Restructuring Charges

9 Months Ended

Sep. 30, 2023

Restructuring and Related Activities [Abstract]

Restructuring Charges

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 $5.2 million of restructuring charges during the nine months ended September 30, 2023 primarily related to the previously announced closure of our site in Moorpark, California in the Americas, and other smaller activities involving capacity reductions and reductions in workforce in certain facilities across various regions. Moorpark, California operations ceased as of March 31, 2023 with restructuring activity expected to be substantially completed in 2023.

The following table summarizes the 2023 activity in accrued restructuring, which is included in accrued liabilities on the condensed consolidated balance sheet, as of September 30, 2023 and relates to various restructuring activities initiated prior to September 30, 2023:

	Balance as of									Foreign		Balance as of
	December 31,		Restructuring		Cash			Non-Cash		Exchange		September 30,
(in thousands)	2022		Charges		Payments			Activity		Adjustments		2023
Restructuring:
Severance	$	3,683	$	2,971	$	(6,600	)	$	—	$	32	$	86
Lease facility costs		17		153		(161	)		—		—		9
Other exit costs		81		2,104		(2,103	)		—		—		82
	$	3,781	$	5,228	$	(8,864	)	$	-	$	32	$	177

The components of restructuring charges during the first nine months of 2023 were as follows:

(in thousands)	Americas		Asia		Europe		Total
Severance costs	$	2,908	$	63	$	—	$	2,971
Lease facility costs		153		—		—		153
Other exit costs		2,104		—		—		2,104
	$	5,165	$	63	$	—	$	5,228

During the second quarter of 2023, 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 and recorded $1.1 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 condensed consolidated statements of income for the nine months ended September 30, 2023.

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. 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.