Restructuring and Lease Charges, Net | 9 Months Ended |
Sep. 29, 2013 |
Restructuring and Related Activities [Abstract] | ' |
Restructuring and Lease Charges, Net | ' |
Restructuring and Contract Termination Charges, Net |
The Company has undertaken a series of restructuring actions related to the impact of acquisitions and divestitures, alignment with the Company’s growth strategy and the integration of its business units. 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 29, 2013 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 2012 Form 10-K. |
The restructuring plan for the third quarter of fiscal year 2013 was 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. The restructuring plan for the first quarter of fiscal year 2013 was principally intended to focus resources on higher growth end markets. The restructuring plan for the fourth quarter of fiscal year 2012 was principally intended to shift resources to higher growth geographic regions and end markets. The restructuring plan for the third quarter of fiscal year 2012 was principally intended to shift certain of the Company's operations into a newly established shared service center. The restructuring plans for the first and second quarters of fiscal year 2012 were principally intended to realign operations, research and development resources and production resources as a result of previous acquisitions. |
|
A description of the restructuring plans and the activity recorded are as follows: |
|
Q3 2013 Restructuring Plan |
During the third quarter of fiscal year 2013, the Company’s management approved a plan 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 will reduce headcount by 30 employees. All employees were notified of termination under the Q3 2013 Plan by September 29, 2013. |
|
The following table summarizes the Q3 2013 Plan activity for the nine months ended September 29, 2013: |
|
| | | | | | | | | | | |
| Severance | | Closure of | | Total |
Excess Facility |
Space |
| (In thousands) |
Provision | $ | 394 | | | $ | 138 | | | $ | 532 | |
|
Amounts paid and foreign currency translation | — | | | (26 | ) | | (26 | ) |
|
Balance at September 29, 2013 | $ | 394 | | | $ | 112 | | | $ | 506 | |
|
|
The Company anticipates that the remaining severance payments of $0.4 million for workforce reductions will be substantially completed by the end of the second quarter of fiscal year 2014. The Company also anticipates that the remaining payments of $0.1 million for the closure of the excess facility space will be paid through fiscal year 2013, in accordance with the terms of the applicable lease. |
|
Q2 2013 Restructuring Plan |
During the second quarter of fiscal year 2013, the Company’s management approved a plan 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, and during the nine months ended September 29, 2013, the Company recognized a $10.3 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 $8.8 million pre-tax restructuring charge in the Environmental Health segment related to a workforce reduction from reorganization activities and the closure of excess facility space. The Company expects to recognize an additional $0.3 million of incremental restructuring expense in future periods as services are provided for one-time termination benefits in which the employee is required to render service until termination in order to receive the benefits. This expense will be recognized ratably over the required service period. As part of the Q2 2013 Plan, the Company will reduce headcount by 265 employees. All employees were notified of termination under the Q2 2013 Plan by June 30, 2013. |
|
The following table summarizes the Q2 2013 Plan activity for the nine months ended September 29, 2013: |
|
| | | | | | | | | | | |
| Severance | | Closure of | | Total |
Excess Facility |
Space |
| (In thousands) |
Provision | $ | 18,476 | | | $ | 572 | | | $ | 19,048 | |
|
Amounts paid and foreign currency translation | (3,824 | ) | | (519 | ) | | (4,343 | ) |
Balance at September 29, 2013 | $ | 14,652 | | | $ | 53 | | | $ | 14,705 | |
|
|
The Company anticipates that the remaining severance payments of $14.7 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 $0.1 million for the closure of the facility space will be paid through fiscal year 2013, in accordance with the terms of the applicable leases. |
|
Q1 2013 Restructuring Plan |
