UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2019~~March 31, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number: 001-32240

(Exact name of registrant as specified in its charter)



Delaware		20-1308307
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)



	3460 Preston Ridge Road
	Alpharetta	,	Georgia	30005
(Address of principal executive offices, including zip code)

(678) 566-6500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	NP	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
(Do not check if a smaller reporting company)		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~November~~May 1, ~~2019,~~2020, there were ~~16,814,795~~16,791,451 shares of the Company’s Common Stock outstanding.

TABLE OF CONTENTS



Part I — Financial Information

Item 1. Financial Statements	F-1

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	~~F-20~~F-17

Item 3. Quantitative and Qualitative Disclosure About Market Risk	~~F-30~~F-24

Item 4. Controls and Procedures	~~F-31~~F-24


Part II — Other Information

Item 1. Legal Proceedings	~~F-32~~F-25

Item 1A. Risk Factors	~~F-32~~F-25

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	~~F-32~~F-26

Item 6. Exhibits	~~F-33~~F-27

Part I—FINANCIAL INFORMATION

Item 1. Financial Statements

NEENAH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except share and per share data)

(Unaudited)


	Three Months Ended September 30,					Nine Months Ended September 30,					Three Months Ended March 31,
'[	2019		2018			2019		2018
											2020		2019
Net sales	$	231.8	$	256.2		$	724.9	$	794.0		$	233.6	$	239.7
Cost of products sold	187.1		214.9			585.8		645.2			179.6		196.0
Gross profit	44.7		41.3			139.1		148.8			54.0		43.7
Selling, general and administrative expenses	23.1		23.6			75.3		75.6			26.6		25.3
Impairment loss (Note 12)	—		2.0			—		34.0
Restructuring and other non-routine costs (Note 13)	2.4		2.2			5.9		2.5
Pension settlement and other benefit costs (Note 7)	0.1		—			0.1		1.8
Acquisition-related adjustments (Note 1)	—		(3.1		)	—		(3.1		)
Insurance settlement	—		(0.4		)	—		(0.4		)
COVID-19 costs											1.1		—
Restructuring and other non-routine costs											1.4		—
Acquisition and due diligence costs											1.0		—
Other expense - net	0.1		0.5			1.6		2.1			0.3		1.0
Operating income	19.0		16.5			56.2		36.3			23.6		17.4
Interest expense - net	2.8		3.2			9.0		9.8			2.9		3.2
Income from continuing operations before income taxes	16.2		13.3			47.2		26.5			20.7		14.2
Provision for income taxes	1.8		0.4			7.4		2.2			4.3		2.4
Income from continuing operations	14.4		12.9			39.8		24.3
Loss from discontinued operations (Note 1)	—		(0.8		)	—		(0.8		)
Net income	$	14.4	$	12.1		$	39.8	$	23.5		$	16.4	$	11.8

Earnings (Loss) Per Common Share
Earnings Per Common Share
Basic											$	0.97	$	0.70
Continuing operations	$	0.85	$	0.76		$	2.35	$	1.43
Discontinued operations	—		(0.05		)	—		(0.05		)
Basic	$	0.85	$	0.71		$	2.35	$	1.38

Diluted
Continuing operations	$	0.84	$	0.75		$	2.33	$	1.41
Discontinued operations	—		(0.05		)	—		(0.05		)
Diluted	$	0.84	$	0.70		$	2.33	$	1.36		$	0.97	$	0.69

Weighted Average Common Shares Outstanding (in thousands)
Basic	16,837		16,849			16,850		16,848			16,817		16,862
Diluted	16,905		16,988			16,910		16,984			16,850		16,921

Cash Dividends Declared Per Share of Common Stock	$	0.45	$	0.41		$	1.35	$	1.23		$	0.47	$	0.45

See Notes to Condensed Consolidated Financial Statements

NEENAH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2019 2018 2019 2018
Net income $ 14.4
$ 12.1
$ 39.8
$ 23.5
Reclassification of amounts recognized in the condensed consolidated statements of operations:
Amortization of adjustments to pension and other postretirement benefit liabilities (Note 7) 1.3
1.5
4.4
4.5
SERP settlement loss (Note 7) 0.1
—
0.1
0.8
Amounts recognized in the condensed consolidated statements of operations 1.4
1.5
4.5
5.3
Unrealized foreign currency translation loss (6.9 ) (0.7 ) (8.6 ) (4.9 )
Net gain from pension and other postretirement benefit plans —
—
4.9
0.4
Income (loss) from other comprehensive income items (5.5 ) 0.8
0.8
0.8
Provision for income taxes 0.3
0.4
2.1
1.5
Other comprehensive income (loss) (5.8 ) 0.4
(1.3 ) (0.7 )
Comprehensive income $ 8.6
$ 12.5
$ 38.5
$ 22.8



	Three Months Ended March 31,
	2020			2019
Net income	$	16.4		$	11.8
Reclassification of amounts recognized in the condensed consolidated statements of operations:
Amortization of adjustments to pension and other postretirement benefit liabilities (Note 5)	1.6			1.7
Unrealized foreign currency translation loss	(4.0		)	(3.2		)
Loss from other comprehensive income items	(2.4		)	(1.5		)
Provision for income taxes	0.2			0.2
Other comprehensive loss	(2.6		)	(1.7		)
Comprehensive income	$	13.8		$	10.1

See Notes to Condensed Consolidated Financial Statements

NEENAH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)


