Restructuring and Other Costs, Net

6 Months Ended

Jun. 27, 2015

Restructuring And Other Costs, Net Disclosure

Restructuring and Other Costs, Net [Text Block]

Note 14.Restructuring and Other Costs, Net

Restructuring and other costs in the first six months of 2015 primarily included continuing charges for headcount reductions and facility consolidations in an effort to streamline operations, including the closure and consolidation of operations within several facilities in the U.S., Europe and Asia, and, to a lesser extent, third-party acquisition transaction and integration costs related to recent acquisitions and a charge for settlement of litigation at an acquired business, offset in part by gains on the sale of a small product line and real estate. In the first six months of 2015, severance actions associated with facility consolidations and cost reduction measures affected approximately 1% of the company’s workforce.

As of July 31, 2015, the company has identified restructuring actions that will result in additional charges of approximately $85 million, primarily in the remainder of 2015 and the first half of 2016, which will be recorded when specified criteria are met, such as abandonment of facilities.

Second Quarter of 2015

During the second quarter of 2015, the company recorded net restructuring and other costs by segment as follows:

(In millions)	Cost of Revenues		Selling, General and Administrative Expenses		Restructuring and Other Costs, Net		Total
Life Sciences Solutions	$	0.9	$	0.1	$	3.4	$	4.4
Analytical Instruments		—		—		12.8		12.8
Specialty Diagnostics		0.2		—		1.9		2.1
Laboratory Products and Services		—		1.3		2.0		3.3
Corporate		—		1.8		0.3		2.1
	$	1.1	$	3.2	$	20.4	$	24.7

The components of net restructuring and other costs by segment are as follows:

Life Sciences Solutions

The Life Sciences Solutions segment recorded $4.4 million of net restructuring and other charges in the second quarter of 2015. The segment recorded charges to cost of revenues of $0.9 million primarily for accelerated depreciation at facilities closing due to real estate consolidation; charges to selling, general and administrative expenses of $0.1million for third-party transaction costs related to the acquisition of Advanced Scientifics; and $3.4 million of restructuring and other costs, net,$9.3 million of which were cash costs, primarily associated with headcount reductions and facility consolidations in the U.S. and Europe. In addition, the segment recorded a $3.5 million provision for settlement of a pre-acquisition litigation-related matter. These costs were partially offset by a $7.6 million gain on the sale of a small product line and a $1.9 million gain on the sale of real estate.

Analytical Instruments

The Analytical Instruments segment recorded $12.8 million of net restructuring and other charges in the second quarter of 2015, $12.7 million of which were cash costs primarily for abandoned facilities costs associated with the remediation and closure of a manufacturing facility in the U.S.

Specialty Diagnostics

The Specialty Diagnostics segment recorded $2.1 million of net restructuring and other charges in the second quarter of 2015. The segment recorded charges to cost of revenues of $0.2 million for accelerated depreciation at facilities closing due to real estate consolidation, as well as $1.9 million of other restructuring costs, all of which were cash costs primarily associated with headcount reductions as well as consolidation of facilities in the U.S. and Europe.

Laboratory Products and Services

The Laboratory Products and Services segment recorded $3.3 million of net restructuring and other charges in the second quarter of2015. The segment recordedcharges to selling, general and administrative expenses of $1.3 million for third-party transaction costs related to the acquisition of Alfa Aesar and $1.2 million of cash restructuring costs, primarily severance costs associated with headcount reductions. The segment also recorded a $0.8 million of charges associated with a litigation-related matter of a divested business.

Corporate

During the second quarter of 2015, the company recorded$2.1 million of net restructuring and other charges. The segment recorded $1.8 million of charges to selling, general and administrative expenses associated with accelerated depreciation on information systems to be abandoned due to integration synergies, as well as $0.3 million of cash costs for severance at its corporate operations.

First Six Months of 2015

During the first six months of 2015, the company recorded net restructuring and other costs by segment as follows:

(In millions)	Cost of Revenues		Selling, General and Administrative Expenses		Restructuring and Other Costs, Net		Total
Life Sciences Solutions	$	1.4	$	6.2	$	26.1	$	33.7
Analytical Instruments		—		—		18.4		18.4
Specialty Diagnostics		0.3		—		4.7		5.0
Laboratory Products and Services		—		0.8		2.9		3.7
Corporate		—		3.8		0.3		4.1
	$	1.7	$	10.8	$	52.4	$	64.9

The components of net restructuring and other costsby segment are as follows:

