Summary
TE Connectivity plc (TEL) filed an 8-K/A amendment on July 24, 2019, to update its previously disclosed restructuring plans. The company is increasing its expected restructuring charges for fiscal year 2019 from approximately $250 million to $375 million. This increase is driven by broader cost reduction initiatives, accelerated factory footprint consolidation, and a response to market weakness. The majority of these charges are related to employee termination benefits across all business segments. While the total charges are higher, the company has already incurred $184 million of these charges in the first nine months of fiscal 2019. The restructuring actions are expected to be completed by fiscal year 2021, with cash spending for these initiatives anticipated to be around $165 million in fiscal 2019, funded by operating cash flow.
Key Highlights
- 1TE Connectivity is increasing its estimated restructuring charges for fiscal year 2019 to $375 million, up from the previously announced $250 million.
- 2The increased charges are attributed to broader cost reduction initiatives, accelerated factory consolidation, and current market weakness.
- 3The majority of the restructuring charges will be for employee-related termination benefits impacting all business segments.
- 4The company has already recognized $184 million of these charges in the first nine months of fiscal 2019.
- 5Total cash spending for restructuring is expected to be approximately $165 million in fiscal 2019, funded by operations.
- 6All planned restructuring actions are expected to be completed by fiscal year 2021.