	September 30, 2019		December 31, 2018		March 31, 2020		December 31, 2019
ASSETS
Current Assets
Cash and cash equivalents	$	7.4	$	9.9	$	77.5	$	9.0
Accounts receivable (less allowances of $1.5 million and $1.3 million)	112.0		114.8
Accounts receivable (less allowances of $2.0 million and $1.5 million)					118.6		102.6
Inventories	118.7		131.6		131.4		122.8
Prepaid and other current assets	15.0		21.6		16.5		18.3
Total Current Assets	253.1		277.9		344.0		252.7
Property, Plant and Equipment
Property, plant and equipment, at cost	838.5		840.2		849.9		850.6
Less accumulated depreciation	461.8		444.0		475.4		470.0
Property, Plant and Equipment—net	376.7		396.2		374.5		380.6
Lease Right-of-Use Assets (Note 11)	14.2		—
Lease Right-of-Use Assets (Note 1)					21.8		13.9
Deferred Income Taxes	13.0		16.4		11.6		13.4
Goodwill	81.9		84.0		82.2		83.1
Intangible Assets—net	67.1		70.7		65.3		66.7
Other Noncurrent Assets	16.4		16.0		16.9		17.4
TOTAL ASSETS	$	822.4	$	861.2	$	916.3	$	827.8

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Debt payable within one year	$	2.6	$	2.3	$	3.3	$	2.6
Lease liabilities payable within one year (Note 11)	1.8		—
Lease liabilities payable within one year (Note 1)					2.7		1.9
Accounts payable	51.7		63.3		57.8		48.9
Accrued expenses	48.7		55.2		48.0		47.0
Total Current Liabilities	104.8		120.8		111.8		100.4
Long-term Debt	202.0		236.8		268.6		198.2
Noncurrent Lease Liabilities (Note 1)					20.2		13.0
Noncurrent Employee Benefits					89.8		93.1
Deferred Income Taxes	13.5		14.4		12.0		12.9
Noncurrent Employee Benefits	79.4		92.9
Noncurrent Lease Liabilities (Note 11)	13.2		—
Other Noncurrent Obligations	4.0		6.1		4.1		3.9
TOTAL LIABILITIES	416.9		471.0		506.5		421.5
Contingencies and Legal Matters (Note 10)	—		—
Contingencies and Legal Matters (Note 8)					—		—
TOTAL STOCKHOLDERS’ EQUITY	405.5		390.2		409.8		406.3
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	822.4	$	861.2	$	916.3	$	827.8

See Notes to Condensed Consolidated Financial Statements

NEENAH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(In millions, shares in thousands)

(Unaudited)


	2019 Activity																	2020 Activity
	Common Stock																	Common Stock
	Shares	Amount		Treasury Stock			Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Total			Shares	Amount		Treasury Stock			Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Total
Balance, December 31, 2018	18,597	$	0.2	$	(76.6	)	$	328.5	$	243.2		$	(105.1	)	$	390.2
Balance, December 31, 2019																		18,678	$	0.2	$	(82.8	)	$	334.1	$	268.1		$	(113.3	)	$	406.3
Net income	—	—		—			—		11.8			—			11.8			—	—		—			—		16.4			—			16.4
Other comprehensive loss, including income taxes	—	—		—			—		—			(1.7		)	(1.7		)	—	—		—			—		—			(2.6		)	(2.6		)
Dividends declared	—	—		—			—		(7.6		)	—			(7.6		)	—	—		—			—		(8.0		)	—			(8.0		)
Shares purchased (Note 9)	—	—		(0.3		)	—		—			—			(0.3		)
Shares purchased (Note 7)																		—	—		(3.6		)	—		—			—			(3.6		)
Stock options exercised	9	—		—			—		—			—			—			3	—		—			—		—			—			—
Restricted stock vesting (Note 9)	3	—		(0.1		)	—		—			—			(0.1		)
Restricted stock vesting (Note 7)																		8	—		(0.2		)	—		—			—			(0.2		)
Stock-based compensation	—	—		—			1.9		—			—			1.9			—	—		—			1.5		—			—			1.5
Balance, March 31, 2019	18,609	0.2		(77.0		)	330.4		247.4			(106.8		)	394.2
Net income	—	—		—			—		13.6			—			13.6
Other comprehensive income, net of income taxes	—	—		—			—		—			6.2			6.2
Dividends declared	—	—		—			—		(7.6		)	—			(7.6		)
Shares purchased (Note 9)	—	—		(1.6		)	—		—			—			(1.6		)
Stock options exercised	1	—		—			—		—			—			—
Restricted stock vesting (Note 9)	21	—		—			—		—			—			—
Stock-based compensation	—	—		—			1.7		—			—			1.7
Balance, June 30, 2019	18,631	0.2		(78.6		)	332.1		253.4			(100.6		)	406.5
Net income	—	—		—			—		14.4			—			14.4
Other comprehensive loss, including income taxes	—	—		—			—		—			(5.8		)	(5.8		)
Dividends declared	—	—		—			—		(7.7		)	—			(7.7		)
Shares purchased (Note 9)	—	—		(2.9		)	—		—			—			(2.9		)
Stock options exercised	2	—		—			—		—			—			—
Restricted stock vesting (Note 9)	2	—		(0.2		)	—		—			—			(0.2		)
Stock-based compensation	—	—		—			1.2		—			—			1.2
Balance, September 30, 2019	18,635	$	0.2	$	(81.7	)	$	333.3	$	260.1		$	(106.4	)	$	405.5
Balance, March 31, 2020																		18,689	$	0.2	$	(86.6	)	$	335.6	$	276.5		$	(115.9	)	$	409.8


