EXIT ACTIVITY COSTS AND ASSET IMPAIRMENTS

The Company has incurred exit activity costs and asset impairment charges as a result of its 80/20 simplification and portfolio management initiatives. These initiatives have resulted in the identification of low-volume, low margin, internally-produced products which have been or will be outsourced or discontinued, and in the sale and exiting of less profitable businesses or products lines.

Exit activity costs were incurred during the nine months ended September 30, 2018 which related to contract terminations, severance, and other moving and closing costs. During this time, the Company also incurred asset impairment charges related to the write-down of inventory, impairment of machinery and equipment and intangible assets associated with either discontinued product lines or reduced sales of lower margin products. In conjunction with these initiatives, the Company also sold and leased back a facility which resulted in a gain, as well as closed two other facilities during the first nine months of 2018.

During the nine months ended September 30, 2017, the Company incurred asset impairment charges and exit activity costs resulting from the above initiatives. Also, as a result of these initiatives, the Company closed three facilities during the first nine months of 2017.

The following tables set forth the asset impairment charges and exit activity costs incurred by segment during the three and nine months ended September 30, related to the restructuring activities described above (in thousands):



	Three months ended September 30,
	2018								2017
	Inventory write-downs &/or asset impairment charges		Exit activity costs (recoveries), net			Total			Inventory write-downs &/or asset impairment charges		Exit activity costs (recoveries), net			Total
Residential Products	$	1,392	$	485		$	1,877		$	442	$	566		$	1,008
Industrial & Infrastructure Products	358		1,417			1,775			98		(12		)	86
Renewable Energy & Conservation	—		(156		)	(156		)	266		191			457
Corporate	—		164			164			—		16			16
Total exit activity costs & asset impairments	$	1,750	$	1,910		$	3,660		$	806	$	761		$	1,567



	Nine months ended September 30,
	2018									2017
	Inventory write-downs &/or asset impairment charges (recoveries), net			Exit activity costs (recoveries), net			Total			Inventory write-downs &/or asset impairment charges (recoveries), net			Exit activity costs		Total
Residential Products	$	1,349		$	333		$	1,682		$	295		$	958	$	1,253
Industrial & Infrastructure Products	(345		)	1,607			1,262			(2,492		)	2,959		467
Renewable Energy & Conservation	84			(107		)	(23		)	266			2,610		2,876
Corporate	—			431			431			—			179		179
Total exit activity costs & asset impairments	$	1,088		$	2,264		$	3,352		$	(1,931	)	$	6,706	$	4,775

The following table provides a summary of where the asset impairments and exit activity costs were recorded in the consolidated statements of income for the three and nine months ended September 30, (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Cost of sales	$	1,621	$	860	$	1,465	$	382
Selling, general, and administrative expense	2,039		707		1,887		4,393
Net asset impairment and exit activity charges	$	3,660	$	1,567	$	3,352	$	4,775

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



	2018			2017
Balance at January 1	$	961		$	3,744
Exit activity costs recognized	2,264			6,706
Cash payments	(1,608		)	(9,207		)
Balance at September 30	$	1,617		$	1,243