Disposals

6 Months Ended

Jul. 01, 2022

Discontinued Operations [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

. DISPOSALS

Mexico Business

In the second quarter of 2022, the Company entered into an asset purchase agreement to sell certain assets and liabilities of its Mexico operations in the Structures segment. Subsequent to the end of the quarter, the transaction closed on July 29, 2022.

The transaction does not meet the criteria set forth in ASC 205-20 for discontinued operations as it does not reflect a significant shift in the Company's strategy. As a result of the asset purchase agreement, the related assets and liabilities of the Mexico operations to be sold were reclassified to assets held for sale and liabilities held for sale, respectively, as of July 1, 2022 on the Company's Condensed Consolidated Balance Sheets as the criteria set forth in ASC 205-20 for held for sale presentation were met.

UK Composites Business

In the fourth quarter of 2020, the Company received approval from its Board of Directors to sell its United Kingdom ("UK") Composites division. The sale of the UK Composites business did not meet the criteria set forth in ASC 205-20 for discontinued operations as it did not reflect a significant shift in the Company's strategy. As a result of the approved plan, the UK Composites division met the criteria set forth in ASC 205-20 for held for sale presentation at December 31, 2020. At December 31, 2020, the assets of the UK Composites business were considered impaired as the estimated fair value of the disposal group was lower than the estimated carrying value of the UK Composites business. As such, the assets of the UK Composites business were written off and the related liabilities of the UK division to be sold were reclassified to liabilities held for sale, as of December 31, 2020 on the Company's Consolidated Balance Sheet. The Company recorded an impairment loss of $36.3 million in the year ended December 31, 2020. The Company sold its UK Composites division in a transaction that closed on February 2, 2021. In the first quarter of 2021, when the sale was finalized, the Company recorded an additional loss of $0.2 million, which was included in loss on sale of business on the Company's Condensed Consolidated Statement of Operations for the six-month fiscal period ended July 2, 2021, resulting in a total loss on the sale of the UK Composites business of $36.5 million.

Cash and cash equivalents and restricted cash at the beginning of the period on the Company's Condensed Consolidated Statement of Cash Flows for the six-month fiscal period ended July 2, 2021 included $6.6 million of cash that was included in the UK Composites business disposal group. Given the assets of the disposal group were recognized net of the impairment recorded in the year ended December 31, 2020, such amounts were not reflected on the Company's Consolidated Balance Sheet at December 31, 2020.

Distribution Business

On August 26, 2019, the Company completed the sale of its Distribution business. Upon closing, the Company entered into a transition services agreement ("TSA") with the buyer, pursuant to which the Company agreed to support the information technology ("IT"), human resources and benefits, tax and treasury functions of the Distribution business for six to twelve months. The buyer exercised an option to extend the support period for up to one additional year for certain services. During the third quarter of 2021, the TSA expired and all services were completed as of the end of the period. As such, there was no activity associated with the TSA in 2022. Through the term of the TSA, the Company incurred $18.9 million in costs and earned $13.0 million in income associated with the TSA. Of these amounts, $1.0 million and $1.7 million in costs were incurred and $0.4 million and $0.9 million in income was earned in three-month and six-month fiscal periods ended July 2, 2021, respectively. These amounts were included in costs from transition services agreement and income from transition services agreement on the Company's Condensed Consolidated Statements of Operations, respectively.

Since the sale of the Distribution business, cash outflows from the Company to its former Distribution business totaled $8.7 million through July 1, 2022, which primarily related to Distribution employee and employee-related costs incurred prior to the sale. There were no cash flows from the Company to its former Distribution business in the six-month fiscal periods ended July 1, 2022 and July 2, 2021. Since the sale of the Distribution business, cash inflows from the Company's former Distribution business to the Company totaled $19.1 million through July 1, 2022, which primarily related to cash received for services performed under the TSA and the $5.2 million working capital adjustment settled in the first quarter of 2020. Cash inflows from the Company's former Distribution business received in the six-month fiscal period ended July 2, 2021 totaled $1.5 million. Cash inflows from the former Distribution business were not material in 2022.