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Costs Associated with Exit and Restructuring Activities | 9 Months Ended
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Sep. 27, 2015
Costs Associated with Exit and Restructuring Activities |
Costs Associated with Exit and Restructuring Activities | NOTE 7 – Costs Associated with Exit and Restructuring Activities Costs associated with exit and restructuring activities are recorded in the Condensed Consolidated Statement of Earnings as follows: restructuring related charges are recorded as a component of Cost of Goods Sold, and restructuring and impairment charges are reported on a separate line and included in Operating Earnings. Total restructuring, impairment and restructuring related charges were as follows:
|  | Three Months Ended
|  | September 27, |  | September 28,
($ in thousands) |  | 2015 |  | 2014
Restructuring related charges |  | $ | 152 |  | $ | 494
Restructuring and impairment charges |  |  | 2,373 |  |  | 1,570
Total restructuring, impairment, and restructuring related charges |  | $ | 2,525 |  | $ | 2,064
|  | Nine Months Ended
|  | September 27, |  | September 28,
($ in thousands) |  | 2015 |  | 2014
Restructuring related charges |  | $ | 444 |  | $ | 1,404
Restructuring and impairment charges |  |  | 5,229 |  |  | 4,806
Total restructuring, impairment, and restructuring related charges |  | $ | 5,673 |  | $ | 6,210
During April 2014, CTS announced plans to restructure its operations and consolidate its Canadian operations into other existing CTS facilities as part of CTS’ overall plan to simplify its business model and rationalize its global footprint (“April 2014 Plan”). During the second quarter of 2015, CTS management revised the April 2014 Plan. The amendment added an additional $4,250,000 in planned costs. Additional administrative and legal costs are estimated to account for $1,300,000 of additional restructuring and impairment charges due to the extension of the timing of the plant shutdown. The remaining $2,950,000 in restructuring related charges are for additional costs related to equipment relocation, training, travel and shipping costs to facilitate an effective transition. The above actions are expected to be substantially complete in 2015. These restructuring actions will result in the elimination of approximately 120 positions. These actions are expected to be completed in 2015. The following table displays the planned restructuring and restructuring-related charges associated with the April 2014 Plan, as well as a summary of the actual costs incurred through September 27, 2015:
|  |  |  |  | Actual costs |
|  | Planned |  | incurred through |
($ in thousands) April 2014 Plan |  | Costs |  | September 27, 2015 |
Inventory write-down |  | $ | 850 |  | $ | — |
Equipment relocation |  |  | 1,800 |  |  | 258 |
Other charges |  |  | 1,400 |  |  | 111 |
Restructuring related charges, included in cost of goods sold |  | $ | 4,050 |  | $ | 369 |
Workforce reduction |  | $ | 4,200 |  | $ | 4,262 |
Asset impairment charge |  |  | — |  |  | — |
Other charges, including pension termination costs |  |  | 1,700 |  |  | 3,110 |
Restructuring and impairment charges |  | $ | 5,900 |  | $ | 7,372 |
Total restructuring, impairment and restructuring related charges |  | $ | 9,950 |  | $ | 7,741 |
Under the April 2014 Plan, total restructuring, impairment and restructuring related charges were as follows:
|  | Three Months Ended |
|  | September 27, |  | September 28, |
($ in thousands) |  | 2015 |  | 2014 |
Restructuring related charges |  | $ | 152 |  | $ | — |
Restructuring and impairment charges |  |  | 2,025 |  |  | 575 |
Total restructuring, impairment, and restructuring related charges |  | $ | 2,177 |  | $ | 575 |
|  | Nine Months Ended |
|  | September 27, |  | September 28, |
($ in thousands) |  | 2015 |  | 2014 |
Restructuring related charges |  | $ | 369 |  | $ | — |
Restructuring and impairment charges |  |  | 3,902 |  |  | 2,980 |
Total restructuring, impairment, and restructuring related charges |  | $ | 4,271 |  | $ | 2,980 |
During June 2013, CTS announced a restructuring plan to simplify CTS’ global footprint by consolidating manufacturing facilities into existing locations (“June 2013 Plan”). The June 2013 Plan includes the consolidation of operations from the U.K. manufacturing facility into the Czech Republic facility, the Carol Stream, Illinois manufacturing facility into the Juarez, Mexico facility and to discontinue manufacturing at its Singapore facility. Certain Corporate functions were consolidated or eliminated as a result of the June 2013 Plan. These restructuring actions will result in the elimination of approximately 350 positions. The above actions are expected to be completed in 2015. During the fourth quarter of 2014, CTS management revised the June 2013 Plan. The amendment added an additional $4,000,000 in planned costs. Future settlement of the U.K. pension plan is estimated to account for $2,000,000 of the added cost. The remaining $2,000,000 in restructuring and impairment charges are for severance costs and will result in the elimination of approximately 130 additional positions. The positions eliminated will be spread globally throughout CTS businesses. The above actions are expected to be substantially complete in 2015. The following table displays the planned restructuring and restructuring-related charges associated with the realignment, as well as a summary of the actual costs incurred through September 27, 2015:
|  | Planned |  | Actual costs incurred through |
($ in thousands) June 2013 Plan |  | Costs |  | September 27, 2015 |
Inventory write-down |  | $ | 800 |  | $ | 1,143 |
Equipment relocation |  |  | 900 |  |  | 1,792 |
Other charges |  |  | 100 |  |  | 652 |
Restructuring-related charges, included in cost of goods sold |  | $ | 1,800 |  | $ | 3,587 |
Workforce reduction |  | $ | 10,150 |  | $ | 9,216 |
Asset impairment charge |  |  | 3,000 |  |  | 4,139 |
Other charges, including pension termination costs |  |  | 7,650 |  |  | 1,784 |
Restructuring and impairment charges |  | $ | 20,800 |  | $ | 15,139 |
Total restructuring and restructuring-related charges |  | $ | 22,600 |  | $ | 18,726 |
Under the June 2013 Plan, total restructuring, impairment and restructuring related charges incurred were as follows:
|  | Three Months Ended |
|  | September 27, |  | September 28, |
($ in thousands) |  | 2015 |  | 2014 |
Restructuring related charges |  | $ | — |  | $ | 494 |
Restructuring and impairment charges |  |  | 348 |  |  | 995 |
Total restructuring, impairment, and restructuring related charges |  | $ | 348 |  | $ | 1,489 |
|  | Nine Months Ended |
|  | September 27, |  | September 28, |
($ in thousands) |  | 2015 |  | 2014 |
Restructuring related charges |  | $ | 75 |  | $ | 1,404 |
Restructuring and impairment charges |  |  | 1,327 |  |  | 1,826 |
Total restructuring, impairment, and restructuring related charges |  | $ | 1,402 |  | $ | 3,230 |
The following table displays the restructuring reserve activity for the period ended September 27, 2015:
($ in thousands) June 2013 Plan and April 2014 Plan |  |  |
Restructuring liability at January 1, 2015 |  | $ | 3,904 |
Restructuring and restructuring-related charges, excluding asset impairments and write-offs |  |  | 5,791 |
Cost paid |  |  | (7,351) |
Restructuring liability at September 27, 2015 |  | $ | 2,344 |

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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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