Impairment and Restructuring Charges

3 Months Ended

Mar. 31, 2023

Note 15 - Impairment and Restructuring Charges

Impairment and restructuring charges by segment are comprised of the following:

For the three months ended March 31, 2023:


	Engineered Bearings		Industrial Motion		Total
Impairment charges	$	—	$	28.3	$	28.3
Severance and related benefit costs	0.7		(0.1)		0.6

Total	$	0.7	$	28.2	$	28.9

For the three months ended March 31, 2022:


	Engineered Bearings		Industrial Motion		Total

Severance and related benefit costs	$	0.4	$	(0.1)	$	0.3
Exit costs	0.7		—		0.7
Total	$	1.1	$	(0.1)	$	1.0

The following discussion explains the impairment and restructuring charges recorded for the periods presented; however, it is not intended to reflect a comprehensive discussion of all amounts in the tables above.

Engineered Bearings:

On January 16, 2023, the Company announced the closure of its bearing plant in Gaffney, South Carolina. The Company expects to transfer its remaining operations to other bearing manufacturing facilities in North America. The closure of this facility is expected to occur by the end of the fourth quarter of 2023 and is expected to affect approximately 225 employees. The Company expects to incur approximately $10 million to $12 million of pretax costs in total related to this closure. During the three months ended March 31, 2023, the Company recorded severance and related benefits of $0.8 million related to this closure. The Company incurred cumulative pretax costs related to this closure of $2.0 million as of March 31, 2023, including rationalization costs recorded in cost of products sold.

On July 19, 2021, the Company announced the closure of its bearing manufacturing facility in Villa Carcina, Italy. The Company transferred the manufacturing of its single-row tapered roller bearing production to other bearing facilities in Europe, Asia and the United States. The Company completed the closure of the facility on October 31, 2022, and it affected approximately 110 employees. During the three months ended March 31, 2022, the Company recorded severance and related benefits of $0.4 million and exit costs of $0.6 million related to this closure. The Company incurred cumulative pretax costs related to this closure of $9.8 million as of March 31, 2023, including rationalization costs recorded in cost of products sold. On November 1, 2022, the Company completed the sale of this facility.

Industrial Motion:

During the third quarter of 2022, the Company announced certain organizational changes, which included the appointment of executive leaders for its Engineered Bearings and Industrial Motion product groups. After evaluating the impact from the organizational changes and revising segment results through the balance of 2022, the Company concluded that it will operate under two new reportable segments, Engineered Bearings and Industrial Motion, effective January 1, 2023. In conjunction with this change in segmented results, the Company had to reallocate goodwill to new reporting units under these two segments. In addition, the Company had to review goodwill for impairment under these new reporting units. As a result of this goodwill impairment review, the Company recognized a pretax goodwill impairment loss of $28.3 million during the three months ended March 31, 2023.

Note 15 - Impairment and Restructuring Charges (continued)

On February 4, 2020, the Company announced the closure of its chain manufacturing facility in Indianapolis, Indiana. This facility was part of the Diamond Chain Company ("Diamond Chain") acquisition completed on April 1, 2019. The Company transferred the majority of its Diamond Chain product line to its chain manufacturing facility in Fulton, Illinois. The chain plant is expected to cease operations by the end of April 2023 and is expected to affect approximately 240 employees. The Company expects to hire approximately 130 full-time positions in Fulton, Illinois and expects to incur approximately $12 million to $15 million of expenses related to this closure. The Company has incurred cumulative pretax costs related to this closure of $14.4 million as of March 31, 2023, including rationalization costs recorded in cost of products sold.

Consolidated Restructuring Accrual:

The following is a rollforward of the consolidated restructuring accrual for the three months ended March 31, 2023 and twelve months ended December 31, 2022:


	March 31, 2023		December 31, 2022
Beginning balance, January 1	$	3.1	$	7.0
Expense	0.6		5.8
Payments	(0.7)		(9.7)
Ending balance	$	3.0	$	3.1

The restructuring accrual at March 31, 2023 and December 31, 2022 was included in other current liabilities on the Consolidated Balance Sheets.