Discontinued Operations (Notes)

3 Months Ended

Mar. 31, 2021

Discontinued Operations and Disposal Groups [Abstract]

During the third quarter of 2019, the Company made a decision to sell its United States Book business as a part of an ongoing process to review its business portfolio and divest assets not core to the Company’s transformation strategy. Accordingly, the Company has classified the Book business as a discontinued operation, as required by ASC 205-20 — Discontinued Operations. The Book business primarily consists of three facilities: Versailles, Kentucky; Fairfield, Pennsylvania; and Martinsburg, West Virginia. The Company’s Book business has historically been included within the United States Print and Related Services segment and the Core Print and Related Services reporting unit.

On July 1, 2020, the Company completed the sale of its Versailles, Kentucky book manufacturing plant to CJK Group, Inc., which serves book, magazine, catalog and journal publishers, for $7.0 million in cash and the assumption of approximately $3.0 million in finance lease obligation, resulting in a $10.1 million impairment charge related to property, plant and equipment and a $3.0 million gain on the sale of the business during the year ended December 31, 2020. The Company used the proceeds from the sale to reduce debt.

On October 31, 2020, the Company completed the sale of its Fairfield, Pennsylvania and Martinsburg, West Virginia book manufacturing plants to Berryville Graphics, a division of Bertelsmann Printing Group USA, a media, services and education company, for $14.2 million in cash, resulting in a loss on the sale of the business of $3.5 million and a $1.4 million impairment charge related to property plant and equipment during the year ended December 31, 2020. The Company used the proceeds from the sale to reduce debt. This sale was the final step in the previously announced strategic decision to divest the Company’s Book business to optimize its product portfolio.

The following table summarizes the results of operations, which are included in the loss from discontinued operations in the condensed consolidated statements of operations for the three months ended March 31, 2020:



	Three Months Ended March 31, 2020
Total net sales	$	40.3
Total cost of sales, excluding depreciation and amortization	41.1
Selling, general and administrative expenses	1.9

Restructuring, impairment and transaction-related charges (1)	2.2

Other expenses, net	—
Loss from discontinued operations before income taxes	(4.9)
Income tax benefit	(1.1)
Loss from discontinued operations, net of tax	$	(3.8)

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(1)The Company recognized $1.3 million of impairment charges for tangible property, plant and equipment during the three months ended March 31, 2020, to reduce the carrying value of the Book business to its fair value.

The condensed consolidated statement of cash flows for the three months ended March 31, 2020 has not been adjusted to separately disclose cash flows related to discontinued operations. Cash flows related to the discontinued Book business during the three months ended March 31, 2020, were as follows:



	Three Months Ended March 31, 2020
Cash flows used in operating activities	$	(0.9)
Cash flows used in investing activities	(1.6)