Restructuring Costs

6 Months Ended

Jun. 30, 2023

. RESTRUCTURING AND SEVERANCE COSTS

Restructuring and severance costs are included in restructuring and severance costs on the Company's Condensed Consolidated Statements of Operations and other unallocated expenses, net within in Note 4, Revenue and Segment Information.

Transformation Restructuring

In December 2022, the Company began a review of all businesses and programs to increase efficiencies, improve working capital management and focus on sustainable and consistent revenue and profit generating activities. As a result of this review, the Company identified areas to reduce annualized costs in the Precision Products segment and at Corporate through streamlining processes, consolidating the production of fuzes for the JPF program at its Middletown facility, discontinuing K-MAX® helicopter production and right-sizing the Company's total cost structure. In the three-month and six-month fiscal periods ended June 30, 2023, the Company incurred $0.3 million and $2.5 million, respectively, in severance costs associated with these actions. Of this amount, $0.3 million was related to share-based compensation expense in the six-month fiscal period ended June 30, 2023. No share-based compensation expense was recorded to restructuring and severance costs in the three-month fiscal period ended June 30, 2023.

The following table summarizes the accrual balances by cost type for the restructuring actions:


	Severance		Other(1)		Total
In thousands
Restructuring accrual balance at December 31, 2022(2)	$	6,629	$	—	$	6,629
Provision	1,292		538		1,830
Cash payments	(5,163)		(538)		(5,701)
Changes in foreign currency exchange rates	31		—		31
Restructuring accrual balance at June 30, 2023	$	2,789	$	—	$	2,789

(1) Includes costs associated with the consolidation of facilities.

(2) Of the above accrual balance, $1.0 million was included in other long-term liabilities on the Company's Condensed Consolidated Balance Sheets as of December 31, 2022. The remainder was included in other current liabilities.

Other Matters

The Company identified workforce reductions and other reductions in certain general and administrative expenses, which resulted in $1.9 million and $2.1 million in restructuring and severance costs in the three-month and six-month fiscal periods ended July 1, 2022, respectively.

In addition to the restructuring and severance costs discussed above, in both the three-month and six-month fiscal periods ended July 1, 2022, the Company incurred $1.0 million in other severance expense.