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Subsequent Events
6 Months Ended
Jun. 30, 2017
Subsequent Events [Abstract]  
Subsequent Events
SUBSEQUENT EVENT
On July 28, 2017, the Company’s board of directors approved a realignment and restructuring plan (the “2017 Restructuring”) to: (i) divest the Company’s pipe coating and insulation businesses in Louisiana, The Bayou Companies, LLC and Bayou Wasco Insulation, LLC (collectively “Bayou”); (ii) exit all non-pipe related contract applications for the Tyfo® Fibrwrap® system in North America; (iii) right-size the Company’s cathodic protection services operations in Canada; and (iv) reduce corporate and other operating costs. These decisions reflect the Company’s (i) desire to reduce further its exposure in the North American upstream oil and gas markets; (ii) assessment of its ability to drive sustainable, profitable growth in the non-pipe FRP contracting market in North America; and (iii) assessment of continuing weak conditions in the Canadian oil and gas markets. To date, the Company has identified certain initial actions to achieve cost savings. With respect to the initially identified actions, the Company expects to incur cash charges of $9 million to $11 million, most of which are expected to be incurred in the second half of 2017 and consist primarily of employee severance, extension of benefits, employment assistance programs, early lease termination and other restructuring related costs. These currently identified charges are mainly in the Infrastructure Solutions segment and, to a lesser extent, the Corrosion Protection segment. The Company expects to reduce headcount by approximately 180 employees as a result of these initial actions. The Company will finalize additional actions to be taken as part of the 2017 Restructuring over the coming months, which could result in additional charges and headcount reductions.
As part of the repositioning of the Tyfo® Fibrwrap® business in North America, the Company will evaluate the long-lived assets and goodwill of its Fyfe reporting unit for impairment during the third quarter of 2017. As of June 30, 2017, the Fyfe reporting unit had $55.7 million of long-lived assets and $56.0 million of goodwill.
In conjunction with the above action to divest Bayou, the Company will classify Bayou’s assets and liabilities, which were $98.8 million and $26.3 million at June 30, 2017, respectively, as held for sale beginning in the third quarter of 2017.