	2018 Activity																		2019 Activity
	Common Stock																		Common Stock
	Shares	Amount		Treasury Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Total			Shares	Amount		Treasury Stock			Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Total
Balance, December 31, 2017	18,458	$	0.2	$	(65.8	)	$	323.9		$	235.7		$	(94.1	)	$	399.9
Net income	—	—		—			—			16.2			—			16.2
Other comprehensive income, net of income taxes	—	—		—			—			—			7.3			7.3
Reclassification of the unrealized loss on "available-for-sale" securities	—	—		—			—			(0.3		)	0.3			—
Reclassification of deferred income taxes on intra-entity asset transfers	—	—		—			—			(0.8		)	—			(0.8		)
Dividends declared	—	—		—			—			(7.0		)	—			(7.0		)
Shares purchased (Note 9)	—	—		(5.3		)	—			—			—			(5.3		)
Stock options exercised	20	—		—			0.1			—			—			0.1
Stock-based compensation	—	—		—			1.8			—			—			1.8
Balance, March 31, 2018	18,478	0.2		(71.1		)	325.8			243.8			(86.5		)	412.2
Net loss	—	—		—			—			(4.8		)	—			(4.8		)
Other comprehensive loss, including income taxes	—	—		—			—			—			(8.4		)	(8.4		)
Dividends declared	—	—		—			—			(6.9		)	—			(6.9		)
Shares purchased (Note 9)	—	—		(1.0		)	—			—			—			(1.0		)
Stock options exercised	12	—		—			0.3			—			—			0.3
Restricted stock vesting (Note 9)	8	—		—			—			—			—			—
Stock-based compensation	—	—		—			1.2			—			—			1.2
Other/currency	—	—		—			(0.1		)	—			—			(0.1		)
Balance, June 30, 2018	18,498	0.2		(72.1		)	327.2			232.1			(94.9		)	392.5
Balance, December 31, 2018																			18,597	$	0.2	$	(76.6	)	$	328.5	$	243.2		$	(105.1	)	$	390.2
Net income	—	—		—			—			12.1			—			12.1			—	—		—			—		11.8			—			11.8
Other comprehensive income, net of income taxes	—	—		—			—			—			0.4			0.4			—	—		—			—		—			(1.7		)	(1.7		)
Dividends declared	—	—		—			—			(6.9		)	—			(6.9		)	—	—		—			—		(7.6		)	—			(7.6		)
Shares purchased (Note 7)																			—	—		(0.3		)	—		—			—			(0.3		)
Stock options exercised	35	—		—			0.3			—			—			0.3			9	—		—			—		—			—			—
Restricted stock vesting (Note 7)																			3	—		(0.1		)	—		—			—			(0.1		)
Stock-based compensation	—	—		—			0.7			—			—			0.7			—	—		—			1.9		—			—			1.9
Balance, September 30, 2018	18,533	$	0.2	$	(72.1	)	$	328.2		$	237.3		$	(94.5	)	$	399.1

Balance, March 31, 2019																			18,609	$	0.2	$	(77.0	)	$	330.4	$	247.4		$	(106.8	)	$	394.2

See Notes to Condensed Consolidated Financial Statements

NEENAH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


	Nine Months Ended September 30,						Three Months Ended March 31,
	2019			2018			2020			2019
OPERATING ACTIVITIES
Net income	$	39.8		$	23.5		$	16.4		$	11.8
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	30.2			27.3			8.6			8.8
Stock-based compensation	4.8			3.7			1.5			1.9
Deferred income tax provision (benefit)	1.1			(4.4		)
Impairment loss (Note 12)	—			34.0
Pension settlement and other benefit costs (Note 7)	0.1			1.8
Loss on asset dispositions	0.1			0.4
Deferred income tax provision							1.1			0.5
Provision for uncollectible accounts receivable							1.0			—
Non-cash effects of changes in liabilities for uncertain income tax positions	(0.5		)	0.1			—			(0.4		)
Decrease (increase) in working capital	1.4			(8.2		)
Increase in working capital							(13.7		)	(20.9		)
Pension and other postretirement benefits	(2.2		)	(13.5		)	(0.4		)	1.5
Other	(0.4		)	(1.0		)	(0.3		)	(0.2		)
NET CASH PROVIDED BY OPERATING ACTIVITIES	74.4			63.7			14.2			3.0

INVESTING ACTIVITIES
Capital expenditures	(13.9		)	(28.1		)	(4.8		)	(4.3		)
Purchase of marketable securities	(0.3		)	—			—			(0.2		)
Other	(0.7		)	(0.8		)	(0.1		)	(0.2		)
NET CASH USED IN INVESTING ACTIVITIES	(14.9		)	(28.9		)	(4.9		)	(4.7		)

FINANCING ACTIVITIES
Long-term borrowings (Note 6)	155.5			224.8
Repayments of long-term debt (Note 6)	(188.8		)	(229.6		)
Long-term borrowings (Note 4)							88.7			62.9
Repayments of long-term debt (Note 4)							(17.0		)	(55.5		)
Debt issuance costs	(0.4		)	(0.3		)	(0.5		)	(0.2		)
Cash dividends paid	(22.9		)	(20.8		)	(8.0		)	(7.6		)
Shares purchased (Note 9)	(5.1		)	(6.3		)
Proceeds from exercise of stock options	—			0.6
NET CASH USED IN FINANCING ACTIVITIES	(61.7		)	(31.6		)
Shares purchased (Note 7)							(3.8		)	(0.3		)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES							59.4			(0.7		)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	(0.3		)	(0.3		)	(0.2		)	0.1
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(2.5		)	2.9			68.5			(2.3		)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR	9.9			4.5			9.0			9.9
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	7.4		$	7.4		$	77.5		$	7.6

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during period for interest, net of interest costs capitalized	$	6.0		$	6.7		$	0.2		$	0.6
Cash paid during period for income taxes	$	11.4		$	6.6		$	2.0		$	4.3
Non-cash investing activities:
Liability for equipment acquired	$	3.1		$	3.9		$	2.4		$	2.6

See Notes to Condensed Consolidated Financial Statements

NEENAH, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, except as noted)

Note 1. Background and Basis of Presentation

Background

Neenah, Inc. ("Neenah" or the "Company"), is a Delaware corporation incorporated in April 2004. The Company has 2 primary operations: its technical products business and its fine paper and packaging business. See Note ~~13,~~9, "Business Segment Information."

