RESTRUCTURING AND ASSETS HELD FOR SALE

9 Months Ended

Jun. 30, 2023

Restructuring And Assets Held For Sale [Abstract]

10. RESTRUCTURING AND ASSETS HELD FOR SALE

During June 2022, the Company approved and announced a plan to close its facility in Cumberland. Further, the Company’s site consolidation strategy includes the following sites, which have been identified for relocation of operations: Dublin, Gannat, Blackthorn, RMS St. Louis, Boyertown and Haslett.

For the three and nine months ended June 30, 2023, the Company incurred immaterial expenses that qualify as exit and disposal costs under GAAP, and does not expect further material charges as a result of the closures and planned site consolidations. Exit and disposal costs were charged to other operating expense. Further, as of June 30, 2023, the liability balance for exit and disposal costs that qualify as employee-related exit and disposal costs was $654.

Cumberland and Dublin

The Cumberland facility exit was a part of the transfer plan settlement, as further described in Note 14 – Contingencies. The Cumberland facility exit was completed in September 2022. The real property of the Cumberland facility initially met the criteria for assets held for sale as of March 31, 2023. Further, in connection with this conclusion, the Company determined that the carrying value exceeded the fair value of the real property at the Cumberland facility less costs to sell. As a result, asset impairment charges of $213 and $891 were recorded within the RMS reportable segment during the three and nine months ended June 30, 2023, respectively. The real property of the Cumberland facility continued to meet the criteria for assets held for sale as of June 30, 2023. The Dublin facility transition was completed in November 2022. The operations at both the Cumberland facility and the Dublin facility were within the RMS reporting segment.

Gannat, Blackthorn and RMS St. Louis

During the nine months ended June 30, 2023, the Company completed its consultation with employee representatives at the Gannat and Blackthorn facilities and the closures of both facilities were approved. The consolidation of operations at Gannat with the operations in Horst, the Netherlands was completed in June 2023, and the consolidation of the operations at the Blackthorn facility with the operations in Hillcrest, U.K. is expected to be complete by the end of June 2024. As of June 30, 2023, the real property of the Gannat and Blackthorn facilities met the criteria for assets held for sale. The RMS St. Louis facility closed in June 2023 and the GEMS operations at the RMS St. Louis facility were relocated to the DSA St. Louis facility and other operational facilities. The operations at the Gannat, Blackthorn and RMS St. Louis facilities are within the RMS reportable segment.

Boyertown and Haslett

Prior to the acquisition of Envigo, the Boyertown and Haslett facilities were identified for relocation of operations to the Denver, Pennsylvania facility. The exits of the Boyertown and Haslett facilities were completed in March 2023. Further, it was determined that the assets of the Boyertown and Haslett facilities initially met the criteria for assets held for sale as of March 31, 2023 and continues to be held for sale as of June 30, 2023.

Israel

Prior to the Envigo acquisition, Envigo management signed a Stock Purchase Agreement dated October 6, 2021, to sell its ownership interest in its Israel RMS and Israel CRS businesses (the “Israeli Businesses”) to the management team of the Israel Businesses for $6,650. The sale includes the Company’s 100% ownership in Israel RMS and Israel RMS’s 62.5% ownership interest in Israel CRS. The management team currently owns the 37.5% non-controlling ownership position in Israel CRS. In October 2022, the Company’s Board of Directors approved the sale of the Israeli Businesses. As a result of this approval, and in consideration of the remaining assets held for sale criteria under ASC 360 – Property, Plant and Equipment, the net assets and liabilities of the Israeli Businesses met the criteria for assets held for sale as of March 31, 2023 and continues to be held for sale as of June 30, 2023. This sale is expected to close by the end of the fiscal year ending September 30, 2023 and will be reflected in the RMS reportable segment. The combined income (loss) before taxes of the Israeli Businesses for the three and nine months ended June 30, 2023 was $670 and $(424), respectively.

Assets Held for Sale

The assets and liabilities, and the resulting net assets held for sale, of the Israeli Businesses and the Boyertown, Haslett, Cumberland, Gannat and Blackthorn facilities are as follows:


	June 30, 2023
Assets
Current assets:
Cash and cash equivalents	$	1,305
Restricted cash	454
Trade receivables and contract assets, net of allowances for credit losses	2,686
Inventories, net	673
Prepaid expenses and other current assets	1,190
Total current assets	$	6,308

Property and equipment, net	2,400
Total assets	$	8,708

Liabilities
Current liabilities:
Accounts payable	$	207
Accrued expenses and other liabilities	1,566
Fees invoiced in advance	498
Total liabilities	$	2,271

Net assets held for sale	$	6,437