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Business Realignment and Restructuring | 12 Months Ended
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Dec. 31, 2020
Business Realignment and Restructuring |
Business Realignment and Restructuring | 13. Restructuring and Business Realignment On May 19, 2020, the Company committed to the strategic exit of its Control Devices particulate matter (“PM”) sensor product line. The decision to exit the PM sensor product line was made after consideration of the decline in the market outlook for diesel passenger vehicles, the current and expected profitability of the product line and the Company’s strategic focus on aligning resources with the greatest opportunities. The Company expects the exit from the PM sensor product line to be completed in the fourth quarter of 2021. As a result of the PM sensor restructuring actions, the Company recognized expense of $3,428 for the year ended December 31, 2020 for non-cash fixed asset charges, including impairment and accelerated depreciation of PM sensor related fixed assets and other related costs. For the year ended December 31, 2020 restructuring related costs of $817 and $2,611 were recognized in COGS and SG&A, respectively. The estimated range of additional cost of the plan to exit the PM sensor product line, that will impact the Control Devices segment, is approximately $2,800 and $6,330 and is related to employee severance and termination costs, contract terminations costs, other related costs such as potential commercial and supplier settlements and accelerated depreciation. We anticipate that these costs will be incurred through the fourth quarter of 2021. The expenses for the exit of the PM sensor line that relate to the Control Devices reportable segment include the following: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Accrual as of | ​ | 2020 Charge | ​ | ​ | Utilization | ​ | Accrual as of
​ | ​ | January 1, 2020 | ​ | to Expense | ​ | Cash | ​ | Non-Cash | ​ | December 31, 2020
Fixed asset impairment and accelerated depreciation | ​ | $ | - | ​ | $ | 3,326 | ​ | $ | - | ​ | $ | (3,326) | ​ | $ | -
Other related costs | ​ | ​ | - | ​ | ​ | 102 | ​ | ​ | (102) | ​ | ​ | - | ​ | ​ | -
Total | ​ | $ | - | ​ | $ | 3,428 | ​ | $ | (102) | ​ | $ | (3,326) | ​ | $ | -
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ On January 10, 2019, the Company committed to a restructuring plan that resulted in the closure of the Canton, Massachusetts facility (“Canton Facility”) on by March 31, 2020 and the consolidation of manufacturing operations at that site into other Company locations (“Canton Restructuring”). Company management informed employees at the Canton Facility of this restructuring decision on January 11, 2019. The costs for the Canton Restructuring included employee severance and termination costs, contract terminations costs, professional fees and other related costs such as moving and set-up costs for equipment and costs to restore the engineering function previously located at the Canton Facility. As a result of the Canton Restructuring actions, the Company recognized expense of $2,978 and $12,530 for the years ended December 31, 2020 and 2019, respectively, for employee termination benefits and other restructuring related costs. For the year ended December 31, 2020 severance and other restructuring related costs of $1,659, $551 and $768 were recognized in COGS, SG&A and D&D, respectively, in the consolidated statement of operations. For the year ended December 31, 2019 severance and other related restructuring costs of $7,625, $1,526 and $3,379 were recognized in COGS, SG&A and D&D, respectively, in the consolidated statement of operations. The estimated additional cost of this restructuring plan, that will impact the Control Devices segment, is immaterial. The expenses for the Canton Restructuring that relate to the Control Devices reportable segment include the following: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Accrual as of | ​ | 2020 Charge | ​ | ​ | Utilization | ​ | Accrual as of
