Business Reorganization

3 Months Ended

Mar. 31, 2024

Restructuring and Related Activities [Abstract]

Business Reorganizations

In July 2022, Company management, commenced a systematic multi-phased initiative to significantly reduce costs and integrate the Company's operations, decreasing complexity and focusing on improved performance across Industrial. More specifically, at this time, the Company announced a restructuring program to further reduce costs within the Industrial segment and, more broadly, transform our businesses in response to macroeconomic disruptions. Additional actions were subsequently announced in October 2022, April 2023 (including Aerospace) and September 2023 (including Aerospace). Management continues to adjust its cost structures to align with market conditions.

2022 Actions

The Company authorized restructuring actions (“2022 Actions”) focused on the consolidation of two manufacturing sites and a number of branch offices and changes in infrastructure to eliminate certain roles across a number of locations in the Industrial segment businesses in July and October 2022. The 2022 Actions resulted in pre-tax charges of $17,986 and $10,328 recorded in 2022 (recorded in second half of 2022) and 2023 (recorded primarily in the first and third quarters of 2023), respectively. Of the aggregate pre-tax charges of $10,328 recorded in 2023, $3,990 were recorded in the first quarter, primarily within Cost of sales in the accompanying Condensed Consolidated Statements of Income, and primarily related to $1,593 of accelerated depreciation of assets and $2,397 of transfer of work charges.

During the first quarter of 2024, additional pre-tax charges of $2,367 related to the 2022 Actions, including $1,553 primarily related to site consolidation and transfer of work charges, and $724 of accelerated depreciation of assets, were recorded within Cost of sales, and $90 of expenses were recorded within Selling and administrative expenses in the accompanying Condensed Consolidated Statements of Income. The Company does not expect any additional costs related to the 2022 Actions to be significant.

A corresponding liability of $509, per below, related to the employee termination costs remained and was included within accrued liabilities as of March 31, 2024.

The following table sets forth the change in the liability for the employee termination benefits related to the 2022 Actions:


December 31, 2023	$	538

Payments	(29)
March 31, 2024	$	509

April 2023 Actions

In April 2023, the Company authorized restructuring actions (“April 2023 Actions”) focused on manufacturing footprint optimization, including the consolidation of manufacturing sites and optimization of production. These actions include the geographic transfer of certain programs within both the Industrial and Aerospace segments and changes in infrastructure to drive improvements and efficiencies in business processes, including the elimination of certain roles across several locations. The April 2023 Actions resulted in pre-tax charges of $13,783 in 2023 (recorded primarily in the second and third quarters of 2023).

During the first quarter of 2024, additional pre-tax charges of $595 related to the April 2023 Actions, primarily related to $470 of transfer of work charges, were recorded within Cost of sales and $125 of expenses were recorded within selling and administrative expenses, in the accompanying Condensed Consolidated Statements of Income. Of the aggregate charges recorded, $232 was reflected within the results of the Industrial segment and $363 was reflected within the results of the Aerospace segment.

A corresponding liability of $1,699, per below, related to the employee termination costs remained and was included within accrued liabilities as of March 31, 2024. The Company expects to incur additional costs of approximately $13,000 related to the April 2023 Actions, which are primarily related to transfer of work charges. Of the aggregate, approximately $10,000 and $3,000 relate to the Aerospace and Industrial segments, respectively. The April 2023 Actions are expected to be completed throughout multiple periods, with completion in 2025.

The following table sets forth the change in the liability for the employee termination benefits related to the April 2023 Actions:


December 31, 2023	$	6,247

Payments	(4,548)
March 31, 2024	$	1,699

September 2023 Actions

In September 2023, the Company authorized restructuring actions (“September 2023 Actions”) including organizational realignment within a Barnes Industrial business and within Barnes Aerospace following the MB Aerospace acquisition. Resulting pre-tax charges of $7,878 were recorded primarily in the third quarter of 2023 related to employee termination costs, primarily employee severance and other termination benefits, which are expected to be paid in cash by the end of 2025. The Company does not expect any additional costs related to the September 2023 Actions to be significant.

A corresponding liability of $1,563, per below, related to the employee termination costs remained and was included within accrued liabilities as of March 31, 2024.

The following table sets forth the change in the liability for the employee termination benefits related to the September 2023 Actions:


December 31, 2023	$	2,736
Employee severance and other termination benefits	23
Payments	(1,196)
March 31, 2024	$	1,563