Exit and Disposal Activities

6 Months Ended

Jul. 03, 2021

Restructuring and Related Activities [Abstract]

Snap-on did not record any costs for exit and disposal activities in the three and six month periods ended July 3, 2021. For the respective three and six month periods ended June 27, 2020, Snap-on recorded costs of $4.0 million and $11.5 million for exit and disposal activities. The costs associated with exit and disposal activities by operating segment are as follows:


	Three Months Ended				Six Months Ended
(Amounts in millions)	July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
Exit and disposal costs
Cost of goods sold:
Commercial & Industrial Group	$	—	$	2.0	$	—	$	6.4
Repair System & Information Group	—		—		—		0.7
Total cost of goods sold	$	—	$	2.0	$	—	$	7.1

Operating Expenses:
Snap-on Tools Group	$	—	$	0.6	$	—	$	0.6
Repair System & Information Group	—		1.4		—		3.8
Total operating expenses	$	—	$	2.0	$	—	$	4.4

Total exit and disposal costs:
Commercial & Industrial Group	$	—	$	2.0	$	—	$	6.4
Snap-on Tools Group	—		0.6		—		0.6
Repair System & Information Group	—		1.4		—		4.5
Total exit and disposal costs	$	—	$	4.0	$	—	$	11.5

Costs associated with exit and disposal activities in the first six 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 six months of 2021 is as follows:


	Balance at		First Quarter				Balance at		Second Quarter				Balance at
(Amounts in millions)	January 2, 2021		Provision		Usage		April 3, 2021		Provision		Usage		July 3, 2021
Severance costs:
Commercial & Industrial Group	$	5.8	$	—	$	(0.3)	$	5.5	$	—	$	(0.5)	$	5.0
Snap-on Tools Group	0.4		—		—		0.4		—		—		0.4
Repair System & Information Group	3.8		—		(0.2)		3.6		—		(0.5)		3.1
Total	$	10.0	$	—	$	(0.5)	$	9.5	$	—	$	(1.0)	$	8.5

As of July 3, 2021, the company expects that of the $8.5 million exit and disposal accrual, approximately $4.1 million will be utilized in the balance of 2021, and the remainder thereafter, 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.