RESTRUCTURING

12 Months Ended

Dec. 31, 2020

Restructuring and Related Activities [Abstract]

In the third quarter of 2020, the Company’s Performance Materials segment undertook actions to discontinue production of a lower efficiency air filtration media product and, in turn, fully depreciated the supporting machinery and equipment in North America and consolidated certain product lines and began exiting underperforming facilities in Europe. These restructuring activities, which are projected to conclude in 2021, are expected to reduce operating costs, increase production efficiency, and enhance the Company’s flexibility by better aligning its manufacturing operations with the segment's customer base. Accordingly, the Company expects to record total pre-tax expenses of approximately $19.0 million to $21.0 million, primarily related to severance and employee retention expenses, in connection with these restructuring activities, of which approximately $13.2 million to $15.2 million are expected to result in cash expenditures. The Company incurred a total of $15.9 million as of December 31, 2020, of which $5.8 million were non-cash expenditures, which consisted of fully depreciating and/or amortizing long-lived assets and, to a lesser extent, writing-off inventory.

In North America, the Company permanently shut down two underperforming nonwoven manufacturing carded lines and ancillary equipment, originally acquired in 2018, that served commercial and residential HVAC markets with low

to medium efficiency air filtration media. The Company experienced lower demand as a result of the COVID-19 pandemic, which accelerated a market shift from lower efficiency air filtration media to higher performance rated air filtration media. As a result, the Company recorded a pre-tax restructuring charge of $5.4 million, primarily due to accelerated depreciation of property, plant and equipment and other intangible assets. The Company does not anticipate incurring additional restructuring expenses related to the closure of these manufacturing carded lines.

The Company also undertook actions to consolidate global production facilities for sealing and advanced solutions products from five facilities to four, resulting in the closure of an underperforming facility in Germany. In the three-month period ended March 31, 2020, the Company performed an impairment analysis of the long-lived assets and determined that the carrying value of the assets exceeded their fair value and recorded an impairment charge of $12.4 million. See Note 6, “Goodwill and Other Intangible Assets” in these Notes to the Consolidated Financial Statements for additional information. The closure is expected to be completed in 2021. In addition, the Company decided to close a small volume membrane filtration production facility in the Netherlands. In the three-month period ended December 31, 2019, the Company performed an impairment analysis of long-lived assets for this facility and recorded an impairment charge of $1.2 million. The assets have been fully depreciated through December 31, 2020. The closure is expected to be completed in 2021.

As a result of the two facility closures in Europe, the Company recorded pre-tax restructuring charges of $10.5 million in 2020 consisting of severance costs, legal expenses, and inventory write-offs and anticipates it could incur an additional $3.1 million to $5.1 million in restructuring expenses, primarily related to severance costs from these facility closures.

In April 2017, the Company commenced a restructuring plan in the Technical Nonwovens segment which included plant consolidations and transfer of equipment to other facilities within the segment's Europe and China operations. The consolidation of certain plants, which concluded in the fourth quarter of 2019, reduced operating costs, increased efficiency and enhanced the Company’s flexibility by better aligning its manufacturing footprint with the segment's customer base. The Company recorded expenses of $3.7 million in connection with this restructuring plan, of which approximately $3.3 million resulted in cash expenditures over the period of consolidation. The Company also incurred cash expenditures of approximately $3.8 million for capital expenditures associated with this plan.

During the year ended December 31, 2019, the Company recorded pre-tax restructuring expenses of $0.8 million as part of this restructuring plan. Restructuring expenses of $0.6 million were recorded in cost of sales and $0.2 million were recorded in selling, product development and administrative expenses. During the year ended December 31, 2018, the Company recorded pre-tax restructuring expenses of $2.3 million as part of this restructuring plan. Restructuring expenses of $1.9 million were recorded in cost of sales and $0.4 million were recorded in selling, product development and administrative expenses.

The following table summarizes the total restructuring charges by cost type:












In thousands	Severance and Related Expenses		Facility Exit and Asset Write-Off Expenses		Total

Expenses incurred during year ended:
December 31, 2018	$	606	$	1,691	$	2,297
December 31, 2019	145		622		767
December 31, 2020	10,097		5,806		15,903
Total expenses	$	10,848	$	8,119	$	18,967

For the year ended December 31, 2020, $15.9 million was included in restructuring expenses on the Company’s Consolidated Statements of Operations with $15.5 million recorded in the Performance Materials segment and $0.4 million recorded within Corporate Office expenses. For the years ended December 31, 2019 and 2018, $0.8 million and $2.3 million, respectively, was included in restructuring expenses on the Company’s Consolidated Statements of Operations, all within the Technical Nonwovens segment.

There were cash outflows of $1.2 million and $0.8 million for the restructuring programs for the years ended December 31, 2020 and 2019, respectively.

The following table summarizes the accrued liability balance by cost type for the restructuring actions:


In thousands	Total


December 31, 2018	$	147
Pre-tax restructuring expenses, excluding depreciation	767
Cash paid	(806)
December 31, 2019	$	108
Pre-tax restructuring expenses, excluding depreciation	10,097
Cash paid	(1,193)
Currency translation adjustments	419
December 31, 2020	$	9,431

The above accrued liability balance was included in Restructuring liabilities on the Company’s Consolidated Balance Sheets.