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RESTRUCTURING AND INTEGRATION

9 Months Ended

Sep. 30, 2016

Restructuring and Related Activities [Abstract]

RESTRUCTURING AND INTEGRATION

4. RESTRUCTURING AND INTEGRATION

During the second quarter of 2015, the Company began evaluating improvement strategies intended to reorganize, simplify and reduce costs from operations through business integration, pursuant to a restructuring and integration plan to be carried out in stages and completed in 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 resulted 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 three months ended September 30, 2015 (in thousands):

Three Months Ended September 30, 2015		T&D Segment				Critical Power Segment				Total
Employee severance and related costs		$	36			$	—			$	36
Lease termination and other facility costs			143				81				224
Business integration expenses			608				—				608
Asset write-down			2,556				—				2,556
Other costs			15				—				15
Pre-tax restructuring and integration expense		$	3,358			$	81			$	3,439

There were no restructuring and integration expenses incurred during the six month period ended June 30, 2015.

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 write-down 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 and integration expenses in our consolidated operating statement, and reflected in our table of Operating Income (Loss) by segment group in Note 15 – Business Segment and Geographic Information.

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

		Severance and Related				Product Line Harmonization				Facility Closure and Exit Costs				Total
Restructuring liability as of January 1, 2016		$	445			$	43			$	91			$	579
Restructuring and integration expense			57				—				142				199
Cash paid			(295	)			—				(192	)			(487	)
Foreign currency translation			—				2				—				2
Restructuring liability as of September 30, 2016		$	207			$	45			$	41			$	293

The Company expects to pay the entire amount of $293 of accrued restructuring costs in the next 12 months. For the nine months ended September 30, 2016, the company recorded pretax charges of $199 related to restructuring in its T&D Segment, including $142 of facility closure and exit costs and $57 of severance and related costs.