Management Actions

6 Months Ended

Jun. 30, 2020

Restructuring and Related Activities [Abstract]

Management Actions

4.

Management Actions

Restructuring Actions

In the first quarter of 2020, we implemented a restructuring action in an effort to streamline our operating model in Japan. In the second quarter of 2020, we recorded a pre-tax charge of $0.7 million, which included severance-related and other costs primarily associated with lease break fees. The pre-tax charge of $1.5 million in the first six months of 2020 consisted of $1.1 million of severance-related costs and $0.4 million of other costs. These costs were included in Selling and Administrative Expense in the Consolidated Statements of Earnings. We expect to incur up to $2 million of costs related to this restructuring. The charge impacted our Asia Pacific (APAC) operating segment. We estimate the savings will offset the pre-tax charge approximately one year from the date of the action.

During 2019, we implemented a restructuring action to further our integration efforts related to the IPC Group. The pre-tax charge of $4.8 million consisted of severance, with $0.3 million in Cost of Sales and $4.5 million in Selling and Administrative Expense in the Consolidated Statements of Earnings. The charge impacted our Europe, Middle East and Africa (EMEA) as well as our Americas operating segments. We expect no further charges related to this restructuring action. We estimate the savings have offset the pre-tax charges incurred to date.

A reconciliation of the beginning and ending liability balances is as follows:

	Severance and Related Costs
December 31, 2018 balance	$	2.2
2019 charges and utilization:
New charges	6.1
Cash payments	(2.5		)
Adjustments to accrual	(1.3		)
December 31, 2019 balance	$	4.5
2020 charges and utilization:
New charges	1.1
Cash payments	(2.2		)
Adjustment to accrual	(0.4		)
June 30, 2020 balance	$	3.0

Other Actions

In 2019, we made the decision to discontinue certain product lines. During the six months ended June 30, 2020, we recorded an additional $1.7 million in Cost of Sales in the Consolidated Statements of Earnings to reflect our estimate of inventory that will not be sold, all of which was recorded in the first quarter of 2020.