Restructuring and Impairment Charges

In the first half of 2012, we began several initiatives to streamline our organization and rationalize our cost structure in order to better position the Company for profitable growth in the future. These initiatives continued in 2013. The goal of these initiatives is to become a more streamlined organization both from an organizational and cost perspective, with efficient manufacturing capabilities that are focused on meeting our customers' needs.

2012

In the first quarter, we announced several initiatives as part of the streamlining plan, which included the following:

•Implemented an early retirement program for certain eligible employees;


•	Realigned our organizational structure by consolidating a number of senior executive positions, reorganizing certain business functions and redeploying resources across the Company;


•	Exited the Thermal Management Solutions business (previously announced in the fourth quarter of 2011);


•	Initiated a plan to shut down the Power Distribution Systems startup operation in North America, which was completed in the third quarter of 2012; and


•	Liquidated our remaining auction rate securities.

In the second quarter, we announced several additional streamlining actions as follows:

•

We announced the shutdown of the High Performance Foams manufacturing facility in Bremen, Germany, which was completed by the end of 2012. The manufacture of certain silicone foam materials produced in the Bremen facility was consolidated into our existing facility in Carol Stream, Illinois. The expenses and charges related to the termination of the operations at the Bremen facility were approximately $3.1 million and were comprised primarily of (i) $0.9 million for the early termination of the lease on the building; (ii) $0.8 million for severance charges for employees in Bremen; (iii) $0.4 million related to the impairment of certain assets; and (iv) $0.3 million of costs to remove and transport certain equipment to Carol Stream and prepare the building for return to the landlord. We recognized approximately $1.5 million of these charges in the second quarter of 2012, and recognized the remaining charges in the second half of 2012.

•

We decided to cease production of our non-woven composite materials products in an effort to redeploy resources to focus on our Core Strategic segments. Sales of these products had been steadily declining for several years and totaled approximately $1.1 million in the third quarter of 2012 and $4.8 million in fiscal 2011. Production was shutdown by the end of 2012 and it did not have a material impact on our overall operations. No material charges were incurred from this initiative.

In the third quarter, we recognized approximately $1.4 million of additional charges related to the shutdown of our High Performance Foams manufacturing facility in Bremen, Germany.

2013

In the second quarter of 2013, we continued our streamlining efforts as we reorganized certain business functions resulting in severance costs of $3.0 million. We also made changes to our salaried and non-union defined benefit pension plans. Effective June 30, 2013 for salaried and non-union hourly employees in the U.S. and effective December 31, 2013 for union employees in the U.S., benefits under our defined benefit pension plans will no longer accrue. The freeze of the defined benefit pension plan for salaried and non-union hourly employees was approved by the Board of Directors on May 3, 2013. The freeze of the union employees' defined benefit pension plan was effective upon ratification of the labor agreement on April 14, 2013. Additionally, our union workforce in Connecticut ratified a current union contract, which resulted in the payout of the union ratification bonus. These changes resulted in the recognition of approximately $1.5 million in charges related to the pension freeze.

In the third quarter of 2013, we incurred additional cost related to our reorganization of certain business functions resulting in severance costs of $1.2 million.

The following table summarizes the restructuring and impairment charges related to these activities recorded in our operating results in the third quarter and first nine months of 2013 and 2012.



(Dollars in thousands)	Three Months Ended		Nine Months Ended		Three Months Ended		Nine Months Ended
	September 30, 2013		September 30, 2013		September 30, 2012		September 30, 2012
Cost of Sales
High Performance Foams
Accelerated depreciation expense related to Bremen shut-down	$	—	$	—	$	179	$	764
Inventory impairment related to Bremen shut-down	—		—		—		191
Union ratification bonus			181		—		—

Printed Circuit Materials
Union ratification bonus			179		—		—

Curamik Electronics Solutions
Union ratification bonus			5		—		—

Power Distribution Systems
Accelerated depreciation expense related to U.S. shut-down	—		—		139		499
Union ratification bonus			3		—		—

Other
Union ratification bonus	—		—		—		—
Total charges for Cost of Sales	$	—	$	368	$	318	$	1,454

Restructuring and Impairment

High Performance Foams
Fixed asset impairment for Bisco and Poron asset disposal	$	—	$	—	$	—	$	79
Severance and other employee related costs (1)	94		1,345		—		3,088
Bremen shut down costs	—		—		1,233		1,233

Printed Circuit Materials
Severance and other employee related costs (1)	93		802		—		3,046

Curamik Electronics Solutions
Severance and other employee related costs (1)	877		2,495		506		1,463

Power Distribution Systems
Impairment of investment related receivable	—		—		—		264
Severance and other employee related costs (1)	154		999		27		504

Other
Severance and other employee related costs (1)	13		115		—		272
Total charges for Restructuring and Impairment	$	1,231	$	5,756	$	1,766	$	9,949

(1) For the nine month period ended September 30, 2013, this includes a pension curtailment charge of $1.5 million. For the nine month period ended September 30, 2012, this includes a net charge of $1.6 million, related to the early retirement program implemented in the first quarter of 2012. See Note 8 - "Pension Benefits and Other Post Retirement Plans" for further information.

The following table summarizes changes in the severance accrual from December 31, 2012 through September 30, 2013:



(Dollars in thousands)	Streamlining and restructuring related activities			Curamik finishing operations relocation to Hungary			Total
Balance at December 31, 2012	$	1,142		$	3,967		$	5,109
Provisions	4,124			—			4,124
Payments	(3,854		)	(3,967		)	(7,821		)
Balance at September 30, 2013	$	1,412		$	—		$	1,412

Balances may differ from prior periods due to foreign exchange rate fluctuations.