Exit and Disposal Activities

The Company has initiated various exit and disposal activities including, but not limited to, the matters described below. Employee separation expenses are comprised of severance, outplacement and retention bonus payments. Other costs include expenses associated with asset write-downs, terminating contractual arrangements, costs to prepare facilities for closure, and costs to move equipment and products to other facilities.

Manufacturing Rationalization and Relocation Initiative

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 (collectively, the "Manufacturing Rationalization & Relocation Initiative").

The Company expects that the range of total cost to complete the Manufacturing Rationalization & Relocation Initiative is as follows:



	Low		High
	(Dollar amounts in millions)
Exit & Disposal Activities (1)	$	26.0	$	29.0
Other Relocation Costs (2)	15.0		17.0
Capital Expenditures	4.0		4.0
	$	45.0	$	50.0


(1)	Exit and disposal activities are comprised of the following:



	Low		High
	(Dollar amounts in millions)
Machinery and Equipment Relocation & Installation	$	10.0	$	11.0
Employee-related Costs	11.0		12.0
Other Costs	5.0		6.0
	$	26.0	$	29.0


(2)	Other relocation costs are comprised of the following:



	Low		High
	(Dollar amounts in millions)
Duplicate Overhead & Inefficiencies	$	12.0	$	13.0
Higher Inventory Levels	3.0		4.0
	$	15.0	$	17.0

Cash expenditures began in the second quarter of 2013 and are expected to continue through fiscal year 2015. During the third quarter and nine months of 2013, the Company recorded approximately $0.4 million (all of which was recorded in the RHC segment) and $7.2 million, respectively, (of which approximately $6.8 million and $0.4 million was recorded in the RHC and CES segment, respectively) of severance and other costs related to the Manufacturing Rationalization & Relocation Initiative.

The following table sets forth the changes to the liability for the Manufacturing Rationalization & Relocation Initiative during the nine months of 2013:



	Severance		Other Costs			Total
	(Dollar amounts in millions)

Balance, December 31, 2012	$	—	$	—		$	—
Provision	6.5		0.7			7.2
Payments	—		(0.3		)	(0.3		)
Other	—		—			—
Balance, September 28, 2013	$	6.5	$	0.4		$	6.9

Warehousing and Distribution Consolidation

On March 11, 2013, in connection with the Company's efforts to optimize supply chain performance, 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 "Warehousing & Distribution Consolidation"). The Company expects the Warehousing & Distribution Consolidation costs to be incurred over a 12 month period, which commenced in the third quarter of 2013. The Company expects these initiatives to generate cost savings as a result of moving to shared distribution centers and leveraging its scale by optimizing shipments and consolidating facilities.

The Company expects that the range of total cost to complete the Warehousing and Distribution Consolidation is as follows:



	Low		High
	(Dollar amounts in millions)
Exit & Disposal Activities (1)	$	4.0	$	7.0
Other Costs (2)	2.0		2.0
	$	6.0	$	9.0


(1)	Exit and disposal activities are comprised of the following:



	Low		High
	(Dollar amounts in millions)
Lease cancellation costs	$	2.0	$	5.0
Employee-related Costs	1.0		1.0
Other Costs	1.0		1.0
	$	4.0	$	7.0

(2)Primarily consists of system implementation costs.

The following table sets forth the changes to the liability for the Warehousing and Distribution Consolidation during the nine months of 2013:



	Severance		Other Costs		Total
	(Dollar amounts in millions)

Balance, December 31, 2012	$	—	$	—	$	—
Provision	0.3		—		0.3
Payments	—		—		—
Other	—		—		—
Balance, September 28, 2013	$	0.3	$	—	$	0.3

TECH Segment Combination

The Company has combined, 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 (the "TECH Segment Combination"). The total expected costs related to one time termination benefits and other costs associated with the TECH Segment Combination are estimated to be approximately $13.0 million to $13.5 million. In connection with the TECH Segment Combination, the Company has incurred cumulative costs of approximately $12.7 million, consisting of one time termination benefits of approximately $3.0 million, approximately $3.4 million in costs to reduce inventory values for certain products to their expected net realizable amount, and facility exit and other costs of approximately $6.3 million.

The following table sets forth the changes to the liability for the TECH Segment Combination during the nine months of 2013:



	Severance			Other Costs			Total
	(Dollar amounts in millions)

Balance, December 31, 2012	$	0.4		$	2.5		$	2.9
Provision	1.6			5.0			6.6
Payments	(1.3		)	(6.4		)	(7.7		)
Other	—			—			—
Balance, September 28, 2013	$	0.7		$	1.1		$	1.8

Best Restructuring

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 (the "Best Restructuring"). The total expected costs related to contractual termination benefits and other costs associated with the Best Restructuring are estimated to be approximately $17.5 million. In connection with the Best Restructuring, the Company has incurred cumulative costs through the nine months of 2013 of approximately $17.5 million, consisting of contractual termination benefits of approximately $17.1 million and other costs of approximately $0.4 million.

The following table sets forth the changes to the liability for the Best Restructuring during the nine months of 2013:



	Severance			Other Costs		Total
	(Dollar amounts in millions)

Balance, December 31, 2012	$	9.1		$	—	$	9.1
Provision	—			—		—
Payments	(3.3		)	—		(3.3		)
Other	0.2			—		0.2
Balance, September 28, 2013	$	6.0		$	—	$	6.0

Summary of Exit and Disposal Activities

The following table outlines amounts recorded within the unaudited condensed consolidated statement of operations associated with the Company's exit and disposal activities for the third quarter of 2013 and 2012:



	For the third quarter of 2013						For the third quarter of 2012
	SG&A		COGS		Total		SG&A		COGS		Total
	(Dollar amounts in millions)

Manufacturing Rationalization & Relocation Initiative	$	—	$	0.4	$	0.4	$	—	$	—	$	—
Warehousing & Distribution Consolidation	—		0.3		0.3		—		—		—
TECH Segment Combination	1.7		0.3		2.0		1.1		—		1.1
Best Restructuring	—		—		—		—		—		—
Other	—		—		—		—		0.4		0.4
Total	$	1.7	$	1.0	$	2.7	$	1.1	$	0.4	$	1.5



	For the nine months of 2013						For the nine months of 2012
	SG&A		COGS		Total		SG&A		COGS		Total
	(Dollar amounts in millions)

Manufacturing Rationalization & Relocation Initiative	$	—	$	7.2	$	7.2	$	—	$	—	$	—
Warehousing & Distribution Consolidation	—		0.3		0.3		—		—		—
TECH Segment Combination	5.2		1.4		6.6		1.4		2.2		3.6
Best Restructuring	—		—		—		—		0.1		0.1
Other	—		—		—		—		1.1		1.1
Total	$	5.2	$	8.9	$	14.1	$	1.4	$	3.4	$	4.8