XML 29 R13.htm IDEA: XBRL DOCUMENT
v3.6.0.2

Restructuring and other impairment charges | 12 Months Ended
--- | ---
Dec. 31, 2016
Restructuring and Related Activities [Abstract] |
Restructuring and other impairment charges | Restructuring and other impairment charges The restructuring and other impairment charges recognized for the years ended December 31, 2016, 2015 and 2014 consisted of the following:
| 2016
| Termination benefits |  | Facility closure and other exit costs |  | Contract termination costs |  | Total
| (Dollars in thousands)
Other 2016 restructuring programs | $ | 2,531 |  |  | $ | 12 |  |  | $ | 671 |  |  | $ | 3,214 |
2016 Manufacturing footprint realignment plan | 11,176 |  |  | 468 |  |  | 866 |  |  | 12,510 |
2014 Manufacturing footprint realignment plan | 81 |  |  | 38 |  |  | — |  |  | 119 |
Other restructuring programs (1) | (558 | ) |  | 398 |  |  | 188 |  |  | 28 |
Total restructuring charges | 13,230 |  |  | 916 |  |  | 1,725 |  |  | 15,871 |
Other impairment charges | — |  |  | 43,356 |  |  | — |  |  | 43,356 |
Total restructuring and other impairment charges | $ | 13,230 |  |  | $ | 44,272 |  |  | $ | 1,725 |  |  | $ | 59,227 |
(1) | Other restructuring programs include the 2015 restructuring programs, the 2014 European Restructuring Plan and the 2012 restructuring programs.
| 2015
| Termination benefits |  | Facility closure and other exit costs |  | Contract termination costs |  | Total
| (Dollars in thousands)
2015 Restructuring programs | $ | 5,009 |  |  | $ | 295 |  |  | $ | 1,000 |  |  | $ | 6,304 |
2014 Manufacturing footprint realignment plan | 1,007 |  |  | 289 |  |  | 389 |  |  | 1,685 |
Other restructuring programs (2) | (194 | ) |  | 37 |  |  | (13 | ) |  | (170 | )
Total restructuring charges | $ | 5,822 |  |  | $ | 621 |  |  | $ | 1,376 |  |  | $ | 7,819 |
(2) | Other restructuring programs include the 2014 European Restructuring Plan, the Other 2014 restructuring programs, the 2013 restructuring programs and the LMA Restructuring Program.
| 2014
| Termination benefits |  | Facility closure and other exit costs |  | Contract termination costs |  | Total
| (Dollars in thousands)
2014 Manufacturing footprint realignment plan | $ | 9,200 |  |  | $ | 60 |  |  | $ | — |  |  | $ | 9,260 |
2014 European restructuring plan | 7,237 |  |  | 226 |  |  | 345 |  |  | 7,808 |
Other 2014 restructuring programs | 552 |  |  | 244 |  |  | 2,754 |  |  | 3,550 |
LMA restructuring program | (29 | ) |  | (112 | ) |  | (3,188 | ) |  | (3,329 | )
Other restructuring programs (3) | (57 | ) |  | 388 |  |  | 249 |  |  | 580 |
Total restructuring charges | $ | 16,903 |  |  | $ | 806 |  |  | $ | 160 |  |  | $ | 17,869 |
(3) | Other restructuring programs include the 2013 and 2012 restructuring programs.
Termination benefits include employee retention, severance and benefit payments for terminated employees. Facility closure costs include general operating costs incurred subsequent to production shutdown as well as equipment relocation and other associated costs. Contract termination costs include costs associated with terminating existing leases and distributor agreements. Other exit costs include legal, outplacement and employee relocation costs and other employee-related costs. Restructuring Charges 2016 Manufacturing Footprint Realignment Plan During the first quarter 2016, the Board of Directors of the Company approved a restructuring plan (the “2016 Manufacturing Footprint Realignment Plan") designed to reduce costs, improve operating efficiencies and enhance the Company’s long term competitive position. The plan primarily involves the relocation of certain manufacturing operations, the relocation and outsourcing of certain distribution operations and a related workforce reduction at certain of the Company's facilities. These actions commenced in the first quarter 2016 and are expected to be substantially completed by the end of 2018. The Company estimates that it will incur aggregate pre-tax charges in connection with the 2016 Manufacturing Footprint Realignment Plan of between approximately $34 million to $44 million, of which an estimated $27 million to $31 million are expected to result in future cash outlays. Most of these charges, and the related cash outlays, are expected to be made prior to the end of 2018.
