Business Realignment and Restructuring | (12) Business Realignment and Restructuring On May 19, 2020, the Company committed to the strategic exit of its Control Devices particulate matter (“PM”) sensor product line. The decision to exit the PM sensor product line was made after consideration of the decline in the market outlook for diesel passenger vehicles, the current and expected profitability of the product line and the Company’s strategic focus on aligning resources with the greatest opportunities. In conjunction with the strategic exit of the PM sensor product line, the Company entered into an asset purchase agreement related to the sale of the PM sensor product line during the first quarter of 2021. Refer to Note 16 of the condensed consolidated financial statements for additional details regarding the sale. As a result of the PM sensor restructuring actions, the Company recognized expense of $285 and $2,552 for the three months ended June 30, 2021 and 2020, respectively, for non-cash fixed asset charges, including impairment and accelerated depreciation of PM sensor related fixed assets and other related costs. For the three months ended June 30, 2021 restructuring related costs of $250 and $35 were recognized in COGS and SG&A, respectively. For the three months ended June 30, 2020 restructuring related costs of $164 and $2,388 were recognized in COGS and SG&A, respectively. The Company recognized expense of $1,654 and $2,552 for the six months ended June 30, 2021 and 2020, respectively, for non-cash fixed asset charges, including impairment and accelerated depreciation of PM sensor related fixed assets and other related costs. For the six months ended June 30, 2021 restructuring related costs of $900 , $673 and $81 were recognized in COGS, SG&A and D&D, respectively. For the six months ended June 30, 2020 restructuring related costs of $164 and $2,388 were recognized in COGS and SG&A, respectively. The estimated range of additional cost of the plan to exit the PM sensor product line, that will impact the Control Devices segment, is approximately $1,700 to $4,900 and is related to employee severance and termination costs, contract terminations costs and other related costs such as potential commercial and supplier settlements. We anticipate that these costs will be incurred through the fourth quarter of 2021. The expenses for the exit of the PM sensor line that relate to the Control Devices reportable segment include the following: Accrual as of 2021 Charge Utilization Accrual as of January 1, 2021 to Expense Cash Non-Cash June 30, 2021 Fixed asset impairment and $ - $ 185 $ - $ (185) $ - Employee termination benefits - 76 (76) - - Other related costs - 1,393 (1,393) - - Total $ - $ 1,654 $ (1,469) $ (185) $ - Accrual as of 2020 Charge Utilization Accrual as of January 1, 2020 to Expense Cash Non-Cash June 30, 2020 Fixed asset impairment and $ - $ 2,482 $ - $ (2,482) $ - Other related costs - 70 (70) - - Total $ - $ 2,552 $ (70) $ (2,482) $ - On January 10, 2019, the Company committed to a restructuring plan that resulted in the closure of the Canton, Massachusetts facility (“Canton Facility”) on March 31, 2020 and the consolidation of manufacturing operations at that site into other Company locations (“Canton Restructuring”). Company management informed employees at the Canton Facility of this restructuring decision on January 11, 2019. The costs for the Canton Restructuring included employee severance and termination costs, contract terminations costs, professional fees and other related costs such as moving and set-up costs for equipment and costs to restore the engineering function previously located at the Canton facility. As a result of the Canton Restructuring actions, the Company recognized expense of $0 and $461 respectively, for the three months ended June 30, 2021 and 2020 for employee termination benefits and other restructuring related costs. For the three months ended June 30, 2020 severance and other related restructuring costs of $80, $235 and $146 were recognized in COGS, SG&A and D&D, respectively, in the condensed consolidated statement of operations. The Company recognized expense of $13 and $2,683 respectively, for the six months ended June 30, 2021 and 2020 for employee termination benefits and other restructuring related costs. For the six months ended June 30, 2021 other restructuring related costs of $13 were recognized in D&D in the condensed consolidated statement of operations. For the six months ended June 30, 2020 severance and other related restructuring costs of $1,570, $549 and $564 were recognized in COGS, SG&A and D&D, respectively, in the condensed consolidated statement of operations. We do not expect to incur additional costs related to the Canton Restructuring. Refer to Note 8 and Note 16 to the condensed consolidated financial statements for additional details regarding the third-party lease and sale, respectively, of the Canton facility. The expenses for the Canton Restructuring that relate to the Control Devices reportable segment include the following: Accrual as of 2021 Charge Utilization Accrual as of January 1, 2021 to Expense Cash Non-Cash June 30, 2021 Employee termination benefits $ 165 $ - $ (25) $ - $ 140 Other related costs - 13 (13) - - Total $ 165 $ 13 $ (38) $ - $ 140 Accrual as of 