RESTRUCTURING ACTIVITIES

9 Months Ended

Oct. 29, 2017

RESTRUCTURING ACTIVITIES

RESTRUCTURING ACTIVITIES

NOTE 8—RESTRUCTURING ACTIVITIES

Fiscal 2017 Restructuring Plan

As a result of the sale of the Waterworks business in third quarter 2017, management evaluated the Company’s talent alignment and functional support strategies. During the third quarter of fiscal 2017, management initiated a restructuring plan that included reducing workforce personnel, resulting in the recognition of $3 million of restructuring charges, primarily related to severance and other employee-related costs.

In addition to actions already taken, management expects to further restructure workforce personnel, close a C&I branch, and relocate the Company’s headquarters in early 2018. Management expects to incur a total of $10 million to $15 million under this plan, and expects a payback of the employee-related costs via a permanent reduction in personnel costs over the next one to two years.

The expected charges include approximately $6 million related to property lease obligations upon exiting the Company’s current headquarters location. The Company will actively pursue buyout options or subleasing opportunities for the leased property prior to its lease expiration in October 2020.

Payments for the charges incurred in the third quarter of fiscal 2017 are expected to be substantially complete in the next twelve months. As of October 29, 2017, the liability for these restructuring activities was $2 million and is included in Other current liabilities in the Consolidated Balance Sheets.

Fiscal 2015 Restructuring Plan

As a result of the sale of the Power Solutions business unit in fiscal 2015, management evaluated the Company’s talent alignment and functional support strategies. Consequently, during fiscal 2015, the Company initiated a restructuring plan to strategically align its leadership and functional support teams. During the nine months ended October 30, 2016, the Company incurred $14 million of restructuring charges under this plan. The Company completed the activities under this plan in fiscal 2016 and does not expect to incur any additional charges. As of October 29, 2017 and January 29, 2017, the Company’s liability balance for these restructuring activities was $2 million and $4 million respectively, and is included in Other current liabilities in the Consolidated Balance Sheets. Payments for these charges are expected to be substantially complete by the end of fiscal 2017.