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 plan included ceasing production within the Company’s facility in Maryland and reducing its workforce at various global RMS facilities during 2018. On August 1, 2018, the Company’s Board of Directors approved a modification to the plan which repurposes the facility in Maryland to be used for alternative initiatives.

The following table presents a summary of severance and transition costs, and asset impairments (referred to as restructuring costs) related to this initiative within the unaudited condensed consolidated statements of income for the three and six months ended June 30, 2018.



	Three Months Ended						Six Months Ended
	June 30, 2018
	Severance and Transition Costs		Asset Impairments and Other Costs		Total		Severance and Transition Costs		Asset Impairments and Other Costs		Total
	(in thousands)
Cost of services provided and products sold (excluding amortization of intangible assets)	$	202	$	69	$	271	$	555	$	584	$	1,139
Selling, general and administrative	18		—		18		188		—		188
Total	$	220	$	69	$	289	$	743	$	584	$	1,327

Restructuring costs incurred during the fourth quarter of 2017 were $18.1 million, which primarily related to non-cash asset impairments and accelerated depreciation charges of $17.7 million. The costs incurred during the three and six months ended June 30, 2018 were $0.3 million and $1.3 million, respectively. The remaining restructuring costs related to this initiative in 2018 are not expected to exceed $1.5 million, all of which relate to employee separation costs and other transition costs. All of the costs are recorded in the RMS reportable segment. The cash portion of the total costs are not expected to exceed $3 million.

Other Restructuring Initiatives

In recent fiscal years, the Company has undertaken productivity improvement initiatives within all reportable segments at various locations 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 within the unaudited condensed consolidated statements of income for the three and six months ended June 30, 2018 and July 1, 2017.



	Three Months Ended
	June 30, 2018						July 1, 2017
	Severance and Transition Costs		Asset Impairments and Other Costs		Total		Severance and Transition Costs		Asset Impairments and Other Costs		Total
	(in thousands)
Cost of services provided and products sold (excluding amortization of intangible assets)	$	174	$	—	$	174	$	76	$	149	$	225
Selling, general and administrative	1,682		—		1,682		247		—		247
Total	$	1,856	$	—	$	1,856	$	323	$	149	$	472



	Six Months Ended
	June 30, 2018						July 1, 2017
	Severance and Transition Costs		Asset Impairments and Other Costs		Total		Severance and Transition Costs		Asset Impairments and Other Costs		Total
	(in thousands)
Cost of services provided and products sold (excluding amortization of intangible assets)	$	737	$	22	$	759	$	999	$	209	$	1,208
Selling, general and administrative	1,735		—		1,735		341		—		341
Total	$	2,472	$	22	$	2,494	$	1,340	$	209	$	1,549

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



	Three Months Ended				Six Months Ended
	June 30, 2018		July 1, 2017		June 30, 2018		July 1, 2017
	(in thousands)
DSA	$	1,197	$	225	$	965	$	481
Manufacturing	—		247		870		1,068
Unallocated corporate	659		—		659		—
Total	$	1,856	$	472	$	2,494	$	1,549

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



	Three Months Ended						Six Months Ended
	June 30, 2018			July 1, 2017			June 30, 2018			July 1, 2017
	(in thousands)
Beginning balance	$	7,053		$	6,531		$	6,856		$	8,102
Expense	2,076			323			3,215			1,340
Payments / utilization	(1,990		)	(140		)	(3,138		)	(2,830		)
Foreign currency adjustments	(329		)	296			(123		)	398
Ending balance	$	6,810		$	7,010		$	6,810		$	7,010

As of June 30, 2018 and July 1, 2017, $2.6 million and $2.5 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 unaudited condensed consolidated balance sheets and $4.2 million and $4.5 million, respectively, were included in other long-term liabilities within the Company’s unaudited condensed consolidated balance sheets.