Restructuring Charges

9 Months Ended

Sep. 30, 2022

Restructuring and Related Activities [Abstract]

Note 12 – Restructuring Charges

The Company has undertaken initiatives to restructure its business operations to improve utilization and realize cost savings. These initiatives have included changing the number and location of production facilities, largely to align capacity and infrastructure with current and anticipated customer demand. This alignment includes transferring programs from higher cost geographies to lower cost geographies. The process of restructuring entails moving production between facilities, reducing staff levels, realigning our business processes, reorganizing our management and other activities.

The Company recognized $4.9 million of restructuring charges during the nine months ended September 30, 2022 primarily related to the previously announced closures of our sites in San Jose, California, Angleton, Texas, and Moorpark, California in the Americas, and other smaller activities involving capacity reductions and reductions in workforce in certain facilities across various regions. San Jose, California operations have ceased and all restructuring activity was complete as of March 31, 2022. Angleton, Texas operations have ceased and all restructuring activity is complete as of June 30, 2022 upon the disposition of the facility. Moorpark, California operations are expected to cease at the end of March 31, 2023 with restructuring activity estimated to be completed shortly thereafter.

The following table summarizes the 2022 activity in accrued restructuring, which is included in accrued liabilities in the condensed consolidated balance sheets, related to various restructuring activities initiated prior to September 30, 2022:


	Balance as of										Foreign		Balance as of
	December 31,		Restructuring		Cash			Non-Cash			Exchange		September 30,
(in thousands)	2021		Charges		Payment			Activity			Adjustments		2022
Restructuring:
Severance	$	3,257	$	2,498	$	(1,665	)	$	(287	)	$	—	$	3,803
Lease facility costs		17		1,261		(1,262	)		—			—		16
Other exit costs		237		1,152		(1,205	)		(102	)		—		82
Total	$	3,511	$	4,911	$	(4,132	)	$	(389	)	$	—	$	3,901

The components of the restructuring charges during 2022 were as follows:


(in thousands)	Americas		Asia		Europe		Total
Severance costs	$	2,368	$	130	$	—	$	2,498
Lease facility costs		1,261		—		—		1,261
Other exit costs		1,152		—		—		1,152
	$	4,781	$	130	$	—	$	4,911

Additionally, during the third quarter of 2021, the Company made the decision to no longer continue certain manufacturing capabilities in the Americas. In connection with that decision, the Company assessed the facility and equipment assets used in those manufacturing capabilities using valuation information from third parties and recorded $4.4 million of impairment charges as a result of that assessment. The asset impairment charges are included in the restructuring charges and other costs line item on the consolidated statements of income as of September 30, 2021. During the nine months ended September 30, 2022, the Company completed the sale of the equipment for $1.3 million and recorded a loss on assets held for sale of $2.0 million included in the restructuring charges and other costs line item on the consolidated statements of income. Additionally, during the nine months ended September 30, 2022, the Company completed the sale of a building in Angleton, Texas for $4.3 million and recorded a gain on assets held for sale of $2.4 million included in the restructuring charges and other costs line item on the consolidated statements of income.