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Realignment Programs

6 Months Ended

Jun. 30, 2024

Restructuring and Related Activities [Abstract]

Realignment Programs

Realignment Programs

In the first quarter of 2023, we identified and initiated certain realignment activities concurrent with the consolidation of our FPD 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. During 2023, we also initiated certain product and portfolio optimization activities. 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 Programs." The activities of the 2023 Realignment Programs were identified and implemented in phases throughout 2023 and are continuing into 2024. 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 SG&A, as applicable, in our condensed consolidated statements of income. We currently anticipate a total investment in realignment activities that have been evaluated and initiated of approximately $107 million of which $31 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 2023 Realignment Programs:

			Three Months Ended June 30, 2024
(Amounts in thousands)			FPD						FCD						Subtotal–Reportable Segments						All Other						Consolidated Total
Realignment Charges
Restructuring Charges
COS			$	6,994					$	129					$	7,123					$	—					$	7,123
SG&A			50						(69)						(19)						(28)						(47)
Loss on sale of business(1)			—						12,981						12,981						—						12,981
			$	7,044					$	13,041					$	20,085					$	(28)					$	20,057
Non-Restructuring Charges
COS			$	384					$	92					$	476					$	(78)					$	398
SG&A			(770)						16						(754)						534						(220)
			$	(386)					$	108					$	(278)					$	456					$	178
Total Realignment Charges
COS			$	7,378					$	221					$	7,599					$	(78)					$	7,521
SG&A			(720)						(53)						(773)						506						(267)
Loss on sale of business(1)			—						12,981						12,981						—						12,981
Total			$	6,658					$	13,149					$	19,807					$	428					$	20,235

__________________________________

(1) Loss on sale of business related to NAF AB control valves business as described within Note 1, "Basis of Presentation and Accounting Policies," to our condensed consolidated financial statements included in this Quarterly Report.

			Three Months Ended June 30, 2023
(Amounts in thousands)			FPD						FCD						Subtotal–Reportable Segments						All Other						Consolidated Total
Realignment Charges
Restructuring Charges
COS			$	1,410					$	—					$	1,410					$	—					$	1,410
SG&A			—						(29)						(29)						1						(28)
			$	1,410					$	(29)					$	1,381					$	1					$	1,382
Non-Restructuring Charges
COS			$	(457)					$	3,153					$	2,696					$	—					$	2,696
SG&A			17						29						46						7,427						7,473
			$	(440)					$	3,182					$	2,742					$	7,427					$	10,169
Total Realignment Charges
COS			$	953					$	3,153					$	4,106					$	—					$	4,106
SG&A			17						—						17						7,428						7,445
Total			$	970					$	3,153					$	4,123					$	7,428					$	11,551

			Six Months Ended June 30, 2024
(Amounts in thousands)			FPD						FCD						Subtotal–Reportable Segments						All Other						Consolidated Total
Realignment Charges
Restructuring Charges
COS			$	11,408					$	144					$	11,552					$	—					$	11,552
SG&A			751						(69)						682						(28)						654
Loss on sale of business(1)			—						12,981						12,981						—						12,981
			$	12,159					$	13,056					$	25,215					$	(28)					$	25,187
Non-Restructuring Charges
COS			$	1,014					$	844					$	1,858					$	(216)					$	1,642
SG&A			(430)						130						(300)						873						573
			$	584					$	974					$	1,558					$	657					$	2,215
Total Realignment Charges
COS			$	12,422					$	988					$	13,410					$	(216)					$	13,194
SG&A			321						61						382						845						1,227
Loss on sale of business(1)			—						12,981						12,981						—						$	12,981
Total			$	12,743					$	14,030					$	26,773					$	629					$	27,402

__________________________________

(1) Loss on sale of business related to NAF AB control valves business as described within Note 1, "Basis of Presentation and Accounting Policies," to our condensed consolidated financial statements included in this Quarterly Report.

