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Restructuring and Divestiture Charges | 12 Months Ended
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Sep. 27, 2014
Restructuring and Related Activities [Abstract] |
Restructuring and Divestiture Charges | Restructuring and Divestiture Charges The Company evaluates its operations for opportunities to improve operational effectiveness and efficiency, including facility and operations consolidation, and to better align expenses with revenues. As a result of these assessments, the Company has undertaken various restructuring actions which are described below. The following table displays charges taken related to restructuring actions in fiscal 2014, 2013 and 2012 and a rollforward of the charges to the accrued balances as of September 27, 2014:
| Abandonment of Adiana Product Line |  | Consolidation of Diagnostics Operations |  | Closure of Indianapolis Facility |  | Fiscal 2014 Actions |  | Fiscal 2013 Actions |  | Other Operating Cost Reductions |  | Total
Restructuring and Divestiture Charges |  |  |  |  |  |  |  |  |  |  |  |  |
Fiscal 2012 charges: |  |  |  |  |  |  |  |  |  |  |  |  |
Non-cash impairment charge | $ | 16.3 |  |  | $ | 0.6 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 16.9 |
Purchase orders and other contractual obligations | 3.1 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3.1 |
Workforce reductions | 0.1 |  |  | 14.2 |  |  | 0.9 |  |  | — |  |  | — |  |  | — |  |  | 15.2 |
Facility closure costs | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 0.4 |  |  | 0.4 |
Other | — |  |  | — |  |  | 0.9 |  |  | — |  |  | — |  |  | — |  |  | 0.9 |
Fiscal 2012 restructuring and divestiture charges | $ | 19.5 |  |  | $ | 14.8 |  |  | $ | 1.8 |  |  | $ | — |  |  | $ | — |  |  | $ | 0.4 |  |  | $ | 36.5 |
Recorded to cost of product revenues | $ | 19.0 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 19.0 |
Recorded to restructuring | $ | 0.5 |  |  | $ | 14.8 |  |  | $ | 1.8 |  |  | $ | — |  |  | $ | — |  |  | $ | 0.4 |  |  | $ | 17.5 |
Fiscal 2013 charges: |  |  |  |  |  |  |  |  |  |  |  |  |
Workforce reductions | $ | — |  |  | $ | 14.0 |  |  | $ | 4.8 |  |  | $ | — |  |  | $ | 11.3 |  |  | $ | 1.1 |  |  | $ | 31.2 |
Facility closure costs | — |  |  | — |  |  | 0.2 |  |  | — |  |  | — |  |  | 0.4 |  |  | 0.6 |
Other | — |  |  | — |  |  | 0.7 |  |  | — |  |  | — |  |  | 0.2 |  |  | 0.9 |
Fiscal 2013 restructuring charges | $ | — |  |  | $ | 14.0 |  |  | $ | 5.7 |  |  | $ | — |  |  | $ | 11.3 |  |  | $ | 1.7 |  |  | $ | 32.7 |
Divestiture net charges |  |  |  |  |  |  |  |  |  |  |  |  | 0.1 |
Fiscal 2013 restructuring and divestiture charges |  |  |  |  |  |  |  |  |  |  |  |  | $ | 32.8 |
Fiscal 2014 charges: |  |  |  |  |  |  |  |  |  |  |  |  |
Workforce reductions | $ | — |  |  | $ | 2.9 |  |  | $ | 0.2 |  |  | $ | 29.5 |  |  | $ | 0.9 |  |  | $ | 8.7 |  |  | $ | 42.2 |
Non-cash impairment charge | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3.1 |  |  | 3.1 |
Facility closure costs | — |  |  | — |  |  | 0.5 |  |  | — |  |  | — |  |  | 0.1 |  |  | 0.6 |
Other | — |  |  | 0.1 |  |  | — |  |  | — |  |  | — |  |  | 0.2 |  |  | 0.3 |
Fiscal 2014 restructuring charges | $ | — |  |  | $ | 3.0 |  |  | $ | 0.7 |  |  | $ | 29.5 |  |  | $ | 0.9 |  |  | $ | 12.1 |  |  | $ | 46.2 |
Divestiture net charges |  |  |  |  |  |  |  |  |  |  |  |  | 5.5 |
Fiscal 2014 restructuring and divestiture charges |  |  |  |  |  |  |  |  |  |  |  |  | $ | 51.7 |
| Abandonment of Adiana Product Line |  | Consolidation of Diagnostics Operations |  | Closure of Indianapolis Facility |  | Fiscal 2014 Actions |  | Fiscal 2013 Actions |  | Other Operating Cost Reductions |  | Total
Rollforward of Accrued Restructuring |  |  |  |  |  |  |  |  |  |  |  |  |
Fiscal 2012 charges | $ | 19.5 |  |  | $ | 14.8 |  |  | $ | 1.8 |  |  | $ | — |  |  | $ | — |  |  | $ | 0.4 |  |  | $ | 36.5 |
Non-cash impairment charges | (16.3 | ) |  | (0.6 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (16.9 | )
Stock-based compensation | — |  |  | (3.5 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (3.5 | )
Severance payments | (0.1 | ) |  | (2.4 | ) |  | — |  |  | — |  |  | — |  |  | (0.1 | ) |  | (2.6 | )
Other payments | (2.6 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (0.3 | ) |  | (2.9 | )
Acquired and other | — |  |  | 0.1 |  |  | — |  |  | — |  |  | — |  |  | 0.1 |  |  | 0.2 |
Balance as of September 29, 2012 | $ | 0.5 |  |  | $ | 8.4 |  |  | $ | 1.8 |  |  | $ | — |  |  | $ | — |  |  | $ | 0.1 |  |  | $ | 10.8 |
Fiscal 2013 restructuring charges | $ | — |  |  | $ | 14.0 |  |  | $ | 5.7 |  |  | $ | — |  |  | $ | 11.3 |  |  | $ | 1.7 |  |  | $ | 32.7 |
Stock-based compensation | — |  |  | (6.3 | ) |  | — |  |  | — |  |  | (1.6 | ) |  | — |  |  | (7.9 | )