Basis of Consolidation and Presentation

These statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") and, in accordance with those rules and regulations, do not include all information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Management believes that the disclosures made are adequate for a fair presentation of the Company’s results of operations, financial position and cash flows. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the results of operations, financial position and cash flows for the interim periods presented herein. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make extensive use of estimates and assumptions that affect the reported amounts and disclosures. Actual results may vary from these estimates.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for the full year.

The condensed consolidated financial statements of Neenah and its subsidiaries included herein are unaudited. The condensed consolidated financial statements include the financial statements of the Company and its wholly owned and majority owned subsidiaries. Intercompany balances and transactions have been eliminated.

Impacts of COVID-19

The Company assessed the impacts of the novel coronavirus pandemic (“COVID-19”) on its various accounting estimates and significant judgments, including those that require consideration of forecasted financial information in the context of the unknown future impacts of COVID-19, using information that is reasonably available at this time. The accounting estimates and other matters assessed included, but were not limited to, goodwill, indefinite-lived intangibles and other long-lived assets, allowance for uncollectible accounts receivable, valuation allowances for tax assets and revenue recognition. Based on the Company’s current assessment of these estimates, there was not a material impact to the condensed consolidated financial statements as of and for the quarter ended March 31, 2020. As additional information becomes available, the Company’s future assessment of these estimates, including updated expectations at the time regarding the duration, scope and severity of the pandemic, could materially and adversely impact its consolidated financial statements in future reporting periods. The Company recorded an accrual for a one-time special payment to its mill operators of $1.1 million related to COVID-19 during the three months ended March 31, 2020.

Earnings per Share ("EPS")

The following table presents the computation of basic and diluted EPS (dollars in millions except per share amounts, shares in thousands):

Earnings Per Basic Common Share


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2019			2018			2019			2018			2020			2019
Income from continuing operations	$	14.4		$	12.9		$	39.8		$	24.3		$	16.4		$	11.8
Amounts attributable to participating securities	(0.1		)	(0.1		)	(0.2		)	(0.3		)	(0.1		)	—
Income from continuing operations available to common stockholders	14.3			12.8			39.6			24.0
Loss from discontinued operations	—			(0.8		)	—			(0.8		)
Net income available to common stockholders	$	14.3		$	12.0		$	39.6		$	23.2		$	16.3		$	11.8

Weighted-average basic shares outstanding	16,837			16,849			16,850			16,848			16,817			16,862

Continuing operations	$	0.85		$	0.76		$	2.35		$	1.43
Discontinued operations	—			(0.05		)	—			(0.05		)
Basic earnings per share	$	0.85		$	0.71		$	2.35		$	1.38		$	0.97		$	0.70

Earnings Per Diluted Common Share


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2019			2018			2019			2018			2020			2019
Income from continuing operations	$	14.4		$	12.9		$	39.8		$	24.3		$	16.4		$	11.8
Amounts attributable to participating securities	(0.1		)	(0.1		)	(0.2		)	(0.3		)	(0.1		)	—
Income from continuing operations available to common stockholders	14.3			12.8			39.6			24.0
Loss from discontinued operations	—			(0.8		)	—			(0.8		)
Net income available to common stockholders	$	14.3		$	12.0		$	39.6		$	23.2		$	16.3		$	11.8

Weighted-average basic shares outstanding	16,837			16,849			16,850			16,848			16,817			16,862
Add: Assumed incremental shares under stock compensation plans (a)	68			139			60			136			33			59
Weighted-average diluted shares	16,905			16,988			16,910			16,984			16,850			16,921

Continuing operations	$	0.84		$	0.75		$	2.33		$	1.41
Discontinued operations	—			(0.05		)	—			(0.05		)
Diluted earnings per share	$	0.84		$	0.70		$	2.33		$	1.36		$	0.97		$	0.69

(a) For the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ there were ~~231,471~~267,152 and ~~106,789~~231,332 potentially dilutive options, respectively, excluded from the computation of dilutive common shares because the exercise price of such options exceeded the average market price of the Company’s Common Stock. For the nine months ended September 30, 2019 and 2018, there were 231,199 and 143,853 potentially dilutive options, respectively, similarly excluded from the computation of dilutive common shares.

Fair Value of Financial Instruments

The Company measures the fair value of financial instruments in accordance with Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures ("ASC Topic 820") which establishes a framework for measuring fair value. ASC Topic 820 provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The following table presents the carrying value and the fair value of the Company’s ~~debt.~~debt:


	September 30, 2019				December 31, 2018				March 31, 2020				December 31, 2019
	Carrying Value		Fair Value (a)		Carrying Value		Fair Value (a)		Carrying Value		Fair Value (a)		Carrying Value		Fair Value (a)
2021 Senior Notes (5.25% fixed rate)	$	175.0	$	174.3	$	175.0	$	170.5	$	175.0	$	174.3	$	175.0	$	174.3
Global Revolving Credit Facilities (variable rates)	25.1		25.1		57.9		57.9		93.0		93.0		21.6		21.6
German loan agreement (2.45% fixed rate)	3.7		3.8		4.8		5.1		3.4		3.5		3.5		3.6
German loan agreement (1.45% fixed rate)	4.0		4.0		4.9		4.9		3.6		3.7		3.7		3.7
Total debt	$	207.8	$	207.2	$	242.6	$	238.4	$	275.0	$	274.5	$	203.8	$	203.2

(a) The fair value for all debt instruments was estimated from Level 2 measurements using rates currently available to the Company for debt of the same remaining maturities.

As of ~~September 30, 2019,~~March 31, 2020, the Company had ~~$3.9~~$3.7 million in marketable securities in the U.S. classified as "Other Noncurrent Assets" on the Condensed Consolidated Balance Sheet. The cost of such marketable securities was ~~$4.3~~$4.4 million. Fair value for the Company’s marketable securities was estimated from Level 1 inputs. The Company’s U.S. marketable securities are designated for the payment of benefits under its supplemental employee retirement plan ("SERP"). As of ~~September 30, 2019,~~March 31, 2020, Neenah Germany had investments of ~~$1.8~~$2.0 million that were restricted to the payment of certain post-retirement employee

benefits of which $0.6 million and ~~$1.2~~$1.4 million are classified as "Prepaid and other current assets" and "Other Noncurrent Assets", respectively, on the Condensed Consolidated Balance Sheet. The cost of these investments approximate market.

