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Realignment Programs

9 Months Ended

Sep. 30, 2023

Restructuring and Related Activities [Abstract]

Realignment Programs

Realignment Programs

In the second quarter of 2020, we identified and initiated certain realignment activities to right-size our organizational operations based on the current business environment, with the overall objective to reduce our workforce costs, including manufacturing optimization through the consolidation of certain facilities ("2020 Realignment Program"). As of December 31, 2022, the 2020 Realignment Program was substantially complete with a minimal amount of residual charges to be incurred prospectively.

In the first quarter of 2023, we identified and initiated certain realignment activities concurrent with the consolidation of our aftermarket and pump operations into a single operating model. This consolidated operating model is designed to better align our go to market strategy with our product offerings, enable end-to-end lifecycle responsibility and accountability, and to facilitate more efficient operations. Additionally, we committed to an estimated $50 million in cost reduction efforts to begin in 2023. Collectively, the above realignment activities are referred to as the 2023 Realignment Program ("2023 Realignment Program"). The 2023 Realignment Program activities will be identified and implemented in phases throughout 2023. The realignment activities consist of restructuring and non-restructuring charges. Restructuring charges represent costs associated with the relocation of certain business activities and facility closures and include related severance costs. Non-restructuring charges are primarily employee severance associated with workforce reductions and professional service fees. Expenses are primarily reported in cost of sales ("COS") or selling, general and administrative ("SG&A"), as applicable, in our consolidated statements of income. We currently anticipate a total investment in realignment activities that have been evaluated and initiated of approximately $62 million of which $13 million is estimated to be non-cash. There are certain other realignment activities that are currently being evaluated, but have not yet been initiated and therefore are not included in the above anticipated total investment.

Generally, the aforementioned charges will be paid in cash, except for asset write-downs, which are non-cash charges. The following is a summary of total charges, net of adjustments, incurred related to our Realignment Programs:

			Three Months Ended September 30, 2023
(Amounts in thousands)			FPD						FCD						Subtotal–Reportable Segments						All Other						Consolidated Total
Realignment Charges
Restructuring Charges
COS			$	173					$	—					$	173					$	—					$	173
SG&A			—						1						1						(1)						—
			$	173					$	1					$	174					$	(1)					$	173
Non-Restructuring Charges
COS			$	5,968					$	1,099					$	7,067					$	—					$	7,067
SG&A			9,929						1,571						11,500						3,454						14,954
			$	15,897					$	2,670					$	18,567					$	3,454					$	22,021
Total Realignment Charges
COS			$	6,141					$	1,099					$	7,240					$	—					$	7,240
SG&A			9,929						1,572						11,501						3,453						14,954
Total			$	16,070					$	2,671					$	18,741					$	3,453					$	22,194

			Three Months Ended September 30, 2022
(Amounts in thousands)			FPD						FCD						Subtotal–Reportable Segments						All Other						Consolidated Total
Realignment Charges
Restructuring Charges
COS			$	(456)					$	26					$	(430)					$	—					$	(430)
SG&A			—						2						2						—						2
			$	(456)					$	28					$	(428)					$	—					$	(428)
Non-Restructuring Charges
COS			$	39					$	(4)					$	35					$	—					$	35
SG&A			74						5						79						18						97
			$	113					$	1					$	114					$	18					$	132
Total Realignment Charges
COS			$	(417)					$	22					$	(395)					$	—					$	(395)
SG&A			74						7						81						18						99
Total			$	(343)					$	29					$	(314)					$	18					$	(296)

			Nine Months Ended September 30, 2023
(Amounts in thousands)			FPD						FCD						Subtotal–Reportable Segments						All Other						Consolidated Total
Realignment Charges
Restructuring Charges
COS			$	571					$	—					$	571					$	66					$	637
SG&A			—						8,877						8,877						—						8,877
			$	571					$	8,877					$	9,448					$	66					$	9,514
Non-Restructuring Charges
COS			$	6,913					$	4,263					$	11,176					$	(265)					$	10,911
SG&A			11,996						1,601						13,597						16,602						30,199
			$	18,909					$	5,864					$	24,773					$	16,337					$	41,110
Total Realignment Charges
COS			$	7,484					$	4,263					$	11,747					$	(199)					$	11,548
SG&A			11,996						10,478						22,474						16,602						39,076
Total			$	19,480					$	14,741					$	34,221					$	16,403					$	50,624

