Exit and Disposal Activities

3 Months Ended

Mar. 28, 2020

Restructuring and Related Activities [Abstract]

Exit and Disposal Activities

Exit and Disposal Activities

Snap-on recorded costs for exit and disposal activities in the three month period ended March 28, 2020, as follows:

	Three Months Ended
(Amounts in millions)	March 28, 2020
Exit and disposal costs
Cost of goods sold:
Commercial & Industrial Group	$	4.4
Repair System & Information Group	0.7
Total cost of goods sold	$	5.1
Operating Expenses:
Repair Systems & Information Group	$	2.4
Total exit and disposal costs:
Commercial & Industrial Group	$	4.4
Repair System & Information Group	3.1
Total exit and disposal costs	$	7.5

The $7.5 million of costs incurred during the three month period ended March 28, 2020, qualified for accrual treatment. Costs associated with exit and disposal activities in the first three months of 2020 primarily related to headcount reductions from the ongoing optimization of the company’s cost structure in Europe and various other management and realignment actions.

Snap-on’s exit and disposal accrual activity for the first quarter of 2020 is as follows:

	Balance at						Balance at
(Amounts in millions)	December 28, 2019		Provision		Usage		March 28, 2020
Severance costs:
Commercial & Industrial Group	$	—	$	4.4	$	—	$	4.4
Repair System & Information Group	—		3.1		—		3.1
Total	$	—	$	7.5	$	—	$	7.5

As of March 28, 2020, the company expects that approximately $5.5 million of the $7.5 million exit and disposal accrual will be utilized in the balance of 2020 and the remainder will extend into 2021 primarily for longer-term severance payments.

Snap-on expects to fund the remaining cash requirements of its exit and disposal activities with available cash on hand, cash flows from operating activities and borrowings under the company’s existing credit facilities. The estimated costs for the exit and disposal activities were based on management’s best business judgement under prevailing circumstances.