Restructuring Activities

9 Months Ended

Sep. 30, 2023

Restructuring and Related Activities [Abstract]

Summary of 2022 Restructuring Plan

In April 2022, management approved and commenced a restructuring plan that will better position us for stronger performance. The restructuring plan will mainly reduce headcount and consolidate facilities. As a result of this restructuring plan, we analyzed the need to write-down inventory and impair long-lived assets, including operating lease right-of-use assets. During the three and nine months ended September 30, 2023, we recorded total charges of $4.0 million and $12.9 million, respectively. Cumulative through the nine months ended September 30, 2023, we recorded aggregate total charges of $19.7 million ($0.7 million of which was recorded as cost of sales). As of September 30, 2023, we estimate the remaining amount of charges related to this initiative will be $7.0 million to $9.0 million in total pre-tax restructuring charges through 2024. Of these charges, we estimate $6.0 million to $8.0 million to be cash payments for employee separation and other facility consolidation related expenses, and $1.0 million to be non-cash charges for impairment of long-lived assets.

In the Electronics Systems segment, we recorded (reversals) charges of $1.5 million, $0.1 million, and $(0.1) million during the three months ended September 30, 2023, for severance and benefits that were classified as restructuring charges, charges for inventory write down that was classified as cost of sales, and other restructuring (reversals), respectively. We recorded charges (reversals) of $5.6 million, $0.1 million, $0.1 million, and $(0.2) million during the nine months ended September 30, 2023, for severance and benefits that were classified as restructuring charges, accelerated depreciation of property and equipment that was classified as restructuring charges, charges for inventory write down that was classified as cost of sales, and other restructuring (reversals), respectively. Cumulative through the nine months ended September 30, 2023, we recorded total charges for severance and benefits that were classified as restructuring charges, accelerated depreciation of property and equipment that was classified as restructuring charges, charges for inventory write down that was classified as cost of sales, and other restructuring (reversals) of $9.1 million, $0.4 million, $0.1 million, and $(0.2) million, respectively.

In the Structural Systems segment, we recorded $0.8 million, $0.4 million, less than $0.1 million, and $1.1 million during the three months ended September 30, 2023 for severance and benefits that were classified as restructuring charges, accelerated depreciation of property and equipment that was classified as restructuring charges, charges for inventory write down that was classified as cost of sales, and other restructuring charges, respectively. We recorded $4.1 million, $1.1 million, less than $0.1 million, and $1.9 million during the nine months ended September 30, 2023, for severance and benefits that were classified as restructuring charges, accelerated depreciation of property and equipment that was classified as restructuring charges, charges for inventory write down that was classified as cost of sales, and other restructuring charges, respectively. Cumulative through the nine months ended September 30, 2023, we recorded total charges for severance and benefits that were classified as restructuring charges, accelerated depreciation of property and equipment that was classified as restructuring charges, charges for inventory write down that was classified as cost of sales, and other restructuring of $5.7 million, $1.6 million, $0.6 million, and $1.9 million, respectively.

Our restructuring activities during the nine months ended September 30, 2023 were as follows (in thousands):


	December 31, 2022		Nine Months Ended September 30, 2023								September 30, 2023
	Balance		Charges		Cash Payments		Non-Cash Payments		Change in Estimates		Balance
Severance and benefits	$	2,799	$	9,782	$	(6,161)	$	—	$	—	$	6,420

Property and equipment accelerated depreciation due to restructuring	—		1,137		—		(1,137)		—		—

Inventory write down	—		188		—		(188)				—
Other	—		1,831		(1,831)		—		—		—
Ending balance	$	2,799	$	12,938	$	(7,992)	$	(1,325)	$	—	$	6,420

The restructuring activities accrual for severance and benefits of $6.4 million as of September 30, 2023 was included as part of accrued and other liabilities and are expected to be paid out through 2024.