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Rationalizations | 6 Months Ended
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Jun. 30, 2024
Restructuring and Related Activities [Abstract] |
Rationalizations | Rationalization Expenses In the first quarter of 2024, we announced a set of initiatives designed to reduce our cost structure and optimize our manufacturing footprint. As part of these initiatives, we indefinitely suspended production activities at our St. Marys, Pennsylvania facility, with the exception of graphite electrode and pin machining. In addition, we indefinitely idled certain assets within our remaining graphite electrode manufacturing footprint. As a result, our graphite electrode production capacity has been reduced to approximately 178 thousand metric tons (“MT”) in 2024. In parallel, we adopted measures for additional overhead reductions to reduce our selling and administrative expenses. Collectively, these initiatives resulted in a reduction of our global headcount by approximately 130 employees, or 10% of our workforce. Rationalization charges of $3.3 million related to severance and contract terminations will be paid in cash and we expect the substantial majority to be paid by the end of the second quarter of 2025. Rationalization-related charges of $2.7 million represent the non-cash write-off of inventory and fixed assets. Substantially all charges relative to this plan were recorded during the first quarter of 2024 and wind-down activities were completed by the end of the second quarter of 2024. The following table summarizes costs incurred related to these initiatives:
|  |  | Three Months Ended June 30, | Six Months Ended June 30, |  |  |  |
|  |  |  |  | 2024 |  | 2023 | 2024 |  | 2023 |  |  |  |
|  |  |  |  | (Dollars in thousands) |  |  |  |
Recorded in Cost of Goods Sold |  |  |  |  |  |  |  |  |  |  |  |  |  |
Inventory write-offs |  |  |  |  | $ | — |  |  | $ | — |  | $ | 2,202 |  |  | $ | — |  |  |  |  |
Fixed asset write-offs |  |  |  |  | — |  |  | — |  | 453 |  |  | — |  |  |  |  |
Total rationalization-related expenses |  |  |  |  | $ | — |  |  | $ | — |  | $ | 2,655 |  |  | $ | — |  |  |  |  |
Recorded in Rationalization Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |
Severance and related costs |  |  |  |  | $ | 35 |  |  | $ | — |  | $ | 2,913 |  |  | $ | — |  |  |  |  |
Contract terminations |  |  |  |  | 75 |  |  | — |  | 342 |  |  | — |  |  |  |  |
Total rationalization expenses |  |  |  |  | $ | 110 |  |  | $ | — |  | $ | 3,255 |  |  | $ | — |  |  |  |  |
The following table presents a roll-forward of the liability incurred for employee termination benefits and contract termination costs incurred in connection with the rationalization initiatives described above.
|  |  | Balance Sheet Line Item |  |  |  |
|  |  |  |  | Other Accrued Liabilities |  | Other Long-Term Obligations |  |  |  |
|  |  |  |  | (Dollars in thousands) |  |  |  |
Balance as of December 31, 2023 |  |  |  |  | $ | — |  |  | $ | — |  |  |  |  |
Charges incurred |  |  |  |  | 2,543 |  |  | 712 |  |  |  |  |
Payments and settlements |  |  |  |  | (1,049) |  |  | — |  |  |  |  |
Adjustments |  |  |  |  | (74) |  |  | 42 |  |  |  |  |
Balance as of June 30, 2024 |  |  |  |  | $ | 1,420 |  |  | $ | 754 |  |  |  |  |

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- Definition 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. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4.e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479823/420-10-S99-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482017/420-10-50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482017/420-10-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/420/tableOfContent Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482017/420-10-50-1 + Details
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