Annual report pursuant to Section 13 and 15(d)

Restructuring Charges Restructuring Charges(Notes)

v3.19.3
Restructuring Charges Restructuring Charges(Notes)
 12 Months Ended
Aug. 31, 2019
Restructuring and Related Activities [Abstract]  
Restructuring and Related Activities Disclosure [Text Block]
Note 3. Restructuring Charges
The Company has undertaken or committed to various restructuring initiatives including workforce reductions; leadership changes; plant consolidations to reduce manufacturing overhead; satellite office closures; the continued movement of production and product sourcing to low-cost alternatives; and the centralization and standardization of certain administrative functions. Liabilities for severance will generally be paid within twelve months, while future lease payments related to facilities vacated as a result of restructuring will be paid over the underlying remaining lease terms. During fiscal 2019, the Company announced a new restructuring plan focused on i) the integration of the Enerpac and Hydratight businesses (IT&S segment), ii) the strategic exit of certain commodity type services in our North America Services operations (IT&S segment) and iii) driving efficiencies within the overall corporate structure. Total restructuring charges associated with this new restructuring plan were $4.2 million for the year ended August 31, 2019, with no additional charges associated with the previously announced restructuring initiatives.
Total restructuring charges associated with previously announced restructuring initiatives were $11.4 million for the year-ended August 31, 2018 with approximately $0.9 million of the restructuring charges recognized for the year ended August 31, 2018 being reported in the Consolidated Statements of Operations in "Cost of products sold," with the balance of the charges reported in "Restructuring charges." The year ended August 31, 2018 included $2.6 million of restructuring expenses related to Cortland U.S. and Viking. Restructuring reserves for Cortland U.S. and Viking (Other Segment) were $0.9 million and $1.9 million for the year ended August 31, 2019 and 2018, respectively.
The following rollforwards summarize restructuring reserve activity for the IT&S reportable segment and corporate (in thousands):
 
 
Year Ended August 31, 2018
 
 
Industrial Tools & Services
 
Corporate
 
Total
Balance as of August 31, 2017
 
$
1,499

 
$
232

 
$
1,731

Restructuring charges
 
4,286

 
4,524

 
8,810

Cash payments
 
(3,375
)
 
(2,483
)
 
(5,858
)
Other non-cash uses of reserve (1)
 
(635
)
 
(2,227
)
 
(2,862
)
Impact of changes in foreign currency rates
 
(88
)
 
—

 
(88
)
Balance as of August 31, 2018
 
$
1,687

 
$
46

 
$
1,733

(1) Majority of non-cash uses of reserve represents accelerated equity vesting with employee severance agreements.
 
 
Year Ended August 31, 2019
 
 
Industrial Tools & Services
 
Corporate
 
Total
Balance as of August 31, 2018
 
$
1,687

 
$
46

 
$
1,733

Restructuring charges
 
4,161

 
—

 
4,161

Cash payments
 
(2,954
)
 
(46
)
 
(3,000
)
Other non-cash uses/reclasses of reserve
 
54

 
—

 
54

Impact of changes in foreign currency rates
 
(36
)
 
—

 
(36
)
Balance as of August 31, 2019
 
$
2,912

 
$
—

 
$
2,912

Restructuring and Related Costs
The following rollforwards summarize restructuring reserve activity for the IT&S reportable segment and corporate (in thousands):
 
 
Year Ended August 31, 2018
 
 
Industrial Tools & Services
 
Corporate
 
Total
Balance as of August 31, 2017
 
$
1,499

 
$
232

 
$
1,731

Restructuring charges
 
4,286

 
4,524

 
8,810

Cash payments
 
(3,375
)
 
(2,483
)
 
(5,858
)
Other non-cash uses of reserve (1)
 
(635
)
 
(2,227
)
 
(2,862
)
Impact of changes in foreign currency rates
 
(88
)
 
—

 
(88
)
Balance as of August 31, 2018
 
$
1,687

 
$
46

 
$
1,733

(1) Majority of non-cash uses of reserve represents accelerated equity vesting with employee severance agreements.
 
 
Year Ended August 31, 2019
 
 
Industrial Tools & Services
 
Corporate
 
Total
Balance as of August 31, 2018
 
$
1,687

 
$
46

 
$
1,733

Restructuring charges
 
4,161

 
—

 
4,161

Cash payments
 
(2,954
)
 
(46
)
 
(3,000
)
Other non-cash uses/reclasses of reserve
 
54

 
—

 
54

Impact of changes in foreign currency rates
 
(36
)
 
—

 
(36
)
Balance as of August 31, 2019
 
$
2,912

 
$
—

 
$
2,912