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Realignment and Transformation Programs

12 Months Ended

Dec. 31, 2023

Restructuring and Related Activities [Abstract]

Realignment and Transformation 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.

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." The 2023 Realignment Program activities were 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 $87 million of which $17 million is estimated to be non-cash. There are certain remaining realignment activities that are currently being evaluated, but have not yet been approved 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:

			December 31, 2023
(Amounts in thousands)			FPD						FCD						Subtotal–Reportable Segments						All Other						Consolidated Total
Restructuring Charges
COS			$	2,962					$	6,405					$	9,367					$	66					$	9,433
SG&A			50						9,777						9,827						—						9,827
			$	3,012					$	16,182					$	19,194					$	66					$	19,260
Non-Restructuring Charges
COS			$	7,835					$	4,171					$	12,006					$	(427)					$	11,579
SG&A			14,483						1,616						16,099						19,099						35,198
			$	22,318					$	5,787					$	28,105					$	18,672					$	46,777
Total Realignment Charges
COS			$	10,797					$	10,576					$	21,373					$	(361)					$	21,012
SG&A			14,533						11,393						25,926						19,099						45,025
Total			$	25,330					$	21,969					$	47,299					$	18,738					$	66,037

			December 31, 2022
(Amounts in thousands)			FPD						FCD						Subtotal–Reportable Segments						All Other						Consolidated Total
Restructuring Charges
COS			$	768					$	93					$	861					$	—					$	861
SG&A			—						(4)						(4)						—						(4)
			$	768					$	89					$	857					$	—					$	857
Non-Restructuring Charges
COS			$	(530)					$	86					$	(444)					$	(61)					$	(505)
SG&A			148						(391)						(243)						(274)						(517)
			$	(382)					$	(305)					$	(687)					$	(335)					$	(1,022)
Total Realignment Charges
COS			$	238					$	179					$	417					$	(61)					$	356
SG&A			148						(395)						(247)						(274)						(521)
Total			$	386					$	(216)					$	170					$	(335)					$	(165)

			December 31, 2021
(Amounts in thousands)			FPD						FCD						Subtotal–Reportable Segments						All Other						Consolidated Total
Restructuring Charges
COS			$	8,046					$	811					$	8,857					$	—					$	8,857
SG&A			665						(9)						656						—						656
			$	8,711					$	802					$	9,513					$	—					$	9,513
Non-Restructuring Charges
COS			$	6,203					$	1,196					$	7,399					$	590					$	7,989
SG&A			368						708						1,076						3,913						4,989
			$	6,571					$	1,904					$	8,475					$	4,503					$	12,978
Total Realignment Charges
COS			$	14,249					$	2,007					$	16,256					$	590					$	16,846
SG&A			1,033						699						1,732						3,913						5,645
Total			$	15,282					$	2,706					$	17,988					$	4,503					$	22,491

    

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

			Inception to Date
(Amounts in thousands)			FPD						FCD						Subtotal–Reportable Segments						All Other						Consolidated Total
Restructuring Charges
COS			$	2,962					$	6,405					$	9,367					$	66					$	9,433
SG&A			50						9,777						9,827						—						9,827
			$	3,012					$	16,182					$	19,194					$	66					$	19,260
Non-Restructuring Charges
COS			$	7,835					$	4,171					$	12,006					$	(427)					$	11,579
SG&A			14,483						1,616						16,099						19,099						35,198
			$	22,318					$	5,787					$	28,105					$	18,672					$	46,777
Total Realignment Charges
COS			$	10,797					$	10,576					$	21,373					$	(361)					$	21,012
SG&A			14,533						11,393						25,926						19,099						45,025
Total			$	25,330					$	21,969					$	47,299					$	18,738					$	66,037

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. Restructuring charges include charges related to approved, but not yet announced, site closures.

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

			December 31, 2023
(Amounts in thousands)			Severance						Contract Termination						Asset Write-Downs						Other						Total
COS			$	7,085					$	301					$	794					$	1,253					$	9,433
SG&A			950						—						8,871						6						9,827
Total			$	8,035					$	301					$	9,665					$	1,259					$	19,260

			December 31, 2022
(Amounts in thousands)			Severance						Contract Termination						Asset Write-Downs						Other						Total
COS			$	122					$	327					$	273					$	139					$	861
SG&A			(4)						—						—						—						(4)
Total			$	118					$	327					$	273					$	139					$	857

			December 31, 2021
(Amounts in thousands)			Severance						Contract Termination						Asset Write-Downs						Other						Total
COS			$	964					$	34					$	2,683					$	5,176					$	8,857
SG&A			167						—						—						489						656
Total			$	1,131					$	34					$	2,683					$	5,665					$	9,513

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

			Inception to Date
(Amounts in thousands)			Severance						Contract Termination						Asset Write-Downs						Other						Total
COS			$	7,085					$	301					$	794					$	1,253					$	9,433
SG&A			950						—						8,871						6						9,827
Total			$	8,035					$	301					$	9,665					$	1,259					$	19,260

The following represents the activity, primarily severance, related to the restructuring reserve for the Realignment Programs for the years ended December 31, 2023 and 2022:

(Amounts in thousands)			2023						2022
Balance at January 1,			$	965					$	4,868
Charges			9,594						584
Cash expenditures			(2,110)						(3,518)
Other non-cash adjustments, including currency			(265)						(969)
Balance at December 31,			$	8,184					$	965

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- Definition

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

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-Topic 420
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