Quarterly report pursuant to Section 13 or 15(d)

Restructuring Charges (Notes)

v3.19.2
Restructuring Charges (Notes) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
May 31, 2018
May 31, 2019
May 31, 2018
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 the three months ended May 31, 2019, the Company announced a new restructuring plan focused on the integration of the Enerpac and Hydratight businesses (IT&S segment) as well as driving efficiencies within the overall corporate structure. Total restructuring charges associated with this new restructuring plan were $1.1 million in the three months ended May 31, 2019, with no additional charges associated with the previously announced restructuring initiatives. Total restructuring charges associated with previously announced restructuring initiatives were $1.2 million in the three months ended May 31, 2018. Restructuring charges totaled $1.6 million and $12.1 million for the nine months ended May 31, 2019 and 2018, respectively, with approximately $0.9 million of the restructuring charges recognized in the nine months ended May 31, 2018 being reported in the Condensed Consolidated Statements of Earnings in "Cost of products sold," with the balance of the charges reported in "Restructuring charges."
The following rollforwards summarize restructuring reserve activity by segment (in thousands):
 
 
Nine Months Ended May 31, 2019
 
 
Industrial Tools & Services
 
Engineered Components & Systems
 
Corporate
 
Total
Balance as of August 31, 2018
 
$
1,687

 
$
1,592

 
$
415

 
$
3,694

Restructuring charges
 
1,136

 
442

 
—

 
1,578

Cash payments
 
(1,379
)
 
(1,140
)
 
(46
)
 
(2,565
)
Other non-cash uses/reclasses of reserve
 
(7
)
 
368

 
(369
)
 
(8
)
Impact of changes in foreign currency rates
 
(28
)
 
(58
)
 
—

 
(86
)
Balance as of May 31, 2019
 
$
1,409

 
$
1,204

 
$
—

 
$
2,613

 
 
Nine Months Ended May 31, 2018
 
 
Industrial Tools & Services
 
Engineered Components & Systems
 
Corporate
 
Total
Balance as of August 31, 2017
 
$
1,499

 
$
4,108

 
$
30

 
$
5,637

Restructuring charges
 
3,480

 
3,783

 
4,836

 
12,099

Cash payments
 
(2,578
)
 
(3,799
)
 
(2,160
)
 
(8,537
)
Other non-cash uses of reserve
 
(616
)
 
(1,382
)
 
(2,093
)
(1) 
(4,091
)
Impact of changes in foreign currency rates
 
(79
)
 
(95
)
 
—

 
(174
)
Balance as of May 31, 2018
 
$
1,706

 
$
2,615

 
$
613

 
$
4,934

(1) Majority of non-cash uses of reserve represents accelerated equity vesting in connection with employee severance agreements.

In June 2019, the Company announced a new restructuring plan focused on reducing costs and driving efficiencies within the EC&S segment. We expect to incur $2.0 million of costs in the fourth quarter associated with these actions and achieve approximately $3.0 million of annual savings.
  
Restructuring Charges, including recorded in Cost of Product Sold $ 1,186   $ 12,099
Restructuring costs recorded in cost of products sold     $ 900