Non-cash impairment charges | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (0.1 | ) |  | (0.1 | )
Severance payments | — |  |  | (13.1 | ) |  | (3.1 | ) |  | — |  |  | (4.4 | ) |  | (0.9 | ) |  | (21.5 | )
Other payments | (0.5 | ) |  | — |  |  | (0.6 | ) |  | — |  |  | — |  |  | (0.6 | ) |  | (1.7 | )
Balance as of September 28, 2013 | $ | — |  |  | $ | 3.0 |  |  | $ | 3.8 |  |  | $ | — |  |  | $ | 5.3 |  |  | $ | 0.2 |  |  | $ | 12.3 |
Fiscal 2014 restructuring charges | $ | — |  |  | $ | 3.0 |  |  | $ | 0.7 |  |  | $ | 29.5 |  |  | $ | 0.9 |  |  | $ | 12.1 |  |  | $ | 46.2 |
Stock-based compensation | — |  |  | — |  |  | — |  |  | (6.6 | ) |  | — |  |  | — |  |  | (6.6 | )
Non-cash impairment charges | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (3.1 | ) |  | (3.1 | )
Severance payments | — |  |  | (3.0 | ) |  | (4.0 | ) |  | (10.9 | ) |  | (6.1 | ) |  | (7.0 | ) |  | (31.0 | )
Other payments | — |  |  | — |  |  | (0.5 | ) |  | — |  |  | — |  |  | (0.4 | ) |  | (0.9 | )
Balance as of September 27, 2014 | $ | — |  |  | $ | 3.0 |  |  | $ | — |  |  | $ | 12.0 |  |  | $ | 0.1 |  |  | $ | 1.8 |  |  | $ | 16.9 |
Abandonment of Adiana Product Line At the end of the second quarter of fiscal 2012, the Company decided to cease manufacturing, marketing and selling its Adiana system, which was a product line within the Company’s GYN Surgical segment. Management determined that the product was not financially viable and would not become so in the foreseeable future. In addition, the Company settled its intellectual property litigation regarding the Adiana system with Conceptus. As a result, in the second quarter of fiscal 2012, the Company recorded a charge of $18.3 million and recorded additional adjustments in fiscal 2012 resulting in an aggregate charge of $19.5 million. Of the total charge, $19.0 million was recorded within cost of product revenues and $0.5 million was recorded in restructuring. The amount recorded in cost of product revenues comprised impairment charges of $9.9 million to record inventory at its net realizable value, $6.5 million to write down certain manufacturing equipment and equipment placed at customer sites to its fair value that had no further utility, and $2.6 million for outstanding contractual purchase orders of raw materials and components that would not be utilized and other contractual obligations. In connection with this action, the Company terminated certain manufacturing and other personnel primarily at its Costa Rica location, resulting in severance charges of $0.1 million, and incurred other contractual charges of $0.4 million. All identified employees were terminated and paid as of September 29, 2012. Consolidation of Diagnostics Operations In connection with its acquisition of Gen-Probe, the Company implemented restructuring actions to consolidate its Diagnostics operations, including streamlining product development initiatives, reducing overlapping functional areas in sales, marketing and general and administrative functions, and consolidating manufacturing resources, field services and support. As a result, the Company terminated certain employees from Gen-Probe and its legacy diagnostics business in research and development, sales, marketing, and general and administrative functions. The Company recorded severance and benefit charges in fiscal 2012 of $13.3 million related to this action pursuant to ASC 420, Exit or Disposal Cost Obligations (ASC 420). The majority of these employees ceased working in the fourth quarter of fiscal 2012, and their full severance charge was recorded in the fourth quarter of fiscal 2012. In addition, certain of the terminated Gen-Probe employees had unvested stock options, which were accelerated at termination pursuant to the stock options’ original terms. As such, the severance charges in fiscal 2012 include $3.5 million of stock-based compensation expense. In fiscal 2013, the Company recorded $10.8 million of severance charges, including $6.3 million for stock-based compensation. Included in these charges was $9.7 million recorded in the second quarter of fiscal 2013 related to the termination of certain Gen-Probe executives, including Carl Hull, Gen-Probe’s former Chairman, President and Chief Executive Officer. The charge was for the acceleration of certain retention payments and equity awards pursuant to the original terms of the related agreements. No additional charges were recorded in fiscal 2014 under this portion of the action. In addition, under this plan, the Company recently completed moving its legacy molecular diagnostics operations from Madison, Wisconsin to Gen-Probe’s facilities in San Diego, California. This transfer was finalized at the end of fiscal 2014 and, as