RESTRUCTURING

3 Months Ended

Mar. 31, 2021

Restructuring and Related Activities [Abstract]

During the third quarter of 2020, the Company’s Performance Materials segment undertook actions to discontinue production of a lower efficiency air filtration media product and, in turn, fully depreciated the supporting machinery and equipment in North America and consolidated certain product lines and began exiting underperforming facilities in Europe. These restructuring activities, which are projected to conclude in 2021, are expected to reduce operating costs, increase production efficiency, and enhance the Company’s flexibility by better aligning its manufacturing operations with the segment's customer base. Accordingly, the Company expects to record total pre-tax expenses of approximately $18.0 million, primarily related to severance and employee retention expenses in connection with these restructuring activities, of which approximately $12.3 million is expected to result in cash expenditures. The Company incurred a total of $16.7 million through March 31, 2021, of which approximately $5.7 million were non-cash expenditures, which consisted of fully depreciating and/or amortizing long-lived assets and, to a lesser extent, writing-off inventory.

The Company undertook actions to consolidate global production facilities for sealing & advanced solutions products from five facilities to four, which would have resulted in the closure a facility in Germany. In the first quarter of 2021, the Company entered into an agreement to sell the German facility, which closed on March 11, 2021. The Company agreed to pay $1.8 million (€1.5 million) to the buyer and provide $2.2 million (€1.9 million) in additional funding, net of cash and certain net working capital adjustments, to cover pension and restructuring liabilities recorded in 2020. As a result of the sale of the business, the Company recorded a pre-tax loss of $0.7 million. The final consideration and loss are subject to a working capital adjustment expected to be settled in 2022.

In the first quarter of 2021, the Company recorded pre-tax restructuring charges of $0.8 million primarily consisting of severance costs and legal expenses.

The following table summarizes the total restructuring charges by cost type:


In thousands	Severance and Related Expenses		Legal and Administrative Expenses		Facility Exit and Asset Write-Off Expenses
Expense incurred during quarter ended:
March 31, 2021	$	777	$	—	$	—
Total pre-tax expense incurred	$	777	$	—	$	—

The following table summarizes the change in the accrued liability balance for the restructuring actions:


In thousands	Total
Balance as of December 31, 2020	$	9,431
Pre-tax restructuring expenses, excluding asset write-off expenses	777
Cash paid	(821)
Accrued liability included with the sale of the German facility	(7,311)
Currency translation adjustments	(34)
Balance as of March 31, 2021	$	2,042

The above accrued liability balances were included in Restructuring liabilities on the Company’s Condensed Consolidated Balance Sheets.