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Restructuring and Impairment Activities | 9 Months Ended
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Sep. 30, 2020
Restructuring and Related Activities [Abstract] |
Restructuring and Impairment Activities | Restructuring and Impairment Activities The Company incurred restructuring and impairment expense of $6.0 million and $1.6 million in the three months ended September 30, 2020 and 2019, respectively, and $7.7 million and $2.0 million in the nine months ended September 30, 2020 and 2019, respectively. In the EP segment, total restructuring and impairment expense was $5.9 million and $1.6 million for the three months ended September 30, 2020 and 2019, respectively, and $7.1 million and $2.0 million in the nine months ended September 30, 2020 and 2019, respectively. During the third quarter of 2020, we announced plans to shut down the Spotswood, New Jersey facility and shift the production of paper made there to other SWM facilities. This decision was part of our ongoing manufacturing optimization efforts and involved the co-development of a new paper production technology with one of the Company’s key customers. Production of paper at this facility is expected to cease by December 31, 2020. As a result of this decision, $4.2 million of restructuring and impairment expense was recognized in the three months ended September 30, 2020 related to severance and other accruals. In the three months ended September 30, 2020, we also recorded $3.2 million of other restructuring related charges in Cost of products sold, of which, $2.0 million was to write-down the value of certain spare parts and consignment inventories to estimated net realizable value and $1.2 million resulted from the acceleration of depreciation and amortization for machinery and equipment due to the change in the estimated lives of these assets driven by the decision to shut down the facility. The effect of the change in the estimated lives of the assets at the Spotswood, New Jersey facility was to increase depreciation and amortization expense by $1.2 million, decrease net income by $0.9 million and decrease basic and diluted earnings per share by $0.03 in the three and nine months ended September 30, 2020. In addition to restructuring costs relating to the Spotswood facility, the EP segment recognized $1.8 million and $2.9 million in restructuring and impairment expense for the three and nine months ended September 30, 2020, respectively, related to severance accruals for employees at our manufacturing facilities in France, Poland and the U.S. In the three and nine months ended September 30, 2019, restructuring and impairment expense of $1.6 million and $2.0 million, respectively, consisted of consulting fees and severance accruals for employees at our manufacturing facilities in the U.S., Brazil and France. These restructuring charges relate to ongoing cost optimization initiatives to remain competitive within the EP segment. The cost optimization initiative project started in 2019 and is expected to be completed in 2022. The EP segment has recognized $5.5 million of restructuring charges cumulatively through September 30, 2020 related to this project. In the AMS segment, restructuring and impairment expense was $0.0 million for the three months ended September 30, 2020 and 2019, respectively, and $0.5 million and $0.0 million in the nine months ended September 30, 2020 and 2019, respectively. The $0.5 million of restructuring and impairment expense recognized in the nine months ended September 30, 2020 related to severance accruals as a result of department realignments. The Company also recognized $0.1 million of restructuring and impairment expense in corporate (unallocated) during the three and nine months ended September 30, 2020 related to severance that resulted from a departmental realignment. There were no restructuring and impairment charges in corporate in the three and nine months ended September 30, 2019. The Company expects to record