Discontinued Operations

12 Months Ended

Dec. 31, 2021

Discontinued Operations and Disposal Groups [Abstract]

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.

On February 25, 2021, we completed the sale of our Tile Coatings business to Pigments Spain, S.L., a company of the Esmalglass-Itaca-Fritta group (the “Buyer”), which is a portfolio company of certain Lone Star Funds, for $460.0 million in cash, subject to post-closing adjustments. The transaction resulted in net proceeds of approximately $402.1 million after expenses and a gain of $94.8 million, which is recorded within Income (loss) from discontinued operations, net of income taxes in our consolidated statement of operations for the period ended December 31, 2021. During the fourth quarter of 2021, we finalized our post-closing adjustments with the Buyer for $13.1 million. We entered into a Transition Services Agreement (“TSA”) with the Buyer, which is designed to facilitate an orderly transfer of business operations. The services provided under the TSA will terminate at various points in times between six to twelve months from the completion of the sale. Except for transition services, we have no continuing involvement with the Buyer subsequent to the completion of the sale.

The table below summarizes results for the Tile Coatings business for the years ended December 31, 2021, 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.


(Dollars in thousands)	2021		2020		2019
Net sales	$	83,579	$	440,501	$	491,493
Cost of sales	60,634		327,505		388,959
Gross profit	22,945		112,996		102,534
Selling, general and administrative expenses	20,327		72,033		71,591
Restructuring and impairment charges	303		2,290		44,378
Interest expense	1,682		10,650		11,556
Interest earned	(189)		(184)		(122)
Foreign currency losses (gains), net	363		6,608		(2,397)
Gain on sale of business, net	(94,832)		—		—
Miscellaneous expense, net	251		2,281		2,127
Income (loss) from discontinued operations before income taxes	95,040		19,318		(24,599)
Income tax expense	17,841		5,315		2,812
Income (loss) from discontinued operations, net of income taxes	77,199		14,003		(27,411)
Less: Net income attributable to noncontrolling interests	64		171		290
Net income (loss) attributable to Tile Coatings business	$	77,135	$	13,832	$	(27,701)

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


(Dollars in thousands)	December 31, 2020
Cash and cash equivalents	$	8,200
Accounts receivable, net	211,548
Inventories	84,239
Other receivables	1,630
Other current assets	2,237
Current assets held-for-sale	307,854
Property, plant and equipment, net	93,430
Amortizable intangible assets, net	42,126
Deferred income taxes	12,267
Other non-current assets	6,384
Non-current assets held-for-sale	154,207
Total assets held-for-sale	$	462,061

Loans payable and current portion of long-term debt	$	3,927
Accounts payable	85,308
Accrued payrolls	5,946
Accrued expenses and other current liabilities	12,364
Current liabilities held-for-sale	107,545
Long-term debt, less current portion	56,359
Postretirement and pension liabilities	8,119
Other non-current liabilities	6,671
Non-current liabilities held-for-sale	71,149
Total liabilities held-for-sale	$	178,694

The following table summarizes cash flow data relating to discontinued operations for the years ended December 31, 2021, 2020 and 2019:


(Dollars in thousands)	2021		2020		2019
Depreciation	$	—	$	—	$	11,264
Amortization of intangible assets	—		—		3,192
Capital expenditures	(1,074)		(4,713)		(9,965)
Gain on sale of discontinued operations	(94,832)		—		—
Non-cash operating activities - goodwill impairment	—		—		42,515
Non-cash operating activities - restructuring	—		1,080		127
Non-cash investing activities - capital expenditures, consisting of unpaid capital expenditure liabilities at year end	—		1,493		1,087