Restructuring, acquisition and integration-related costs

6 Months Ended

Jun. 27, 2020

Restructuring and Related Activities [Abstract]

Restructuring, acquisition and integration-related costs

The Company incurs costs in connection with acquiring, integrating and restructuring acquisitions and in connection with its global cost-reduction/productivity initiatives. For example:

•In connection with acquisition activity, the Company typically incurs costs associated with executing the transactions, integrating the acquired operations (which may include expenditures for consulting and the integration of systems and processes), and restructuring the combined company (which may include charges related to employees, assets and activities that will not continue in the combined company); and

•In connection with the Company’s cost-reduction/productivity initiatives, it typically incurs costs and charges associated with site closings and other facility rationalization actions and workforce reductions.

Restructuring, acquisition transaction and integration-related costs consisted of the following during the three and six months ended June 27, 2020 and June 29, 2019:


	Three Months Ended				Six Months Ended
	June 27, 2020		June 29, 2019	June 27, 2020	June 29, 2019
Cost of sales
Restructuring costs⁽¹⁾	$	49,500	4,379	60,672	35,913

Acquisition integration-related costs	543		1,488	1,153	2,556
Restructuring and acquisition integration-related costs	$	50,043	5,867	61,825	38,469

Selling, general and administrative expenses
Restructuring costs⁽¹⁾	$	12,540	443	13,077	1,845
Acquisition transaction-related costs	6		637	(210)	917
Acquisition integration-related costs	990		1,988	1,565	3,407
Restructuring, acquisition transaction and integration-related costs	$	13,536	3,068	14,432	6,169

⁽¹⁾The restructuring costs for 2020 and 2019 primarily relate to the Company’s actions taken to lower its cost structure and improve efficiencies of manufacturing and distribution operations as well as actions related to the Company’s recent acquisitions. The Company currently estimates that it will incur additional restructuring costs of approximately $70,000 primarily related to asset write-downs in its Flooring North America and Global Ceramic segments, which are expected to be substantially concluded in 2020.

The restructuring activity for the six months ended June 27, 2020 is as follows:


	Lease impairments		Asset write-downs	Severance	Other restructuring costs	Total
Balance as of December 31, 2019	$	21	—	4,122	116	4,259
Provision - Global Ceramic segment	—		4,625	11,953	305	16,883
Provision - Flooring NA segment	—		26,332	4,982	5,681	36,995
Provision - Flooring ROW segment	—		8,898	7,638	2,076	18,612
Provision - Corporate	—		—	1,259	—	1,259
Cash payments	(16)		—	(5,617)	(5,726)	(11,359)
Non-cash items	—		(39,855)	(151)	(1,989)	(41,995)
Balance as of June 27, 2020	$	5	—	24,186	463	24,654

The Company expects the remaining severance and other restructuring costs to be paid over the next 12 months.