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Realignment Programs

9 Months Ended

Sep. 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 services 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 $123 million of which $37 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 September 30, 2024
(Amounts in thousands)			FPD						FCD						Subtotal–Reportable Segments						All Other						Consolidated Total
Realignment Charges
Restructuring Charges
COS			$	7,856					$	(2,342)					$	5,514					$	—					$	5,514
SG&A			484						1,254						1,738						—						1,738
			$	8,340					$	(1,088)					$	7,252					$	—					$	7,252
Non-Restructuring Charges
COS			$	559					$	752					$	1,311					$	(12)					$	1,299
SG&A			232						125						357						47						404
			$	791					$	877					$	1,668					$	35					$	1,703
Total Realignment Charges
COS			$	8,415					$	(1,590)					$	6,825					$	(12)					$	6,813
SG&A			716						1,379						2,095						47						2,142
Total			$	9,131					$	(211)					$	8,920					$	35					$	8,955

			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

			Nine Months Ended September 30, 2024
(Amounts in thousands)			FPD						FCD						Subtotal–Reportable Segments						All Other						Consolidated Total
Realignment Charges
Restructuring Charges
COS			$	19,264					$	(2,198)					$	17,066					$	—					$	17,066
SG&A			1,235						1,185						2,420						(28)						2,392
Loss on sale of business(1)			—						12,981						12,981						—						12,981
			$	20,499					$	11,968					$	32,467					$	(28)					$	32,439
Non-Restructuring Charges
COS			$	1,573					$	1,595					$	3,168					$	(228)					$	2,940
SG&A			(199)						256						57						920						977
			$	1,374					$	1,851					$	3,225					$	692					$	3,917
Total Realignment Charges
COS			$	20,837					$	(603)					$	20,234					$	(228)					$	20,006
SG&A			1,036						1,441						2,477						892						3,369
Loss on sale of business(1)			—						12,981						12,981						—						$	12,981
Total			$	21,873					$	13,819					$	35,692					$	664					$	36,356

__________________________________

(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.

			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

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			$	22,226					$	4,207					$	26,433					$	66					$	26,499
SG&A			1,285						10,962						12,247						(28)						12,219
Loss on sale of business(1)			—						12,981						12,981						—						12,981
			$	23,511					$	28,150					$	51,661					$	38					$	51,699
Non-Restructuring Charges
COS			$	9,408					$	5,767					$	15,175					$	(655)					$	14,520
SG&A			14,285						1,871						16,156						20,019						36,175
			$	23,693					$	7,638					$	31,331					$	19,364					$	50,695
Total Realignment Charges
COS			$	31,634					$	9,974					$	41,608					$	(589)					$	41,019
SG&A			15,570						12,833						28,403						19,991						48,394
Loss on sale of business(1)			—						12,981						12,981						—						12,981
Total			$	47,204					$	35,788					$	82,992					$	19,402					$	102,394

__________________________________

(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 or impairment of fixed assets, accelerated amortization or impairment 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, facility closures.

The following is a summary of restructuring charges, net of adjustments, for our restructuring activities related to our 2023 Realignment Programs:

			Three Months Ended September 30, 2024
(Amounts in thousands)			Severance						Contract Termination						Asset Write-Downs (Gains)						Other						Total
COS			$	2,593					$	—					$	2,597					$	324					$	5,514
SG&A			(1,055)						—						2,455						338						1,738
Total			$	1,538					$	—					$	5,052					$	662					$	7,252

			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

			Nine Months Ended September 30, 2024
(Amounts in thousands)			Severance						Contract Termination						Asset Write-Downs (Gains)						Other						Total
COS			$	6,489					$	—					$	9,104					$	1,473					$	17,066
SG&A			(269)						—						2,702						(41)						2,392
Loss on sale of business(1)			—						—						—						12,981						12,981
Total			$	6,220					$	—					$	11,806					$	14,413					$	32,439

__________________________________

(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.

			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

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			$	13,574					$	301					$	9,898					$	2,726					$	26,499
SG&A			680						—						11,573						(34)						12,219
Loss on sale of business(1)			—						—						—						12,981						12,981
Total			$	14,254					$	301					$	21,471					$	15,673					$	51,699

__________________________________

(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 nine months ended September 30, 2024 and 2023:

(Amounts in thousands)			2024						2023
Balance at January 1			$	8,184					$	965
Charges, net of adjustments			6,541						1,912
Cash expenditures			(3,012)						(1,747)
Other non-cash adjustments, including currency			(1,894)						(266)
Balance at September 30			$	9,819					$	864

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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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