Held for Sale

3 Months Ended

Mar. 27, 2020

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

As of March 27, 2020, the Company committed to a plan to sell its Large Area Coatings (LAC) reporting unit within the Precision Coatings segment and determined that it met the criteria to be classified as held for sale. Therefore, its assets and liabilities have been presented as held for sale in the Consolidated Balance Sheet as of March 27, 2020. Assets and liabilities classified as held for sale are measured at the lower of carrying value or fair value less costs to sell. The Company entered into a letter of intent to sell the LAC reporting unit in March 2020.

Before measuring the fair value less costs to sell of the disposal group as a whole, the Company first reviewed individual assets and liabilities to determine if any fair value adjustments were required. Based on the letter of intent entered into by the Company and the prospective buyer, the Company recorded a goodwill impairment charge of $9.1 million to write-off the remaining balance of goodwill for the LAC reporting unit. The Company determined fair value based on its expected proceeds to be received, which it concluded is most representative of the value of the assets.

The Company then estimated the fair value of the disposal group as a whole, less costs to sell, and compared the fair value to the remaining carrying value. Based on this review, the Company recorded an additional $1.7 million asset impairment loss.

The assets and liabilities of the LAC reporting unit classified as held for sale at March 27, 2020 were as follows:

(Thousands)
Accounts receivable, net	$	3,902
Inventories, net	1,650
Prepaid and other current assets	56
Property, plant, and equipment - net	2,516
Operating lease, right-of-use assets	777
Impairment on carrying value	$	(1,713	)
Assets held for sale	$	7,188
Accounts payable	$	1,528
Salaries and wages	236
Other liabilities and accrued items	808
Operating lease liabilities	588
Other long term liabilities	44
Liabilities held for sale	$	3,204

The pending transaction is subject to the entry into a definitive agreement and customary closing conditions and is expected to close no later than the third quarter of 2020.

Excluding the $9.1 million goodwill impairment charge and $1.7 million asset impairment charge recorded in the first quarter of 2020, the operating results of the LAC reporting unit were not material to the Company for any period presented.