All employees were notified of termination, or in some cases the intention to terminate, under the Q3 2014 Plan by September 28, 2014. |
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The following table summarizes the Q3 2014 Plan activity for the nine months ended September 28, 2014: |
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| Severance | | | | | | | | |
| (In thousands) | | | | | | | | |
Provision | $ | 13,051 | | | | | | | | | |
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Amounts paid and foreign currency translation | (694 | ) | | | | | | | | |
Balance at September 28, 2014 | $ | 12,357 | | | | | | | | | |
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The Company anticipates that the remaining severance payments of $12.4 million for workforce reductions will be substantially completed by the end of the third quarter of fiscal year 2015. |
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Q2 2014 Restructuring Plan |
During the second quarter of fiscal year 2014, the Company’s management approved a plan principally intended to focus resources on higher growth end markets (the “Q2 2014 Plan”). As a result of the Q2 2014 Plan, the Company recognized pre-tax restructuring charges of $0.5 million in the Human Health segment and $0.3 million in the Environmental Health segment related to workforce reductions from reorganization activities. As part of the Q2 2014 Plan, the Company reduced headcount by 22 employees. All employees were notified of termination under the Q2 2014 Plan by June 29, 2014. |
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The following table summarizes the Q2 2014 Plan activity for the nine months ended September 28, 2014: |
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| Severance | | | | | | | | |
| (In thousands) | | | | | | | | |
Provision | $ | 735 | | | | | | | | | |
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Amounts paid and foreign currency translation | (410 | ) | | | | | | | | |
Balance at September 28, 2014 | $ | 325 | | | | | | | | | |
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The Company anticipates that the remaining severance payments of $0.3 million for workforce reductions will be substantially completed by the end of the second quarter of fiscal year 2015. |
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Q1 2014 Restructuring Plan |
During the first quarter of fiscal year 2014, the Company’s management approved a plan principally intended to focus resources on higher growth end markets (the “Q1 2014 Plan”). As a result of the Q1 2014 Plan, the Company recognized pre-tax restructuring charges of $0.4 million in the Human Health segment and $0.2 million in the Environmental Health segment related to workforce reductions from reorganization activities. As part of the Q1 2014 Plan, the Company reduced headcount by 17 employees. All employees were notified of termination under the Q1 2014 Plan by March 30, 2014. |
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The following table summarizes the Q1 2014 Plan activity for the nine months ended September 28, 2014: |
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| Severance | | | | | | | | |
| (In thousands) | | | | | | | | |
Provision | $ | 567 | | | | | | | | | |
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Amounts paid and foreign currency translation | (395 | ) | | | | | | | | |
Balance at September 28, 2014 | $ | 172 | | | | | | | | | |
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The Company anticipates that the remaining severance payments of $0.2 million for workforce reductions will be substantially completed by the end of the fourth quarter of fiscal year 2014. |
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Q4 2013 Restructuring Plan |
During the fourth quarter of fiscal year 2013, the Company’s management approved a plan principally intended to shift certain of the Company's research and development resources into a newly opened Center for Innovation (the “Q4 2013 Plan”). As a result of the Q4 2013 Plan, the Company recognized an $8.2 million pre-tax restructuring charge in the Human Health segment related to a workforce reduction from reorganization activities and the closure of excess facility space and recognized a $3.0 million pre-tax restructuring charge in the Environmental Health segment related to a workforce reduction from reorganization activities. As part of the Q4 2013 Plan, the Company reduced headcount by 73 employees. All employees were notified of termination under the Q4 2013 Plan by December 29, 2013. |
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The following table summarizes the Q4 2013 Plan activity for the nine months ended September 28, 2014: |
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| Severance | | Closure of | | Total |
Excess Facility |
Space |
| (In thousands) |
Balance at December 29, 2013 | $ | 1,987 | | | $ | 6,854 | | | $ | 8,841 | |
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Amounts paid and foreign currency translation | (1,506 | ) | | (1,501 | ) | | (3,007 | ) |
Balance at September 28, 2014 | $ | 481 | | | $ | 5,353 | | | $ | 5,834 | |
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The Company anticipates that the remaining severance payments of $0.5 million for workforce reductions will be substantially completed by the end of the fourth quarter of fiscal year 2014. The Company also anticipates that the remaining payments of $5.4 million, net of estimated sublease income, for the closure of the excess facility space will be paid through fiscal year 2019, in accordance with the terms of the applicable leases. |
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Q3 2013 Restructuring Plan |
During the third quarter of fiscal year 2013, the Company’s management approved a plan principally intended to shift certain of the Company's research and development resources into a newly opened Center for Innovation (the “Q3 2013 Plan”). As a result of the Q3 2013 Plan, the Company recognized a $0.5 million pre-tax restructuring charge in the Human Health segment related to a workforce reduction from reorganization activities and the closure of excess facility space. As part of the Q3 2013 Plan, the Company reduced headcount by 29 employees. All employees were notified of termination under the Q3 2013 Plan by September 29, 2013. |
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The following table summarizes the Q3 2013 Plan activity for the nine months ended September 28, 2014: |
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| Severance | | | | | | | | |
| (In thousands) | | | | | | | | |
Balance at December 29, 2013 | $ | 137 | | | | | | | | | |
