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Restructuring and Impairment Activities

12 Months Ended

Dec. 31, 2020

Restructuring and Related Activities [Abstract]

Restructuring and Impairment Activities

Restructuring and Impairment Activities

The Company incurred restructuring and impairment expenses of $11.9 million, $3.7 million and $1.7 million in the years ended December 31, 2020, 2019 and 2018, respectively.

In the AMS segment, the Company incurred $0.5 million, $1.1 million and $1.5 million in restructuring and impairment expenses during the years ended December 31, 2020, 2019 and 2018, respectively. Restructuring and impairment expense for the year ended December 31, 2020 related to severance accruals as a result of department realignments. Restructuring and impairment expense for the year ended December 31, 2019 consisted of $1.1 million in impairment charges at our U.S. and Chinese manufacturing facilities. Restructuring and impairment expense for the year ended December 31, 2018 consisted of $1.1 million in severance accruals for employees at our U.S. manufacturing operations, as well as $0.4 million in impairment charges at our U.S. manufacturing facilities.

In the EP segment, restructuring and impairment expenses were $11.3 million, $2.6 million and $0.2 million during the years ended December 31, 2020, 2019 and 2018, 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 ceased during December of 2020.

As a result of this decision, $6.7 million of restructuring and impairment expense was recognized in the year ended December 31, 2020 related to severance and other accruals. In the year ended December 31, 2020, we also recorded $4.9 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 $2.9 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.

In addition to restructuring costs relating to the Spotswood facility, the EP segment recognized $4.6 million in restructuring and impairment expense in the year ended December 31, 2020, related to severance accruals for employees at our manufacturing facilities in Brazil, France, Poland and the U.S. During 2019, restructuring and impairment expenses in the EP segment consisted of $2.6 million in severance accruals for employees at our manufacturing facilities in 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 $6.9 million of restructuring charges cumulatively through December 31, 2020 related to this project.

In 2018, restructuring and impairment expenses in the EP segment consisted of $0.2 million in severance accruals for employees at our manufacturing facilities in France.

The Company expects to recognize approximately $2.2 million in restructuring related costs for retention based severance and other costs associated with closing the Spotswood, New Jersey facility during 2021. In addition, the Company expects to record an immaterial amount of restructuring expense in the EP segment in 2021 primarily for severance related to the cost optimization initiatives.

The following table summarizes total restructuring and related charges:

			For the Years Ended December 31,
			2020						2019			2018
Restructuring and impairment expense:
Severance			11.6						2.6			1.3
Other			0.3						1.1			0.4
Total restructuring and impairment expense			$	11.9					$	3.7		$	1.7
Other restructuring related charges - Cost of products sold
Accelerated depreciation and amortization			2.9						—			—
Spare parts and consignment inventory write-down to estimated net realizable value			2.0						—			—
Total other restructuring related charges - Cost of products sold			$	4.9					$	—		—
Total restructuring costs and related charges			$	16.8					$	3.7		$	1.7

Restructuring liabilities were classified within Accrued expenses and Other Liabilities in each of the Consolidated Balance Sheets as of December 31, 2020 and 2019. Changes in the restructuring liabilities, substantially all of which are employee-related, are summarized as follows ($ in millions):

			2020						2019
Balance at beginning of year			$	0.5					$	1.4
Accruals for announced programs			11.9						3.7
Cash payments			(5.2)						(4.2)
Other			—						(0.4)
Exchange rate impacts			0.2						—
Balance at end of period			$	7.4					$	0.5

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- References

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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

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