a result, many of the employees in Madison were terminated. The Company recorded severance and benefit charges pursuant to ASC 420, which resulted in total severance and benefits charges of $7.1 million. These charges were recorded ratably over the required service period of the affected employees. The Company recorded $3.0 million, $3.2 million, and $0.9 million in the years ended September 27, 2014, September 28, 2013, and September 29, 2012, respectively. The Company also recorded non-cash charges of $0.6 million in the fourth quarter of fiscal 2012 as a result of exiting certain research projects. This action is complete and no additional charges will be recorded. Closure of Indianapolis Facility In the fourth quarter of fiscal 2012, the Company finalized its decision to transfer production of the majority of its interventional breast products, which are included within the Breast Health segment, from its Indianapolis, Indiana facility to its facility in Costa Rica. The transfer was completed in the first quarter of fiscal 2014, and all employees at the Indianapolis location were terminated. The Company recorded total severance and benefit charges under this action of $5.9 million pursuant to ASC 420. These charges were recorded ratably over the required service period of the affected employees. The Company recorded severance and benefits charges of $0.2 million, $4.8 million and $0.9 million in fiscal 2014, 2013 and 2012, respectively, related to this action. In addition, the Company recorded a charge of $0.4 million in the first quarter of fiscal 2014 related to the termination of its Indianapolis lease. The Company also recorded miscellaneous charges of $0.8 million in fiscal 2013 and $0.9 million in fiscal 2012 for amounts owed to the state of Indiana for employment credits. This action is complete and no additional charges will be recorded. Fiscal 2014 Actions During the first quarter of fiscal 2014, the Company implemented a cost reduction initiative comprised of reducing headcount and evaluating research projects and operating costs. In connection with this plan, the Company terminated certain employees on a worldwide basis. The Company recorded the severance and benefit charges pursuant to ASC 420 and ASC 712, Compensation-Nonretirement Postemployment Benefits (ASC 712), depending on the employee terminated. The Company recorded $6.3 million of severance and benefit charges in the first quarter of fiscal 2014, which included $0.4 million of stock-based compensation. On December 6, 2013, Stephen P. MacMillan was appointed as President, Chief Executive Officer and a director of the Company. The employment of John W. Cumming, the Company’s prior President and Chief Executive Officer, terminated upon Mr. MacMillan’s appointment. The Company provided separation benefits to Mr. Cumming pursuant to his employment letter dated July 18, 2013 resulting in a charge of $6.6 million in the first quarter of fiscal 2014, which included $4.4 million of stock-based compensation related to the acceleration of all of Mr. Cumming’s outstanding equity awards in accordance with the existing terms of Mr. Cumming’s share based payment arrangements. In the second, third, and fourth quarters of fiscal 2014, the Company continued to make executive management changes and implement additional cost reduction initiatives resulting in the termination of certain executives and employees on a worldwide basis. In addition, in the fourth quarter of fiscal 2014 the Company decided to consolidate and close certain international offices. Severance and benefit charges under these actions have been recorded pursuant to ASC 420 and ASC 712 depending on the circumstances, and the Company recorded severance and benefit charges of $16.6 million in fiscal 2014. Included in the charge is $1.8 million of stock-based compensation for the modification of the terms of equity awards to certain employees. Since a portion of the charges are pursuant to ASC 420, the Company expects to incur approximately $5.0 million during fiscal 2015 of additional charges as the severance benefits are recorded ratably over the required service period. Charges related to lease obligations will be recorded upon either the cease-use date or entering into a termination contract. Fiscal 2013 Actions During the third quarter of fiscal 2013, the Company implemented a cost reduction initiative comprised of reducing headcount and evaluating research projects and operating costs. In connection with this plan, the Company terminated certain employees on a worldwide basis. The Company primarily recorded severance and benefit charges pursuant to ASC 420, and the total severance and benefits charge related to this plan was $5.4 million. For those employees