Severance, Restructuring, and Acquisition Integration Activities

12 Months Ended

Dec. 31, 2021

Restructuring and Related Activities [Abstract]

Severance, Restructuring, and Acquisition Integration Activities

Severance, Restructuring, and Acquisition Integration Activities

Cost Reduction Program

We have executed a cost reduction program to streamline the organizational structure and invest in technology to drive productivity. We recognized $5.8 million, $4.0 million, and $19.6 million of severance and other restructuring costs for this program during the years ended December 31, 2021, 2020, and 2019, respectively. These costs were incurred by both the Enterprise Solutions and Industrial Solutions segments. The cost reduction program is substantially complete and has delivered a reduction in selling, general, and administrative expenses of approximately $60 million on an annual basis. We expect to recognize costs of approximately $3 million for this program in 2022.

Acquisition Integration Program

We are integrating our recent acquisitions such as OTN Systems, SPC, and Opterna with our existing businesses. The restructuring and integration activities are focused on achieving desired cost savings by consolidating existing and acquired facilities and other support functions. We recognized $12.6 million, $4.9 million, and $6.1 million of severance and other restructuring costs for this program during the years ended December 31, 2021, 2020, and 2019, respectively. These costs were incurred by both the Enterprise Solutions and Industrial Solutions segments. We do not expect to incur significant incremental costs for this program in 2022.

The following table summarizes the costs by segment of the programs described above as well as other immaterial programs and acquisition integration activities:

 

	Severance		Other Restructuring and Integration Costs		Total Costs
			(In thousands)
Year Ended December 31, 2021
Enterprise Solutions	$	1,312	$	12,488	$	13,800
Industrial Solutions	4,119		5,973		10,092
Total	$	5,431	$	18,461	$	23,892
Year Ended December 31, 2020
Enterprise Solutions	$	1,345	$	6,374	$	7,719
Industrial Solutions	1,706		2,833		4,539
Total	$	3,051	$	9,207	$	12,258
Year Ended December 31, 2019
Enterprise Solutions	$	5,018	$	5,790	$	10,808
Industrial Solutions	15,736		—		15,736
Total	$	20,754	$	5,790	$	26,544

The other restructuring and integration costs primarily consisted of equipment transfers, costs to consolidate operating and support facilities, retention bonuses, relocation, travel, legal, and other costs. The majority of the other restructuring and integration costs related to these actions were paid as incurred or are payable within the next 60 days.

The following table summarizes the costs of the various programs described above as well as other immaterial programs and acquisition integration activities by financial statement line item in the Consolidated Statement of Operations:

	Years ended December 31,
	2021		2020		2019
	(In thousands)
Cost of sales	$	11,308	$	704	$	3,425
Selling, general and administrative expenses	12,584		11,554		23,119
Total	$	23,892	$	12,258	$	26,544

Accrued Severance

The table below sets forth severance activity included in accrued liabilities that occurred for the Cost Reduction Program as well as the Acquisition Integration Program described above.

	Years ended December 31,
	2021		2020
	(In thousands)
Balance at beginning of year	$	7,085	$	19,575
New charges	2,060		2,529
Cash payments	(1,798)		(4,483)
Foreign currency translation	49		(89)
Other adjustments	—		(4,147)
Balance at the end of Q1	7,396		$	13,385
New charges	458		4,660
Cash payments	(1,023)		(4,795)
Foreign currency translation	(4)		(132)
Other adjustments	(59)		(1,420)
Balance at the end of Q2	$	6,768	$	11,698
New charges	63		2,060
Cash payments	(941)		(3,968)
Foreign currency translation	(2)		(156)
Other adjustments	(197)		(1,541)
Balance at the end of Q3	$	5,691	$	8,093
New charges	1,541		992
Cash payments	(587)		(1,823)
Foreign currency translation	3		(95)
Other adjustments	(440)		(82)
Balance at year-end	$	6,208	$	7,085

The other adjustments above were the result of changes in estimates. The company has experienced higher than expected voluntary turnover and as a result, certain previously approved severance actions were not taken.