Restructuring, Impairment and Transaction-Related Charges

3 Months Ended

Mar. 31, 2022

Restructuring and Related Activities [Abstract]

Restructuring, Impairment and Transaction-Related Charges

Restructuring, Impairment and Transaction-Related Charges

The Company recorded restructuring, impairment and transaction-related charges for the three months ended March 31, 2022 and 2021, as follows:

	Three Months Ended March 31,
	2022		2021
Employee termination charges	$	1.1	$	4.7
Impairment charges	0.1		0.8
Transaction-related charges	0.2		0.2
Other restructuring charges (income)	2.2		(3.1)
Total	$	3.6	$	2.6

The costs related to these activities have been recorded in the condensed consolidated statements of operations as restructuring, impairment and transaction-related charges. See Note 18, “Segment Information,” for restructuring, impairment and transaction-related charges by segment.

Restructuring Charges

The Company has a restructuring program related to eliminating excess manufacturing capacity and properly aligning its cost structure. The Company classifies the following charges as restructuring:

•Employee termination charges are incurred when the Company reduces its workforce through facility consolidations and separation programs.

•Other restructuring charges (income) are presented net of the gains on the sale of facilities, including a gain on the sale of the Riverside, California facility during the three months ended March 31, 2021. The components of other restructuring charges (income) consisted of the following during the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
	2022		2021
Vacant facility carrying costs and lease exit charges	$	1.0	$	3.9
Equipment and infrastructure removal costs	—		0.8
Gains on the sale of facilities	—		(7.8)
Other restructuring activities	1.2		—
Other restructuring charges (income)	$	2.2	$	(3.1)

The restructuring charges recorded were based on plans that have been committed to by management and were, in part, based upon management’s best estimates of future events. Changes to the estimates may require future restructuring charges and adjustments to the restructuring liabilities. The Company expects to incur additional restructuring charges related to these and other initiatives.

Impairment Charges

The Company recognized impairment charges of $0.1 million and $0.8 million during the three months ended March 31, 2022 and 2021, respectively. The impairment charges were primarily for machinery and equipment no longer being utilized in production as a result of facility consolidations, as well as other capacity reduction and strategic divestiture activities.

The fair values of the impaired assets were determined by the Company to be Level 3 under the fair value hierarchy (see Note 11, “Financial Instruments and Fair Value Measurements,” for the definition of Level 3 inputs) and were estimated based on broker quotes, internal expertise related to current marketplace conditions and estimated future discounted cash flows. These assets were adjusted to their estimated fair values at the time of impairment. If estimated fair values subsequently decline, the carrying values of the assets are adjusted accordingly.

Transaction-Related Charges

The Company incurs transaction-related charges primarily consisting of professional service fees related to business acquisition and divestiture activities. Transaction-related charges of $0.2 million were recorded during the three months ended March 31, 2022 and 2021.

Restructuring Reserves

Activity impacting the Company’s restructuring reserves for the three months ended March 31, 2022, was as follows:

	Employee Termination Charges		Impairment Charges		Transaction-Related Charges		Other Restructuring Charges		Total
Balance at December 31, 2021	$	4.7	$	—	$	0.4	$	50.2	$	55.3
Expense, net	1.1		0.1		0.2		2.2		3.6
Cash payments, net	(1.7)		—		(0.1)		(3.4)		(5.2)
Non-cash adjustments/reclassifications and translation	(0.2)		(0.1)		—		0.5		0.2
Balance at March 31, 2022	$	3.9	$	—	$	0.5	$	49.5	$	53.9

The Company’s restructuring reserves at March 31, 2022, included a short-term and a long-term component. The short-term portion included $46.7 million in other current liabilities (see Note 12, “Other Current and Long-Term Liabilities”) and $0.7 million in accounts payable in the condensed consolidated balance sheets as the Company expects these reserves to be settled within the next twelve months. The long-term portion of $6.5 million is included in other long-term liabilities (see Note 12, “Other Current and Long-Term Liabilities”) in the condensed consolidated balance sheets.