Restructuring, Exit, Impairment and Integration Activities
|12 Months Ended|
Dec. 31, 2017
|Restructuring and Related Activities [Abstract]|
Restructuring, Exit, Integration and Impairment Activities
The Company has announced and implemented a number of initiatives designed to improve its cost structure, better utilize overall capacity, improve general operating efficiencies and consolidate the operations of recently acquired businesses. These initiatives resulted in the recognition of restructuring, exit, integration and impairment charges in the Consolidated Statements of Operations during 2017, 2016 and 2015.
The costs incurred under these initiatives include:
•Restructuring and Exit Activities – These amounts relate to:
•Asset Disposition and Impairment Actions – These amounts relate to sales and impairments of assets. Impairments of assets are recognized when the carrying amount of the asset is not expected to be fully recoverable. The impairments recognized were equal to the difference between the carrying amount of the asset and the estimated fair value of the asset, which was determined using observable inputs, including appraisals from independent third parties when available. When observable inputs were not available, estimated fair value was determined using the Company’s assumptions, including the data that market participants would use in pricing the asset, based on the best information available in the circumstances. Specifically, the Company used discounted cash flows to determine the fair value of the asset when observable inputs were unavailable.
•Integration Activities – These amounts relate to professional fees for systems integration and deal costs, employee termination and benefits and other charges associated with integrating the operations of recently acquired businesses.
•Intangible Asset Impairments – These amounts relate to impairments of intangible assets recognized as a result of the Company's periodic impairment testing. Goodwill and indefinite-lived intangible assets are evaluated for impairment annually, and all intangible assets are evaluated for impairment whenever events or changes in circumstances indicate that the fair value of an intangible asset may be below its carrying value. Refer to Note 1 – Significant Accounting Policies for further details about the Company's impairment testing procedures. In the fourth quarter of 2017, the Company recorded an impairment charge for the Cybex trade name as a result of declining sales and operating performance. The Company used a relief-from-royalty analysis, a Level 3 input, to assess the fair value of the Cybex trade name. The impairment charge was recorded within the Fitness segment.
The Company has reported restructuring, exit, integration and impairment activities based on the specific driver of the cost and reflected the expense in the accounting period when the Company has committed to or incurred the cost, as appropriate. The following table is a summary of the net expense associated with the restructuring, exit, integration and impairment activities for 2017, 2016 and 2015. The 2017 charges related to actions initiated in 2017 and 2016. The 2016 charges related to actions initiated in 2016 and 2015. The 2015 charges related to actions initiated in 2015.
(A) Total cash payments include payments related to prior period charges.
(B) Restructuring, exit, integration and impairment charges accrued as of December 31, 2017 are expected to be paid during 2018.
Reductions in demand for the Company’s products, further refinement of its product portfolio, further opportunities to reduce costs or the cost of integrating future acquisitions may result in additional restructuring, exit, integration and impairment charges in future periods.
Actions Initiated in 2017
During 2017, the Company executed certain restructuring and exit activities within the Fitness, Boat and Corporate segments, resulting in the recognition of restructuring, exit, integration and impairment charges within the Consolidated Statements of Operations.
In the third quarter of 2017, the Company recorded restructuring charges within the Fitness segment for the write-down of inventory and tooling related to the exit of the InMovement product line.
In the second, third and fourth quarters of 2017, the Company implemented headcount reductions in the Fitness and Boat segments aimed at improving general operating efficiencies.
In the first quarter of 2017, the Company announced the closure of its boat manufacturing facility in Joinville, Santa Catarina, Brazil, as a result of continued market weakness due partially to unfavorable foreign currency impacts in the region. As a result, the Company recorded restructuring, exit and impairment charges including the write-down of inventory. The facility manufactured certain Bayliner and Sea Ray boat models for the Latin American market. The long-lived assets at this facility were previously fully impaired.
In the first quarter of 2017, the Company also recorded restructuring charges within Corporate related to the transition of certain corporate officers.
The following table is a summary of the expense associated with the restructuring, exit, integration and impairment activities for the year ended December 31, 2017 and related actions initiated in 2017:
Actions Initiated in 2016
The Company acquired Cybex International, Inc. (Cybex) and Indoor Cycling Group GmbH (ICG) in the first and third quarters of 2016, respectively, as discussed in Note 4 – Acquisitions. During 2016, the Company executed certain restructuring and integration activities within the Fitness segment primarily related to these acquisitions.
The following table is a summary of the expense associated with the restructuring, exit, integration and impairment activities for the year ended December 31, 2017 and 2016 and related actions initiated in 2016:
Actions Initiated in 2015
The Company recorded impairment charges of $0.9 million and $4.1 million in the fourth quarters of 2016 and 2015, respectively, in connection with its decision to sell its corporate headquarters facility in Lake Forest, Illinois. The Company used an independent market appraisal report, a Level 2 input, to assess the fair value of its corporate headquarters facility.
No definition available.
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.
Reference 1: http://www.xbrl.org/2003/role/presentationRef