Restructuring Charges (Notes)

9 Months Ended

May 31, 2021

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure [Text Block]

Note 3. Restructuring Charges

The Company has undertaken or committed to various restructuring initiatives, including workforce reductions, leadership changes, plant consolidations to reduce manufacturing overhead, satellite office closures, the continued movement of production and product sourcing to low-cost alternatives and the centralization and standardization of certain administrative functions. Liabilities for severance are generally to be paid within twelve months, while future lease payments related to facilities vacated as a result of restructuring are to be paid over the underlying remaining lease terms. During fiscal 2019, the Company announced a new restructuring plan focused on (i) the integration of the Enerpac and Hydratight businesses (IT&S segment), (ii) the strategic exit of certain commodity-type services in our North America Services operations (IT&S segment) and (iii) driving efficiencies within the overall corporate structure. In the third quarter of fiscal 2020, the Company announced the expansion and revision of this plan, which further simplifies and flattens the corporate structure through elimination of redundancies between the segment and corporate functions, while enhancing our commercial and marketing processes to become even closer to our customers. Restructuring charges associated with this plan were $1.5 million and $2.2 million in the three and nine months ended May 31, 2021, respectively, and $2.5 million and $5.6 million in the three and nine months ended May 31, 2020, respectively.

The following summarizes restructuring reserve activity for the IT&S segment and Corporate (in thousands):

	Nine Months Ended May 31, 2021
	IT&S		Corporate
Balance as of August 31, 2020	$	1,443	$	267
Restructuring charges	2,180		9
Cash payments	(1,444)		(250)
Other non-cash uses of reserve (1)	(14)		—
Impact of changes in foreign currency rates	49		—
Balance as of May 31, 2021	$	2,214	$	26

	Nine Months Ended May 31, 2020
	IT&S		Corporate
Balance as of August 31, 2019	$	2,912	$	—
Restructuring charges	4,019		1,590
Cash payments	(4,265)		(871)
Other non-cash uses of reserve (1)	(556)		(484)
Impact of changes in foreign currency rates	(23)		—
Balance as of May 31, 2020	$	2,087	$	235

(1) Majority of non-cash uses of reserve represents accelerated equity vesting with employee severance agreements.

Total restructuring charges (inclusive of the Other segment) being reported in "Restructuring charges" were $1.6 million and $2.5 million in the three and nine months ended May 31, 2021, respectively. Restructuring charges for the three and nine months ended May 31, 2020 were $3.3 million and $7.2 million, respectively, which included approximately $0.8 million of charges in each period being reported in the Consolidated Statements of Operations in "Cost of products sold," with the balance of the charges reported in "Restructuring charges."

Restructuring expenses related to Cortland U.S. (Other segment) were less than $0.1 million and $0.3 million in the three and nine months ended May 31, 2021, respectively. The three and nine months ended May 31, 2020 included $0.8 million (reported in the Condensed Consolidated Statements of Earnings in "Cost of products sold,") and $1.6 million, respectively, which included approximately $0.8 million of charges in each period being reported in the Consolidated Statements of Operations in "Cost of products sold," with the balance of the charges reported in "Restructuring charges." Restructuring reserves for Cortland U.S. were $0.1 million and $0.4 million as of May 31, 2021 and August 31, 2020, respectively.