who continued to be employed beyond the minimum retention period, charges were recorded ratably over the estimated service period of the affected employees. The Company recorded severance and benefit charges of $0.9 million and $4.6 million in fiscal 2014 and 2013, respectively, related to this action. During the fourth quarter of fiscal 2013, Robert A. Cascella resigned as the Company’s President and Chief Executive Officer and as a member of the Board of Directors of the Company, and effective at the same time, Mr. Cumming was appointed as the Company’s President and Chief Executive Officer. In connection with this management change, additional headcount reductions were implemented. As a result of this action, the Company recorded $6.8 million in the fourth quarter of fiscal 2013 for severance and benefits charges. All employees were notified prior to September 28, 2013 and primarily ceased employment in the fourth quarter of fiscal 2013. The severance and benefit charges were recorded pursuant to ASC 712 for those employees with contractual arrangements and under ASC 420 for the remainder of the affected employees. In addition to the acceleration of stock options pursuant to the stock options’ original terms for certain employees, the Company also modified the terms of equity awards to certain employees resulting in aggregate stock-based compensation charges of $1.4 million recorded in the fourth quarter of fiscal 2013. Other Operating Cost Reductions: Hitec-Imaging Organic Photoconductor Manufacturing Line Shut-down In the fourth quarter of fiscal 2013, in connection with the Company’s cost reduction initiatives, the Company decided to shut-down its Hitec-Imaging organic photoconductor manufacturing line located in Germany. This production line was included within the Breast Health segment. As a result, the Company terminated certain employees, primarily in manufacturing, in fiscal 2014. During the first quarter of fiscal 2014, the Company completed its negotiations with the local Works Council to determine severance benefits for the approximately 95 affected employees. The Company is recording severance and benefit charges pursuant to ASC 420 and estimates the severance and related charges will be approximately $9.1 million. The Company recorded charges of $8.7 million in fiscal 2014 in connection with terminating these employees. In the first quarter of fiscal 2014, the Company recorded an impairment charge of $3.1 million to record certain buildings at this location to their estimated fair value. Consolidation of Selenium Panel Coating Production During the third quarter of fiscal 2012, the Company finalized its decision to consolidate its Selenium panel coating process and transfer the production line to its Newark, Delaware facility from its Hitec-Imaging German subsidiary. This production line is included within the Breast Health segment. The transfer was completed in the fourth quarter of fiscal 2013. In connection with this consolidation plan, the Company terminated certain employees, primarily manufacturing personnel. Severance charges were recorded pursuant to ASC 420. The termination communications began in January 2013 and the Company recorded severance charges of $1.1 million in fiscal 2013. Divestitures In the fourth quarter of fiscal 2014, the Company completed the sale of its MRI breast coils product line and recorded a loss on disposal of $5.3 million. The Company will provide certain transition services, including the manufacturing and sale of inventory to the buyer, over a six-month period. In the fourth quarter of fiscal 2013, the Company designated the assets of its Elucigene product line as assets held-for-sale, and recorded a charge of $0.7 million to record the assets at fair value. In the first quarter of fiscal 2014, the Company finalized the sale of the assets for $2.8 million, resulting in additional charges of $0.2 million in fiscal 2014. At September 28, 2013, assets held-for-sale consisted of inventory and certain equipment valued at $2.4 million and goodwill of $0.6 million. The Company completed the sale of its Lifecodes business and recorded a net gain of $0.9 million in the second quarter of fiscal 2013. For the year ended September 28, 2013, the Company recorded a charge of $0.3 million related to the disposition of certain other assets held-for-sale.

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 5.P.3) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140864-122747 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 5 -Section P -Subsection 3, 4 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB TOPIC 5.P.4) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140904-122747 + Details
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