Restructuring and other Exit Charges

3 Months Ended

Jul. 03, 2022

Restructuring and Related Activities [Abstract]

Restructuring Programs

As disclosed in the 2022 Annual Report, the Company committed to restructuring plans aimed at improving operational efficiencies across its lines of business. A substantial portion of these plans are complete with an estimated $717 remaining to be incurred by the end of fiscal 2023, mainly related to plans started in fiscal 2021. Restructuring and exit charges for the first quarter of fiscal 2023 by reportable segments are as follows:


	Quarter ended July 3, 2022
	Energy Systems		Motive Power		Specialty		Total
Restructuring charges	$	162	$	—	$	—	$	162
Exit charges	—		8,166		—		8,166
Restructuring and other exit charges	$	162	$	8,166	$	—	$	8,328

A roll-forward of the restructuring reserve, excluding exit charges, is as follows:


Balance as of March 31, 2022	$	1,030
Accrued	162
Costs incurred	(417)
Foreign currency impact	(58)
Balance as of July 3, 2022	$	717

Exit Charges

Fiscal 2023 Program

On June 29, 2022, the Company committed to a plan to close its facility in Ooltewah, Tennessee, which produces flooded motive power batteries for electric forklifts. Management determined that future demand for traditional motive power flooded cells will decrease as customers transition to maintenance free product solutions in lithium and Thin Plate Pure Lead (TPPL). The Company currently estimates that the total charges for these actions will amount to approximately $18,500, of which $7,300 of non-cash charges relating to fixed asset write-offs were recorded during the current quarter ended July 3, 2022. Cash charges for employee severance related payments, cleanup related to the facility, contractual releases and legal expenses are estimated to be $9,200 and other non-cash charges are estimated to be $2,000. These actions will result in the reduction of approximately 165 employees. The plan is expected to be completed by calendar 2023.

Fiscal 2022 Program

Hagen, Germany

In fiscal 2021, the Company's Board of Directors approved a plan to close substantially all of its facility in Hagen, Germany, which produces flooded motive power batteries for electric forklifts. Management determined that future demand for the motive power batteries produced at this facility was not sufficient, given the conversion from flooded to maintenance free batteries by customers, the existing number of competitors in the market, as well as the near term decline in demand and increased

uncertainty from the pandemic. The Company plans to retain the facility with limited sales, service and administrative functions along with related personnel for the foreseeable future.

The Company currently estimates that the total charges for these actions will amount to approximately $60,000, of which cash charges for employee severance related payments, cleanup related to the facility, contractual releases and legal expenses were estimated to be $40,000 and non-cash charges from inventory and equipment write-offs were estimated to be $20,000. The majority of these charges were recorded as of March 31, 2022. These actions resulted in the reduction of approximately 200 employees.

During fiscal 2021, the Company recorded cash charges relating to severance of $23,331 and non-cash charges of $7,946 primarily relating to fixed asset write-offs.

During fiscal 2022, the Company recorded cash charges primarily relating to severance of $8,069 and non-cash charges of $3,522 primarily relating to fixed asset write-offs. The Company also recorded a non-cash write off relating to inventories of $960, which was reported in cost of goods sold.

During the first quarter of fiscal 2023, the Company recorded cash charges of $721 relating to site clean up and $145 of non-cash charges relating to accelerated depreciation of fixed assets.

Targovishte, Bulgaria

During fiscal 2019, the Company committed to a plan to close its facility in Targovishte, Bulgaria, which produced diesel-electric submarine batteries. Management determined that the future demand for batteries of diesel-electric submarines was not sufficient given the number of competitors in the market. Of the estimated total charges of $26,000 for this plan, the Company had recorded charges amounting to $20,242 in fiscal 2019, relating to severance and inventory and fixed asset write-offs and an additional $5,123 relating to cash and non-cash charges during fiscal 2020. During fiscal 2021, in keeping with its strategy of

exiting the manufacture of batteries for diesel-electric submarines, the Company completed further actions which resulted in

$220 relating to cash and non-cash charges. During the first quarter of fiscal 2022, the Company sold this facility for $1,489. A net gain of $1,208 was recorded as a credit to exit charges in the Consolidated Condensed Statement of Income.

Zamudio, Spain

During the first quarter of fiscal 2022, the Company closed a minor assembling plant in Zamudio, Spain and sold the same for $1,779. A net gain of $740 was recorded as a credit to exit charges in the Consolidated Condensed Statement of Income.