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Restructuring and Other Charges

6 Months Ended

Jul. 03, 2011

5. Restructuring and Other Charges

The Company’s Board of Directors approves all major restructuring programs that involve the discontinuance of product lines or the shutdown of facilities. From time to time, the Company takes additional restructuring actions, including involuntary terminations that are not part of a major program. The Company accounts for these costs in the period that the individual employees are notified or the liability is incurred. These costs are included in restructuring and other charges in the Company’s consolidated statements of operations. The Company also includes as part of other charges, expenses associated with asset impairments. In 2011, the Board approved a restructuring program with respect to the Company’s operating facilities in Europe. The Company expects to close a facility. The program is expected to include pre-tax costs of approximately $2.6 million, including costs for severance and shut down costs. The total net after-tax charge for this restructuring program is $1.8 million with costs being incurred through 2012. Also, in 2011 the Board approved a restructuring program in association with the acquisition of Socla. The restructuring program was designed to eliminate certain redundancies with a total estimated pre-tax cost of $6.4 million with costs being incurred through 2012. See Note 4 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, for a detailed description of the 2010 Europe and North America actions.

A summary of the pre- tax cost by restructuring program is as follows:

	Second Quarter Ended				Six Months Ended
	July 3, 2011		July 4, 2010		July 3, 2011		July 4, 2010
	(in millions)
2009 Actions	$	—	$	0.3	$	—	$	1.1
2010 Actions	1.8		2.7		2.7		5.6
2011 Actions	3.4		—		3.6		—
Other Actions	—		0.1		—		0.2
Total restructuring charges	$	5.2	$	3.1	$	6.3	$	6.9
Other charges related to impairments	0.3		—		0.3		0.2
	$	5.5	$	3.1	$	6.6	$	7.1
Less: amounts included in cost of goods sold	—		0.6		—		1.3
Total restructuring and other charges	$	5.5	$	2.5	$	6.6	$	5.8

The Company recorded total pre-tax restructuring and other charges in its business segments as follows:

	Second Quarter Ended				Six Months Ended
	July 3, 2011		July 4, 2010		July 3, 2011		July 4, 2010
	(in millions)
North America	$	—	$	0.3	$	0.1	$	1.0
Europe	5.3		2.8		6.3		5.8
China	0.2		—		0.2		0.3
Total	$	5.5	$	3.1	$	6.6	$	7.1

The Company does not expect to incur additional costs related to the 2009 restructuring plan, as the project is substantially complete.

2011 Actions

Socla Actions

The following table summarizes the total expected, incurred and remaining pre-tax costs for the 2011 Socla restructuring program:

Reportable Segment	Total Expected Costs		Incurred through July 3, 2011		Remaining Costs at July 3, 2011
	(in millions)
Europe	$	6.2	$	2.5	$	3.7
China	0.2		0.2		—
Total	$	6.4	$	2.7	$	3.7

Details of the Company’s 2011 Socla restructuring program reserve for the first six months of 2011 are as follows:

	Severance			Facility exit and other		Total
	(in millions)
Balance at December 31, 2010	$	—		$	—	$	—
Net pre-tax restructuring charges	2.7			—		2.7
Utilization and foreign currency impact	(0.1		)	—		(0.1		)
Balance at July 3, 2011	$	2.6		$	—	$	2.6

The company expects to spend the remaining reserve by mid 2012.

The following table summarizes expected, incurred and remaining costs for 2011 Socla restructuring actions by type:

	Severance			Facility exit and other		Total
	(in millions)
Expected costs	$	5.4		$	1.0	$	6.4
Costs incurred — quarter ended July 3, 2011	(2.7		)	—		(2.7		)
Remaining costs at July 3, 2011	$	2.7		$	1.0	$	3.7

Europe Actions

The following table summarizes the total expected, incurred and remaining pre-tax costs for the 2011 Europe restructuring program:

Reportable Segment	Total Expected Costs		Incurred through July 3, 2011		Remaining Costs at July 3, 2011
	(in millions)
Europe	$	2.6	$	0.9	$	1.7

Details of the Company’s 2011 Europe restructuring program for the first six months of 2011 are as follows:

	Severance			Facility exit and other			Total
	(in millions)
Balance at December 31, 2010	$	—		$	—		$	—
Net pre-tax restructuring charges	0.1			0.1			0.2
Utilization and foreign currency impact	(0.1		)	(0.1		)	(0.2		)
Balance at April 3, 2011	—			—			—
Net pre-tax restructuring charges	0.7			—			0.7
Utilization and foreign currency impact	(0.3		)	—			(0.3		)
Balance at July 3, 2011	$	0.4		$	—		$	0.4

The following table summarizes expected, incurred and remaining costs for 2011 Europe restructuring actions by type:

	Severance			Facility exit and other			Total
	(in millions)
Expected costs	$	2.4		$	0.2		$	2.6
Costs incurred — quarter ended April 3, 2011	(0.1		)	(0.1		)	(0.2		)
Remaining costs at April 3, 2011	2.3			0.1			2.4
Costs incurred — quarter ended July 3, 2011	(0.7		)	—			(0.7		)
Remaining costs at July 3, 2011	$	1.6		$	0.1		$	1.7

