Cost Reduction Initiatives and Other Charges

2016 Cost Reduction Initiatives and Other Charges

In April 2016, the Company implemented additional cost saving initiatives by reducing its current workforce by approximately 12%. Additional reductions were needed to further streamline the organization and bring it in line with the Company’s current revenue stream, while maintaining the necessary core capabilities to continue our operations and strategic initiatives. In addition, the Company incurred losses in association with the exchange of a portion of its bonds during the second quarter 2016. During the twelve months ended December 31, 2016, the Company recognized the following pre-tax charges (in thousands):



	Severance charges^(a)		Loss on bond exchange^(b)		Total
Cost of goods sold	$	1,077	$	—	$	1,077
Operating expenses	932		—		932
Other expense	—		2,182		2,182
Consolidated total	$	2,009	$	2,182	$	4,191


^(a)	Represents severance charges related to the second quarter 2016 restructurings.


^(b)	Represents a loss on exchange of bonds during the second quarter 2016.

2015 Cost Reduction Initiatives

During 2015, the Company implemented additional savings initiatives by (i) centralizing the Company’s global data processing capabilities to two core geographical hubs in the U.S. and the U.K., (ii) reducing the Company’s marine repair infrastructure to two locations in the U.S. and U.A.E., (iii) making further reductions in personnel across all of the Company’s segments that, combined with reductions starting in December 2014 and reduced the Company’s full-time employee base by approximately 50%. During 2015, the Company recognized the following pre-tax charges and credits (in thousands):



	Severance charges^(a)			Facility charges^(b)			Total
Cost of goods sold	$	3,981		$	—		$	3,981
Operating expenses	1,910			1,323			3,233
Other (income) expense	—			1,618			1,618
Income tax benefit	(119		)	(150		)	(269		)
Net income attributable to noncontrolling interest	(172		)	—			(172		)
Consolidated total	$	5,600		$	2,791		$	8,391


^(a)	Represents severance charges related to 2015 restructurings, a portion of which relates to a noncontrolling interest.


^(b)	Represents facility charges related to 2015 restructurings.