​ | ​ | January 1, 2020 | ​ | to Expense | ​ | Cash | ​ | Non-Cash | ​ | December 31, 2020
Employee termination benefits | ​ | $ | 2,636 | ​ | $ | 1,119 | ​ | $ | (3,590) | ​ | $ | - | ​ | $ | 165
Other related costs | ​ | ​ | - | ​ | ​ | 1,859 | ​ | ​ | (1,859) | ​ | ​ | - | ​ | ​ | -
Total | ​ | $ | 2,636 | ​ | $ | 2,978 | ​ | $ | (5,449) | ​ | $ | - | ​ | $ | 165
​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Accrual as of | ​ | 2019 Charge | ​ | ​ | Utilization | ​ | Accrual as of
​ | ​ | January 1, 2019 | ​ | to Expense | ​ | Cash | ​ | Non-Cash | ​ | December 31, 2019
Employee termination benefits | ​ | $ | - | ​ | $ | 8,088 | ​ | $ | (5,452) | ​ | $ | - | ​ | $ | 2,636
Other related costs | ​ | ​ | - | ​ | ​ | 4,442 | ​ | ​ | (4,442) | ​ | ​ | - | ​ | ​ | -
Total | ​ | $ | - | ​ | $ | 12,530 | ​ | $ | (9,894) | ​ | $ | - | ​ | $ | 2,636
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ In the fourth quarter of 2018, the Company undertook restructuring actions for the Electronics segment affecting the European Aftermarket business and China operations. In the second quarter of 2020, the Company finalized plans to move its European Aftermarket sales activities in Dundee, Scotland to a new location which resulted in incurring contract termination costs as well as employee severance and termination costs. In addition, the Company announced a restructuring program to transfer the European production of its controls product line to China. As a result of these actions, the Company recognized expense of $2,400, $603 and $3,539 respectively, for the years ended December 31, 2020, 2019 and 2018 for employee severance and termination costs, contract termination costs, non-cash fixed asset charges for accelerated depreciation of fixed assets and other related costs. Electronics segment restructuring costs recognized in COGS, SG&A and D&D in the consolidated statement of operations for the year ended December 31, 2020 were $147, $1,774 and $479, respectively. Electronics segment restructuring costs were recorded in SG&A in the consolidated statements of operations for the year ended December 31, 2019. Excess and obsolete inventory write-offs of $823 were recognized in COGS for the year ended December 31, 2018 and all other restructuring costs were recognized in SG&A in the consolidated statement of operations. The Company expects to incur approximately $200 of additional restructuring costs related to the actions through the second quarter of 2021. The expenses for the restructuring activities that relate to the Electronics reportable segment include the following:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Accrual as of | ​ | 2020 Charge to | ​ | ​ | Utilization | ​ | Accrual as of
​ | ​ | January 1, 2020 | ​ | Expense | ​ | Cash | ​ | Non-Cash | ​ | December 31, 2020
Employee termination benefits | ​ | $ | 52 | ​ | $ | 1,034 | ​ | $ | (859) | ​ | $ | - | ​ | $ | 227
Contract termination costs | ​ | ​ | - | ​ | ​ | 452 | ​ | ​ | (452) | ​ | ​ | - | ​ | ​ | -
Other related costs | ​ | ​ | - | ​ | ​ | 914 | ​ | ​ | (914) | ​ | ​ | - | ​ | ​ | -
Total | ​ | $ | 52 | ​ | $ | 2,400 | ​ | $ | (2,225) | ​ | $ | - | ​ | $ | 227
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Accrual as of | ​ | 2019 Charge to | ​ | ​ | Utilization | ​ | Accrual as of
​ | ​ | January 1, 2019 | ​ | Expense | ​ | Cash | ​ | Non-Cash | ​ | December 31, 2019
Employee termination benefits | ​ | $ | 520 | ​ | $ | (18) | ​ | $ | (453) | ​ | $ | 3 | ​ | $ | 52
