Exit and Disposal Activities

12 Months Ended

Dec. 31, 2012

Restructuring and Related Activities [Abstract]

EXIT AND DISPOSAL ACTIVITIES

EXIT AND DISPOSAL ACTIVITIES

The Company has initiated various exit and disposal activities including, but not limited to, the following matters.

The Company has completed or is in the process of combining the operations of certain subsidiaries within the TECH segment in order to improve overall operational efficiencies, reduce costs, and provide potential for greater revenue growth.  In connection with these combinations, during 2012, the Company recorded approximately $2.4 million in costs to reduce inventory values for certain products to their expected net realizable amount within COGS.  Additionally, the Company recorded approximately $3.7 million in one time termination benefits and other costs to SG&A during 2012.  The Company anticipates recording additional expenses related to one time termination benefits and other costs associated with these activities of approximately $4.0 million to $5.0 million.

In 2011, management approved a plan to reduce costs and improve production efficiencies at Best, one of the Company's RESV subsidiaries, including transferring certain operations from Italy to Poland. During 2012, the Company recorded expenses of approximately $1.8 million, including approximately $1.7 million in the fourth quarter of 2012, within COGS related to contractual termination benefits associated with this exit activity. During 2011, the Company recorded expenses of approximately $1.3 million within SG&A and approximately $14.4 million within COGS related to contractual termination benefits and other costs arising from the implementation of this plan. As the Company continues to restructure Best, it is possible that additional expenses may be incurred.

The following table sets forth the exit and disposal activity discussed above, and other less significant exit and disposal activities, for 2012:

	Balance										Balance
	12/31/11		Provision		Payments			Other			12/31/12
	(Dollar amounts in millions)
Employee Separation Expenses:
SG&A	$	0.5	$	1.3	$	(1.1	)	$	(0.4	)	$	0.3
COGS	11.0		1.9		(4.3		)	0.6			9.2
Total Employee Separation Expenses	11.5		3.2		(5.4		)	0.2			9.5
Other Costs and Expenses:
SG&A	0.2		2.4		(1.1		)	—			1.5
COGS	—		3.5		(3.4		)	0.9			1.0
Total Other Costs and Expenses	0.2		5.9		(4.5		)	0.9			2.5
Total Restructuring Activity:
SG&A	0.7		3.7		(2.2		)	(0.4		)	1.8
COGS	11.0		5.4		(7.7		)	1.5			10.2
	$	11.7	$	9.1	$	(9.9	)	$	1.1		$	12.0

Employee separation expenses are comprised of severance, accrued vacation, outplacement, and retention bonus payments. Other costs include expenses associated with asset write-downs, remaining lease payments on abandoned facilities, costs to prepare facilities for closure, and costs to move equipment and products to other facilities.

On March 11, 2013, the Company's Board of Directors approved the following initiatives: (i) construction of two new manufacturing facilities on a campus in Mexico to be shared by the RHC and CES segments, which will provide an integrated manufacturing footprint for both RHC and CES; (ii) consolidation of two North American manufacturing facilities in the RHC segment into the new, shared facility in Mexico; and (iii) transfer of product manufacturing from certain manufacturing facilities in the CES segment to the new, shared campus in Mexico, as well as transferring and expanding parts and sub-assembly operations in Mexico. The Company expects that the total cost to complete these manufacturing relocation projects will approximate between $45.0 million and $50.0 million, with cash expenditures to begin in the second quarter of 2013 and continue through fiscal year 2015. The Company's Board of Directors also approved entry into a five-year agreement with a third party logistics service provider to outsource certain warehousing and distribution activities in the Company's North American operating segments and facilitate the consolidation of North American warehousing distribution centers. The Company expects this process of outsourcing and consolidation to cost approximately $8.0 million to $10.0 million to be incurred over a 12 month period commencing in the second quarter of 2013.