Gain on Sale and Other Costs, Net

6 Months Ended

Jul. 01, 2023

Restructuring and Related Activities [Abstract]

Gain on Sale of Assets

The Company entered into several agreements with the local government in China to sell the existing manufacturing building and land use rights of one of its subsidiaries in China for $25,159,000 and relocate to a new facility (the China Transaction). The agreements became effective in the first quarter of 2022 after a 31% down payment was received, including 25% in 2021 and 6% in the first quarter of 2022, and a land use right in a new location was secured. As a result, the Company recognized a gain on the China Transaction of $20,190,000, or $15,143,000 net of deferred taxes of $5,047,000, in the first quarter of 2022. A receivable of $16,082,000 was recognized for the present value of the remaining amount of the sale proceeds, which is due the earlier of when the government sells the property or within two years from the effective date of the agreements. The subsidiary, which is part of the Industrial Processing segment, will continue to occupy its current facility until construction of its new facility is complete, which is expected during the second half of 2023.

A summary of the change in the outstanding receivable on the China Transaction is as follows:


(In thousands)	July 1, 2023
Balance at Inception	$	17,294
Present value discount	(1,212)
Receivable recorded, net	16,082
Accretion of interest income	422
Currency translation	(1,323)
Balance at December 31, 2022 (included in other assets)	15,181
Accretion of interest income	278
Currency translation	(707)
Balance at July 1, 2023 (included in other current assets)	$	14,752

Other Costs

Other costs of $74,000 in the second quarter of 2023 and $182,000 in the first quarter of 2022 consisted of charges in the Company's Industrial Processing segment associated with the China Transaction for the write-down of certain fixed assets that will not be moved to the new manufacturing facility in China and facility moving costs.