Severance, Restructuring, and Acquisition Integration Activities

12 Months Ended

Dec. 31, 2019

Restructuring and Related Activities [Abstract]

Severance, Restructuring, and Acquisition Integration Activities

Cost Reduction Program: 2019

During the fourth quarter of 2019, we began a cost reduction program to improve performance and enhance margins by streamlining the organizational structure and investing in technology to drive productivity. We recognized approximately $19.6 million of severance costs for this program during 2019. The costs were incurred by both of our segments, as well as our corporate office. The cost reduction program is expected to deliver an estimated $40.0 million reduction in selling, general, and administrative expenses on an annual basis, with some benefit in 2020, and the full benefit realized in 2021. We expect to incur approximately $10.0 million for this program in 2020.

Opterna, FutureLink, and SPC Integration Program: 2019

In 2019, we began a restructuring program to integrate Opterna, FutureLink, and SPC with our existing businesses. The restructuring and integration activities were focused on achieving desired cost savings by consolidating existing and acquired facilities and other support functions. We recognized $6.1 million of severance and other restructuring costs for this program during 2019. The costs were incurred by the Enterprise Solutions segment. We expect to incur an additional $5.0 million for this program in 2020.

Industrial Manufacturing Footprint Program: 2016-2018

In 2016, we began a program to consolidate our manufacturing footprint. The manufacturing consolidation is complete. We recognized $17.7 million and $30.6 million of severance and other restructuring costs for this program during 2018 and 2017, respectively, and $66.1 million cumulatively. The costs were incurred by the Enterprise Solutions and Industrial Solutions segments, as the manufacturing locations involved in the program serve both platforms.

The following table summarizes the costs by segment of the programs described above as well as other immaterial programs and acquisition integration activities:



	Severance		Other Restructuring and Integration Costs		Total Costs
			(In thousands)
Year Ended December 31, 2019
Enterprise Solutions	$	5,260	$	5,790	$	11,050
Industrial Solutions	15,494		—		15,494
Total	$	20,754	$	5,790	$	26,544

Year Ended December 31, 2018
Enterprise Solutions	$	548	$	14,314	$	14,862
Industrial Solutions	240		7,523		7,763
Total	$	788	$	21,837	$	22,625

Year Ended December 31, 2017
Enterprise Solutions	$	4,165	$	23,981	$	28,146
Industrial Solutions	676		13,071		13,747
Total	$	4,841	$	37,052	$	41,893

The other restructuring and integration costs primarily consisted of equipment transfers, costs to consolidate operating and support facilities, retention bonuses, relocation, travel, legal, and other costs. The majority of the other restructuring and integration costs related to these actions were paid as incurred or are payable within the next 60 days.

The following table summarizes the costs of the various programs described above as well as other immaterial programs and acquisition integration activities by financial statement line item in the Consolidated Statement of Operations:



	Years ended December 31,
	2019		2018		2017

	(In thousands)
Cost of sales	$	3,425	$	17,962	$	32,480
Selling, general and administrative expenses	23,119		4,546		9,308
Research and development expenses	—		117		105
Total	$	26,544	$	22,625	$	41,893

Accrued Severance

Our accrued severance balance was $20.2 million, $1.7 million, and $3.4 million as of December 31, 2019, 2018 and 2017, respectively. The $20.2 million accrued severance balance at December 31, 2019 relates to the new Cost Reduction program, for which no cash payments were made during 2019; the majority of these amounts will be paid during 2020.