Exit Activity Costs and Asset Impairments

9 Months Ended

Sep. 30, 2020

Restructuring and Related Activities [Abstract]

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, the simplification of processes, the sale and exiting of less profitable businesses or product lines, and the reduction in our manufacturing footprint.

Exit activity costs were incurred during the nine months ended September 30, 2020 and 2019 which related to moving and closing costs, contract terminations, and severance incurred as a result of process simplification initiatives. In conjunction with these initiatives, the Company closed one facility and, separately, sold a facility closed in 2017 during the nine months ended September 30, 2020. During the nine months ended September 30, 2019, the Company closed one facility as a result of these initiatives.

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,
	2020						2019
	Inventory write-downs &/or asset impairment charges		Exit activity costs		Total		Inventory write-downs &/or asset impairment (recoveries) charges, net		Exit activity costs		Total
Renewable Energy and Conservation	$	—	$	172	$	172	$	(9)	$	46	$	37
Residential Products	21		165		186		478		2,937		3,415
Industrial and Infrastructure Products	138		114		252		10		275		285
Corporate	—		17		17		—		246		246
Total exit activity costs & asset impairments	$	159	$	468	$	627	$	479	$	3,504	$	3,983


	Nine months ended September 30,
	2020						2019
	Inventory write-downs &/or asset impairment charges		Exit activity costs		Total		Inventory write-downs &/or asset impairment (recoveries) charges, net		Exit activity costs		Total
Renewable Energy and Conservation	$	72	$	506	$	578	$	(9)	$	45	$	36
Residential Products	21		649		670		478		3,307		3,785
Industrial and Infrastructure Products	412		152		564		10		1,588		1,598
Corporate	—		116		116		—		919		919
Total exit activity costs & asset impairments	$	505	$	1,423	$	1,928	$	479	$	5,859	$	6,338

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,
	2020		2019		2020		2019
Cost of sales	$	325	$	683	$	1,198	$	968
Selling, general, and administrative expense	302		3,300		730		5,370
Total asset impairment and exit activity charges	$	627	$	3,983	$	1,928	$	6,338

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


	2020		2019
Balance at January 1	$	5,449	$	1,923
Exit activity costs recognized	1,423		5,859
Cash payments	(6,179)		(3,032)
Balance at September 30	$	693	$	4,750

On June 30, 2020, the Company sold its self-guided apartment tour application business to a third party from its Residential Products segment. The $2.0 million net proceeds from the sale resulted in pre-tax net gain of $1.9 million and has been presented within other (income) expense in the consolidated statements of income. This

divestiture does not meet the criteria to be reported as a discontinued operation nor will it have a major effect on the Company's operations.