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Amounts paid and foreign currency translation | (137 | ) | | | | | | | | |
Balance at September 28, 2014 | $ | — | | | | | | | | | |
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There are no severance payments remaining to be made under the Q3 2013 Plan. |
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Q2 2013 Restructuring Plan |
During the second quarter of fiscal year 2013, the Company’s management approved a plan principally intended to shift certain of the Company's operations into a newly established shared service center as well as realign operations, research and development resources, and production resources as a result of previous acquisitions (the “Q2 2013 Plan”). As a result of the Q2 2013 Plan, the Company initially recognized pre-tax restructuring charges of $9.9 million in the Human Health segment and $8.8 million in the Environmental Health segment related to workforce reductions from reorganization activities and the closures of excess facility space. Subsequent to the initial charge, during fiscal year 2013, the Company recorded an additional $0.6 million pre-tax restructuring charge in the Human Health segment for services that were provided for one-time benefits in which the employee was required to render service beyond the legal notification period. During the nine months ended September 28, 2014, the Company recorded additional pre-tax restructuring charges of $0.1 million in each of the Human Health and Environmental Health segments due to higher than expected costs associated with the closure of the excess facility space. As part of the Q2 2013 Plan, the Company reduced headcount by 264 employees. All employees were notified of termination under the Q2 2013 Plan by June 30, 2013. |
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The following table summarizes the Q2 2013 Plan activity for the nine months ended September 28, 2014: |
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| Severance | | Closure of | | Total |
Excess Facility |
Space |
| (In thousands) |
Balance at December 29, 2013 | $ | 12,750 | | | $ | — | | | $ | 12,750 | |
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Change in estimates | — | | | 184 | | | 184 | |
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Amounts paid and foreign currency translation | (9,610 | ) | | (184 | ) | | (9,794 | ) |
Balance at September 28, 2014 | $ | 3,140 | | | $ | — | | | $ | 3,140 | |
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The Company anticipates that the remaining severance payments of $3.1 million for workforce reductions will be substantially completed by the end of the fourth quarter of fiscal year 2014, as local law requires some severance to be paid in monthly installments through the fourth quarter of fiscal year 2014. The closure of the excess facility space will not require any additional payments. |
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Q1 2013 Restructuring Plan |
During the first quarter of fiscal year 2013, the Company’s management approved a plan principally intended to focus resources on higher growth end markets (the “Q1 2013 Plan”). As a result of the Q1 2013 Plan, the Company recognized pre-tax restructuring charges of $2.3 million in the Human Health segment and $0.2 million in the Environmental Health segment related to workforce reductions from reorganization activities. During the nine months ended September 28, 2014, the Company recorded a pre-tax restructuring reversal of $0.2 million in the Human Health segment due to lower than expected costs associated with the remaining severance payments. As part of the Q1 2013 Plan, the Company reduced headcount by 62 employees. All employees were notified of termination under the Q1 2013 Plan by March 31, 2013. |
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The following table summarizes the Q1 2013 Plan activity for the nine months ended September 28, 2014: |
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| Severance | | | | | | | | |
| (In thousands) | | | | | | | | |
Balance at December 29, 2013 | $ | 208 | | | | | | | | | |
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Change in estimates | (208 | ) | | | | | | | | |
Balance at September 28, 2014 | $ | — | | | | | | | | | |
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There are no severance payments remaining to be made under the Q1 2013 Plan. |
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Previous Restructuring and Integration Plans |
The principal actions of the restructuring and integration plans from fiscal year 2001 through fiscal year 2012 were workforce reductions and the closure of excess facility space related to the integration of the Company’s businesses in order to realign operations, reduce costs, achieve operational efficiencies and shift resources into geographic regions and end markets that are more consistent with the Company’s growth strategy. During the nine months ended September 28, 2014, the Company paid $4.5 million related to these plans and recognized pre-tax restructuring reversals of $0.8 million in the Human Health Segment and $1.1 million in the Environmental Health Segment related to lower than expected costs associated with workforce reductions. As of September 28, 2014, the Company had $6.9 million of remaining liabilities associated with these restructuring and integration plans, primarily for residual lease obligations related to closed facilities and remaining severance payments for workforce reductions in both the Human Health and Environmental Health segments. The Company expects to make payments for these leases, the terms of which vary in length, through fiscal year 2022. The Company anticipates the remaining severance payments for workforce reductions will be substantially completed by the end of the fourth quarter of fiscal year 2014, as local law requires some severance to be paid in monthly installments through the fourth quarter of fiscal year 2014. |
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Contract Termination Charges |
The Company has terminated various contractual commitments in connection with certain disposal activities and has recorded charges, to the extent applicable, for the costs of terminating these contracts before the end of their terms and the costs that will continue to be incurred for the remaining terms without economic benefit to the Company. The Company recorded an additional pre-tax charge of $1.5 million, primarily as a result of terminating various contractual commitments in the Environmental Health segment, and the Company made payments for these obligations of $1.5 million in the first nine months of fiscal year 2014. The remaining balance of these accruals as of September 28, 2014 was $0.4 million. |