~~Acquisitions~~Revenue from Contracts with Customers

The Company recognizes sales revenue at a point in time following the transfer of control of the product to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contracts. Sales are reported net of allowable discounts and estimated returns. Reserves for cash discounts, trade allowances and sales returns are estimated using historical experience. The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill our promise to transfer the associated products. Accordingly, the Company records customer payments of shipping and handling costs as a component of net sales and classifies such costs as a component of cost of sales. The Company excludes tax amounts assessed by governmental authorities that are both (i) imposed on and concurrent with a specific revenue-producing transaction and (ii) collected from customers from our measurement of transaction prices. Accordingly, such tax amounts are not included as a component of net sales or cost of sales.

~~During~~The Company considers each transaction/shipment as a separate performance obligation. Neenah recognizes revenue when the title transfers to the customer. As such, the remaining performance obligations at period end are not considered significant.

Sales terms in the technical products business vary depending on the type of product sold and customer category. In general, sales are collected in 45 to 55 days. Extended credit terms of up to 120 days are offered to customers located in certain international markets. Fine paper and packaging sales terms range between 20 and 30 days with discounts of 0 to 2% for customer payments, with discounts of 1% and 20-day terms used most often. Extended credit terms are offered to customers located in certain international markets.

Refer to Note 9, "Business Segment Information" for disaggregation of segment revenue from contracts with customers for the three months ended ~~September 30, 2018,~~March 31, 2020 and 2019.

Allowance for Uncollectible Accounts Receivable

In January 2020, the Company ~~recognized $3.1~~adopted Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments which amends the FASB's guidance on the impairment of financial instruments. The ASU adds to U.S. GAAP an impairment model (known as the "current expected credit loss model" or "CECL") that is based on expected losses rather than incurred losses. The adoption of this standard did not have a material impact on the Company's financial position, results of operations and cash flows. We estimate losses on receivables based on known troubled accounts and historical experience of losses incurred. Receivables are considered impaired and written-off when it is probable that contractual payments due will not be collected in accordance with the terms of the agreement. The allowance for uncollectible accounts receivable was $2.0 million and $1.5 million as of ~~income related to the adjustment in contingent liability~~March 31, 2020 and ~~an escrow arrangement~~December 31, 2019. The Company recorded a $1.0 million provision for uncollectible accounts receivable from the ~~2017 acquisition~~impacts of ~~Coldenhove ("Coldenhove Acquisition"). These items were recognized as income as they related to~~ the ~~operating results subsequent to the acquisition.~~

~~Discontinued Operations~~

~~During~~COVID-19 pandemic for the three months ended ~~September 30, 2018,~~March 31, 2020.

Leases

The Company has operating leases for corporate offices, warehouses and certain equipment, with remaining lease terms of up to 11 years, some of which include options to extend the leases for up to five years. The Company determines if an arrangement is a lease at inception. Operating leases with terms greater than 12 months are included in "Lease Right-of-Use Assets", "Lease liabilities payable within one year" and "Noncurrent Lease Liabilities" on the Condensed Consolidated Balance Sheets. As of March 31, 2020, the Company ~~recorded~~did not have any material finance leases.

In March 2020, the Company entered into operating leases for 2 warehouse buildings, and recognized an ~~additional loss on sale~~ROU asset and a corresponding lease liability of ~~$0.8~~$6.6 million ~~arising from~~with a term of 10 years, and an ROU asset and corresponding lease liability of $1.8 million with a term of 5 years. As most of the ~~final adjustment to~~Company’s leases do not provide an implicit rate, the ~~transaction price~~Company uses its incremental borrowing rate based on the ~~sale~~information available at commencement date in determining the present value of ~~the Lahnstein Mill in 2015.~~future payments.

Note 2. Accounting Standards Changes

As discussed in Note 1, in January 2020, the Company adopted ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848)-Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU addresses accounting implications of the replacement of LIBOR (London Inter-Bank Offered Rate) with SOFR (Secured Overnight Financing Rate) or other alternatives by the end of 2021. The FASB allows immediate relief from application of contract modification accounting triggered by reference rate reform that otherwise would be costly to implement and result in burdensome financial reporting. The Company intends to elect the expedients and exceptions offered in the ASU.

As of ~~September 30, 2019,~~March 31, 2020, no other amendments to the ASC have been issued that will have or are reasonably likely to have a material effect on the Company’s financial position, results of operations or cash flows.

~~Note 3. Revenue from Contracts with Customers~~

~~The following tables represent a disaggregation of segment revenue from contracts with customers for the three and nine months ended September 30, 2019 and 2018.~~

The technical products business is an international producer of fiber-formed, coated and/or saturated specialized media that deliver high performance benefits to customers. Included in this segment are transportation and other filtration media ("Filtration"), tape and abrasives backings products ("Backings"), and digital image transfer, durable label and other specialty substrate products ("Specialty"). Following the disposition of the Brattleboro mill which eliminated a significant portion of the products of the Other business segment, in January 2019 the Company realigned the remaining products manufactured in the Other business segment to be managed as part of the Technical Products business segment. As a result, the Company presented the net sales and operating income for the three and nine months ended September 30, 2019 of this remaining portion of the Other business segment within the Technical Products business segment and recast the comparable 2018 information into Specialty products. Refer to Note 13, "Business Segment Information", for further discussion on the amount recast.

