Restructuring and Other Impairment Activities

12 Months Ended

Dec. 31, 2023

Restructuring and Related Activities [Abstract]

Restructuring and Other Impairment Activities

Our restructuring programs have been developed with the objective of realigning the business and lowering our cost structure. As such, our ongoing programs relate to manufacturing and cost optimization. The Company incurred restructuring and other impairment expenses of $22.6 million, $19.1 million, and $1.9 million in the years ended December 31, 2023, 2022 and 2021, respectively.

In the FBS segment, restructuring and other impairment expenses were $9.9 million and $1.1 million during the years ended December 31, 2023 and 2022, respectively. There were no restructuring and other impairment expenses in the FBS segment during the year ended December 31, 2021. During the year ended December 31, 2023 the Company recognized impairment charges of $9.5 million related to long-lived assets at our Eerbeek, Netherlands facility. An impairment assessment was performed after significant changes in market conditions, including the entrance of new competitors and products caused management to revise our long-term view on pricing and volume recovery. The impairment reduced the carrying value of the assets to fair value, which was determined using management estimates for future cash flows.

Restructuring and other impairment expense in the FBS segment for the year ended December 31, 2022 was primarily related to closed facilities.

In the ATM segment, the Company incurred $12.4 million, $17.2 million, and $1.9 million in restructuring and other impairment expenses during the years ended December 31, 2023, 2022, and 2021, respectively. During 2023, we announced plans to close two facilities as a result of decisions to exit certain end markets amid ongoing manufacturing optimization efforts. The facilities are expected to cease operations in 2024 and one facility is expected to be sold in Q1 of 2024. As a result of these planned closures, the Company recognized $8.8 million related to fixed asset and certain other asset impairments for the year ended December 31, 2023. In addition, the ATM segment recognized $2.0 million of restructuring expense for the year ended December 31, 2023 related to facilities closed in prior years. As of December 31, 2023 assets held for sale of $14.2 million and $2.2 million were included in Other current assets and Other assets, respectively. As of December 31, 2022, assets held for sale of $10.5 million were included in Other current assets.

Through December 31, 2023 the Company has recognized accumulated restructuring charges of $8.8 million related to the facility closures announced in 2023 and $3.2 million related to facilities closed in prior years in the ATM segment. During 2024, the Company expects to record additional restructuring related costs in the ATM segment of approximately $4.7 million related to the closing of these facilities.

In the year ended December 31, 2022, restructuring and other impairment expense in the ATM segment was primarily due to a $12.9 million impairment of certain assets in conjunction with the divestiture of a portion of a legacy SWM ATM segment. The assets were sold during the third quarter of 2022 for net proceeds of $4.6 million and a loss of $0.4 million.

Restructuring and other impairment expense in the ATM segment for the year ended December 31, 2021 was related to the impairment of non-productive manufacturing equipment and severance accruals.

Other restructuring related inventory adjustments and acceleration of depreciation due to changes in the estimated lives of certain assets resulting from planned facility closures are included in Cost of products sold. We recorded $2.7 million for the year ended December 31, 2023 primarily to write down inventory to estimated net realizable value. Restructuring related inventory adjustments for the years ended December 31, 2022 and 2021 were not material.

Other restructuring related charges are included in corporate General expense as other unallocated items as these costs are not included in management's evaluation of the segments' performance. Unallocated expenses included in corporate General expense for the year ended December 31, 2023 were $1.1 million related to the relocation of the corporate headquarters. Unallocated restructuring and other impairment expense for the years ended December 31, 2022 and 2021 were not material.

The following table summarizes total restructuring, restructuring related, and other impairment expense (in millions):


	Years Ended December 31,
	2023		2022		2021
Restructuring and other impairment expense:
Severance	$	0.1	$	1.8	$	0.3

Asset impairment	18.6		14.0		1.6
Other	3.9		3.3		—
Total restructuring and other impairment expense	$	22.6	$	19.1	$	1.9
Other restructuring related charges - Cost of products sold:
Accelerated depreciation and amortization	$	0.1	$	—	$	—
Inventory write-down to estimated net realizable value	2.6		0.8		—
Total other restructuring related charges - Cost of products sold	2.7		0.8		—
Other restructuring related charges - General expense:
Accelerated depreciation and amortization	1.1		0.3		—
Total restructuring, restructuring related, and other impairment expense	$	26.4	$	20.2	$	1.9

Restructuring liabilities were classified within Accrued expenses and other current liabilities and Other liabilities in the Consolidated Balance Sheets as of December 31, 2023 and 2022. Changes in the restructuring liabilities, substantially all of which are employee-related, are summarized as follows (in millions):


	Years Ended December 31,
	2023		2022
Balance at beginning of year	$	4.0	$	3.8
Accruals for announced programs	0.3		1.0
Accruals assumed from Merger(1)	—		2.3
Cash payments	(0.5)		(3.0)

Foreign exchange impact	—		(0.1)
Balance at end of period	$	3.8	$	4.0

(1) Accrued liabilities primarily for severance related to an optimization program at facilities acquired through the Merger