Discontinued Operations

9 Months Ended

Sep. 30, 2020

4. Discontinued Operations

During the fourth quarter of 2019, substantially all of the assets and liabilities of our Tile Coatings business were classified as held-for-sale in the accompanying consolidated balance sheets. We entered into a definitive agreement to sell our Tile Coatings business, which has historically been a part of our Performance Coatings reportable segment. Therefore, the associated operating results, net of income tax, have been classified as discontinued operations in the accompanying consolidated statements of operations for all periods presented.

The table below summarizes results for the Tile Coatings business for the three and nine months ended September 30, 2020 and 2019, which are reflected in our consolidated statements of operations as discontinued operations. Interest expense has been allocated to the discontinued operations based on the ratio of net assets of the business to consolidated net assets excluding debt.



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Net sales	$	120,163	$	120,389	$	310,167	$	377,499
Cost of sales		89,120		96,160		235,095		300,145
Gross profit		31,043		24,229		75,072		77,354
Selling, general and administrative expenses		18,549		20,180		52,899		53,725
Restructuring and impairment charges		269		4,161		2,306		10,751
Interest expense		2,950		2,880		7,698		8,838
Interest earned		(21)		(24)		(174)		(91)
Foreign currency losses (gains), net		113		(158)		5,074		(2,047)
Miscellaneous expense, net		173		328		1,420		598
Income (loss) from discontinued operations before income taxes		9,010		(3,138)		5,849		5,580
Income tax expense		3,643		382		3,499		4,275
Income (loss) from discontinued operations, net of income taxes		5,367		(3,520)		2,350		1,305
Less: Net income (loss) attributable to noncontrolling interests		(11)		92		33		242
Net income (loss) attributable to Tile Coatings business	$	5,378	$	(3,612)	$	2,317	$	1,063

The following table summarizes the assets and liabilities which are classified as held-for-sale at September 30, 2020 and December 31, 2019:



	September 30,		December 31,
(Dollars in thousands)	2020		2019
Cash and cash equivalents	$	8,200	$	8,200
Accounts receivable, net		186,457		156,645
Inventories		84,422		101,127
Other receivables		3,331		22,442
Other current assets		2,819		3,006
Current assets held-for-sale		285,229		291,420
Property, plant and equipment, net		100,944		96,762
Goodwill		3		3
Amortizable intangible assets, net		40,947		39,692
Deferred income taxes		14,695		14,425
Other non-current assets		6,514		7,049
Non-current assets held-for-sale		163,103		157,931
Total assets held-for-sale	$	448,332	$	449,351

Loans payable and current portion of long-term debt	$	3,759	$	3,678
Accounts payable		66,082		96,998
Accrued payrolls		7,597		4,838
Accrued expenses and other current liabilities		12,043		28,266
Current liabilities held-for-sale		89,481		133,780
Long-term debt, less current portion		54,755		25,805
Postretirement and pension liabilities		8,378		7,473
Other non-current liabilities		6,402		5,063
Non-current liabilities held-for-sale		69,535		38,341
Total liabilities held-for-sale	$	159,016	$	172,121

The following table summarizes cash flow data relating to discontinued operations for the nine months ended September 30, 2020 and 2019:



	Nine Months Ended
	September 30,
(Dollars in thousands)	2020		2019
Depreciation	$	—	$	8,702
Amortization of intangible assets		—		2,388
Capital expenditures		(3,048)		(9,114)
Non-cash operating activities - goodwill impairment		—		9,100
Non-cash operating activities - restructuring and impairment charges		1,091		127
Non-cash investing activities - capital expenditures, consisting of unpaid capital expenditure liabilities at period end		683		738