During the first quarter of fiscal year 2013, the Company’s management approved a plan to focus resources on higher growth end markets (the “Q1 2013 Plan”). As a result of the Q1 2013 Plan, the Company recognized a $2.3 million pre-tax restructuring charge in the Human Health segment related to a workforce reduction from reorganization activities and recognized a $0.2 million pre-tax restructuring charge in the Environmental Health segment related to a workforce reduction from reorganization activities. 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. |
|
The following table summarizes the Q1 2013 Plan activity for the nine months ended September 29, 2013: |
| | | | | | | | |
| | | | | | | | | | | |
| Severance | | | | | | | | |
| (In thousands) | | | | | | | | |
Provision | $ | 2,585 | | | | | | | | | |
| | | | | | | |
Amounts paid and foreign currency translation | (2,371 | ) | | | | | | | | |
Balance at September 29, 2013 | $ | 214 | | | | | | | | | |
| | | | | | | |
|
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. |
|
Q4 2012 Restructuring Plan |
During the fourth quarter of fiscal year 2012, the Company’s management approved a plan to shift resources to higher growth geographic regions and end markets (the “Q4 2012 Plan”). As a result of the Q4 2012 Plan, and during fiscal year 2012, the Company recognized a $0.6 million pre-tax restructuring charge in the Human Health segment related to a workforce reduction from reorganization activities and recognized a $2.4 million pre-tax restructuring charge in the Environmental Health segment related to a workforce reduction from reorganization activities. As part of the Q4 2012 Plan, the Company reduced headcount by 54 employees. All employees were notified of termination under the Q4 2012 Plan by December 30, 2012. |
|
The following table summarizes the Q4 2012 Plan activity for the nine months ended September 29, 2013: |
| | | | | | | | |
| | | | | | | | | | | |
| Severance | | | | | | | | |
| (In thousands) | | | | | | | | |
Balance at December 30, 2012 | $ | 2,682 | | | | | | | | | |
| | | | | | | |
Amounts paid and foreign currency translation | (2,016 | ) | | | | | | | | |
Balance at September 29, 2013 | $ | 666 | | | | | | | | | |
| | | | | | | |
|
The Company anticipates that the remaining severance payments of $0.7 million for workforce reductions will be substantially completed by the end of the second quarter of fiscal year 2014. |
Q3 2012 Restructuring Plan |
During the third quarter of fiscal year 2012, the Company’s management approved a plan to shift certain of the Company's operations into a newly established shared service center (the “Q3 2012 Plan”). As a result of the Q3 2012 Plan, and during fiscal year 2012, the Company recognized $3.9 million pre-tax restructuring charges in each of the Human Health and Environmental Health segments related to a workforce reduction from reorganization activities. During the nine months ended September 29, 2013, the Company recorded a pre-tax restructuring reversal of $0.3 million in each of the Human Health and Environmental Health segments due to lower than expected costs associated with remaining severance payments. As part of the Q3 2012 Plan, the Company reduced headcount by 66 employees. All employees were notified of termination under the Q3 2012 Plan by September 30, 2012. |
|
The following table summarizes the Q3 2012 Plan activity for the nine months ended September 29, 2013: |
| | | | | | | | |
| | | | | | | | | | | |
| Severance | | | | | | | | |
| (In thousands) | | | | | | | | |
Balance at December 30, 2012 | $ | 7,553 | | | | | | | | | |
| | | | | | | |
Change in estimates | (546 | ) | | | | | | | | |
Amounts paid and foreign currency translation | (2,859 | ) | | | | | | | | |
Balance at September 29, 2013 | $ | 4,148 | | | | | | | | | |
| | | | | | | |
The Company anticipates that the remaining severance payments of $4.1 million for workforce reductions will be substantially completed by the end of the fourth quarter of fiscal year 2014. |
Q2 2012 Restructuring Plan |
