Exit Activity Costs and Asset Impairments

6 Months Ended

Jun. 30, 2020

Restructuring and Related Activities [Abstract]

EXIT ACTIVITY COSTS AND ASSET IMPAIRMENTS

The Company has incurred exit activity costs and asset impairment charges as a result of its 80/20 simplification and portfolio management initiatives. These initiatives have resulted in the identification of low-volume, low margin, internally-produced products which have been or will be outsourced or discontinued, the simplification of processes, the sale and exiting of less profitable businesses or product lines, and the reduction in our manufacturing footprint.

Exit activity costs were incurred during the six months ended June 30, 2020 and 2019 which related to moving and closing costs, contract terminations, and severance incurred as a result of process simplification initiatives. During the six months ended June 30, 2020, the Company closed one facility in conjunction with these initiatives. No facilities were closed as a result of these initiatives during the first half of 2019.

The following tables set forth the asset impairment charges and exit activity costs incurred by segment during the three and six months ended June 30, related to the restructuring activities described above (in thousands):


	Three months ended June 30,
	2020										2019
	Inventory write-downs &/or asset impairment charges		Exit activity costs		Total		Inventory write-downs &/or asset impairment charges		Exit activity (recoveries) costs, net		Total
Renewable Energy and Conservation	$	72	$	316	$	388	$	—	$	(95)	$	(95)
Residential Products	—		263		263		—		219		219
Industrial and Infrastructure Products	274		40		314		—		1,346		1,346
Corporate	—		45		45		—		666		666
Total exit activity costs & asset impairments	$	346	$	664	$	1,010	$	—	$	2,136	$	2,136


	Six months ended June 30,
	2020										2019
	Inventory write-downs &/or asset impairment charges		Exit activity costs		Total		Inventory write-downs &/or asset impairment charges		Exit activity (recoveries) costs, net		Total
Renewable Energy and Conservation	$	72	$	334	$	406	$	—	$	(1)	$	(1)
Residential Products	—		484		484		—		370		370
Industrial and Infrastructure Products	274		38		312		—		1,313		1,313
Corporate	—		99		99		—		673		673
Total exit activity costs & asset impairments	$	346	$	955	$	1,301	$	—	$	2,355	$	2,355

The following table provides a summary of where the asset impairments and exit activity costs were recorded in the consolidated statements of income for the three and six months ended June 30, (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Cost of sales	$	786	$	319	$	873	$	285
Selling, general, and administrative expense	224		1,817		428		2,070
Total asset impairment and exit activity charges	$	1,010	$	2,136	$	1,301	$	2,355

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


	2020		2019
Balance at January 1	$	5,449	$	1,923
Exit activity costs recognized	955		2,355
Cash payments	(5,575)		(1,329)
Balance at June 30	$	829	$	2,949

On June 30, 2020, the Company sold its self-guided apartment tour application business to a third party from its Residential Products segment. The $2.0 million net proceeds from the sale resulted in pre-tax net gain of $1.9 million and has been presented within other (income) expense in the consolidated statements of income. This divestiture does not meet the criteria to be reported as a discontinued operation nor will it have a major effect on the Company's operations.