Bausch & Lomb 1999 Annual Report

5. Restructuring Charges And Asset Write-offs
1999 Program
In December 1999, the company's board of directors announced that it was implementing a comprehensive program to exit certain contact
lens manufacturing platforms and take additional steps to further reduce the administrative cost structure throughout the company. As a
result, the company recorded a pre-tax charge of $56.7 for 1999, the major components of which are summarized in the table below:
See the future 29 Bausch & Lomb
Vision Care Other/Administrative Total
Provisions
Employee terminations $ 27.1 $ 3.7 $ 30.8
Asset write-offs 25.8 0.1 25.9
Less 1999 Activity
52.9 3.8 56.7
Cash payments (1.0) .– (1.0)
Non-cash items (25.8) (0.1) (25.9)
Remaining reserve at December 25, 1999 $ 26.1 $ 3.7 $ 29.8
The restructuring program within the vision care segment will focus on the elimination of certain contact lens manufacturing platforms
resulting from exiting less cost-effective technologies. The programs included under other/administrative will focus primarily on further
reducing overhead costs throughout the company. The major actions in this restructuring plan include:
Start Date Anticipated Completion Date
Project
Vision Care
Exit certain European manufacturing platforms Q4/99 Q2/00
Exit certain U.S. manufacturing platforms Q4/99 Q4/00
Eliminate internal infrastructure costs
Other/Administrative
Q4/99 Q2/00
Eliminate internal infrastructure costs Q4/99 Q4/00
The above projects will result in the termination of approximately
900 employees. Vision care includes terminations of 710
employees in production and 116 administrative staff. The
other/administrative actions include the termination of approximately
80 staff in both administrative and sales roles. As of
December 25, 1999, approximately 240 employees have been
involuntarily terminated under this restructuring plan with $1.0
of related costs being charged against the liability.
The employee terminations will result in future cash
outflows to the company. These cash outflows, which began in
December 1999, are expected to take place throughout 2000,
with the majority of the outflows occurring in the second half of
the year. The company will use its current cash balance as well as
cash provided by operations to fund these cash outflows.
In addition to employee terminations, the above projects
resulted in $25.9 of asset write-offs, primarily for the abandonment
of manufacturing equipment. The disposition and/or decommissioning
of these assets occurred in the fourth quarter of 1999
and January 2000.