Exit Activity Costs and Asset Impairments

12 Months Ended

Dec. 31, 2015

Restructuring and Related Activities [Abstract]

Exit Activity Costs and Asset Impairments

EXIT ACTIVITY COSTS AND ASSET IMPAIRMENTS

The Company’s business strategy has been formulated to effect a transformation of its operations and much-improved financial results over a five year period.  In 2015, the first year of this planned transformation, an 80/20 simplification initiative commenced across many of our business units.  This initiative, in part, focuses the Company’s internal resources on further increasing the value provided to our customers.  A result of this initiative in 2015 was the identification of low-volume, internally-produced products which have been or will be planned to be outsourced or discontinued.  There were costs resulting from this identification that aggregated $8,504,000. These charges relate to the write-down of inventory and impairment of machinery and equipment associated with either discontinued product lines or the reduction of manufactured goods offered within a product line. These assets were written down to their sale or scrap value, and were subsequently sold or disposed of. Exit activity costs of $1,418,000 were incurred relating to contract termination costs, severance costs, and other moving and closing costs. These costs were the result of the closing and consolidation of four facilities, relocation of inventory and equipment at those facilities and the reduction of workforce associated with the discontinued products and closed facilities. Lastly, the Company sold and leased back a facility which resulted in a gain of $6,799,000.

In 2014, the Company closed and consolidated two facilities which resulted in asset impairment charges of $208,000 and exit activity costs of $2,126,000. In addition, the Company recognized a gain on the sale of a consolidated facility previously impaired in 2013 of $663,000.

The following table sets forth the asset impairment charges, exit activity costs and gain on facilities sold in conjunction with these efforts, incurred by segment during the years ended December 31 related to the restructuring activities described above (in thousands):

	2015									2014									2013
	Inventory write-downs &/or asset impairment charges		Exit activity costs		Gain on sale leaseback			Total		Inventory write-downs &/or asset impairment charges		Exit activity costs		Gain on sale			Total		Inventory write-downs &/or asset impairment charges		Exit activity costs		Total
Residential Products	$	6,495	$	1,256	$	(6,799	)	$	952	$	83	$	1,332	$	(663	)	$	752	$	1,616	$	905	$	2,521
Industrial & Infrastructure Products	2,009		162		—			2,171		125		794		—			919		—		113		113
Total exit activity costs & asset impairments	$	8,504	$	1,418	$	(6,799	)	$	3,123	$	208	$	2,126	$	(663	)	$	1,671	$	1,616	$	1,018	$	2,634

The following table provides a summary of where the above exit activity costs and asset impairments are recorded in the consolidated statements of operations for the years ended December 31 (in thousands):

	2015			2014		2013
Cost of sales	$	9,381		$	843	$	2,519
Selling, general, and administrative expense	(6,258		)	828		115
Total exit activity costs and asset impairments	$	3,123		$	1,671	$	2,634

The following table reconciles the beginning and ending liability for exit activity costs relating to the Company’s facility consolidation efforts (in thousands):

	2015			2014
Balance as of January 1	$	575		$	1,092
Exit activity costs recognized	1,418			2,126
Cash payments	(1,390		)	(2,643		)
Balance as of December 31	$	603		$	575