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 Initiatives

The Company's Board of Directors have approved several initiatives relating to the transfer of product manufacturing and the consolidation of certain manufacturing facilities within the RCH and CAS segments (collectively, the "Manufacturing Rationalization & Relocation Initiatives").

The Company expects that the range of total costs of the Manufacturing Rationalization & Relocation Initiatives is as follows:



	Low⁽¹⁾		High ⁽¹⁾
	(Dollar amounts in millions)
Employee-related costs	$	9.0	$	10.0
Other costs, including machinery and equipment relocation and installation	9.0		10.0
	$	18.0	$	20.0


(1)	The range of total estimated exit and disposal activities by segment are as follows:



	Low		High
	(Dollar amounts in millions)
RCH	$	16.4	$	18.4
CAS	1.6		1.6
	$	18.0	$	20.0

Cash expenditures began in the second quarter of 2013 and are expected to continue through fiscal year 2015. In connection with the Manufacturing Rationalization & Relocation Initiatives, the Company has incurred cumulative costs of approximately $17.7 million (of which approximately $16.1 million and $1.6 million were recorded in the RCH and CAS segments, respectively).

The following table sets forth the changes to the liability for the Manufacturing Rationalization & Relocation Initiatives during the first half of 2015:



	Severance			Other Costs			Total
	(Dollar amounts in millions)

Balance, December 31, 2014	$	5.2		$	—		$	5.2
Provision ⁽¹⁾	0.2			2.2			2.4
Payments	(4.2		)	(2.2		)	(6.4		)
Other	—			—			—
Balance, June 27, 2015	$	1.2		$	—		$	1.2


(1)	Approximately $2.0 million and $0.4 million of costs were recorded in the RCH and CAS segments, respectively, during the first half of 2015.

Warehousing and Distribution Consolidation

In connection with the Company's efforts to optimize supply chain performance, the Company's Board of Directors have 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").

Cumulative costs incurred in connection with the Warehousing & Distribution Consolidation include severance and other costs of approximately $2.7 million, of which approximately $1.7 million, $0.6 million, and $0.4 million were recorded in the SCS, ERG, and combined AVC segments, respectively.

The following table sets forth the changes to the liability for the Warehousing and Distribution Consolidation during the first half of 2015:



	Severance		Other Costs			Total
	(Dollar amounts in millions)

Balance, December 31, 2014	$	—	$	0.5		$	0.5
Provision ⁽¹⁾	—		(0.3		)	(0.3		)
Payments	—		(0.2		)	(0.2		)
Other	—		—			—
Balance, June 27, 2015	$	—	$	—		$	—


(1)	All activity during the first half of 2015 was recorded in the SCS segment.

Subsidiary Combinations

The Company has combined, or is in the process of combining, the operations of certain subsidiaries in order to improve overall operational efficiencies, reduce costs, and provide potential for greater revenue growth ("Subsidiary Combinations"). The Company currently expects the estimated total costs related to one time termination benefits and other costs associated with Subsidiary Combinations to be approximately $18.0 million to $18.3 million. Total expected costs by segment are as follows:



	Low		High
	(Dollar amounts in millions)
SCS	$	0.9	$	0.9
RCH	1.3		1.3
AVC	15.8		16.1
	$	18.0	$	18.3

In connection with Subsidiary Combinations, the Company has incurred cumulative costs of approximately $17.9 million, of which approximately $0.9 million, $1.3 million and $15.7 million was recorded in the SCS, RCH, and combined AVC segments, respectively. These costs consist of one time termination benefits of approximately $5.0 million, approximately $3.5 million in costs to reduce inventory values for certain products to their expected net realizable amount, and facility exit and other costs of approximately $9.4 million.

The following table sets forth the changes to the liability for Subsidiary Combinations during the first half of 2015:



	Severance			Other Costs			Total
	(Dollar amounts in millions)

Balance, December 31, 2014	$	0.7		$	1.0		$	1.7
Provision ⁽¹⁾	—			0.2			0.2
Payments	(0.6		)	(0.8		)	(1.4		)
Other	—			(0.2		)	(0.2		)
Balance, June 27, 2015	$	0.1		$	0.2		$	0.3


(1)	All costs during the first half of 2015 were recorded in the AVC segments.

On July 28, 2015, the Company’s Board of Directors approved a restructuring plan designed to merge the operations of Gefen into Core Brands, including the exit from certain product lines. It is expected that the restructuring plan will commence in the third quarter of 2015. Costs to be incurred in connection with the plan are expected to be in the range of approximately $6.0 million to $8.0 million, comprised principally of employee separation costs and certain asset impairment charges, principally related to inventory write-offs associated with the products that will be discontinued.

In the event the Company elects to further consolidate subsidiaries, the Company may incur additional costs related to severance and other costs.

Best Restructuring

In 2011, management approved a plan to reduce costs and improve production efficiencies at Best, one of the Company's AQH 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 $18.0 million. In connection with the Best Restructuring, the Company has incurred cumulative costs of approximately $18.0 million, consisting of contractual termination benefits of approximately $17.6 million and other costs of approximately $0.4 million. As the Company continues to restructure Best, it is possible that additional expenses may be incurred.