Life Sciences Solutions

In the first six months of 2015, the Life Sciences Solutions segment recorded $33.7 million of net restructuring and other charges. The segment recorded charges to cost of revenues of $1.4 million primarily for sales of inventories revalued at the date of acquisition and accelerated depreciation at facilities closing due to real estate consolidation; $6.2 million of charges to selling, general and administrative expenses for third-party transaction and integration costs related to the acquisitions of Life Technologies and Advanced Scientifics; and $26.1 million of restructuring and other costs, net, $31.8 million of which were cash costs. These costs included $5.0 million of cash compensation contractually due to employees of an acquired business on the date of acquisition; $0.9 million of charges associated with a previous sale of a business; and $25.9 million of costs primarily associated with headcount reductions and facility consolidations in the U.S. and Europe, including $20.1 million for severance, $1.7 million of abandoned facility costs, and $4.1 million of other cash costs, including retention and outplacement costs. The segment also recorded a $3.5 million provision for a settlement of a pre-acquisition litigation related matter and $0.2 million of non-cash charges associated with restructuring actions. These costs were partially offset by a $7.6 million gain on the sale of a small product line, as well as a $1.9 million gain on the sale of real estate.

Analytical Instruments

In the first six months of 2015, the Analytical Instruments segment recorded $18.4 million of net restructuring and other charges, $18.3 million of which were cash costs associated with abandoned facilities, including remediation and other closure costs, and, to a lesser extent, headcount reductions.

Specialty Diagnostics

In the first six months of 2015, the Specialty Diagnostics segment recorded $5.0 million of net restructuring and other charges, including charges to cost of revenues of $0.3 million for accelerated depreciation at facilities closing due to real estate consolidation, and $4.7 million of cash costs for employee severance and other costs associated with headcount reductions.

Laboratory Products and Services

In the first six months of 2015, the Laboratory Products and Services segment recorded $3.7 million of net restructuring and other charges. The segment recorded $0.8 million of charges to selling, general and administrative expenses, including $1.3 million of third party transaction costs related to the acquisition of Alfa Aesar which was partially offset by $0.5 million of income for changes in estimates of contingent consideration. In addition, the segment recorded $2.1 million of cash restructuring costs primarily for employee severance and other costs associated with headcount reductions. The segment also recorded $0.8 million of charges associated with a litigation-related matter of a divested business.

Corporate

In the first six months of 2015, the company recorded$4.1 million of net restructuring and other charges, primarily $3.8 million of selling, general and administrative charges associated with accelerated depreciation on information systems to be abandoned due to integration synergies. The segment also recorded $0.3 million of cash restructuring costs for severance at its corporate operations.

The following table summarizes the cash components of the company’s restructuring plans. The non-cash components and other amounts reported as restructuring and other costs, net, in the accompanying statement of income have been summarized in the notes to the tables. Accrued restructuring costs are included in other accrued expenses in the accompanying balance sheet.

				Abandonment
(In millions)		Severance			of Excess Facilities		Other (a)		Total
Pre-2014 Restructuring Plans
	Balance At December 31, 2014	$	6.2		$	7.5	$	1.8	$	15.5
	Costs incurred in 2015 (b)		1.3			0.5		0.1		1.9
	Reserves reversed		(1.8)			(0.2)		(0.1)		(2.1)
	Payments		(2.4)			(1.5)		(0.8)		(4.7)
	Currency translation		(0.3)			(0.1)		(0.1)		(0.5)
	Balance At June 27, 2015	$	3.0		$	6.2	$	0.9	$	10.1
2014 Restructuring Plans
	Balance At December 31, 2014	$	31.5		$	2.3	$	4.1	$	37.9
	Costs incurred in 2015 (b)		8.0			1.2		4.1		13.3
	Reserves reversed		(7.0)			(0.1)		(1.4)		(8.5)
	Payments		(29.1)			(3.0)		(4.4)		(36.5)
	Currency translation		(0.5)			(0.1)		(0.1)		(0.7)
	Balance At June 27, 2015	$	2.9		$	0.3	$	2.3	$	5.5
2015 Restructuring Plans
	Costs incurred in 2015 (b)	$	29.2		$	13.1	$	4.4	$	46.7
	Payments		(21.3)			(0.5)		(3.8)		(25.6)
	Currency translation		0.1			—		—		0.1
	Balance At June 27, 2015	$	8.0		$	12.6	$	0.6	$	21.2

• Other includes cash charges for relocation and moving expenses associated with facility consolidations, as well as employee retention costs which are accrued ratably over the period through which employees must work to qualify for a payment.
• Excludes a $7.6 million gain on the sale of a product line, $5.0 million of cash compensation contractually due to employees of an acquired business on the date of acquisition; $4.3 million of provision for losses on litigation-related matters; $0.9 million of charges associated with a previous sale of a business; and an aggregate of $1.5 million of non-cash income, net, which are detailed by segment above.

The company expects to pay accrued restructuring costs as follows: severance, employee-retention obligations and other costs primarily through 2015 and abandoned-facility payments, over lease terms expiring through 2020.