During the second quarter of fiscal year 2012, the Company’s management approved a plan to realign operations, research and development resources, and production resources as a result of previous acquisitions (the “Q2 2012 Plan”). As a result of the Q2 2012 Plan, and during fiscal year 2012, the Company recognized a $7.2 million pre-tax restructuring charge in the Human Health segment related to a workforce reduction from reorganization activities and recognized a $0.2 million pre-tax restructuring charge in the Environmental Health segment related to a workforce reduction from reorganization activities. During the nine months ended September 29, 2013, the Company recognized a $2.1 million pre-tax restructuring charge in the Human Health segment related to a workforce reduction from reorganization activities and a $0.1 million pre-tax restructuring reversal in the Environmental Health segment due to lower than expected costs associated with remaining severance payments. The Company expects to recognize an additional $0.2 million of incremental restructuring expense in future periods as services are provided for one-time termination benefits in which the employee is required to render service until termination in order to receive the benefits. This expense will be recognized ratably over the required service period. As part of the Q2 2012 Plan, the Company will reduce headcount by 203 employees. All employees were notified of termination under the Q2 2012 Plan by July 1, 2012. |
The following table summarizes the Q2 2012 Plan activity for the nine months ended September 29, 2013: |
| | | | | | | | |
| | | | | | | | | | | |
| Severance | | | | | | | | |
| (In thousands) | | | | | | | | |
Balance at December 30, 2012 | $ | 4,586 | | | | | | | | | |
| | | | | | | |
Provision | 2,052 | | | | | | | | | |
| | | | | | | |
Amounts paid and foreign currency translation | (3,975 | ) | | | | | | | | |
Balance at September 29, 2013 | $ | 2,663 | | | | | | | | | |
| | | | | | | |
The Company anticipates that the remaining severance payments of $2.7 million for workforce reductions will be substantially completed by the end of the fourth quarter of fiscal year 2013. |
Q1 2012 Restructuring Plan |
During the first quarter of fiscal year 2012, the Company’s management approved a plan to realign operations and production resources as a result of previous acquisitions (the “Q1 2012 Plan”). As a result of the Q1 2012 Plan, and during fiscal year 2012, the Company recognized a $5.4 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 $1.0 million pre-tax restructuring charge in the Environmental Health segment related to a workforce reduction from reorganization activities. The Company expects to recognize no additional incremental restructuring expense in future periods as all services were provided for one-time termination benefits in which the employee was required to render service until termination in order to receive the benefits. As part of the Q1 2012 Plan, the Company reduced headcount by 112 employees. All employees were notified of termination and the Company completed all actions related to the closure of excess facility space under the Q1 2012 Plan by April 1, 2012. |
The following table summarizes the Q1 2012 Plan activity for the nine months ended September 29, 2013: |
| | | | | | | | |
| | | | | | | | | | | |
| Severance | | | | | | | | |
| (In thousands) | | | | | | | | |
Balance at December 30, 2012 | $ | 1,281 | | | | | | | | | |
| | | | | | | |
Provision | 30 | | | | | | | | | |
| | | | | | | |
Amounts paid and foreign currency translation | (594 | ) | | | | | | | | |
Balance at September 29, 2013 | $ | 717 | | | | | | | | | |
| | | | | | | |
The Company anticipates that the remaining severance payments of $0.7 million for workforce reductions will be substantially completed by the end of the fourth quarter of fiscal year 2013. The closure of the excess facility space will not require any additional payments. |
Previous Restructuring and Integration Plans |
The principal actions of the restructuring and integration plans from fiscal years 2001 through 2011 were workforce reductions related to the integration of the Company’s businesses in order to reduce costs and achieve operational efficiencies as well as workforce reductions in both the Human Health and Environmental Health segments by shifting resources into geographic regions and end markets that are more consistent with the Company’s growth strategy. During the nine months ended September 29, 2013, the Company paid $1.9 million related to these plans and recorded a reversal of $0.3 million primarily related to lower than expected costs associated with workforce reductions within the Environmental Health segment. As of September 29, 2013, the Company had $8.9 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. |
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 $0.3 million and made payments for these obligations of $0.9 million in the first nine months of fiscal year 2013. The remaining balance of these accruals as of September 29, 2013 was $0.1 million. |