Type of expense | Total estimated amount expected to be incurred
Termination benefits | $14 million to $15 million
Facility closure and other exit costs (1) | $2 million to $3 million
Accelerated depreciation charges | $10 million to $13 million
Other (2) | $8 million to $13 million
| $34 million to $44 million
(1) | Includes costs to transfer product lines among facilities and outplacement and employee relocation costs.
(2) | Consists of other costs directly related to the plan, including project management, legal and regulatory costs.
As the 2016 Plan progresses, management will reevaluate the estimated expenses set forth above, and may revise its estimates, as appropriate, consistent with GAAP. The following table summarizes the activity related to the 2016 Manufacturing Footprint Realignment Plan restructuring reserve:
| Termination benefits |  | Facility closure and other exit costs |  | Contract termination costs |  | Total
| (Dollars in thousands)
Balance at December 31, 2015 | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Subsequent accruals | 11,176 |  |  | 468 |  |  | 866 |  |  | 12,510 |
Cash payments | (3,220 | ) |  | (469 | ) |  | (95 | ) |  | (3,784 | )
Translation | 179 |  |  | 1 |  |  | (11 | ) |  | 169 |
Balance at December 31, 2016 | $ | 8,135 |  |  | $ | — |  |  | $ | 760 |  |  | $ | 8,895 |
For the year ended December 31, 2016, the Company also recognized restructuring related costs of $6.4 million related to this plan, the majority of which constituted accelerated depreciation and other costs and was primarily reported within cost of goods sold. 2016 Other Restructuring Programs During 2016, the Company committed to programs designed to improve operating efficiencies and reduce costs. The programs involve the consolidation of certain global administrative functions and manufacturing operations (the "Other 2016 Restructuring Programs"). The programs commenced in the second half of 2016 and are expected to be substantially complete by the end of the first quarter 2018. The Company estimates that it will record aggregate pre-tax charges of $3.8 million to $4.7 million related to these programs, which constitute termination benefits and contract termination costs that will result in cash outlays. Additionally, the Company expects to incur approximately $1.5 million of accelerated depreciation and other costs directly related to these programs and anticipates that these costs will be recognized as cost of goods sold, approximately $0.6 million of which is expected to result in cash outlays. As of December 31, 2016, the Company has a reserve of $1.9 million related to these programs. 2014 Manufacturing Footprint Realignment Plan In April 2014, the Company's Board of Directors approved a restructuring plan (the "2014 Manufacturing Footprint Realignment Plan") involving the consolidation of operations and a related reduction in workforce at certain facilities, and the relocation of manufacturing operations from certain higher-cost locations to existing lower-cost locations. These actions commenced in the second quarter 2014. During the third quarter 2016, the Company revised its expense and timing estimates related to the 2014 Manufacturing Footprint Realignment Plan to reflect the impact of changes the Company has implemented with respect to medication delivery devices included in certain of the kits primarily sold by the Company’s Vascular North America operating segment and, to a lesser extent, the Company's Anesthesia North America operating segment. The Company estimates that it will incur aggregate pre-tax charges in connection with the 2014 Manufacturing Footprint Realignment Plan of approximately $43 million to $48 million, compared to the Company’s prior estimate of approximately $37 million to $44 million. The Company expects aggregate cash outlays associated with the plan to be in the range of $33 million to $38 million, compared to its prior estimate of approximately $26 million to $31 million. Most of these charges and cash outlays are expected to be incurred prior to 2020. Additionally, the Company continues to expect that it will incur $24 million to $30 million in aggregate capital expenditures under the plan. The Company currently expects that the 2014 Manufacturing Footprint Realignment Plan will be substantially complete by the end of the first half of 2020 rather than the end of 2017, as was previously estimated. The following table provides a summary of the Company’s cost estimates by major type of expense associated with the 2014 Manufacturing Footprint Realignment Plan, which reflect the revised estimates:
Type of expense | Total estimated amount expected to be incurred
Termination benefits | $11 million to $12 million
Facility closure and other exit costs (1) | $1 million to $2 million
Accelerated depreciation charges | $10 million to $10 million
Other (2) | $21 million to $24 million
| $43 million to $48 million
(1) | Includes costs to transfer product lines among facilities and outplacement and employee relocation costs.