Three Months Ended September 30, Nine Months Ended September 30,
2019 2018 2019 2018
Filtration 43 % 41 % 42 % 40 %
Backings 24 % 27 % 25 % 28 %
Specialty 33 % 32 % 33 % 32 %
Total 100 % 100 % 100 % 100 %

The fine paper and packaging business is a leading supplier of premium printing and other high end specialty papers ("Graphic Imaging"), premium packaging ("Packaging") and specialty office papers ("Filing/Office") primarily in North America. With the sale of the Brattleboro mill in 2018, the Filing/Office category has been eliminated.

Three Months Ended September 30, Nine Months Ended September 30,
2019 2018 2019 2018
Graphic Imaging 80 % 78 % 79 % 77 %
Packaging 20 % 18 % 21 % 19 %
Filing/Office — % 4 % — % 4 %
Total 100 % 100 % 100 % 100 %

~~The following tables represent a disaggregation of revenue from contracts with customers by location of the selling entities for the three and nine months ended September 30, 2019 and 2018.~~

Three Months Ended September 30, Nine Months Ended September 30,
2019 2018 2019 2018
United States 72 % 73 % 72 % 72 %
Germany 21 % 20 % 21 % 21 %
Rest of Europe 7 % 7 % 7 % 7 %
Total 100 % 100 % 100 % 100 %

The Company considers each transaction/shipment as a separate performance obligation. Neenah recognizes revenue when the title transfers to the customer. As such, the remaining performance obligations at period end are not considered significant.

Note 4.3. Supplemental Balance Sheet Data

The following table presents inventories by major class:


	September 30, 2019			December 31, 2018			March 31, 2020			December 31, 2019
Raw materials	$	32.0		$	35.6		$	33.4		$	32.8
Work in progress	25.1			30.1			24.8			26.4
Finished goods	67.2			78.3			76.4			67.3
Supplies and other	5.1			3.0			5.2			5.2
	129.4			147.0			139.8			131.7
Adjust FIFO inventories to LIFO cost	(10.7		)	(15.4		)	(8.4		)	(8.9		)
Total	$	118.7		$	131.6		$	131.4		$	122.8

The FIFO values of inventories valued on the LIFO method were ~~$103.3~~$110.6 million and ~~$109.1~~$102.2 million as of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, respectively. For the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, income from continuing operations before income taxes was reduced by less than $0.1 million due to a decrease in certain LIFO inventory quantities.

The following table presents changes in accumulated other comprehensive income (loss) ("AOCI") for the ~~nine~~three months ended ~~September 30, 2019:~~March 31, 2020:


	Net Unrealized Foreign Currency Translation Loss			Net Loss from Pension and Other Postretirement Liabilities			Accumulated Other Comprehensive Loss			Net Unrealized Foreign Currency Translation Loss			Net Loss from Pension and Other Postretirement Liabilities			Accumulated Other Comprehensive Loss
AOCI — December 31, 2018	$	(15.5	)	$	(89.6	)	$	(105.1	)
AOCI — December 31, 2019										$	(19.0	)	$	(94.3	)	$	(113.3	)
Other comprehensive income (loss) before reclassifications ~~(a)~~	(8.6		)	5.0			(3.6		)	(4.0		)	—			(4.0		)
Amounts reclassified from AOCI	—			4.4			4.4			—			1.6			1.6
Income (loss) from other comprehensive income items	(8.6		)	9.4			0.8			(4.0		)	1.6			(2.4		)
Provision (benefit) for income taxes	(0.2		)	2.3			2.1			(0.3		)	0.5			0.2
Other comprehensive income (loss)	(8.4		)	7.1			(1.3		)	(3.7		)	1.1			(2.6		)
AOCI — September 30, 2019	$	(23.9	)	$	(82.5	)	$	(106.4	)
AOCI — March 31, 2020										$	(22.7	)	$	(93.2	)	$	(115.9	)


~~(a)~~	For the nine months ended September 30, 2019, the Company recorded a $4.9 million decrease in the employee benefit obligations related to a pension remeasurement in conjunction with the redistribution of active and inactive participants between separate pension plans and a $0.1 million settlement loss related to the SERP.

For the ~~nine~~three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ the Company reclassified ~~$4.4~~$1.6 million and ~~$4.5~~$1.7 million, respectively, of costs from AOCI to "Other expense - net" on the Condensed Consolidated Statements of Operations. For ~~each of~~ the ~~nine~~three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ the Company recognized an income tax benefit of ~~$1.1~~$0.5 million and $0.4 million, respectively. related to such reclassifications classified as "Provision for income taxes" on the Condensed Consolidated Statements of Operations.

Note ~~5. Income Taxes~~

~~The Company accounts for income taxes in accordance with ASC Topic 740,~~ ~~Income Taxes.~~ Income tax expense represented 11% and 3% of pre-tax book income for the three months ended September 30, 2019 and 2018, respectively, and 16% and 8% of pre-tax book income for the nine months ended September 30, 2019 and 2018, respectively. The effective income tax rates for the three and nine months ended September 30, 2019 were reduced by a $1.2 million reversal of U.S. federal and state reserves for uncertain tax positions as a result of expiration of statutes of limitation for audit. The effective income tax rate for the three and nine months ended September 30, 2018 was significantly impacted by the effects of the $34.0 million impairment loss of the Brattleboro mill and associated research and office facilities (see Note 12), as lower pre-tax income resulted in similarly sized reconciling items having a larger percentage impact. In addition, the effective income tax rates for these 2018 periods were favorably impacted by incremental pension plan contributions applied to the 2017 tax year.

