Restructuring and Impairment

12 Months Ended

Dec. 31, 2015

Restructuring and Impairment [Abstract]

4. RESTRUCTURING AND IMPAIRMENT

During the second quarter of 2015, the Company began evaluating improvement strategies intended to reorganize, simplify and cut costs from operations through closer business integration, pursuant to a restructuring and integration plan to be carried out in stages and completed by mid-2016.

In August 2015, management finalized and commenced execution of its plan, which includes a consolidation of the Company’s six manufacturing facilities into three locations, workforce reductions, staff relocations and measures to more closely align product lines and supply chains across business units, among other actions that have and will result in the recognition of certain restructuring, integration and impairment expenses.

The following is a summary of the components of restructuring, integration and impairment expenses, before taxes, during the year ended December 31, 2015 (in thousands):

	T&D		Critical Power
Year Ended December 31, 2015	Segment		Segment		Total
Employee severance and related costs	$	564	$	-	$	564
Lease termination and other facility costs		168		80		248
Business integration expenses		1,565		5		1,570
Asset impairments		2,792		-		2,792
Other costs		403		-		403
Pre-tax restructuring, integration and impairment expense	$	5,492	$	85	$	5,577

Employee severance and related costs consists of retention pay and severance benefits. Lease termination and other facility costs include contract termination and exit costs. Business integration expenses include inventory obsolescence as a result of product line integration, travel, and third-party information technology costs. Asset impairments includes the write-down of the Company’s Canadian dry-type transformer facility, excess machinery and equipment held for sale in preparation for the plant consolidations, and certain intangible assets associated with products the Company no longer expects to continue to produce and sell. Other costs consist primarily of legal expenses incurred in connection with implementing the restructuring plan.

Charges associated with each action were included in restructuring, integration and impairment expenses in our consolidated operating statement, and reflected in our table of Operating Income (Loss) by segment group in Note 13 – Business Segment and Geographic Information.

The components and changes in the Company’s restructuring liability were as follows:

					Facility
	Severance and		Product Line		Closure and		Asset Write-
	Related		Harmonization		Exit Costs		downs		Total
Restructuring liability as of December 31, 2014	$	-	$	-	$	-	$	-	$	-
Restructuring, integration and impairment expense		565		64		1,395		3,553		5,577
Cash paid		(120)		(21)		(1,327)		-		(1,468)
Non-cash		-		-		-		(3,553)		(3,553)
Foreign currency translation		-		-		23		-		23
Restructuring liability as of December 31, 2015	$	445	$	43	$	91	$	-	$	579