CLOSURE OF OBER-SCHMITTEN, GERMANY FACILITY

6 Months Ended

Jun. 30, 2023

Restructuring and Related Activities [Abstract]

CLOSURE OF OBER-SCHMITTEN, GERMANY FACILITY

In the second quarter of 2023, we announced our plans to close Composite Fibers’ Ober-Schmitten, Germany facility as part of the Company’s turnaround strategy that aimed at improving financial performance of the Company’s overall business. Pending the completion of negotiations with the Ober-Schmitten Economic Committee and Works Council (“Works Council”), we expect to cease operations at the site during the third quarter of 2023 with some final finishing, shipping wind-down and decommissioning to follow. In connection with the planned closure, we recognized the following costs which are included in our condensed consolidated statements of income:


	Three months ended June 30,		Six months ended June 30,
In thousands	2023		2023
Severance and benefit continuation	10,368		10,368
Other costs	424		373

Total	$	10,792	$	10,741

The Company now estimates that it will incur approximately $10.4 million of cash expenses in connection with employee severance and benefit costs associated with the termination of the employees at the Facility and has recognized an expense for this amount included in “Cost of Goods Sold” in its condensed consolidated financial statements for the three and six months ended June 30, 2023. This estimate is based on the Company’s estimate of the cost of the current proposed compromise of interest and social plan made to the Works Council. As negotiations between the Company and the Works Council have not been finalized, the total amount of severance and benefit continuation costs that will ultimately be recognized is subject to change until such time as negotiations with the local works council are concluded. The accrued and unpaid severance and benefit continuation totaled approximately $10.4 million as of June 30, 2023.

The Company has also recognized other shutdown related costs at the Facility, related to potential contract termination costs, site closure costs, and other associated costs, and the Company expects that it will continue to incur other shutdown related costs. The Company has recognized such other costs of approximately $0.4 million, which are predominately non-cash expenses and included in “Selling, general & administrative expenses” in its condensed consolidated financial statements for the three and six months ended June 30, 2023. The Company is currently unable to make a good faith determination of an estimate of the amount or range of the amounts of the charges expected to be recorded in connection with other major types of cost associated with the closure (such as contract termination costs and other associated costs) or the amount or range of amounts of such charges that will result in future cash expenditures.