~~The following table presents the principal reasons for the difference between the Company's effective income tax (benefit) rate and the U.S. federal statutory income tax (benefit) rate:~~

Three Months Ended September 30, Nine Months Ended September 30,
2019 2018 2019 2018
U.S. federal statutory income tax (benefit) rate 21 % 21 % 21 % 21 %
U.S. state income taxes (benefit), net of federal income tax effect 1 % — % 1 % (3 )%
Foreign tax rate differences and financing structure — % 1 % 1 % 3 %
U.S. taxes on foreign earnings 1 % (2 )% 1 % 6 %
Change in statutory tax rates — % (3 )% — % (3 )%
Research and development and other tax credits (5 )% (10 )% (6 )% (12 )%
Excess tax benefits from stock compensation — % (5 )% — % (4 )%
Uncertain income tax positions (7 )% 2 % (3 )% 2 %
Other differences - net — % (1 )% 1 % (2 )%
Effective income tax (benefit) rate 11 % 3 % 16 % 8 %

~~Note 6.~~4. Debt

Long-term debt consisted of the following:


	September 30, 2019			December 31, 2018			March 31, 2020			December 31, 2019
2021 Senior Notes (5.25% fixed rate) due May 2021	$	175.0		$	175.0		$	175.0		$	175.0
Global Revolving Credit Facilities (variable rates) due December 2023	25.1			57.9			93.0			21.6
German loan agreement (2.45% fixed rate) due in quarterly installments ending September 2022	3.7			4.8			3.4			3.5
German loan agreement (1.45% fixed rate) due in quarterly installments ending March 2023	4.0			4.9			3.6			3.7
Deferred financing costs	(3.2		)	(3.5		)	(3.1		)	(3.0		)
Total debt	204.6			239.1			271.9			200.8
Less: Debt payable within one year	2.6			2.3			3.3			2.6
Long-term debt	$	202.0		$	236.8		$	268.6		$	198.2

2021 Senior Notes

In May 2013, the Company completed an underwritten offering of eight-year senior unsecured notes (the "2021 Senior Notes") at a face amount of $175 million. The 2021 Senior Notes contain terms, covenants and events of default with which the Company must comply, which the Company believes are ordinary and standard for notes of this nature. As of ~~September 30, 2019,~~March 31, 2020, the Company was in compliance with all terms of the indenture for the 2021 Senior Notes. The Company continues to actively monitor the debt markets for refinancing opportunities and believes that it will be able to refinance these notes later this year on more favorable terms than are currently available in the market.

Amended and Restated Secured Revolving Credit Facility

In December 2018, the Company amended and restated its existing credit facility by entering into the Fourth Amended and Restated Credit Agreement (the "Fourth Amended Credit Agreement"), that will mature on December 10, 2023.

On March 12, 2020, the Company amended the Fourth Amended and Restated Credit Agreement, to among other things: (a) modify the Domestic Borrowing Base (as defined in the Credit Agreement) to permit the Domestic Borrowers to include a portion of certain capital assets acquired from time to time by any Domestic Borrower in permitted acquisitions, whether directly or indirectly through the acquisition of new subsidiaries (the “Acquired Assets”), pending the completion of the field exams and appraisals required under the Credit Agreement, for up to 60 days after the applicable acquisition, after which the Acquired Assets would be included in the Domestic Borrowing Base to the same extent and on the same basis as other inventory, receivables and applicable capital assets of the Domestic Borrowers; and (b) temporary adjustment to lower certain thresholds included in the agreement that impact, among other things, redemptions of existing Senior Notes, cash dividends, and other covenant restrictions, until the sooner of 90 days following the completion of a pending acquisition or the refinancing of the Company’s 5.25% Senior Notes due 2021, limit the payment of cash dividends on the Company’s common stock and the applicability of certain other covenants.

The Fourth Amended Credit Agreement contains covenants with which the Company and its subsidiaries must comply during the term of the agreement, which the Company believes are ordinary and standard for agreements of this nature. As of ~~September 30, 2019,~~March 31, 2020, the Company was in compliance with all terms of the Fourth Amended Credit Agreement.

Availability under the Global Revolving Credit Facilities varies over time depending on the value of the Company’s inventory, receivables and various capital assets. As of ~~September 30, 2019,~~March 31, 2020, the Company had ~~$25.1~~$93.0 million of borrowings and $0.5 million in letters of credit outstanding under the Global Revolving Credit Facilities and ~~$176.3~~$117.2 million of available credit (based on exchange rates at ~~September 30, 2019)~~March 31, 2020). As of ~~September 30, 2019,~~March 31, 2020, the weighted-average interest rate on outstanding Global Revolving Credit Facility borrowings was ~~1.3~~2.4 percent per annum. As of December 31, ~~2018,~~2019, the weighted-average interest rate under the Global Revolving Credit Facilities was ~~2.9~~1.3 percent per annum.

Under the terms of the 2021 Senior Notes and the Fourth Amended Credit Agreement, the Company has limitations on its ability to repurchase shares of and pay dividends on its Common Stock. These limitations are triggered depending on the Company’s credit availability under the Fourth Amended Credit Agreement and leverage levels under the Senior Notes. As of ~~September 30, 2019,~~

March 31, 2020, none of these covenants were restrictive to the Company’s ability to repurchase shares of and pay dividends on its Common Stock.

For additional information about ~~our~~the Company's debt agreements, see Note 7, "Debt" of the Notes to Consolidated Financial Statements in ~~our 2018~~the 2019 Form 10-K.

Borrowings and Repayments of Long-Term Debt

The Condensed Consolidated Statements of Cash Flows present borrowings and repayments under the Global Revolving Credit Facilities using a gross approach. This approach presents not only discrete borrowings for transactions such as a business acquisition, but also reflects all borrowings and repayments that occur as part of daily management of cash receipts and disbursements. For the ~~nine~~three months ended ~~September 30,~~March 31, 2020, the Company made net long-term debt borrowings of $71.7 million of which $6.7 million related to daily cash management activities, and $65.0 million related to increased cash on hand through borrowings near quarter-end as a precautionary measure to protect against any potential disruption in the banking system that would adversely impact the Company's ability to access cash as a result of COVID-19 and to enhance the Company's liquidity. For the three months ended March 31, 2019, the Company made scheduled debt repayments of ~~$1.6~~$0.3 million and net long-term debt ~~repayments~~borrowings of $31.7 million related to daily cash management activities. For the nine months ended September 30, 2018, the Company made scheduled debt repayments of $1.0 million and net long-term debt repayments of $3.8$7.7 million related to daily cash management activities.

