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Restructuring | 9 Months Ended
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Sep. 27, 2015
Restructuring |
Restructuring | 5.Restructuring The Company’s Board of Directors approves all major restructuring programs that may involve the discontinuance of significant product lines or the shutdown of significant facilities. From time to time, the Company takes additional restructuring actions, including involuntary terminations that are not part of a major program. The Company accounts for these costs in the period that the liability is incurred. These costs are included in restructuring and other charges in the Company’s consolidated statements of operations. A summary of the pre-tax cost by restructuring program is as follows:
|  | Third Quarter Ended |  | Nine Months Ended |
|  | September 27, 2015 |  | September 28 2014 |  | September 27, 2015 |  | September 28, 2014 |
|  | (in millions) |
Restructuring costs: |  |  |  |  |  |  |  |  |
2015 Actions |  | $ | 5.0 |  | $ | — |  | $ | 10.3 |  | $ | — |
2013 Actions |  | — |  | 0.4 |  | 0.5 |  | 2.9 |
Other Actions |  | 0.8 |  | — |  | 1.7 |  | 4.3 |
Total restructuring |  | $ | 5.8 |  | $ | 0.4 |  | $ | 12.5 |  | $ | 7.2 |
The Company recorded pre-tax restructuring in its business segments as follows:
|  | Third Quarter Ended |  | Nine Months Ended |
|  | September 27, 2015 |  | September 28, 2014 |  | September 27, 2015 |  | September 28, 2014 |
|  | (in millions) |
Americas |  | $ | 4.8 |  | $ | — |  | $ | 6.8 |  | $ | 2.3 |
EMEA |  | 0.8 |  | 0.4 |  | 2.3 |  | 4.1 |
Asia-Pacific |  | 0.2 |  | — |  | 3.5 |  | — |
Corporate |  | — |  | — |  | (0.1 | ) | 0.8 |
Total |  | $ | 5.8 |  | $ | 0.4 |  | $ | 12.5 |  | $ | 7.2 |
2015 Actions On February 17, 2015, the Board of Directors of the Company approved the initial phase of a transformation program relating to the Company’s Americas and Asia-Pacific businesses, which primarily involves product line rationalization efforts relating to non-core products (“phase one”). The Company expects to ultimately eliminate between $175 million to $200 million of the combined Americas and Asia-Pacific net sales primarily within the Company’s do-it-yourself (DIY) distribution channel. The total estimated pre-tax cost for phase one is $33 million, including restructuring of $9.4 million, goodwill and intangible asset impairments of $13.4 million and other transformation and deployment costs of $10.2 million. Total phase one program costs of $27.6 million have been incurred to date. Total phase one non-cash charges are estimated to be $18 million, and after-tax charges are estimated to be $28 million. On October 26, 2015, the Board of Directors of the Company completed its approval of the second phase of the Company’s transformation program related to its Americas and Asia-Pacific businesses (“phase two”). Phase two involves reducing the square footage of the Company’s North American facilities, which together with phase one, is expected to reduce the Americas net operating footprint by approximately 30%. Phase two is designed to improve the utilization of the Company’s remaining facilities, better leverage the Company’s cost structure, reduce working capital, and improve execution of customer delivery requirements. The total estimated pre-tax cost for phase two is $30 million to $35 million, including restructuring of $12 million and other transformation and deployment costs of $18 million to $23 million. Total phase two program costs of $2.8 million have been incurred to date. Total phase two non-cash charges are estimated to be $5 million, and after-tax charges are estimated to be $18 million to $22 million. On a combined basis, the total estimated pre-tax cost for phase one and phase two is $63 million to $68 million, including restructuring costs of $21.4 million, goodwill and intangible asset impairments of $13.4 million and other transformation and deployment costs of $28.2 to $33.2 million. The other transformation and deployment costs include consulting and project management fees and other associated costs. Costs of the program are expected to be incurred through 2017. The following table summarizes by type, the total expected, incurred and remaining pre-tax restructuring costs for phase one and phase two combined:
|  | Severance |  | Legal and consultancy |  | Asset write-downs |  | Facility exit and other |  | Total |
|  | (in millions) |
Costs incurred—first quarter 2015 |  | $ | — |  | $ | — |  | $ | — |  | $ | 1.3 |  | $ | 1.3 |
Costs incurred—second quarter 2015 |  | 3.7 |  | — |  | 0.3 |  | — |  | 4.0 |
Costs incurred—third quarter 2015 |  | 2.5 |  | 0.3 |  | 0.9 |  | 1.3 |  | 5.0 |
Remaining costs to be incurred |  | 2.6 |  | 0.2 |  | 1.8 |  | 6.5 |  | 11.1 |
Total restructuring costs |  | $ | 8.8 |  | $ | 0.5 |  | $ | 3.0 |  | $ | 9.1 |  | $ | 21.4 |