2020 Charge Utilization Accrual as of January 1, 2020 to Expense Cash Non-Cash June 30, 2020 Employee termination benefits $ 2,636 $ 1,119 $ (3,755) $ - $ - Other related costs - 1,564 (1,564) - - Total $ 2,636 $ 2,683 $ (5,319) $ - $ - In the fourth quarter of 2018, the Company undertook restructuring actions for the Electronics segment affecting the European Aftermarket business and China operations. In the second quarter of 2020, the Company finalized plans to move its European Aftermarket sales activities in Dundee, Scotland which resulted in incurring contract termination costs as well as employee severance and termination costs. In addition, the Company announced an additional restructuring program to transfer the European production of its controls product line to China. As a result of these actions, the Company recognized expense of $21 and $1,621, respectively, for the three months ended June 30, 2021 and 2020 for employee severance and termination costs, contract termination costs, other related costs and non-cash fixed asset charges for accelerated depreciation of fixed assets and other related costs. Electronics segment restructuring costs (benefit) recognized in COGS, SG&A, and D&D in the condensed consolidated statement of operations for the three months ended June 30, 2021 were $5, $19 and $(3), respectively. Electronics segment restructuring costs recognized in SG&A and D&D in the condensed consolidated statement of operations were $1,244 and $377 for the three months ended June 30, 2020, respectively. The Company recognized expense of $220 and $1,628, respectively, for the six months ended June 30, 2021 and 2020 for employee severance and termination costs, contract termination costs, other related costs and non-cash fixed asset charges for accelerated depreciation of fixed assets and other related costs. Electronics segment restructuring costs recognized in COGS, SG&A, and D&D in the condensed consolidated statement of operations for the three months ended June 30, 2021 were $3, $174 and $43, respectively. Electronics segment restructuring costs recognized in SG&A and D&D in the condensed consolidated statement of operations were $1,251 and $377 for the six months ended June 30, 2020, respectively. The Company expects to incur up to $19 of additional restructuring costs related to these actions through the fourth quarter of 2021. The expenses for the restructuring activities that relate to the Electronics reportable segment include the following: Accrual as of 2021 Charge to Utilization Accrual as of January 1, 2021 Expense Cash Non-Cash June 30, 2021 Employee termination benefits $ 227 $ 50 $ (212) $ - $ 65 Other related costs - 170 (170) - - Total $ 227 $ 220 $ (382) $ - $ 65 Accrual as of 2020 Charge to Utilization Accrual as of January 1, 2020 Expense Cash Non-Cash June 30, 2020 Employee termination benefits $ 52 $ 863 $ (319) $ - $ 596 Contract termination costs - 452 (452) - - Other related costs - 313 (313) - - Total $ 52 $ 1,628 $ (1,084) $ - $ 596 In addition to the specific restructuring activities, the Company regularly evaluates the performance of its businesses and cost structures, including personnel, and makes necessary changes thereto in order to optimize its results. The Company also evaluates the required skill sets of its personnel and periodically makes strategic changes. As a consequence of these actions, the Company incurs severance related costs which are referred to as business realignment charges. Business realignment charges by reportable segment were as follows: Three months ended Six months ended June 30, June 30, 2021 2020 2021 2020 Control Devices (A) $ - $ 1,042 $ 192 $ 1,419 Electronics (B) 1 1,305 13 1,305 Stoneridge Brazil (C) 59 - 59 153 Unallocated Corporate (D) - 236 42 310 Total business realignment charges $ 60 $ 2,583 $ 306 $ 3,187 (A) Severance costs for the three months ended June 30, 2020 related to COGS, D&D and SG&A were $603 , $249 and $190 , respectively. Severance costs for the six months ended June 30, 2021 related to SG&A were $192 . Severance costs for the six months ended June 30, 2020 related to COGS, D&D and SG&A were $603 , $249 and $567 , respectively. (B) Severance costs for the three months ended June 30, 2021 related to D&D were $1, respectively. Severance costs for the six months ended June 30, 2021 related to SG&A and D&D were $(22) and $35 , respectively. Severance costs for the three and six months ended June 30, 2020 related to COGS, D&D and SG&A were $323 , $228 and $754 , respectively. (C) Severance costs for the three and six months ended June 30, 2021 related to COGS and SG&A were $7 and $52 , respectively. Severance costs for the six months ended June 30, 2020 related to COGS and SG&A were $86 and $67, respectively. (D) Severance costs for the three months ended 2020 related to SG&A were $236 . Severance costs for the six months ended June 30, 2021 and 2020 related to SG&A were $42 and $310 , respectively. Business realignment charges classified by statement of operations line item were as follows: Three months ended Six months ended June 30, June 30, 2021 2020 2021 2020 Cost of goods sold $ 7 $ 926 $ 7 $ 1,012 Selling, general and administrative 52 1,180 264 1,698 Design and development 1 477 35 477 Total business realignment charges $ 60 $ 2,583 $ 306 $ 3,187 |