The following table sets forth the changes to the liability for the Best Restructuring during the first half of 2015:



	Severance			Other Costs		Total
	(Dollar amounts in millions)

Balance, December 31, 2014	$	0.4		$	—	$	0.4
Provision	0.4			—		0.4
Payments	(0.6		)	—		(0.6		)
Other	—			—		—
Balance, June 27, 2015	$	0.2		$	—	$	0.2

CAS Segment Consolidation

On May 4, 2015, the Company’s Board of Directors approved a restructuring plan designed to consolidate production activities in its North American and European operations in the CAS segment, and exit from certain product lines which have been determined to have limited strategic importance or to be competitively disadvantaged. The plan anticipates that the production facilities at two North American locations will be discontinued, with the product lines from those facilities transferred to other North American locations, or discontinued. Furthermore, the CAS segment's manufacturing operations in Mexico will be substantially reduced and the operation of the manufacturing facility is in the process of being transferred to the Company's RCH segment to be used in that segment's production activities. It is expected that the restructuring plan, which commenced in the second quarter of 2015, will be in process through the second quarter of 2016. Total expected exit costs to be incurred in connection with the plan are expected to be in the range of approximately $10.0 million to $15.0 million, of which approximately $4.8 million was recorded in the second quarter of 2015, comprised principally of employee separation, facility abandonment, and inventory write-offs during the consolidation period.

The following table sets forth the changes to the liability for the CAS Segment Consolidation during the first half of 2015:



	Severance			Other Costs			Total
	(Dollar amounts in millions)

Balance, December 31, 2014	$	—		$	—		$	—
Provision	1.6			3.2			4.8
Payments	(0.1		)	(0.5		)	(0.6		)
Other	—			0.2			0.2
Balance, June 27, 2015	$	1.5		$	2.9		$	4.4

Other Restructuring Activities

As noted previously, the Company has transferred the management of its UK commercial HVAC subsidiary from the CAS segment to the RCH segment. As part of this transfer, the Company's Board of Directors approved a restructuring plan related to the UK commercial HVAC subsidiary including a reduction of headcount, the closure of one facility, and the transfer of certain operations to other facilities within the RCH segment. Costs to be incurred in connection with this plan are expected to be in the range of approximately $5.0 million to $6.0 million, comprised principally of employee separation and lease obligations. The Company has recorded severance and other costs in the first half of 2015 of approximately $2.6 million, consisting of severance of approximately $1.8 million and other costs of approximately $0.8 million related to these activities.

During the first half of 2015, the Company also recorded inventory write-offs of approximately $0.9 million related to the discontinuation of a certain legacy product line at an AVC entity.

The following table sets forth the changes to the liability for other restructuring activities during the first half of 2015:



	Severance			Other Costs			Total
	(Dollar amounts in millions)

Balance, December 31, 2014	$	—		$	—		$	—
Provision ⁽¹⁾	1.8			1.7			3.5
Payments	(0.5		)	(0.2		)	(0.7		)
Other	—			—			—
Balance, June 27, 2015	$	1.3		$	1.5		$	2.8


(1)	Approximately $2.6 million and $0.9 million of costs were recorded in the RCH and AVC segments, respectively, during the first half of 2015.

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 second quarter of 2015 and 2014:



	For the second quarter of 2015						For the second quarter of 2014
	SG&A		COGS		Total		SG&A		COGS		Total
	(Dollar amounts in millions)

Manufacturing Rationalization & Relocation Initiatives	$	0.1	$	1.4	$	1.5	$	—	$	1.6	$	1.6
Warehousing & Distribution Consolidation	—		—		—		0.1		0.1		0.2
Subsidiary Combinations	0.1		—		0.1		0.4		0.3		0.7
CAS Segment Consolidation	0.5		4.3		4.8		—		—		—
Best Restructuring	—		0.2		0.2		—		—		—
Other restructuring activities	0.2		2.7		2.9		—		—		—
Total	$	0.9	$	8.6	$	9.5	$	0.5	$	2.0	$	2.5



	For the first half of 2015								For the first half of 2014
	SG&A		COGS			Total			SG&A		COGS		Total
	(Dollar amounts in millions)

Manufacturing Rationalization & Relocation Initiatives	$	0.1	$	2.3		$	2.4		$	—	$	2.7	$	2.7
Warehousing & Distribution Consolidation	—		(0.3		)	(0.3		)	0.3		0.6		0.9
Subsidiary Combinations	0.2		—			0.2			0.5		0.3		0.8
CAS Segment Consolidation	0.5		4.3			4.8			—		—		—
Best Restructuring	—		0.4			0.4			—		—		—
Other restructuring activities	0.4		3.1			3.5			—		—		—
Total	$	1.2	$	9.8		$	11.0		$	0.8	$	3.6	$	4.4