Restructuring

12 Months Ended

Dec. 31, 2023

Restructuring and Related Activities [Abstract]

RESTRUCTURING

On February 14, 2020, our Board of Directors approved a global restructuring plan (the “Restructuring Plan”) to improve operating performance and help ensure that we are appropriately structured and resourced to deliver sustainable value to our shareholders and customers. Key activities under the Restructuring Plan have targeted and achieved approximately $40 million in annualized savings. We believe we have successfully redefined our go-to-market strategy to place an increased focus on our customers and to help enable our sales employees, supported by our talented pool of field application engineers, to sell all product lines globally.

In conjunction with the Restructuring Plan, on July 15, 2021, we entered into a manufacturing services agreement (the “Agreement”) with Sanmina Corporation (“Sanmina”), in connection with the Restructuring Plan. Under the Agreement, Sanmina provides manufacturing services for the Company’s measurement device products previously manufactured by the Company at the Company’s Lake Mary, Florida, Exton, Pennsylvania, Stuttgart, Germany and Portugal manufacturing sites. This phased transition to a Sanmina production facility was completed at the beginning of the third quarter of 2022 as part of our cost reduction initiative. As a result of an evaluation on the usage of our manufacturing spaces, we decided to abandon 17,000 square feet of unused space at our Exton, Pennsylvania facility in the third quarter of 2022. Since the approval of the Restructuring Plan, we paid $24.8 million, primarily consisting of severance and related benefits. All actions under this plan were completed as of March 31, 2023, and the remaining amounts payable of $0.5 million were rolled forward to the Integration Plan discussed below.

In connection with the Restructuring Plan, we recorded a total pre-tax charge of approximately $4.6 million for the year ended December 31, 2022, which include expenses to be paid in cash of $3.0 million, primarily consisting of severance and related benefits, professional fees and other related charges and a non-cash expense of $1.6 million, consisting of the impairment of assets. We paid $6.4 million for the year ended December 31, 2022, primarily consisting of severance and related benefits.

On February 7, 2023, our Board of Directors approved an integration plan (the "Integration Plan"), which is intended to streamline and simplify operations, particularly around our recent acquisitions and the resulting redundant operations and offerings. The Integration Plan was amended on May 3, 2023, and the Board approved increases to both the expected pre-tax

charges and the annualized cost savings. Key activities under the Integration Plan include a planned decrease in headcount, consolidation of our cloud-based offerings from 3 platforms (2 acquired, 1 organic) into a single customer offering, and the optimization of our facility assets to align with current and expected future utilization. We expected to incur total pre-tax charges in the range of $22 million to $28 million, at the inception of the Integration Plan, predominantly through the first half of 2024, with a targeted annualized savings of approximately $20 million to $30 million. As of December 31, 2023, in relation with the Integration Plan, we have incurred total restructuring charges of $26.1 million, and have made cash payments of $8.7 million, primarily consisting of severance and related benefits, inventory impairment charges and right-of-use asset impairment charges.

In 2023, we completed an evaluation of our leased facilities located in Lake Mary, Florida, Stuttgart and Dresden, Germany, Portugal and Singapore and determined that we will abandon portions of these facilities. Consequently, we recorded right-of-use asset and leasehold improvement impairment charges of $4.0 million, which was included in restructuring costs on the condensed consolidated statements of operations. We expect to make cash payments for the remaining duration of the contractual lease period approximating the right-of-use asset write-off value. In 2023, we recorded $1.4 million in asset impairment charges to fully expense the net book value of certain software assets. As a part of the Integration Plan, we also evaluated our product portfolio and decided to discontinue certain legacy products. This led to inventory and related purchase commitments impairment charges of $9.3 million, which were included in the cost of sales on the condensed consolidated statements of operations.

Activity related to the accrued restructuring and integration charge and cash payments during the year ended December 31, 2023, 2022 and 2021 was as follows:


	Severance and other benefits		Professional fees and other related charges		Total
Balance at December 31, 2022	$	318	$	210	$	528
Additions charged to expense	9,448		303		9,751
Cash payments	(8,277)		(393)		(8,670)
Balance at December 31, 2023	$	1,489	$	120	$	1,609

Balance at December 31, 2021	$	3,442	$	477	$	3,919
Additions charged to expense	1,643		1,330		2,973
Cash payments	(4,767)		(1,597)		(6,364)
Balance at December 31, 2022	$	318	$	210	$	528

Balance at December, 2020	$	1,481	$	866	$	2,347
Additions charged to expense	5,197		2,171		7,368
Cash payments	(3,236)		(2,560)		(5,796)
Balance at December 31, 2021	$	3,442	$	477	$	3,919

Substantially all of our planned activities under the Restructuring Plan and Integration Plan are complete and as part of our final steps, we expect to potentially incur remaining pre-tax charges in the range of $0.5 million to $1.0 million through the first half of fiscal year 2024.