2010 Actions

Europe Actions

The following table summarizes the total expected, incurred and remaining pre-tax costs for the 2010 Europe footprint consolidation-restructuring program:

Reportable Segment	Total Expected Costs		Incurred through July 3, 2011		Remaining Costs at July 3, 2011
	(in millions)
Europe	$	16.3	$	16.3	$	—

Details of the Company’s 2010 Europe footprint consolidation-restructuring program reserve for the first six months of 2011 are as follows:

	Severance			Asset write- downs		Facility exit and other			Total
	(in millions)
Balance at December 31, 2010	$	5.4		$	—	$	—		$	5.4
Net pre-tax restructuring charges	0.2			—		0.6			0.8
Utilization and foreign currency impact	(1.2		)	—		(0.6		)	(1.8		)
Balance at April 3, 2011	4.4			—		—			4.4
Net pre-tax restructuring charges	1.5					0.3			1.8
Utilization and foreign currency impact	(1.7		)	—		(0.3		)	(2.0		)
Balance at July 3, 2011	$	4.2		$	—	$	—		$	4.2

The Company expects to spend the remaining reserve by mid-2012.

The following table summarizes expected, incurred and remaining costs for 2010 Europe footprint consolidation- restructuring actions by type:

	Severance			Asset write- downs			Facility exit and other			Total
	(in millions)
Expected costs	$	8.8		$	1.7		$	5.8		$	16.3
Costs incurred —2009	(4.2		)	—			(0.4		)	(4.6		)
Costs incurred —2010	(2.9		)	(1.7		)	(4.5		)	(9.1		)
Costs incurred — quarter ended April 3, 2011	(0.2		)	—			(0.6		)	(0.8		)
Costs incurred — quarter ended July 3, 2011	(1.5		)	—			(0.3		)	(1.8		)
Remaining costs at July 3, 2011	$	—		$	—		$	—		$	—

The Company does not expect to incur additional costs related to the 2010 Europe footprint consolidation- restructuring plan, as the project is substantially complete.

North America Actions

The following table summarizes the total expected, incurred and remaining pre-tax costs for the 2010 North America footprint consolidation-restructuring program:

Reportable Segment	Total Expected Costs		Incurred through July 3, 2011		Remaining Costs at July 3, 2011
	(in millions)
North America	$	3.3	$	2.1	$	1.2

In August 2011, the Company revised its original estimate from $4.9 million to $3.3 million on the North America footprint consolidation-restructuring program as the total costs to shut down and relocate equipment was lower than anticipated.

Details of the Company’s 2010 North America footprint consolidation-restructuring program reserve for the first six months of 2011 are as follows:

	Severance			Asset write- downs		Facility exit and other			Total
	(in millions)
Balance at December 31, 2010	$	2.0		$	—	$	—		$	2.0
Net pre-tax restructuring charges	—			—		0.1			0.1
Utilization	(0.2		)	—		(0.1		)	(0.3		)
Balance at April 3, 2011	1.8			—		—			1.8
Net pre-tax restructuring charges	—			—		—			—
Utilization	(0.4		)	—		—			(0.4		)
Balance at July 3, 2011	$	1.4		$	—	$	—		$	1.4

The Company expects to spend the remaining reserve by mid 2012.

The following table summarizes expected, incurred and remaining costs for the Company’s 2010 North America footprint consolidation-restructuring actions by type:

	Severance			Asset write- downs		Facility exit and other			Total
	(in millions)
Expected costs	$	2.0		$	0.5	$	0.8		$	3.3
Costs incurred — 2010	(2.0		)	—		—			(2.0		)
Costs incurred — quarter ended April 3, 2011	—			—		(0.1		)	(0.1		)
Costs incurred — quarter ended July 3, 2011	—			—		—			—
Remaining costs at July 3, 2011	$	—		$	0.5	$	0.7		$	1.2

The second quarter charge for 2010 of $3.1 million consisted of approximately $1.3 million related to involuntary termination benefits, $0.6 million for accelerated depreciation for manufacturing operations, which was charged to cost of sales, and $0.8 million for other costs associated with the 2010 actions. Additionally, the Company recorded $0.2 million related to involuntary termination benefits and $0.1 million for relocation expenses associated with the 2009 actions. The remaining costs of approximately $0.1 million related to involuntary termination benefits which were not part of a previously announced restructuring plan.

The first six months charges for 2010 of $6.9 million consisted of approximately $3.3 million related to involuntary termination benefits, $1.3 million for accelerated depreciation for manufacturing operations, which was charged to cost of sales, and $1.0 million for other costs all associated with the 2010 actions. Additionally, the Company recorded $0.5 million related to involuntary termination benefits and $0.6 million for relocation expenses associated with the 2009 actions. The remaining costs of approximately $0.2 million related to involuntary termination benefits which were not part of a previously announced restructuring plan.

In addition, in 2010, the Company recorded a tax charge of approximately $1.5 million in connection with the expected sale of TWVC. The Company expects the sale of TWVC to be finalized in the third quarter of 2011, subject to receiving all applicable government approvals. The Company expects to receive net proceeds of approximately $5.9 million from the sale. The Company also expects to record a gain of approximately $7.9 million after-tax to recognize the cumulative currency translation adjustment related to TWVC. Further, the Company will recognize a $3.9 million gain to reverse a tax provision upon completion of the sale.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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