additional restructuring related costs in the EP segment relating to the shutdown of the Spotswood, New Jersey facility during the 2020 fourth quarter of approximately $2.2 million, primarily for accelerated depreciation and amortization of the machinery and equipment and retention based severance and in 2021, the Company expects to recognize approximately $1.0 million in restructuring related costs for retention based severance and other costs associated with closing the facility. In addition, the Company expects to record an immaterial amount of restructuring expense in the EP segment in the fourth quarter of 2020 and $0.8 million in 2021 primarily for severance related to the cost optimization initiatives. The following table summarizes total restructuring and related charges for the three and nine months ended September 30, 2020:
| Three Months Ended |  | Nine Months Ended
| September 30, 2020 |  | September 30, 2019 |  | September 30, 2020 |  | September 30, 2019
Restructuring and impairment expense: |  |  |  |  |  |  |
Severance | $ | 5.7 |  |  | $ | 0.6 |  |  | $ | 7.4 |  |  | $ | 1.0 |
Other | 0.3 |  |  | 1.0 |  |  | 0.3 |  |  | 1.0 |
Total restructuring and impairment expense | $ | 6.0 |  |  | $ | 1.6 |  |  | $ | 7.7 |  |  | $ | 2.0 |
Other restructuring related charges - Cost of products sold |  |  |  |  |  |  |
Accelerated depreciation and amortization | $ | 1.2 |  |  | $ | — |  |  | $ | 1.2 |  |  | $ | — |
Spare parts and consignment inventory write-down to estimated net realizable value | $ | 2.0 |  |  | $ | — |  |  | $ | 2.0 |  |  | $ | — |
Total other restructuring related charges - Cost of products sold | $ | 3.2 |  |  | $ | — |  |  | $ | 3.2 |  |  | $ | — |
Total restructuring costs and related charges | $ | 9.2 |  |  | $ | 1.6 |  |  | $ | 10.9 |  |  | $ | 2.0 |
The following tables summarize our restructuring activities for the three months ended September 30, 2020 and 2019. ($ in millions):
| Three Months Ended September 30, 2020
| AMS |  | EP |  | Unallocated |  | Consolidated
Balance at June 30, 2020 | $ | 0.4 |  |  | $ | 1.0 |  |  | $ | — |  |  | $ | 1.4 |
Accruals for announced programs | — |  |  | 5.9 |  |  | 0.1 |  |  | 6.0 |
Cash payments | (0.3) |  |  | (0.2) |  |  | — |  |  | (0.5) |
Foreign exchange impact | — |  |  | — |  |  | — |  |  | — |
Balance at September 30, 2020 | $ | 0.1 |  |  | $ | 6.7 |  |  | $ | 0.1 |  |  | $ | 6.9 |
| Three Months Ended September 30, 2019
| AMS |  | EP |  | Unallocated |  | Consolidated
Balance at June 30, 2019 | $ | 0.1 |  |  | $ | 0.7 |  |  | $ | — |  |  | $ | 0.8 |
Accruals for announced programs | — |  |  | 1.6 |  |  | — |  |  | 1.6 |
Cash payments | — |  |  | (1.7) |  |  | — |  |  | (1.7) |
Foreign exchange impact | — |  |  | (0.1) |  |  | — |  |  | (0.1) |
Balance at September 30, 2019 | $ | 0.1 |  |  | $ | 0.5 |  |  | $ | — |  |  | $ | 0.6 |
| Nine Months Ended September 30, 2020
| AMS |  | EP |  | Unallocated |  | Consolidated
Balance at December 31, 2019 | $ | 0.1 |  |  | $ | 0.4 |  |  | $ | — |  |  | $ | 0.5 |
Accruals for announced programs | 0.5 |  |  | 7.1 |  |  | 0.1 |  |  | 7.7 |
Cash payments | (0.5) |  |  | (0.8) |  |  | — |  |  | (1.3) |
Foreign exchange impact | — |  |  | — |  |  | — |  |  | — |
Balance at September 30, 2020 | $ | 0.1 |  |  | $ | 6.7 |  |  | $ | 0.1 |  |  | $ | 6.9 |
| Nine Months Ended September 30, 2019
| AMS |  | EP |  | Unallocated |  | Consolidated
Balance at December 31, 2018 | 0.5 |  |  | 0.9 |  |  | — |  |  | $ | 1.4 |
Accruals for announced programs | — |  |  | 2.0 |  |  | — |  |  | 2.0 |
Cash payments | (0.4) |  |  | (2.3) |  |  | — |  |  | (2.7) |
Foreign exchange impact | — |  |  | (0.1) |  |  | — |  |  | (0.1) |
Balance at September 30, 2019 | $ | 0.1 |  |  | $ | 0.5 |  |  | $ | — |  |  | $ | 0.6 |
Restructuring liabilities were classified within Accrued expenses and other current liabilities in each of the condensed consolidated balance sheets.

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 + Details
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