(

)

Exit and Disposal Activities

During

2016,

the continued strength of the U.S. dollar, the tightening of margins in certain sectors of the commercial vehicle markets and the generally softening of certain key market segments led the Company to reevaluate the strategic importance of each of its customers to the Company’s long-term success. The Company has reduced its reliance on certain of its traditional Tier

customers that represent the primary suppliers to the original equipment manufacturers (“OEMs”) in the commercial vehicle markets, while targeting to replace these customers with more diversified, longer-term relationships, especially among the OEMs, Tier

suppliers and others who place a higher value on the Company’s innovation, flexibility and core commitment to lean manufacturing principles. Among the customer programs

not

being renewed were (i) a supply agreement with Meritor that expired on

January

2017

and (ii) the Company’s business with Eaton, both of which utilized production at the Company’s Broadway Plant.

February 21, 2017,

the Board of Directors approved a modified exit or disposal plan with respect to the Broadway Plant, which included the relocation of production to other Company facilities, as needed, and/or the closure of the plant. The relocation of production was complete as of the end of

2017.

The Company has relocated certain assets from the Broadway Plant to other manufacturing facilities, as needed, to serve its existing and target customer base and identified underutilized or non-core assets, including the Broadway Plant real estate, for disposal.

As a result of these initiatives, the Company recorded charges of

$509,000,

$0.02

per share, and

$1,394,000,

$0.07

per share, during

2019

and

2018,

respectively, related to the transition of production from the Broadway Plant, which is included in severance, relocation and other costs in the consolidated statement of operations. All amounts incurred were recorded within Sypris Technologies. The charges for

2019

were primarily related to mothball costs associated with the closed facility. The charges for

2018

included

$361,000

for equipment relocation costs and

$1,033,000

primarily related to mothball costs associated with the closed facility. A summary of the total pre-tax charges is as follows (in thousands):

			Costs Incurred
			Year		Total		Remaining
	Total		Ended		Recognized		Costs to be
	Program		Dec. 31, 2019		to date		Recognized
Severance and benefit related costs	$	1,350	$	0	$	1,350	$	0
Asset impairments		188		0		188		0
Equipment relocation costs		1,826		38		1,826		0
Other		1,609		471		1,546		63
	$	4,973	$	509	$	4,910	$	63

The Company expects to incur additional pre-tax costs of approximately

$63,000

within Sypris Technologies, all of which is expected to be cash expenditures.

As noted above, management expects to apply proceeds from the sale of underutilized or non-core assets to help fund the costs to transfer additional equipment from the Broadway Plant and the transition of the related production. The following assets have been segregated and included in assets held for sale in the consolidated balance sheets (in thousands):

	December 31,
	2019			2018
Property, plant and equipment	$	13,346		$	11,207
Accumulated depreciation	$	(11,113	)	$	(9,733	)
Property, plant and equipment, net	$	2,233		$	1,474