Accelerated depreciation | ​ | ​ | - | ​ | ​ | 289 | ​ | ​ | - | ​ | ​ | (289) | ​ | ​ | -
Contract termination costs | ​ | ​ | 17 | ​ | ​ | 9 | ​ | ​ | (26) | ​ | ​ | - | ​ | ​ | -
Other related costs | ​ | ​ | 119 | ​ | ​ | 323 | ​ | ​ | (442) | ​ | ​ | - | ​ | ​ | -
Total | ​ | $ | 656 | ​ | $ | 603 | ​ | $ | (921) | ​ | $ | (286) | ​ | $ | 52
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Accrual as of | ​ | 2018 Charge to | ​ | ​ | Utilization | ​ | Accrual as of
​ | ​ | January 1, 2018 | ​ | Expense | ​ | Cash | ​ | Non-Cash | ​ | December 31, 2018
Employee termination benefits | ​ | $ | - | ​ | $ | 1,939 | ​ | $ | (1,419) | ​ | $ | - | ​ | $ | 520
Excess and obsolete inventory | ​ | ​ | - | ​ | ​ | 823 | ​ | ​ | - | ​ | ​ | (823) | ​ | ​ | -
Intangible impairment | ​ | ​ | - | ​ | ​ | 200 | ​ | ​ | - | ​ | ​ | (200) | ​ | ​ | -
Fixed asset impairment | ​ | ​ | - | ​ | ​ | 157 | ​ | ​ | - | ​ | ​ | (157) | ​ | ​ | -
Contract termination costs | ​ | ​ | - | ​ | ​ | 156 | ​ | ​ | (139) | ​ | ​ | - | ​ | ​ | 17
Other related costs | ​ | ​ | - | ​ | ​ | 264 | ​ | ​ | (145) | ​ | ​ | - | ​ | ​ | 119
Total | ​ | $ | - | ​ | $ | 3,539 | ​ | $ | (1,703) | ​ | $ | (1,180) | ​ | $ | 656
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ In addition to the specific restructuring activities, the Company regularly evaluates the performance of its businesses and cost structures, including personnel, and makes necessary changes thereto in order to optimize its results. The Company also evaluates the required skill sets of its personnel and periodically makes strategic changes. As a consequence of these actions, the Company incurs severance related costs which are referred to as business realignment charges. Business realignment charges by reportable segment were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
Year ended December 31 | ​ | 2020 |  | 2019 |  | 2018
Control Devices (A) | ​ | $ | 1,752 | ​ | $ | 682 | ​ | $ | 169
Electronics (B) | ​ | ​ | 1,690 | ​ | ​ | 99 | ​ | ​ | 63
Stoneridge Brazil (C) | ​ | ​ | 234 | ​ | ​ | - | ​ | ​ | 478
Unallocated Corporate (D) | ​ | ​ | 361 | ​ | ​ | 1,048 | ​ | ​ | -
Total business realignment charges | ​ | $ | 4,037 | ​ | $ | 1,829 | ​ | $ | 710
(A) | Severance costs for the year ended December 31, 2020 related to COGS, D&D and SG&A were $724, $283 and $745, respectively. Severance costs for the year ended December 31, 2019 related to SG&A were $682. Severance costs for the year ended December 31, 2018 related to D&D and SG&A were $128 and $41, respectively.
(B) | Severance costs for the year ended December 31, 2020 related to COGS, D&D and SG&A were $383, $402 and $905, respectively. Severance costs for the year ended December 31, 2019 related to SG&A were $99. Severance costs for the year ended December 31, 2018 related to SG&A were $63.
(C) | Severance costs for the year ended December 31, 2020 related to COGS and SG&A were $124 and $110, respectively. Severance costs for the year ended December 31, 2018 related to COGS, SG&A and D&D were $63, $387 and $28, respectively.
(D) | Severance costs for the years ended December 31, 2020 and 2019 related to SG&A were $361 and $1,048, respectively.
Business realignment charges classified by statement of operations line item were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Year ended December 31 | ​ | ​ | 2020 | ​ |  | 2019 | ​ |  | 2018
Cost of goods sold | ​ | $ | 1,231 | ​ | $ | - | ​ | $ | 63
Selling, general and administrative | ​ | ​ | 2,121 | ​ | ​ | 1,829 | ​ | ​ | 491
Design and development | ​ | ​ | 685 | ​ | ​ | - | ​ | ​ | 156
Total business realignment charges | ​ | $ | 4,037 | ​ | $ | 1,829 | ​ | $ | 710
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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 + Details
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