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Supplemental Financial Information | 12 Months Ended
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Dec. 31, 2022
Supplemental Income Statement Elements [Abstract] |
Supplemental Financial Information | Supplemental Financial Information Restructuring and Impairment Charges The components of “Restructuring and impairment charges” line item in the condensed consolidated statements of operations, were as follows:
| Years Ended December 31,
(Dollars in thousands) | 2022 |  | 2021 |  | 2020
Restructuring charges |  |  |  |  |
Manufacturing footprint optimization | $ | 1,114 |  |  | $ | 3,115 |  |  | $ | 12,348 |
U.S. footprint consolidation | 363 |  |  | — |  |  | — |
Restructuring charges | 1,477 |  |  | 3,115 |  |  | 12,348 |
Impairment charges |  |  |  |  |
Fixed assets impairment charges | 47,191 |  |  | 455 |  |  | 587 |
Other impairment charges | 17,894 |  |  | — |  |  | 52 |
Impairment charges | 65,085 |  |  | 455 |  |  | 639 |
Total restructuring and impairment charges | $ | 66,562 |  |  | $ | 3,570 |  |  | $ | 12,987 |
Restructuring Charges - Manufacturing Footprint Optimization During the third quarter of 2020, we commenced manufacturing footprint optimization plans involving certain Europe and Asia manufacturing locations, primarily impacting our AES operating segment, in order to achieve greater cost competitiveness as well as align capacity with end market demand. The majority of the restructuring activities were completed in the first half of 2021. We incurred restructuring charges and related expenses of $1.1 million and $3.1 million in 2022 and 2021. Severance and related benefits activity related to the manufacturing footprint optimization plan is presented in the table below for the year ended December 31, 2022:
(Dollars in thousands) | Manufacturing Footprint Optimization Restructuring Severance and Related Benefits
Balance as of December 31, 2021 | $ | 1,395 |
Provisions | 363 |
Payments | (1,606) |
Foreign currency translation adjustment | (104) |
Balance as of December 31, 2022 | $ | 48 |
Impairment Charges We recognized $65.1 million, $0.5 million and $0.6 million of impairment charges in 2022, 2021 and 2020, respectively. The impairment charges in 2022 primarily related to certain AES operating segment equipment-in-process in the U.S. as well as certain EMS operating segment intangibles and fixed assets related to our high-performance engineered cellular elastomer business in the U.S. The impairment charges in 2021 and 2020 were both primarily related to AES operating segment fixed assets in Belgium. The impairment of the equipment-in-process in our AES operating segment was triggered by our decision in November 2022 to exit the Price Road facility in Arizona. The impairment of certain intangibles and fixed assets related to our high-performance engineered cellular elastomer business in our EMS operating segment was triggered upon committing to a plan in late 2022 to divest ourselves of this business by early 2023 and the subsequent fair valuing of assets and liabilities. In addition to the impairment charges, we recognized an additional $2.6 million accrual against the remaining net assets of the business based on the estimated fair value of the business. As the high-performance engineered cellular elastomer business met the criteria of held for sale accounting as of December 31, 2022, the remaining $4.6 million in assets and $3.3 million in liabilities were designated as assets held for sale and liabilities held for sale, respectively, which are captured in the “Other current assets” and “Other accrued liabilities” financial statement line items of our Statements of Financial Position. The assets are primarily comprised of accounts receivables, contract assets and inventories, while the liabilities are primarily comprised of accounts payables and other accrued liabilities. On February 17, 2023 we entered into an asset purchase agreement to sell our high-performance engineered cellular elastomer business for a net purchase price of $1.8 million. The business disposition is scheduled to be completed in early March. Allocation of Restructuring and Impairment Charges to Operating Segments The following table summarizes the allocation of restructuring and impairment charges to our operating segments:
| Years Ended December 31,
(Dollars in thousands) | 2022 |  | 2021 |  | 2020
Advanced Electronics Solutions |  |  |  |  |
Allocated restructuring charges | $ | 1,070 |  |  | $ | 3,029 |  |  | $ | 11,947 |
Allocated impairment charges | 40,450 |  |  | 455 |  |  | 587 |
Elastomeric Material Solutions |  |  |  |  |