The following table summarizes total incurred for the three and nine months ended September 27, 2015, incurred program to date and expected pre-tax restructuring costs by business segment for the Company’s Americas and Asia-Pacific 2015 transformation program:
|  | Third Quarter Ended |  | Nine Months Ended |  |  |  |  |
|  | September 27, 2015 |  | September 27, 2015 |  | Incurred to Date |  | Total Expected Costs |
|  | (in millions) |
Asia-Pacific |  | $ | 0.2 |  | $ | 3.5 |  | $ | 3.5 |  | $ | 3.7 |
Americas |  | 4.8 |  | 6.8 |  | 6.8 |  | 17.7 |
Total restructuring costs |  | $ | 5.0 |  | $ | 10.3 |  | $ | 10.3 |  | $ | 21.4 |
Details of the restructuring reserve activity for the Company’s Americas and Asia-Pacific 2015 transformation program for the nine months ended September 27, 2015 are as follows:
|  |  |  |  |  |  |  | Facility |  |  |
|  |  |  | Legal and |  | Asset |  | exit |  |  |
|  | Severance |  | consultancy |  | write-downs |  | and other |  | Total |
|  | (in millions) |
Balance at December 31, 2014 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |
Net pre-tax restructuring charges |  | — |  | — |  | — |  | 1.3 |  | 1.3 |
Utilization and foreign currency impact |  | — |  | — |  | — |  | — |  | — |
Balance at March 29, 2015 |  | $ | — |  | $ | — |  | $ | — |  | $ | 1.3 |  | $ | 1.3 |
Net pre-tax restructuring charges |  | 3.7 |  | — |  | 0.3 |  | — |  | 4.0 |
Utilization and foreign currency impact |  | — |  | — |  | (0.3 | ) | — |  | (0.3 | )
Balance at June 28, 2015 |  | $ | 3.7 |  | $ | — |  | $ | — |  | $ | 1.3 |  | $ | 5.0 |
Net pre-tax restructuring charges |  | 2.5 |  | 0.3 |  | 0.9 |  | 1.3 |  | 5.0 |
Utilization and foreign currency impact |  | (1.1 | ) | (0.1 | ) | (0.9 | ) | (0.7 | ) | (2.8 | )
Balance at September 27, 2015 |  | $ | 5.1 |  | $ | 0.2 |  | $ | — |  | $ | 1.9 |  | $ | 7.2 |
Other Actions The Company also periodically initiates other actions which are not part of a major program. In the fourth quarter of 2014, management initiated certain restructuring actions and strategic initiatives with respect to the Company’s EMEA segment in response to the ongoing economic challenges in Europe and additional product rationalization. The restructuring actions primarily include expected severance benefits and limited costs relating to asset write offs, professional fees and relocation. The total pre-tax charge for these restructuring initiatives is expected to be approximately $9.9 million, of which approximately $8.3 million were incurred as of September 27, 2015 for the program to date. The remaining expected costs relate to severance, asset write-offs and relocation costs and are expected to be completed by the end of the fourth quarter of fiscal 2016. The following table summarizes total expected, incurred and remaining pre-tax restructuring costs for the EMEA 2014 restructuring actions:
|  | Severance |  | Legal and consultancy |  | Asset write-downs |  | Facility exit and other |  | Total |
|  | (in millions) |
Costs incurred—2014 |  | $ | 6.9 |  | $ | — |  | $ | — |  | $ | — |  | $ | 6.9 |
Costs incurred—first quarter 2015 |  | — |  | 0.2 |  | 0.1 |  | — |  | 0.3 |
Costs incurred—second quarter 2015 |  | 0.5 |  | — |  | — |  | — |  | 0.5 |
Costs incurred—third quarter 2015 |  | 0.5 |  | — |  | 0.1 |  | — |  | 0.6 |
Remaining costs to be incurred |  | 0.9 |  | — |  | 0.6 |  | 0.1 |  | 1.6 |
Total restructuring costs |  | $ | 8.8 |  | $ | 0.2 |  | $ | 0.8 |  | $ | 0.1 |  | $ | 9.9 |
Details of the Company’s EMEA 2014 restructuring reserve activity for the nine months ended September 27, 2015 are as follows:
|  | Severance |  | Legal and consultancy |  | Asset write-downs |  | Total |
|  | (in millions) |
Balance at December 31, 2014 |  | $ | 6.9 |  | $ | — |  | $ | — |  | $ | 6.9 |
Net pre-tax restructuring charges |  | — |  | 0.2 |  | 0.1 |  | 0.3 |
Utilization and foreign currency impact |  | (0.8 | ) | (0.2 | ) | (0.1 | ) | (1.1 | )
Balance at March 29, 2015 |  | $ | 6.1 |  | $ | — |  | $ | — |  | $ | 6.1 |
Net pre-tax restructuring charges |  | 0.5 |  | — |  | — |  | 0.5 |
Utilization and foreign currency impact |  | (0.2 | ) | — |  | — |  | (0.2 | )
Balance at June 28, 2015 |  | $ | 6.4 |  | $ | — |  | $ | — |  | $ | 6.4 |
Net pre-tax restructuring charges |  | 0.5 |  | — |  | 0.1 |  | 0.6 |
Utilization and foreign currency impact |  | (1.1 | ) | — |  | (0.1 | ) | (1.2 | )
Balance at September 27, 2015 |  | $ | 5.8 |  | $ | — |  | $ | — |  | $ | 5.8 |

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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 2 -Subparagraph (SAB TOPIC 5.P.4) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140904-122747 Reference 2: 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 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 SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 5 -Section P -Subsection 3, 4 + Details
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