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, net, is recorded in accrued restructuring costs, and the long-term portion of restructuring and contract termination charges, net, is recorded in long-term liabilities. The activities associated with these plans have been reported as restructuring expenses and are included as a component of operating expenses from continuing operations.

A description of the restructuring plans and the activity recorded for the six months ended July 1, 2012 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 2011 Form 10-K.

The restructuring plans for the first and second quarters of fiscal year 2012 were intended principally to realign operations, research and development resources, and production resources as a result of recent acquisitions. The restructuring plans for the second and fourth quarters of fiscal year 2011 were intended principally to shift resources to higher growth geographic regions and end markets.

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 recent acquisitions (the “Q2 2012 Plan”). As a result of the Q2 2012 Plan, and during the three months ended July 1, 2012, the Company recognized a $4.0 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. The Company expects to recognize an additional $5.4 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, and will be recognized ratably over the future service period. As part of the Q2 2012 Plan, the Company will reduce headcount by 229 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 six months ended July 1, 2012:



	Severance
	(In thousands)
Provision	$	4,218
Amounts paid and foreign currency translation	(714		)
Balance at July 1, 2012	$	3,504

The Company anticipates that the remaining severance payments of $3.5 million for workforce reductions will be 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 recent acquisitions (the “Q1 2012 Plan”). As a result of the Q1 2012 Plan, and during the six months ended July 1, 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 recognized a $0.8 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 $0.5 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, and will be recognized ratably over the future service period. As part of the Q1 2012 Plan, the Company will reduce headcount by 129 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 six months ended July 1, 2012:



	Severance			Closure of Excess Facility Space			Total
	(In thousands)
Provision	$	6,125		$	79		$	6,204
Amounts paid and foreign currency translation	(3,236		)	(79		)	(3,315		)
Balance at July 1, 2012	$	2,889		$	—		$	2,889

The Company anticipates that the remaining severance payments of $2.9 million for workforce reductions will be completed by the end of the fourth quarter of fiscal year 2012.

Q4 2011 Restructuring Plan

During the fourth quarter of fiscal year 2011, the Company’s management approved a plan to shift resources to higher growth geographic regions and end markets (the “Q4 2011 Plan”). As a result of the Q4 2011 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. The Company also recognized a $4.6 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. During the first six months of fiscal year 2012, the Company recorded a pre-tax restructuring reversal of $0.1 million relating to the Q4 2011 Plan due to a reduction in the estimated costs associated with the closure of an excess facility in the Environmental Health segment. As part of the Q4 2011 Plan, the Company reduced headcount by 114 employees. All employees were notified of termination and the Company completed all actions related to the closure of excess facility space under the Q4 2011 Plan by January 1, 2012.

The following table summarizes the Q4 2011 Plan activity for the six months ended July 1, 2012:



	Severance			Closure of Excess Facility Space			Total
	(In thousands)
Balance at January 1, 2012	$	4,674		$	370		$	5,044
Change in estimates	—			(135		)	(135		)
Amounts paid and foreign currency translation	(3,233		)	(60		)	(3,293		)
Balance at July 1, 2012	$	1,441		$	175		$	1,616

The Company anticipates that the remaining severance payments of $1.4 million for workforce reductions will be completed by the end of the second quarter of fiscal year 2013. The Company also anticipates that the remaining payments of $0.2 million for the closure of excess facility space will be paid through the third quarter of fiscal year 2012, in accordance with the terms of the applicable lease.

Q2 2011 Restructuring Plan

During the second quarter of fiscal year 2011, the Company’s management approved a plan to shift resources to higher growth geographic regions and end markets (the “Q2 2011 Plan”). As a result of the Q2 2011 Plan, the Company recognized a $2.2 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. The Company also recognized a $3.4 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. As part of the Q2 2011 Plan, the Company reduced headcount by 72 employees. All employees were notified of termination and the Company completed all actions related to the closure of excess facility space under the Q2 2011 Plan by July 3, 2011.

The following table summarizes the Q2 2011 Plan activity for the six months ended July 1, 2012:



	Severance			Closure of Excess Facility Space		Total
	(In thousands)
Balance at January 1, 2012	$	1,283		$	—	$	1,283
Amounts paid and foreign currency translation	(454		)	—		(454		)
Balance at July 1, 2012	$	829		$	—	$	829

The Company anticipates that the remaining severance payments of $0.8 million for workforce reductions will be completed by the end of the fourth quarter of fiscal year 2012.

Previous Restructuring and Integration Plans

The principal actions of the restructuring and integration plans from fiscal years 2001 through 2010 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 product lines that are more consistent with the Company’s growth strategy. During the six months ended July 1, 2012, the Company paid $2.5 million related to these plans and recorded an additional charge of $0.3 million to reduce the estimated sublease rental payments reasonably expected to be obtained for an excess facility in Europe within the Environmental Health segment, as well as a charge of $0.4 million related to higher than expected costs associated with workforce reductions in Europe within the Human Health segment. As of July 1, 2012, the Company had $12.7 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 costs that will continue to be incurred for the remaining terms without economic benefit to the Company. The Company recorded a pre-tax charge of $0.4 million and made payments for these obligations of $0.8 million in the first six months of fiscal year 2012. The remaining balance of these accruals as of July 1, 2012 was $1.7 million.