			Six Months Ended June 30, 2023
(Amounts in thousands)			FPD						FCD						Subtotal–Reportable Segments						All Other						Consolidated Total
Realignment Charges
Restructuring Charges
COS			$	398					$	—					$	398					$	66					$	464
SG&A			—						8,876						8,876						1						8,877
			$	398					$	8,876					$	9,274					$	67					$	9,341
Non-Restructuring Charges
COS			$	945					$	3,164					$	4,109					$	(265)					$	3,844
SG&A			2,067						30						2,097						13,148						15,245
			$	3,012					$	3,194					$	6,206					$	12,883					$	19,089
Total Realignment Charges
COS			$	1,343					$	3,164					$	4,507					$	(199)					$	4,308
SG&A			2,067						8,906						10,973						13,149						24,122
Total			$	3,410					$	12,070					$	15,480					$	12,950					$	28,430

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			$	14,370					$	6,549					$	20,919					$	66					$	20,985
SG&A			801						9,708						10,509						(28)						10,481
Loss on sale of business(1)			—						12,981						12,981						—						12,981
			$	15,171					$	29,238					$	44,409					$	38					$	44,447
Non-Restructuring Charges
COS			$	8,849					$	5,015					$	13,864					$	(643)					$	13,221
SG&A			14,053						1,746						15,799						19,972						35,771
			$	22,902					$	6,761					$	29,663					$	19,329					$	48,992
Total Realignment Charges
COS			$	23,219					$	11,564					$	34,783					$	(577)					$	34,206
SG&A			14,854						11,454						26,308						19,944						46,252
Loss on sale of business(1)			—						12,981						12,981						—						12,981
Total			$	38,073					$	35,999					$	74,072					$	19,367					$	93,439

__________________________________

(1) Loss on sale of business related to NAF AB control valves business as described within Note 1, "Basis of Presentation and Accounting Policies," to our condensed consolidated financial statements included in this Quarterly Report.

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 2023 Realignment Programs:

			Three Months Ended June 30, 2024
(Amounts in thousands)			Severance						Contract Termination						Asset Write-Downs (Gains)						Other						Total
COS			$	(89)					$	—					$	6,507					$	705					$	7,123
SG&A			84						—						247						(378)						(47)
Loss on sale of business(1)			—						—						—						12,981						12,981
Total			$	(5)					$	—					$	6,754					$	13,308					$	20,057

__________________________________

(1) Loss on sale of business related to NAF AB control valves business as described within Note 1, "Basis of Presentation and Accounting Policies," to our condensed consolidated financial statements included in this Quarterly Report.

			Three Months Ended June 30, 2023
(Amounts in thousands)			Severance						Contract Termination						Asset Write-Downs (Gains)						Other						Total
COS			$	255					$	228					$	33					$	894					$	1,410
SG&A			(5)						—						(29)						6						(28)
Total			$	250					$	228					$	4					$	900					$	1,382

			Six Months Ended June 30, 2024
(Amounts in thousands)			Severance						Contract Termination						Asset Write-Downs (Gains)						Other						Total
COS			$	3,896					$	—					$	6,507					$	1,149					$	11,552
SG&A			785						—						247						(378)						654
Loss on sale of business(1)			—						—						—						12,981						12,981
Total			$	4,681					$	—					$	6,754					$	13,752					$	25,187

__________________________________

(1) Loss on sale of business related to NAF AB control valves business as described within Note 1, "Basis of Presentation and Accounting Policies," to our condensed consolidated financial statements included in this Quarterly Report.

			Six Months Ended June 30, 2023
(Amounts in thousands)			Severance						Contract Termination						Asset Write-Downs (Gains)						Other						Total
COS			$	441					$	294					$	(1,270)					$	999					$	464
SG&A			—						—						8,871						6						8,877
Total			$	441					$	294					$	7,601					$	1,005					$	9,341

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			$	10,981					$	301					$	7,301					$	2,402					$	20,985
SG&A			1,735						—						9,118						(372)						10,481
Loss on sale of business(1)			—						—						—						12,981						12,981
Total			$	12,716					$	301					$	16,419					$	15,011					$	44,447

__________________________________

(1) Loss on sale of business related to NAF AB control valves business as described within Note 1, "Basis of Presentation and Accounting Policies," to our condensed consolidated financial statements included in this Quarterly Report.

The following represents the activity, primarily severance charges from reductions in force, related to the restructuring reserves for the six months ended June 30, 2024 and 2023:

(Amounts in thousands)			2024						2023
Balance at January 1			$	8,184					$	965
Charges, net of adjustments			5,566						1,739
Cash expenditures			(72)						(1,231)
Other non-cash adjustments, including currency			(2,714)						(170)
Balance at June 30			$	10,964					$	1,303

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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.

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