			Nine Months Ended September 30, 2022
(Amounts in thousands)			FPD						FCD						Subtotal–Reportable Segments						All Other						Consolidated Total
Realignment Charges
Restructuring Charges
COS			$	430					$	97					$	527					$	—					$	527
SG&A			—						2						2						—						2
			$	430					$	99					$	529					$	—					$	529
Non-Restructuring Charges
COS			$	(550)					$	(41)					$	(591)					$	(61)					$	(652)
SG&A			150						55						205						(248)						(43)
			$	(400)					$	14					$	(386)					$	(309)					$	(695)
Total Realignment Charges
COS			$	(120)					$	56					$	(64)					$	(61)					$	(125)
SG&A			150						57						207						(248)						(41)
Total			$	30					$	113					$	143					$	(309)					$	(166)

The following is a summary of total inception to date charges, net of adjustments, related to the 2023 Realignment Programs:

			Inception to Date
(Amounts in thousands)			FPD						FCD						Subtotal–Reportable Segments						All Other						Consolidated Total
Realignment Charges
Restructuring Charges
COS			$	571					$	—					$	571					$	66					$	637
SG&A			—						8,877						8,877						—						8,877
			$	571					$	8,877					$	9,448					$	66					$	9,514
Non-Restructuring Charges
COS			$	6,913					$	4,263					$	11,176					$	(265)					$	10,911
SG&A			11,996						1,601						13,597						16,602						30,199
			$	18,909					$	5,864					$	24,773					$	16,337					$	41,110
Total Realignment Charges
COS			$	7,484					$	4,263					$	11,747					$	(199)					$	11,548
SG&A			11,996						10,478						22,474						16,602						39,076
Total			$	19,480					$	14,741					$	34,221					$	16,403					$	50,624

Restructuring charges represent costs associated with the relocation or reorganization of certain business activities and facility closures and include costs related to employee severance at closed facilities, contract termination costs, asset write-downs and other costs. Severance costs primarily include costs associated with involuntary termination benefits. Contract termination costs include costs related to the termination of operating leases or other contract termination costs. Asset write-downs include accelerated depreciation of fixed assets, accelerated amortization of intangible assets, divestiture of certain non-strategic assets and inventory write-downs. Other costs generally include costs related to employee relocation, asset relocation, vacant facility costs (i.e., taxes and insurance) and other charges.

The following is a summary of restructuring charges, net of adjustments, for our restructuring activities related to our Realignment Programs:

			Three Months Ended September 30, 2023
(Amounts in thousands)			Severance						Contract Termination						Asset Write-Downs (Gains)						Other						Total
COS			$	2					$	—					$	—					$	171					$	173
SG&A			—						—						—						—						—
Total			$	2					$	—					$	—					$	171					$	173

			Three Months Ended September 30, 2022
(Amounts in thousands)			Severance						Contract Termination						Asset Write-Downs (Gains)						Other						Total
COS			$	(309)					$	—					$	(89)					$	(32)					$	(430)
SG&A			12						—						—						(10)						2
Total			$	(297)					$	—					$	(89)					$	(42)					$	(428)

			Nine Months Ended September 30, 2023
(Amounts in thousands)			Severance						Contract Termination						Asset Write-Downs (Gains)						Other						Total
COS			$	443					$	294					$	(1,270)					$	1,170					$	637
SG&A			—						—						8,871						6						8,877
Total			$	443					$	294					$	7,601					$	1,176					$	9,514

			Nine Months Ended September 30, 2022
(Amounts in thousands)			Severance						Contract Termination						Asset Write-Downs (Gains)						Other						Total
COS			$	260					$	—					$	170					$	97					$	527
SG&A			12						—						—						(10)						2
Total			$	272					$	—					$	170					$	87					$	529

The following is a summary of total inception to date restructuring charges, net of adjustments, related to our 2023 Realignment Programs:

			Inception to Date
(Amounts in thousands)			Severance						Contract Termination						Asset Write-Downs (Gains)						Other						Total
COS			$	443					$	294					$	(1,270)					$	1,170					$	637
SG&A			—						—						8,871						6						8,877
Total			$	443					$	294					$	7,601					$	1,176					$	9,514

The following represents the activity, primarily severance charges from reductions in force, related to the restructuring reserves for the nine months ended September 30, 2023 and 2022:

(Amounts in thousands)			2023						2022
Balance at January 1			$	965					$	4,868
Charges, net of adjustments			1,912						359
Cash expenditures			(1,747)						(2,311)
Other non-cash adjustments, including currency			(266)						(1,431)
Balance at September 30			$	864					$	1,485

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The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 420
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
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