RESTRUCTURING AND ASSETS HELD FOR SALE

12 Months Ended

Sep. 30, 2023

Restructuring And Assets Held For Sale [Abstract]

RESTRUCTURING AND ASSETS HELD FOR SALE

RESTRUCTURING AND ASSETS HELD FOR SALE

During June 2022, the Company approved and announced a plan to close its facility in Cumberland, Virginia. Further, the Company’s restructuring and site optimization plan includes the following sites, which were identified for relocation of operations: Dublin, Virginia, Gannat, France, Blackthorn, U.K., RMS St. Louis, Missouri, Spain, Boyertown, Pennsylvania, and Haslett, Michigan.

For the fiscal years ended September 30, 2023 and 2022, the Company incurred expenses that qualified as exit and disposal costs under GAAP. For the fiscal year ended September 30, 2023, the costs were immaterial and the Company does not expect further material charges as a result of the closures and planned site consolidations. For the fiscal year ended September 30, 2022, costs included employee severance and other costs related to workforce reductions (“employee-related”) of $2,159 and other exit costs (“other”) of $5,351, which primarily related to inventory write-downs related to the exit of the Cumberland facility and costs to maintain the facilities until each facility had been exited. Exit and disposal costs were charged to other operating expense. During the fiscal year ended September 30, 2022, payments of $764 and $3,276 were made for employee-related and other costs, respectively. The remaining exit and disposal costs in fiscal 2022 were non-cash expenses. As of September 30, 2023 and 2022, the liability balance for exit and disposal costs that qualify as employee-related exit and disposal costs was $585 and $1,395, respectively. As of September 30, 2023, the property and equipment related to the facilities at Haslett, Cumberland, Gannat, Blackthorn and Spain were presented within assets held for sale.

Cumberland and Dublin

During June 2022, the Company approved and announced a plan to close its facility in Cumberland, Virginia (“Cumberland facility”) and to close and relocate its operations in Dublin, Virginia (“Dublin facility”) into its other existing facilities, as a part of the Company’s restructuring and site optimization plan. The Cumberland facility exit was also a part of the settlement, as further described in Note 16 – Contingencies. The Cumberland facility exit was completed in September 2022 and the Dublin facility transition was completed in November 2022. The Company determined that the carrying value exceeded the fair value of the real property at the Cumberland and Dublin facilities less costs to sell. As a result, asset impairment charges of $890 and $1,054 were recorded within the RMS reportable segment during the fiscal years ended September 30, 2023 and 2022, respectively. The real property of the Cumberland facility initially met the criteria for assets held for sale as of March 31, 2023 and continued to meet the criteria for assets held for sale as of September 30, 2023. The operations at both the Cumberland facility and the Dublin facility were within the RMS reporting segment.

Gannat, Blackthorn, Spain and RMS St. Louis

During the fiscal year ended September 30, 2023, the Company completed its consultation with employee representatives at the Gannat and Blackthorn facilities and the closures of both facilities were approved. The consolidation of operations at Gannat with the operations in Horst, the Netherlands was completed in June 2023, and the consolidation of the operations at the Blackthorn facility with the operations in Hillcrest, U.K. is expected to be complete by the end of March 2024. In July 2023, the Company decided to close its Spain facility. The exit of the facility in Spain was completed in September 2023 and was sold subsequent to year-end in November 2023. As of June 30, 2023, the real property of the Gannat and

Blackthorn facilities initially met the criteria for assets held for sale, the real property of the Spain facility initially met the criteria for assets held for sale as of September 30, 2023, and all three facilities continued to meet the criteria for assets held for sale as of September 30, 2023. The RMS St. Louis facility closed in June 2023 and the GEMS operations at the RMS St. Louis facility were relocated to the DSA St. Louis facility and other operational facilities. The operations at the Gannat, Blackthorn, Spain and RMS St. Louis facilities were within the RMS reportable segment.

Boyertown and Haslett

Prior to the acquisition of Envigo, the Boyertown and Haslett facilities were identified for relocation of operations to the Denver, Pennsylvania facility. The exits of the Boyertown and Haslett facilities were completed in March 2023. The Boyertown facility was sold in September 2023. The real property of the Haslett facility initially met the criteria for assets held for sale as of March 31, 2023, and continued to meet the criteria for assets held for sale as of September 30, 2023.

Israel

As of December 31, 2022, the assets and liabilities related to the Israel RMS and Israel CRS businesses (the “Israeli Businesses”) initially met the held for sale criteria and, in August 2023, the Company sold its ownership interest in the Israeli Businesses, which were previously reflected in the RMS reportable segment.

Consideration for the sale consisted of (i) $1,000 in cash, (ii) an excess cash adjustment of $316, (iii) real property valued at $3,700, and (iv) a promissory note receivable in the aggregate amount of $2,453. The promissory note bears interest at a rate of 5.00% per annum, with quarterly payments of interest and principal payments on the first anniversary of the closing date and at maturity on August 29, 2025. The sale includes the Company’s 100.00% ownership in Israel RMS and Israel RMS’s 62.50% ownership interest in Israel CRS. Prior to the sale, the management team owned a 37.50% non-controlling ownership position in Israel CRS. The gain of $1,377 on the sale is presented within other income (expense). The combined (loss) income before taxes of the Israeli Businesses for fiscal years ended September 30, 2023 and 2022, was $62 and $4,245, respectively.