TEXTRON INC. (NYSE:TXT) Files An 8-K Costs Associated with Exit or Disposal ActivitiesItem 2.05 Costs Associated with Exit or Disposal Activities.
Item 2.06 Material Impairments.
On December 4, 2018, our Board of Directors approved a plan to restructure the Textron Specialized Vehicles businesses within our Industrial segment. We expect to incur pre-tax charges in the range of $60 million to $85 million under this plan, which will be recorded in the fourth quarter of 2018.
Textron Specialized Vehicles has undergone significant changes since the acquisition of Arctic Cat as we have expanded the product portfolio and integrated manufacturing operations and retail distribution. As disclosed in our Form 10-Q filed for the third quarter of 2018, the operating results for these businesses were significantly below our expectations as dealer sell-through lagged despite the introduction of new products into our dealer network. Management conducted a strategic review of the Textron Specialized Vehicles businesses, which included an assessment of the acquired dealer network and go-to-market strategy for the Textron Off Road and Arctic Cat brands, as well as cost reduction initiatives throughout the Textron Specialized Vehicles businesses. The restructuring plan will result in the impairment of intangible assets, primarily related to product rationalization, the elimination of approximately 400 positions, representing approximately 10% of Textron Specialized Vehicles’ workforce, and closure of several factory-direct turf-care branch locations and a manufacturing facility. The restructuring actions under this plan are expected to result in improved operating results for these businesses.
Severance and related costs for this plan are estimated to be in the range of $10 million to $15 million. Contract termination and other facility closure charges are estimated to be in the range of $5 million to $15 million. Impairment charges are estimated to be in the range of $45 million to $55 million and largely relate to acquired intangible assets. Expected cash outlays in connection with this plan are estimated to be in the range of $15 million to $30 million, with up to $10 million in the fourth quarter of 2018 and the remainder in 2019. We anticipate that this plan will be substantially completed by the end of 2018.
About TEXTRON INC. (NYSE:TXT)
Textron Inc. is a multi-industry company engaged in aircraft, defense, industrial and finance businesses to provide customers with products and services across the world. The Company operates through five segments: Textron Aviation, Bell, Textron Systems, Industrial and Finance. Textron Aviation manufactures, sells and services Beechcraft and Cessna aircraft, and services the Hawker brand of business jets. Bell Helicopter is a supplier of military and commercial helicopters, tiltrotor aircraft, and related spare parts and services in the world. Textron Systems segment’s product lines consist of unmanned aircraft systems, marine and land systems, weapons and sensors, and simulation, training and other defense and aviation mission support products and services. The Industrial segment designs and manufactures a range of products under three principal product lines. The Finance segment provides financing to purchasers of Textron Aviation aircraft and Bell helicopters.