Annual report pursuant to Section 13 and 15(d)


12 Months Ended
Dec. 31, 2021
Restructuring and Related Activities [Abstract]  
Goodwill Impairment
The 2021 goodwill impairment test resulted in no impairment to the carrying value of goodwill in any of the Company’s reporting units and no impairment charge was recognized in 2021. See Note 7 for discussion of the $86.3 million and $1.6 million of goodwill impairments charges in 2020 and 2019, respectively, within the Aerospace segment. Such amounts are reported within the Impairment Loss line of the Consolidated Statements of Operations in the respective year.
Restructuring Activities
In the fourth quarter of 2019, in an effort to reduce the significant operating losses at our AeroSat business, we initiated a restructuring plan to reduce costs and minimize losses of our AeroSat antenna business. The plan narrows the initiatives for the AeroSat business to focus primarily on near-term opportunities pertaining to business jet connectivity. The plan has a downsized manufacturing operation remaining in New Hampshire, with significantly reduced personnel and operating expenses.
As a result of the restructuring plan, the Company’s total non-cash asset write-downs and impairment charges recorded in the fourth quarter of 2019 (including the goodwill impairment described above and a $9.5 million impairment of long-lived assets) amounted to $23.6 million. Restructuring charges of $5.2 million comprised of employee termination benefits and non-cancelable inventory purchase commitments in the future for inventory which is not expected to be purchased prior to the expiration date of such agreements as a result of the restructuring plan were also recorded in 2019. The Company incurred an impairment charge to ROU assets of approximately $0.7 million during 2020. Additional charges of $0.2 million and $0.4 million associated with restructuring at AeroSat were recorded during 2021 and 2020, respectively. All such charges were included in the Aerospace segment.
The COVID-19 pandemic has significantly impacted the global economy, and particularly the aerospace industry, resulting in reduced expectations of the Company’s anticipated future operating results. As a result, the Company executed restructuring activities in the form of workforce reduction, primarily in the second quarter of 2020, to align capacity with expected demand. Accordingly, restructuring charges of $4.9 million in severance expense associated primarily with the Aerospace segment were recorded in 2020. Additional restructuring charges of $0.6 million occurred during 2021 to align the workforce to expected activities and to consolidate certain facilities. $0.3 million of current year severance expense was related with the Aerospace segment and $0.3 million was related with the Test Systems segment. Any future restructuring actions will depend upon market conditions, customer actions and other factors.
The above restructuring and impairment charges are presented in the Consolidated Statements of Operations for the years ended December 31 as follows:
(In thousands) 2021 2020 2019
Cost of Products Sold $ 221  $ 280  $ 15,397 
Selling, General and Administrative Expenses 577  5,047  2,356 
Impairment Loss —  87,016  11,083 
Total Restructuring and Impairment Charges $ 798  $ 92,343  $ 28,836 
The following table reconciles the beginning and ending liability for restructuring charges:
(In thousands) 2021 2020 2019
Balance as of January 1 $ 5,631  $ 5,190  $ — 
Restructuring Charges Recognized 798  5,327  5,190 
Cash Paid (4,029) (4,886) — 
Balance as of December 31 $ 2,400  $ 5,631  $ 5,190 
Financial Instrument Impairment
From time to time, the Company makes long-term, strategic equity investments in companies to promote business and strategic objectives. These investments are included in Other Assets on the Consolidated Balance Sheets. One of the investments became impaired in 2020 which resulted in an impairment charge of $3.5 million recorded within the Other Expense, Net of Other Income line in the accompanying Consolidated Statements of Operations for the year ended December 31, 2020. A full impairment charge of $5.0 million for an additional investment was recorded in 2019.