Restructuring

9 Months Ended

Sep. 30, 2022

Restructuring and Related Activities [Abstract]

In the first quarter of 2020, our Board of Directors approved a global restructuring plan (the “Restructuring Plan”), which is intended to support our strategic plan in an effort to improve operating performance and ensure that we are appropriately structured and resourced to deliver increased and sustainable value to our shareholders and customers. Key activities under the Restructuring Plan include a continued focus on efficiency and cost-saving efforts, which included a planned decrease of total headcount upon the completion of the Restructuring Plan.

On July 15, 2021, we entered into a manufacturing services agreement (the “Agreement”) with Sanmina Corporation (Nasdaq: SANM) (“Sanmina”), in connection with the Restructuring Plan. Under the Agreement, Sanmina will provide manufacturing services for the Company’s measurement device products previously manufactured by the Company at the Company’s Lake Mary, Florida, Exton, Pennsylvania, and Stuttgart, Germany 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. We are currently evaluating these manufacturing sites with the intention to reduce our leased floor space. However, all of these facilities are mixed-use spaces shared with our service, research and development, or sales teams who continue to use these spaces. The Company, in collaboration with third party lessors and architectural resources, intends to conduct studies over the feasibility of abandoning or demising leased floor space against our current needs. Our current needs continue to include access to existing spaces previously constructed to closely monitor temperature and vibration for our service and research and development teams. The conclusion of this evaluation and any subsequent approval to abandon or reduce these leased spaces would be considered as a change in the manner of the use of these corresponding assets, and thereby will be evaluated for impairment. We expect to complete this evaluation before the first half of fiscal year 2023. As of September 30, 2022, the remaining value of leasehold improvements for these facilities is approximately $3 million and a portion of this may be impaired, if the Company decides to reduce or abandon the leased space. Separately, we may also incur additional charges for the modification of leases for these facilities.

In connection with the Restructuring Plan, we paid $5.9 million during the nine months ended September 30, 2022, primarily consisting of severance and related benefits. Since the approval of the Restructuring Plan, we have paid $24.8 million, primarily consisting of severance and related benefits. Activity related to the accrued restructuring charge and cash payments during the nine months ended September 30, 2022 and September 30, 2021 was as follows:


	Severance and other benefits		Professional fees and other related charges		Total
Balance at December 31, 2021	$	3,442	$	477	$	3,919
Additions charged to expense	1,439		1,072		2,511
Cash payments	(4,619)		(1,291)		(5,910)
Balance at September 30, 2022	$	262	$	258	$	520

Balance at December 31, 2020	$	1,481	$	867	$	2,348
Additions charged to expense	2,515		1,164		3,679
Cash payments	(2,784)		(1,750)		(4,534)
Balance at September 30, 2021	$	1,212	$	281	$	1,493

Substantially all of our planned activities under the Restructuring Plan are complete and as part of our final steps, we expect to potentially incur remaining pre-tax charges in the range of $1.5 million to $3.5 million through the first half of fiscal year 2023. We have reduced our total headcount by approximately 390 employees. The Company expects to make concluding cash payments of approximately $1.5 million in the remainder of fiscal year 2022, primarily consisting of remaining severance and related benefits.