RESTRUCTURING AND ASSET IMPAIRMENTS

Global RMS Restructuring Initiatives

In the fourth quarter of fiscal year 2017, the Company committed to a plan to further reduce costs and improve operating efficiencies in its RMS reportable segment. The Company plans to close its RMS production facility in Maryland before the end of 2018 and consolidate production in other facilities. Additionally, the Company will reduce its workforce at various other global RMS facilities during 2018.

The following table presents a summary of severance and transition costs, and asset impairments and accelerated depreciation (referred to as restructuring costs) related to this initiative by classification within the consolidated statements of income for the year ended December 30, 2017.



	Severance and Transition Costs		Asset Impairments and Accelerated Depreciation		Total
	(in thousands)
Cost of services provided and products sold (excluding amortization of intangible assets)	$	362	$	17,716	$	18,078
Selling, general and administrative	67		—		67
Total	$	429	$	17,716	$	18,145

Total restructuring costs related to this initiative in 2017 and 2018 are expected to be between $24.5 million and $26.0 million, of which $18.0 million to $18.5 million relate to estimated asset impairments and accelerated depreciation, and $6.5 million to $7.5 million relate to employee separation and facility exit costs, including accelerated lease obligations. All of the costs are recorded in the RMS reportable segment. The majority of the costs are non-cash and were incurred in the fourth quarter of 2017. The cash portion of the costs are not expected to exceed $8 million. The Company’s existing lease obligation continues through 2028.

Other Restructuring Initiatives

In recent fiscal years, the Company has undertaken productivity improvement initiatives at various locations across all reportable segments across the U.S., Europe, and Japan. This includes workforce reductions, resulting in severance and transition costs; and cost related to the consolidation of facilities, resulting in asset impairment and accelerated depreciation charges. The Company’s existing lease obligations for certain facilities continue through various dates, the latest being March 2028.

The following table presents a summary of restructuring costs related to these initiatives by classification within the consolidated statements of income for the years ended 2017, 2016, and 2015.



	2017
	Severance and Transition Costs		Asset Impairments and Accelerated Depreciation		Total
	(in thousands)
Cost of services provided and products sold (excluding amortization of intangible assets)	$	1,944	$	929	$	2,873
Selling, general and administrative	1,905		—		1,905
Total	$	3,849	$	929	$	4,778



	2016
	Severance and Transition Costs		Lease Obligations		Asset Impairments and Accelerated Depreciation		Total
	(in thousands)
Cost of services provided and products sold (excluding amortization of intangible assets)	$	4,717	$	4,616	$	4,809	$	14,142
Selling, general and administrative	3,737		—		—		3,737
Total	$	8,454	$	4,616	$	4,809	$	17,879



	2015
	Severance and Transition Costs		Asset Impairments and Accelerated Depreciation		Total
	(in thousands)
Cost of services provided and products sold (excluding amortization of intangible assets)	$	735	$	1,833	$	2,568
Selling, general and administrative	5,438		—		5,438
Total	$	6,173	$	1,833	$	8,006

The following table presents restructuring costs by reportable segment for these productivity improvement initiatives:



	Fiscal Year
	2017		2016		2015
	(in thousands)
RMS	$	291	$	759	$	3,171
DSA	1,604		17,114		1,068
Manufacturing	2,883		6		1,639
Unallocated corporate	—		—		2,128
Total	$	4,778	$	17,879	$	8,006

The following table provides a rollforward for all of the Company’s severance and transition costs, and lease obligation liabilities related to restructuring activities:



	December 30, 2017			December 31, 2016			December 26, 2015
	(in thousands)
Beginning balance	$	8,102		$	2,969		$	2,666
Expense	4,278			13,070			6,173
Payments / utilization	(6,103		)	(7,667		)	(5,820		)
Foreign currency adjustments	579			(270		)	(50		)
Ending balance	$	6,856		$	8,102		$	2,969

As of December 30, 2017 and December 31, 2016, $3.0 million and $4.1 million of severance and other personnel related costs liabilities and lease obligation liabilities, respectively, were included in accrued compensation and accrued liabilities within the Company’s consolidated balance sheets and $3.9 million and $4.0 million, respectively, were included in other long-term liabilities within the Company's consolidated balance sheets.