Restructuring and Related Charges

3 Months Ended

Nov. 30, 2016

Restructuring and Related Charges [Abstract]

12. Restructuring and Related Charges

2017 Restructuring Plan

In conjunction with the restructuring plan that was approved by the Company’s Board of Directors on September 15, 2016 (the “2017 Restructuring Plan”), the Company charged $34.1 million of restructuring and related charges to the Condensed Consolidated Statement of Operations during the three months ended November 30, 2016. The 2017 Restructuring Plan is intended to better align the Company’s global capacity and administrative support infrastructure in order to further optimize organizational effectiveness. This action includes headcount reductions across the Company’s Selling, General and Administrative cost base and capacity realignment in higher cost locations. The restructuring and related charges during the three months ended November 30, 2016 include cash costs of $17.9 million related to employee severance and benefit costs, $3.3 million related to lease costs and $0.2 million of other related costs, as well as non-cash costs of $12.7 million related to asset write-off costs.

The Company currently expects to recognize approximately $195.0 million in pre-tax restructuring and other related costs over the course of the Company’s fiscal years 2017 and 2018. Since the inception of the 2017 Restructuring Plan, a total of $34.1 million of restructuring and related costs have been recognized. Of the $34.1 million recognized to date, $5.5 million was allocated to the EMS segment, $11.5 million was allocated to the DMS segment and $17.1 million was not allocated to a segment. The charges related to the 2017 Restructuring Plan, excluding asset write-off costs, are currently expected to result in net cash expenditures of approximately $50.0 million that have been or will be payable over the course of the Company’s fiscal years 2017 and 2018. The remaining $160.9 million of the restructuring and related costs expected to be recognized reflects the Company’s intention only and restructuring decisions, and the timing of such decisions, at certain plants are still subject to the finalization of timetables for the transition of functions and consultation with the Company’s employees and their representatives.

The table below set forth the significant components and activity in the 2017 Restructuring Plan during the three months ended November 30, 2016 (in thousands):

2017 Restructuring Plan – Three Months Ended November 30, 2016

			Restructuring		Asset Write-off
	Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
	August 31, 2016		Charges		Non-Cash Activity		Payments		November 30, 2016
Employee severance and benefit costs	$	―	$	17,896	$	(15)	$	(7,987)	$	9,894
Lease costs		―		3,291		―		(767)		2,524
Asset write-off costs		―		12,640		(12,640)		―		―
Other related costs		―		235		―		(146)		89
Total	$	―	$	34,062	$	(12,655)	$	(8,900)	$	12,507

The tables below set forth the significant components and activity in the 2017 Restructuring Plan by reportable segment during the three months ended November 30, 2016 (in thousands):

2017 Restructuring Plan – Three Months Ended November 30, 2016

				Restructuring		Asset Write-off
		Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
		August 31, 2016		Charges		Non-Cash Activity		Payments		November 30, 2016
	EMS	$	―	$	5,521	$	(5,070)	$	(326)	$	125
	DMS		―		11,504		(7,577)		(1,144)		2,783
	Other		―		17,037		(8)		(7,430)		9,599
	Total	$	―	$	34,062	$	(12,655)	$	(8,900)	$	12,507

2013 Restructuring Plan

In conjunction with the restructuring plan that was approved by the Company’s Board of Directors in fiscal year 2013 (the “2013 Restructuring Plan”), the Company charged $1.8 million and $1.4 million of restructuring and related charges to the Condensed Consolidated Statement of Operations during the three months ended November 30, 2016 and 2015, respectively. The 2013 Restructuring Plan is intended to better align the Company’s manufacturing capacity in certain geographies and to reduce the Company’s worldwide workforce in order to reduce operating expenses. The restructuring and related charges during the three months ended November 30, 2016 and 2015 include cash costs of $1.5 million and $1.1 million related to employee severance and benefit costs, respectively, and $0.3 million and $0.3 million of other related costs, respectively.

The Company currently expects to recognize approximately $179.0 million in pre-tax restructuring and other related costs over the course of the Company’s fiscal years 2013 through 2017 under the 2013 Restructuring Plan. Since the inception of the 2013 Restructuring Plan, a total of $163.7 million of restructuring and related costs have been recognized. Of the $163.7 million recognized to date, $126.0 million was allocated to the EMS segment, $28.8 million was allocated to the DMS segment and $8.9 million was not allocated to a segment. A majority of the total restructuring costs are related to employee severance and benefit arrangements. The charges related to the 2013 Restructuring Plan, excluding asset write-off costs, are currently expected to result in cash expenditures of approximately $157.4 million that have been or will be payable over the course of the Company’s fiscal years 2013 through 2017. The remaining $15.3 million of the restructuring and related costs expected to be recognized reflects the Company’s intention only and restructuring decisions, and the timing of such decisions, at certain plants are still subject to the finalization of timetables for the transition of functions and consultation with the Company’s employees and their representatives.

The tables below set forth the significant components and activity in the 2013 Restructuring Plan during the three months ended November 30, 2016 and 2015 (in thousands):

2013 Restructuring Plan – Three Months Ended November 30, 2016

			Restructuring		Asset Write-off
	Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
	August 31, 2016		Charges		Non-Cash Activity		Payments		November 30, 2016
Employee severance and benefit costs	$	17,266	$	1,490	$	(669)	$	(2,883)	$	15,204
Lease costs		21		―		―		―		21
Other related costs		740		350		(32)		(338)		720
Total	$	18,027	$	1,840	$	(701)	$	(3,221)	$	15,945


2013 Restructuring Plan – Three Months Ended November 30, 2015

			Restructuring		Asset Write-off
	Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
	August 31, 2015		Charges		Non-Cash Activity		Payments		November 30, 2015
Employee severance and benefit costs	$	30,047	$	1,078	$	(1,396)	$	(8,954)	$	20,775
Lease costs		64		―		―		―		64
Other related costs		846		275		(49)		(216)		856
Total	$	30,957	$	1,353	$	(1,445)	$	(9,170)	$	21,695

The tables below set forth the significant components and activity in the 2013 Restructuring Plan by reportable segment during the three months ended November 30, 2016 and 2015 (in thousands):

2013 Restructuring Plan – Three Months Ended November 30, 2016

				Restructuring		Asset Write-off
		Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
		August 31, 2016		Charges		Non-Cash Activity		Payments		November 30, 2016
	EMS	$	17,338	$	1,840	$	(689)	$	(3,101)	$	15,388
	DMS		689		―		(12)		(120)		557
	Other		―		―		―		―		―
	Total	$	18,027	$	1,840	$	(701)	$	(3,221)	$	15,945


2013 Restructuring Plan – Three Months Ended November 30, 2015

				Restructuring		Asset Write-off
		Liability Balance at		Related		Charge and Other		Cash		Liability Balance at
		August 31, 2015		Charges		Non-Cash Activity		Payments		November 30, 2015
	EMS	$	28,834	$	1,236	$	(1,426)	$	(8,565)	$	20,079
	DMS		1,960		236		(19)		(561)		1,616
	Other		163		(119)		―		(44)		―
	Total	$	30,957	$	1,353	$	(1,445)	$	(9,170)	$	21,695