RESTRUCTURING AND ASSET IMPAIRMENTS

9 Months Ended

Sep. 30, 2020

Restructuring and Related Activities [Abstract]

RESTRUCTURING AND ASSET IMPAIRMENTS

RESTRUCTURING AND ASSET IMPAIRMENTSDuring the third quarter of 2020, DynaEnergetics sold its Tyumen, Siberia production facility to a third-party for $448, which was equal to the carrying value of the assets held for sale.

During the second quarter of 2020 the COVID-19 pandemic-related collapse in oil and gas demand led to a downturn in well completions and the corresponding demand for DynaEnergetics’ products. As a result, DynaEnergetics recorded asset impairment charges of $1,181 on certain manufacturing assets that will no longer be utilized in production at its Blum, Texas and Troisdorf, Germany facilities. Additionally, both DynaEnergetics and NobelClad further reduced the respective workforces during the quarter.

During the first quarter of 2020, DMC reduced its workforce by 264 positions to address a sharp decline in well completions in the Company’s core oil and gas end market principally due to the COVID-19 pandemic. The workforce reduction impacted full-time, part-time and temporary direct-labor roles in manufacturing and assembly at DynaEnergetics as well as general and administrative positions at DynaEnergetics, NobelClad, and at DMC’s corporate office.

During the third quarter of 2019, DynaEnergetics completed a series of capacity expansion initiatives at its plants in North America and Germany. The new capacity improved DynaEnergetics’ operating efficiencies and enabled the business to more effectively serve its global customer base. Capitalizing on its more efficient manufacturing footprint, DynaEnergetics ceased its operations in Tyumen, Siberia in September 2019. In conjunction with shutting down operations, DynaEnergetics recorded a non-cash asset impairment charge of $4,620 within “Restructuring expenses, net and asset impairments”, which was calculated by comparing the estimated fair value less costs to sell to the carrying value of the assets. DynaEnergetics also recorded $1,260 in severance charges within “Restructuring expenses, net and asset impairments” and a non-cash inventory write down of $630 recorded within “Cost of products sold” associated with the decision to cease operations in Siberia.

During the fourth quarter of 2017, NobelClad announced plans to consolidate its European production facilities by closing manufacturing operations in France. During the second quarter of 2019, NobelClad sold its production facility and related assets and other machinery and equipment to third-parties for a gain of $519. Additionally, it moved certain machinery and equipment to its manufacturing facility in Germany. During the second quarter of 2019, NobelClad also recorded an additional accrual of $712 for known and probable severance liabilities related to employees terminated as part of closing the manufacturing operations in France. The additional severance accrual was recorded based, in part, on a successful appeal of the severance benefits by some terminated employees during the second quarter of 2019.

Total restructuring and impairment charges incurred for these programs are as follows and are reported in the “Restructuring expenses, net and asset impairments” line item in our Condensed Consolidated Statements of Operations:

	Three months ended September 30, 2020
	Severance		Contract Termination Costs		Other Exit Costs		Total
DynaEnergetics	$	109	$	8	$	16	$	133
NobelClad	—		—		10		10
Total	$	109	$	8	$	26	$	143

	Three months ended September 30, 2019
	Severance		Asset Impairment		Contract Termination Costs		Equipment Moving Costs		Other Exit Costs		Total
DynaEnergetics	$	1,260	$	4,620	$	—	$	—	$	—	$	5,880
NobelClad	2		—		(4)		7		13		18
Total	$	1,262	$	4,620	$	(4)	$	7	$	13	$	5,898

	Nine months ended September 30, 2020
	Severance		Asset Impairment		Contract Termination Costs		Equipment Moving Costs		Other Exit Costs		Total
DynaEnergetics	$	936	$	1,181	$	19	$	126	$	660	$	2,922
NobelClad	244		—		—		—		20		264
Corporate	119		—		—		—		—		119
Total	$	1,299	$	1,181	$	19	$	126	$	680	$	3,305

	Nine months ended September 30, 2019
	Severance		Asset Impairment / (Gain on Asset Disposal)		Contract Termination Costs		Equipment Moving Costs		Other Exit Costs		Total
DynaEnergetics	$	1,260	$	4,620	$	—	$	—	$	—	$	5,880
NobelClad	714		(636)		39		234		69		420
Total	$	1,974	$	3,984	$	39	$	234	$	69	$	6,300

During the nine months ended September 30, 2020, the changes to the restructuring liability associated with these programs is summarized below:

	December 31, 2019		Net expense (1)		Payments and Other Adjustments		Currency Adjustments		September 30, 2020
Severance	$	2,404	$	1,299	$	(2,393)	$	(139)	$	1,171
Contract termination costs	—		19		(11)		—		8
Equipment moving costs	—		126		(126)		—		—
Other exit costs	271		680		(1,129)		178		—
Total	$	2,675	$	2,124	$	(3,659)	$	39	$	1,179

(1) Excludes asset impairment expenses