Restructuring

6 Months Ended

Jun. 30, 2023

Restructuring and Related Activities [Abstract]

In the first quarter of 2020, our Board of Directors approved a global restructuring plan (the “Restructuring Plan”), which is intended to support our strategic plan in an effort to improve operating performance and ensure that we are appropriately structured and resourced to deliver increased and sustainable value to our shareholders and customers. Key activities under the Restructuring Plan include a continued focus on efficiency and cost-saving efforts, which included a planned decrease of total headcount.

On July 15, 2021, we entered into a manufacturing services agreement (the “Agreement”) with Sanmina Corporation (“Sanmina”), in connection with the Restructuring Plan. Under the Agreement, Sanmina will provide manufacturing services for the Company’s measurement device products manufactured by the Company at the Company’s Lake Mary, Florida, Exton, Pennsylvania, Stuttgart, Germany and Portugal manufacturing sites. This phased transition to a Sanmina production facility was completed at the beginning of the third quarter of 2022 as part of our cost reduction initiative. As a result of an evaluation on

the usage of our manufacturing spaces, we decided to abandon 17,000 square feet of unused space at our Exton, Pennsylvania facility in the third quarter of 2022. Since the approval of the Restructuring Plan, we have paid $24.8 million, primarily consisting of severance and related benefits. All actions under this plan were completed as of March 31, 2023, and the remaining amounts payable of $0.5 million were rolled forward to the Integration Plan discussed below.

On February 7, 2023, our Board of Directors approved an integration plan (the "Integration Plan"), which is intended to streamline and simplify operations, particularly around our recent acquisitions and the resulting redundant operations and offerings. The Integration Plan was amended on May 3, 2023, and the Board approved increases to both the expected pre-tax charges and the annualized cost savings. Key activities under the Integration Plan include a planned decrease in headcount, consolidation of our cloud-based offerings from 3 platforms (2 acquired, 1 organic) into a single customer offering, and the optimization of our facility assets to align with current and expected future utilization. As of June 30, 2023, we expected to incur total pre-tax charges in the range of $22 million to $28 million through the end of fiscal year 2023, with a targeted annualized savings of approximately $20 million to $30 million. As of June 30, 2023, in relation with the Integration Plan, we have incurred total restructuring charges of $21.4 million, and have made cash payments of $4.0 million.

In the second quarter of 2023, we completed an evaluation of our leased facilities located in Lake Mary, Florida, Stuttgart, Germany and Portugal and determined that portions of these facilities will be abandoned. Consequently, we recorded right-of-use asset and leasehold improvement impairment charges of $3.7 million,which was included in restructuring costs on the condensed consolidated statements of operations.As a part of the Integration Plan, we also evaluated our product portfolio and decided to discontinue certain legacy products. This led to inventory and related purchase commitments impairment charges of $8.1 million in the second quarter of 2023, and these charges were included in the cost of sales on the condensed consolidated statements of operations.

In the second quarter of 2023 and 2022, we have recognized $3.1 million and $1.0 million, respectively, in employee severance and other professional costs associated with the restructuring plans. Additionally, we paid $3.2 million and $1.6 million, respectively, for the same periods, primarily consisting of severance and related benefits.

Activity related to the accrued restructuring charges for the Integration Plan and cash payments during the six months ended June 30, 2023 is as follows:


	Severance and other benefits		Professional fees and other related charges		Total
Balance at 12/31/2022	$	318	$	210	$	528
Additions charged to expense	7,197		220		7,417
Cash payments	(3,988)				(3,988)
Balance at June 30, 2023	$	3,527	$	430	$	3,957


	Severance and other benefits		Professional fees and other related charges		Total
Balance at December 31, 2021	$	3,442	$	477	$	3,919
Additions charged to expense	1,422		510		1,932
Cash payments	(2,016)		(819)		(2,835)
Balance at June 30, 2022	$	2,848	$	168	$	3,016