(2) | Consists of other costs directly related to the plan, including project management, legal and regulatory costs.
As the 2014 Manufacturing Footprint Realignment Plan progresses, management will reevaluate the estimated expenses and charges set forth above, and may revise its estimates, as appropriate, consistent with generally accepted accounting principles. The following table summarizes the activity related to the 2014 Manufacturing Footprint Realignment Plan restructuring reserve:
| Termination benefits |  | Facility closure and other exit costs |  | Contract termination costs |  | Total
| (Dollars in thousands)
Balance at December 31, 2014 | $ | 9,097 |  |  | $ | — |  |  | $ | — |  |  | $ | 9,097 |
Subsequent accruals | 1,007 |  |  | 289 |  |  | 389 |  |  | 1,685 |
Cash payments | (2,657 | ) |  | (289 | ) |  | (389 | ) |  | (3,335 | )
Balance at December 31, 2015 | 7,447 |  |  | — |  |  | — |  |  | 7,447 |
Subsequent accruals | 81 |  |  | 38 |  |  | — |  |  | 119 |
Cash payments | (2,158 | ) |  | (38 | ) |  | — |  |  | (2,196 | )
Balance at December 31, 2016 | $ | 5,370 |  |  | $ | — |  |  | $ | — |  |  | $ | 5,370 |
For the years ended December 31, 2016, 2015 and 2014 the Company reported restructuring related costs of $8.5 million, $9.5 million and $4.9 million, respectively, related to this plan within cost of goods sold. These costs related to accelerated depreciation and certain other costs, primarily for the transfer of manufacturing operations from the existing locations to the new locations in connection with the plan. As of December 31, 2016, the Company has incurred net aggregate restructuring expenses related to the plan of $11.1 million. Additionally, as of December 31, 2016, the Company has incurred net aggregate accelerated depreciation and certain other costs in connection with the plan of $22.9 million, which were included in cost of goods sold. Other Restructuring Programs 2015 Restructuring Programs During 2015, the Company committed to programs associated with the reorganization of certain businesses and shared service center functions as well as the consolidation of certain facilities in North America. As of December 31, 2016, the Company incurred net aggregate restructuring charges under these programs of $6.4 million. The Company expects future restructuring expenses associated with these programs, if any, to be nominal. As of December 31, 2016, the Company had a reserve of $0.1 million related to these programs. The Company expects to complete these programs in 2017. 2014 European Restructuring Plan In February 2014, the Company committed to a restructuring plan (the “2014 European Restructuring Plan”), which impacts certain administrative functions in Europe and involves the consolidation of operations and a related reduction in workforce at certain of the Company’s European facilities. As of December 31, 2016, the Company incurred net aggregate restructuring charges under the plan of $7.7 million. The Company expects future restructuring expenses associated with the 2014 European Restructuring Plan, if any, to be nominal. As of December 31, 2016, the Company has a reserve of $0.2 million in connection with the program. The Company expects to complete this plan in 2017. Other 2014 Restructuring Programs In June 2014, the Company initiated programs to consolidate locations in Australia and terminate certain European distributor agreements in an effort to reduce costs. The Company incurred aggregate restructuring charges of $3.6 million related to these programs, which were completed in 2015. 2013 Restructuring Programs In 2013, the Company initiated restructuring programs to consolidate administrative and manufacturing facilities in North America and warehouse facilities in Europe and terminate certain European distributor agreements in an effort to reduce costs. The Company incurred net aggregate restructuring charges of $10.9 million related to these programs, which were completed in 2015. LMA Restructuring Program In connection with the acquisition of substantially all of the assets of LMA International N.V. (the “LMA business”) in 2012, the Company commenced a program (the "LMA Restructuring Program") related to the integration of the LMA business and the Company’s other businesses. The program was focused on the closure of the LMA business’ corporate functions and the consolidation of manufacturing, sales, marketing, and distribution functions in North America, Europe and Asia. The Company incurred net aggregate restructuring charges related to the LMA Restructuring Program of $11.3 million. The Company completed the program in 2015. For the year ended December 31, 2014, the Company recorded a net credit of $3.3 million, primarily resulting from the reversal of contract termination costs following the favorable settlement of a terminated distributor agreement. 