Discontinued Operations

9 Months Ended

Sep. 30, 2023

Discontinued Operations and Disposal Groups [Abstract]

On January 30, 2023, we completed the sale of Garlock Pipeline Technologies, Inc. ("GPT") for gross proceeds of $31.4 million. We recorded a pre-tax gain on the sale of discontinued operations of $14.6 million in the first quarter of 2023.

GPT, along with our GGB business that we divested on November 4, 2022, comprised our remaining Engineered Materials segment ("Engineered Materials"). During the third quarter of 2022, we determined Engineered Materials to be a discontinued operation. Accordingly, we have reported, for all periods presented, the financial condition, results of operations, and cash flows of Engineered Materials as a discontinued operation in the accompanying consolidated financial statements.

For the quarter ended September 30, 2022 and the nine months ended September 30, 2023 and 2022, the results of operations from the discontinued Engineered Materials segment were as follows:


(in millions)	Quarter Ended September 30,		Nine Months Ended September 30,
	2022		2023		2022
Net sales	$	51.8	$	2.0	$	166.6
Cost of sales	34.9		1.3		109.1
Gross profit	16.9		0.7		57.5
Operating expenses:
Selling, general and administrative	13.0		0.4		39.3
Other	—		—		0.2
Total operating expenses	13.0		0.4		39.5


Income from discontinued operation before income tax	3.9		0.3		18.0
Income tax expense	(3.2)		(0.1)		(4.1)
Income from discontinued operations, net of tax	0.7		0.2		13.9
Gain from sale of discontinued operation, net of tax	—		11.2		—
Income from discontinued operations, including gain on sale, net of tax	$	0.7	$	11.4	$	13.9

The major classes of assets and liabilities for the discontinued Engineered Materials segment are shown below:


(in millions)	December 31, 2022
Assets:
Accounts receivable	$	3.8
Inventories	3.1
Property, plant and equipment	7.6

Intangible assets	1.2
Other assets	0.2
Current assets of discontinued operation	$	15.9

Liabilities
Accounts payable	$	1.4
Accrued expenses	0.9

Current liabilities of discontinued operation	$	2.3

Pursuant to applicable accounting guidance for the reporting of discontinued operations, allocations to Engineered Materials for corporate services not expected to continue at the divested business subsequent to closing have not been reflected in the above financial statements of discontinued operations and have been reclassified to income from continuing operations in the accompanying consolidated financial statements of the Company for all periods. In addition, divestiture-related costs previously not allocated to Engineered Materials that were incurred as a result of the divestiture of Engineered Materials have been reflected in the financial results of discontinued operations. As a result, income before income taxes of Engineered

Materials has been decreased by $1.1 million and $1.6 million for the quarter and nine months ended September 30, 2022, respectively, with offsetting decreases in corporate expenses of continuing operations.