Restructuring and Other Charges, Net

9 Months Ended

Sep. 27, 2020

Restructuring and Other Charges, Net

Restructuring and Other Charges, Net

6. Restructuring and Other Charges, Net

The Company’s Board of Directors approves all major restructuring programs that may involve the discontinuance of significant product lines or the shutdown of significant 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 liability is incurred. These costs are included in restructuring charges in the Company’s consolidated statements of operations.

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

	Third Quarter Ended				Nine Months Ended
	September 27,		September 29,		September 27,		September 29,
	2020		2019		2020		2019
	(in millions)
Restructuring costs:
Other Actions	$	3.4	$	—	$	8.7	$	2.7
Total restructuring charges	$	3.4	$	—	$	8.7	$	2.7

The Company recorded pre-tax restructuring costs in its business segments as follows:

	Third Quarter Ended				Nine Months Ended
	September 27,		September 29,		September 27,		September 29,
	2020		2019		2020		2019
	(in millions)
Americas	$	0.6	$	—	$	5.2	$	—
Europe		1.7		—		1.4		2.7
APMEA		1.1		—		2.0		—
Corporate		—		—		0.1		—
Total	$	3.4	$	—	$	8.7	$	2.7

Other Actions

The Company periodically initiates other actions which are not part of a major program. Total “Other Actions” pre-tax restructuring expense was $3.4 million and $8.7 million for the third quarter and nine months ended September 27, 2020, respectively. Total “Other Actions” pre-tax restructuring expense was $2.7 million through the nine months ended September 29, 2019. Included in “Other Actions” for the nine months ended September 27, 2020 were actions taken in the Americas, Europe, APMEA and Corporate primarily in response to the COVID-19 pandemic. Also included in “Other Actions” in 2019 were European restructuring activities that were initiated in 2018 and extended through 2019, as discussed below.

2020 Other Actions

In the second quarter of 2020, management initiated certain restructuring actions with respect to the Company’s Americas and APMEA segments as well as at Corporate, and in the third quarter of 2020 initiated additional restructuring actions within the Company’s Europe and Americas segments. These actions were primarily in response to the economic challenges related to the COVID-19 pandemic. The restructuring actions included costs mainly for severance benefits due to reductions in force, as well as costs relating to asset write-offs, facility exit and other exit costs.

The total pre-tax charge for the 2020 restructuring initiatives were initially estimated to be approximately $9.5 million. As of September 27, 2020, the Company increased its total expected pre-tax restructuring charges for these programs to be approximately $11.0 million, primarily resulting from increased severance costs. As of September 27, 2020, approximately $9.0 million has been incurred for these programs to date. Through September 27, 2020, the Company paid approximately $4.2 million of severance benefits and other related costs. As of September 27, 2020, the restructuring reserve associated with these actions was approximately $5.0 million and primarily related to severance benefits. The remaining expected costs relate to asset write off, facility exit and other exit costs and are expected to be completed by the first half of 2021.

The following table summarizes total expected, incurred and remaining pre-tax restructuring costs for the 2020 restructuring actions:

					Facility
			Asset		exit
	Severance		write-downs		and other		Total
	(in millions)
Costs incurred—second quarter 2020	$	5.3	$	0.3	$	—	$	5.6
Costs incurred—third quarter 2020		3.1		0.3		—		3.4
Remaining costs to be incurred		—		0.9		1.1		2.0
Total expected restructuring costs	$	8.4	$	1.5	$	1.1	$	11.0

2018 Other Actions

In the third quarter of 2018, management initiated restructuring actions primarily associated with the Company’s European headquarters as well as cost savings initiatives at certain European manufacturing facilities. These actions included reductions in force and other related costs. Total pre-tax charges for the program were reduced through the nine months ended September 27, 2020 by approximately $0.3 million due primarily to decreased severance costs. This resulted in total program restructuring charges of approximately $8.0 million, which have been fully incurred. Pre-tax restructuring charges of approximately $2.7 million were incurred through the nine months ended September 29, 2019. The restructuring reserve associated with these actions as of September 27, 2020 was approximately $0.7 million, and primarily relates to severance benefits.