Restructuring Activities

12 Months Ended

Mar. 31, 2020

Note 5: Restructuring Activities

During fiscal 2020 and 2019, restructuring actions consisted primarily of targeted headcount reductions and plant consolidation activities. The headcount reductions were primarily in Europe and the Americas within the VTS segment and support the Company’s objective to reduce operational and SG&A cost structures. Also, the Company is in the process of transferring product lines to its CIS manufacturing facility in Mexico in order to achieve operational improvements and organizational efficiencies.

During fiscal 2018, the Company ceased production at its Gailtal, Austria manufacturing facility, primarily to reduce excess capacity and lower manufacturing costs in Europe. As a result of this facility closure, the Company recorded $8.3 million of restructuring expenses within the CIS segment, primarily related to employee severance and related benefits. Fiscal 2018 restructuring activities also included plant consolidation activities, targeted headcount reductions, and certain product line transfers in Europe within the VTS segment. In addition, the Company recorded restructuring expenses associated with the discontinuance of its geothermal product line within the BHVAC segment.

During fiscal 2021, the Company approved headcount reductions in the VTS and CIS segments and, as a result, expects to record approximately $4.0 million of severance expenses during the first quarter of fiscal 2021.

Restructuring and repositioning expenses were as follows:

	Years ended March 31,
	2020		2019		2018
Employee severance and related benefits	$	10.2	$	8.7	$	13.0
Other restructuring and repositioning expenses		2.0		0.9		3.0
Total	$	12.2	$	9.6	$	16.0

Other restructuring and repositioning expenses primarily consist of equipment transfer and plant consolidation costs.

The Company accrues severance in accordance with its written plans, procedures, and relevant statutory requirements. Changes in accrued severance were as follows:

	Years ended March 31,
	2020			2019
Beginning balance	$	10.0		$	11.0
Additions		10.2			8.7
Payments		(15.1	)		(9.1	)
Effect of exchange rate changes		(0.1	)		(0.6	)
Ending balance	$	5.0		$	10.0

During fiscal 2020, the Company identified potential impairment indicators related to manufacturing facilities in Austria and Germany within the VTS segment. The Company anticipates the future cash flows of these asset groups will be negatively impacted by planned wind downs of certain commercial vehicle and automotive programs. In response, the Company performed an impairment evaluation and recorded asset impairment charges totaling $7.5 million within its VTS segment to write down property and equipment assets to fair value. The Company determined fair value using Level 3 inputs, primarily consisting of appraisals, which considered the market rental value, market conditions, physical condition of the assets, salability in the marketplace and estimated scrap values, based on the specialized nature of the machinery and equipment.

Also during fiscal 2020, the Company recorded a $0.6 million impairment charge to reduce the carrying value of the previously-closed CIS Austrian facility to its current estimated fair value, less costs to sell. During fiscal 2019 and 2018, the Company recorded asset impairment charges of $0.4 million and $1.3 million, respectively, related to this closed facility.