Exit Activity Costs and Asset Impairments

3 Months Ended

Mar. 31, 2016

Restructuring and Related Activities [Abstract]

Exit Activity Costs And Asset Impairments

EXIT ACTIVITY COSTS AND ASSET IMPAIRMENTS

The Company’s business strategy has been formulated to effect a transformation of its operations and much-improved financial results over a five year period.  In 2015, the first year of this planned transformation, an 80/20 simplification initiative commenced across many of our business units.  This on-going initiative, in part, focuses the Company’s internal resources on further increasing the value provided to our customers.  

A result of this initiative was the identification of low-volume, internally-produced products which have been or will be outsourced or discontinued. During the three months ended March 31, 2016, there were charges resulting from this identification that aggregated $910,000. These charges relate to the write-down of inventory and impairment of machinery and equipment associated with either discontinued product lines or the reduction of manufactured goods offered within a product line. These assets were written down to their sale or scrap value, and were subsequently sold or disposed of. Exit activity costs of $788,000 were also incurred during the three months ended March 31, 2016 relating to contract termination costs, severance costs, and other moving and closing costs. These costs were the result of the closing and consolidation of facilities, relocation of inventory and equipment at those facilities and the reduction of workforce associated with the discontinued products and closed facilities.

During the three months ended March 31, 2015, the Company sold one facility and eliminated one product line which resulted in asset impairment charges of $108,000 and exit activity costs of $111,000. In addition, the Company sold and leased back a facility, which resulted in a gain of $6,799,000.

The following table sets forth the asset impairment charges, exit activity costs and gain on facilities sold in conjunction with these efforts, incurred by segment during the three months ended March 31, related to the restructuring activities described above (in thousands):

	2016						2015
	Inventory write-downs &/or asset impairment charges		Exit activity costs		Total		Inventory write-downs &/or asset impairment charges		Exit activity costs		Gain on sale leaseback			Total
Residential Products	$	688	$	330	$	1,018	$	108	$	111	$	(6,799	)	$	(6,580	)
Industrial & Infrastructure Products	222		458		680		—		—		—			—
Total exit activity costs & asset impairments	$	910	$	788	$	1,698	$	108	$	111	$	(6,799	)	$	(6,580	)

The following table provides a summary of where the asset impairments and exit activity costs (gains) were recorded in the statement of operations for the three months ended March 31, (in thousands):

	Three Months Ended   March 31,
	2016		2015
Cost of sales	$	1,118	$	188
Selling, general, and administrative expense	580		(6,768		)
Net asset impairment and exit activity charges (gains)	$	1,698	$	(6,580	)

The following table reconciles the beginning and ending liability for exit activity costs relating to the Company’s facility consolidation efforts (in thousands):

	2016			2015
Balance at January 1	$	603		$	575
Exit activity costs recognized	788			111
Cash payments	(430		)	(323		)
Balance at March 31	$	961		$	363