Allocated restructuring charges | 407 |  |  | 86 |  |  | 401 |
Allocated impairment charges | 24,635 |  |  | — |  |  | 52 |
Total restructuring and impairment charges | $ | 66,562 |  |  | $ | 3,570 |  |  | $ | 12,987 |
Subsequent Event - Restructuring Charges On February 16, 2023, we announced a reduction in force plan of our global workforce that is expected to be completed in the first half of 2023. The plan is expected to significantly reduce our manufacturing costs and operating expenses, and are being done in conjunction with other previously announced cost reduction initiatives. We estimate that we will incur approximately $10 million to $13 million in pre-tax restructuring charges related to this plan, all of which are expected to be in the form of cash-based expenditures and substantially all of which are expected to be related to employee severance and other termination benefits. Other Operating (Income) Expense, Net The components of “Other operating (income) expense, net” were as follows:
| Years Ended December 31,
(Dollars in thousands) | 2022 |  | 2021 |  | 2020
UTIS fire |  |  |  |  |
Fixed assets write-offs | $ | — |  |  | $ | 1,073 |  |  | $ | — |
Inventory charges | 197 |  |  | 874 |  |  | — |
Professional services | 1,449 |  |  | 2,771 |  |  | — |
Lease obligations | 437 |  |  | 994 |  |  | — |
Lease impairments | — |  |  | 495 |  |  | — |
Compensation & benefits | 2,420 |  |  | 2,072 |  |  | — |
Third-party property claims | — |  |  | 4,650 |  |  | — |
Other | (262) |  |  | 155 |  |  | — |
Insurance recoveries | (6,646) |  |  | (6,874) |  |  | — |
Total UTIS fire | (2,405) |  |  | 6,210 |  |  | — |
Regulatory termination fee, net | (142,069) |  |  | — |  |  | — |
Loss (gain) on sale or disposal of property, plant and equipment | 460 |  |  | (880) |  |  | 41 |
Economic incentive grants | — |  |  | — |  |  | (145) |
Total other operating (income) expense, net | $ | (144,014) |  |  | $ | 5,330 |  |  | $ | (104) |
In early February 2021, there was a fire at our UTIS manufacturing facility in Ansan, South Korea, which manufactures eSorba® polyurethane foams used in portable electronics and display applications. The site was safely evacuated and there were no reported injuries; however, there was extensive damage to the manufacturing site and some damage to nearby property. Commercial production at our new location in Siheung, South Korea commenced in late-January 2023. In 2022, in connection with the UTIS fire, we recognized insurance recoveries of $6.6 million related to our ongoing insurance claim for property damage and compensation and benefits of hourly employees, incurred $1.4 million for various professional services and incurred $2.4 million for compensation and benefits for UTIS manufacturing employees subsequent to the fire. In 2021, in connection with the UTIS fire, we recognized fixed asset write-offs and inventory charges of $1.1 million and $0.9 million, respectively, related to property destroyed in the fire, a $4.7 million contingent liability pertaining to damage to nearby property and a $0.5 million contingent liability pertaining to our obligations for the fire damage to the building in connection with the underlying lease agreement. Further, in 2021 we incurred $2.8 million of fees for various professional services in connection with the assessment of the fire and the efforts to rebuild and resume operations and $2.1 million of compensation and benefits for UTIS manufacturing employees, subsequent to the fire. In 2021, we also recognized anticipated insurance recoveries of $6.9 million related to our ongoing insurance claim for property damage and compensation and benefits of hourly employees, less the applicable $0.3 million deductible. In 2022, we recognized income from a regulatory termination fee of $142.1 million, which was net of an incurred transaction-related fee. For additional information, refer to “Note 16 – Mergers and Acquisitions.” Interest Expense, Net The components of “Interest expense, net” were as follows:
| Years Ended December 31,
(Dollars in thousands) | 2022 |  | 2021 |  | 2020
Interest on revolving credit facility | $ | 8,966 |  |  | $ | 892 |  |  | $ | 3,294 |
Interest rate swap settlements | — |  |  | — |  |  | 3,191 |
Line of credit fees | 522 |  |  | 1,066 |  |  | 715 |
Debt issuance amortization costs | 715 |  |  | 715 |  |  | 593 |
Interest on finance leases | 23 |  |  | 287 |  |  | 134 |
Interest income | (685) |  |  | (541) |  |  | (939) |
Other | 6 |  |  | 117 |  |  | 147 |
Total interest expense, net | $ | 9,547 |  |  | $ | 2,536 |  |  | $ | 7,135 |

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