2012 Restructuring Program In 2012, the Company identified opportunities to improve its supply chain strategy by consolidating its three North American warehouses into one centralized warehouse, and lower costs and improve operating efficiencies through the termination of certain distributor agreements in Europe, the closure of certain North American facilities and workforce reductions. As of December 31, 2016, the Company has incurred net aggregate restructuring and impairment charges of $6.2 million in connection with this program, and expects future restructuring expenses associated with the program, if any, to be nominal. As of December 31, 2016, the Company has a reserve of $0.2 million in connection with the program. The Company expects to complete this program in 2017. Restructuring Charges by Segment Restructuring charges by reportable operating segment for the years ended December 31, 2016, 2015, and 2014 are set forth in the following table:
| 2016 |  | 2015 |  | 2014
| (Dollars in thousands)
Vascular North America | $ | 5,906 |  |  | $ | 3,742 |  |  | $ | 8,057 |
Anesthesia North America | 1,839 |  |  | 384 |  |  | 1,379 |
Surgical North America | 151 |  |  | 397 |  |  | — |
EMEA | 4,423 |  |  | 4 |  |  | 6,375 |
Asia | — |  |  | 313 |  |  | 1,305 |
OEM | 795 |  |  | 61 |  |  | — |
All other | 2,757 |  |  | 2,918 |  |  | 753 |
Total restructuring charges | $ | 15,871 |  |  | $ | 7,819 |  |  | $ | 17,869 |
Other Impairment Charges IPR&D Impairment Charge In May 2012, the Company acquired Semprus BioSciences Corp. (“Semprus”), a biomedical research and development company that developed a polymer surface treatment technology intended to reduce thrombus-related complications. Through 2016, the Company continued to engage in research and development activities designed to support an application for regulatory approval and achieve commercialization of the technology. However, upon considering the continuing challenges, remaining risks and uncertainties and significant additional resources required in connection with the development and commercialization of the technology, as well as the availability and advances made with respect to other technologies, during the fourth quarter of 2016, the Company determined it would not be commercially reasonable to continue its efforts to develop the Semprus technology. As a result, the Company has significantly reduced, and over the course of 2017 will discontinue, its research and development efforts with regard to the Semprus technology. Consequently, the Company recognized a pre-tax impairment charge of $41.0 million ($26.1 million after tax) for the year ended December 31, 2016. See Note 10 for the impacts to contingent consideration resulting from the developments described above. Long-lived Asset Impairment Charges During the fourth quarter the Company recorded $2.4 million in impairment charges related to two properties, one of which was classified as a held for sale building asset. The asset impairment charges were measured at fair value based on the sales contract with the buyer, adjusted to reflect associated disposition costs, which is considered a significant unobservable inputs and categorized as Level 3 under the fair value hierarchy as defined in Note 10. There were no impairment charges for the years ended December 31, 2015 or 2014.

X
- References No definition available. + Details
Name: | us-gaap_RestructuringAndRelatedActivitiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure of costs incurred for restructuring including, but not limited to, exit and disposal activities, remediation, implementation, integration, asset impairment, and charges against earnings from the write-down of assets. + References No definition available. + Details
Name: | us-gaap_RestructuringImpairmentAndOtherActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration