Charges Related To Restructuring Activities

9 Months Ended

Sep. 30, 2022

Restructuring and Related Activities [Abstract]

Charges Related To Restructuring Activities

Charges Related to Restructuring Activities

The company's restructuring charges were originally necessitated primarily by continued declines in Medicare and Medicaid reimbursement by the U.S. government, as well as similar healthcare reimbursement pressures abroad, which negatively affected the company's customers (e.g. home health care providers) and continued pricing pressures faced by the company due to the outsourcing by competitors to lower cost locations. Restructuring decisions were also the result of reduced profitability in each of the segments. Restructuring actions have continued into 2022.

For the nine months ended September 30, 2022, severance and other charges totaled $16,383,000 which were related to North America of $5,534,000, Europe of $9,766,000 and All Other of $1,083,000. Payments for the nine months ended September 30, 2022 were $10,789,000 and the cash payments were funded with the company's cash on hand. The 2022 charges are expected to be paid out within 12 months.

For the nine months ended September 30, 2021, charges totaled $2,476,000 which were related to North America of $975,000 and Europe of $1,501,000. In North America costs were incurred related to severance. The European charges were for severance costs $895,000 and contract terminations $606,000, primarily related to the closure of a German manufacturing facility. Payments for the nine months ended September 30, 2021 were $7,367,000 and the cash payments were funded with company's cash on hand.

There have been no material changes in accrued balances related to the charges, either as a result of revisions to the plans or changes in estimates. In addition, the savings anticipated as a result of the company's restructuring plans have been or are expected to be achieved, primarily resulting in reduced salary and benefit costs principally impacting selling, general and administrative expenses, and to a lesser extent, costs of products sold. To date, the company's liquidity has been sufficient to absorb these charges and payments.

A progression by reporting segment of the accruals recorded as a result of the restructuring for the nine months ended September 30, 2022 is as follows (in thousands):

	Severance		Other		Total
December 31, 2021 Balances
North America	$	482	$	—	$	482
Total	482		—		482
Charges
North America	1,124		538		1,662
Europe	2,119		—		2,119
All Other	9		—		9
Total	3,252		538		3,790
Payments
North America	(422)		(538)		(960)
Europe	(367)		—		(367)
All Other	(9)		—		(9)
Total	(798)		(538)		(1,336)
March 31, 2022 Balances
North America	1,184		—		1,184
Europe	1,752		—		1,752
Total	$	2,936	$	—	$	2,936
Charges
North America	$	542	998		$	1,540
Europe	1,288		1,325		2,613
Total	1,830		2,323		4,153
Payments
North America	(768)		(442)		(1,210)
Europe	(1,254)		(624)		(1,878)
Total	(2,022)		(1,066)		(3,088)
June 30, 2022 Balances
North America	958		556		1,514
Europe	1,786		701		2,487
Total	$	2,744	$	1,257	$	4,001
Charges
North America	116		2,216		2,332
Europe	1,033		4,001		5,034
All Other	1,074		—		1,074
Total	2,223		6,217		8,440
Payments
North America	(438)		(1,807)		(2,245)
Europe	(1,067)		(3,041)		(4,108)
All Other	(12)		—		(12)
Total	(1,517)		(4,848)		(6,365)
September 30, 2022 Balances
North America	636		965		1,601
Europe	1,752		1,661		3,413
All Other	1,062		—		1,062
Total	$	3,450	$	2,626	$	6,076