Restructuring Costs

12 Months Ended

Mar. 31, 2022

RESTRUCTURING AND IMPAIRMENT COSTS

During the fiscal years ended March 31, 2022, 2021, and 2020 Universal recorded restructuring and impairment costs related to business changes and various initiatives to adjust certain operations and reduce costs.

Fiscal Year Ended March 31, 2022

Tobacco Operations

As a result of efforts to exit the idled tobacco operations in Tanzania, the Company reevaluated the carrying values of property, plant, and equipment associated with the Tanzania operations. During the fiscal year ended March 31, 2022, the Company determined the carrying value exceeded the estimated fair value of those assets and recognized a $9.4 million impairment charge. See Note 19 for additional information.

During the fiscal year ended March 31, 2022, the Company also incurred $2.2 million of termination costs for the Tobacco Operations segment.

Ingredients Operations

During the fiscal year ended March 31, 2022, the Company recognized $1.2 million of net gains on the sale of the remaining property, plant, and equipment associated with the wind-down of the CIFI operations that was announced in fiscal year 2021.

Fiscal Year Ended March 31, 2021

Tobacco Operations

During the fiscal year ended March 31, 2021, the Company incurred $4.4 million of termination and impairment costs associated with the restructuring of tobacco buying and administrative operations in Africa, $1.2 million of combined termination costs in other regions, and a $0.9 million charge for the liquidation of an idled service entity in Tanzania. Total restructuring and impairments costs related to the Tobacco Operations segment were $6.5 million for the fiscal year ended March 31, 2021.

Ingredients Operations

In fiscal year 2021, the Company committed to a plan to wind-down its subsidiary, Carolina Innovative Food Ingredients, Inc. (“CIFI”), a sweet potato processing operation located in Nashville, North Carolina. The CIFI operation was a start-up project initially undertaken by the Company in fiscal year 2015. The decision to wind down CIFI was consistent with the Company’s capital allocation strategy to focus on delivering shareholder value through building and enhancing a plant-based ingredients platform, which includes integrating and exploring the synergies of recently acquired businesses, FruitSmart and Silva. The Company determined that CIFI was not a strategic fit for the platform’s long-term objectives. CIFI’s single-product focused processing facility and ongoing international pricing pressures, among other factors, created challenges that proved insurmountable. As a result of the decision to wind down the CIFI operations, the Company paid termination benefits totaling approximately $0.6 million to employees whose permanent positions were eliminated. In addition to the termination costs, the Company recognized various other costs associated with the wind-down of the CIFI facility. These costs include impairments of property, plant, and equipment (including the factory building), as well as inventory and supply write-downs. The total restructuring and impairment charge incurred for the CIFI wind-down was $16.1 million for the fiscal year ended March 31, 2021.

Fiscal Year Ended March 31, 2020

Tobacco Operations

In fiscal year 2020, the Company recorded restructuring and impairment costs totaling $7.5 million, primarily related to $3.4 million of employee termination benefits for a voluntary workforce reduction at the Company's tobacco facilities in North Carolina, $1.8 million of employee termination benefits for the Company’s operations in Africa, and a $2.2 million impairment charge for machinery used by the Company's operations in Africa. Restructuring and impairment costs were also incurred in connection with downsizing efforts at several other locations around the Company.

A summary of the restructuring and impairment costs incurred during the fiscal years ended March 31, 2022, 2021, and 2020 is as follows:


	Fiscal Years Ended March 31,
	2022		2021		2020
Restructuring Costs:
Employee termination benefits	$	2,174	$	5,237	$	5,356
Other restructuring costs	(24)		3,468		—
	2,150		8,705		5,356
Impairment Costs:
Property, plant, and equipment and other noncurrent assets	8,307		13,872		2,187

	$	8,307	$	13,872	$	2,187
Total restructuring and impairment costs	$	10,457	$	22,577	$	7,543

A reconciliation of the Company’s liability for employee termination benefits and other restructuring costs for fiscal years 2020 through 2022 is as follows:


	Employee Termination Benefits	Other Costs	Total
Balance at April 1, 2019	$623	$223	$846
Fiscal Year 2020 Activity:
Costs charged to expense	5,356	—	5,356
Payments and write-offs	(2,564)	(223)	(2,787)
Balance at March 31, 2020	3,415	—	3,415
Fiscal Year 2021 Activity:
Costs charged to expense	5,237	3,468	8,705
Payments and write-offs	(7,282)	(2,855)	(10,137)
Balance at March 31, 2021	1,370	613	1,983
Fiscal Year 2022 Activity:
Costs charged to expense	2,174	(24)	2,150
Payments and write-offs	(3,544)	(589)	(4,133)
Balance at March 31, 2022	$—	$—	$—

Universal continually reviews its business for opportunities to realize efficiencies, reduce costs, and realign its operations in response to business changes. The Company may incur additional restructuring and impairment costs in future periods as business changes occur and additional cost savings initiatives are implemented.