Quarterly report pursuant to Section 13 or 15(d)

Restructuring Charges (Notes)

v3.21.1
Restructuring Charges (Notes)
6 Months Ended
Feb. 28, 2021
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 are generally to be paid within twelve months, while future lease payments related to facilities vacated as a result of restructuring are to 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. In the third quarter of fiscal 2020, the Company announced the expansion and revision of this plan, which further simplifies and flattens the corporate structure through elimination of redundancies between the segment and corporate functions, while enhancing our commercial and marketing processes to become even closer to our customers. Restructuring charges associated with this plan were $0.6 million and $0.7 million in the three and six months ended February 28, 2021, respectively, and $1.7 million and $3.1 million in the three and six months ended February 29, 2020, respectively.
The following summarizes restructuring reserve activity for the IT&S segment and Corporate (in thousands):
Six Months Ended February 28, 2021
IT&S Corporate
Balance as of August 31, 2020 $ 1,443  $ 267 
Restructuring charges 688 
Cash payments (1,107) (250)
Other non-cash uses of reserve (1)
(14) — 
Impact of changes in foreign currency rates 15  — 
Balance as of February 28, 2021 $ 1,025  $ 26 
Six Months Ended February 29, 2020
IT&S Corporate
Balance as of August 31, 2019 $ 2,912  $ — 
Restructuring charges 2,189  939 
Cash payments (2,693) (628)
Other non-cash uses of reserve (1)
(406) (302)
Impact of changes in foreign currency rates (4) — 
Balance as of February 29, 2020 $ 1,998  $
(1) Majority of non-cash uses of reserve represents accelerated equity vesting with employee severance agreements.
Total restructuring charges (inclusive of the Other segment) being reported in "Restructuring charges" were $0.6 million and $0.9 million in the three and six months ended February 28, 2021, respectively, and $1.9 million and $3.9 million in the three and six months ended February 29, 2020, respectively.
Restructuring expenses related to Cortland U.S. (Other segment) were less than $0.1 million and $0.2 million in the three and six months ended February 28, 2021, respectively, and $0.3 million and $0.8 million in the three and six months ended February 29, 2020, respectively. Restructuring reserves for Cortland U.S. were $0.2 million and $0.4 million as of February 28, 2021 and August 31, 2020, respectively.