Note 7.5. Pension and Other Postretirement Benefits

Pension Plans

Substantially all active employees of the Company’s U.S. operations participate in defined benefit pension plans and/or defined contribution retirement plans. The Company has defined benefit plans for substantially all its employees in Germany ~~the Netherlands~~ and the United Kingdom. In addition, the Company maintains a SERP, which is a non-qualified defined benefit plan, and a supplemental retirement contribution plan (the "SRCP"), which is a non-qualified, unfunded defined contribution plan. The Company provides benefits under the non-qualified SERP and SRCP plans to the extent necessary to fulfill the intent of its retirement plans without regard to the limitations set by the Internal Revenue Code on qualified retirement benefit plans.

During October 2019, the Company reached an agreement with the union members of the Christelijke Nationale Vakbond ("CNV") and the Federatie Nederlandse Vakvereniging ("FNV") that affected employees in the Netherlands. In accordance with the new agreements, effective December 31, 2019, the current Dutch defined benefit pension plan will be closed to new entrants, and the defined benefit pension plan will be replaced by a new defined contribution plan. All new employees will participate in the new defined contribution plan, and current employees will have their benefit frozen at current levels under the defined benefit plan and will begin participation in the new defined contribution plan. The Company expects to recognize a curtailment gain of €1.7 million in the fourth quarter of 2019 due to these changes.

The following table presents the components of net periodic benefit cost for the Company’s defined benefit plans and postretirement plans other than pensions:

Components of Net Periodic Benefit Cost for Defined Benefit Plans


	Pension Benefits						Postretirement Benefits Other than Pensions				Pension Benefits						Postretirement Benefits Other than Pensions
	Three Months Ended September 30,										Three Months Ended March 31,
	2019			2018			2019		2018		2020			2019			2020		2019
Service cost	$	1.2		$	1.7		$	0.3	$	0.3	$	1.2		$	1.3		$	0.3	$	0.3
Interest cost	4.0			3.9			0.3		0.3		3.5			4.1			0.2		0.4
Expected return on plan assets (a)	(5.4		)	(5.2		)	—		—		(5.2		)	(5.0		)	—		—
Recognized net actuarial loss	1.1			1.3			0.1		0.1		1.3			1.5			0.2		0.2
Amortization of prior service benefit	0.1			—			—		—		0.1			0.1			—		—
Amount of settlement loss recognized	0.1			—			—		—
Net periodic benefit cost	$	1.1		$	1.7		$	0.7	$	0.7	$	0.9		$	2.0		$	0.7	$	0.9

Pension Benefits
Postretirement Benefits
Other than Pensions
Nine Months Ended September 30,
2019 2018 2019 2018
Service cost $ 3.8
$ 5.1
$ 0.9
$ 0.9
Interest cost 12.2
11.8
1.1
0.9
Expected return on plan assets (a) (15.7 ) (15.7 ) —
—
Recognized net actuarial loss 3.7
3.9
0.5
0.4
Amortization of prior service benefit 0.2
0.1
—
(0.1 )
Amount of settlement loss recognized (b) 0.1
0.8
—
—
Net periodic benefit cost $ 4.3
$ 6.0
$ 2.5
$ 2.1

(a) The expected return on plan assets is determined by multiplying the fair value of plan assets at the prior year-end (adjusted for estimated current year cash benefit payments and contributions) by the expected long-term rate of return. The Dutch pension plan is funded through an insurance contract, and the expected return on plan assets is calculated based on the discount rate of the insured obligations.

~~(b) For the nine months ended September 30, 2019 and 2018, the Company recognized a settlement loss of $0.1 million and $0.8 million, respectively, related to the SERP.~~

The Company records the service cost component of net periodic benefit cost as part of cost of sales and selling, general and administrative ("SG&A") expenses; and the non-service cost components of net periodic benefit cost (i.e., interest cost, expected return on plan assets, net actuarial gains or losses, and amortization of prior service cost or credits) as part of "Other expense - net" on the Condensed Consolidated Statements of Operations.

~~The~~

For the three months ended March 31, 2020, the Company ~~expects to make~~made $1.8 million of aggregate contributions to qualified and nonqualified defined benefit pension trusts and payments to ~~pay~~ pension benefits for unfunded pension and other postretirement benefit ~~plans of $14.7 million in calendar 2019. For the nine months ended September 30, 2019, the~~plans. The Company ~~made $9.7~~expects to make $7.4 million of such ~~payments.~~payments in calendar 2020. The Company made similar

payments of ~~$21.5~~$2.0 million and ~~$23.1~~$13.1 million for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 and for the year ended December 31, ~~2018,~~2019, respectively.

Multi-Employer Plan

Historically, we have contributed to the PACE Industry Union-Management Pension Fund (the “PIUMPF"), a multiemployer pension plan. The amount of our annual contributions to the PIUMPF was negotiated with the plan and the bargaining unit representing our employees covered by the plan. The PIUMPF was certified to be in "critical status" for the plan year beginning January 1, 2010, and continued to be in critical status for the plan year beginning January 1, 2018.

~~In June~~Effective July 1, 2018, the Company and representatives of the United Steelworkers Union (the "USW") of the Lowville mill ~~reached an agreement~~initiated actions to withdraw from the ~~Pace Industry Union-Management Pension Fund (“PIUMPF”), effective July 1, 2018.~~PIUMPF. As a result, the Company recorded an estimated withdrawal liability of $1.0 million, which ~~assumes~~assumed payment of $0.1 million per year over 20 years, discounted at a credit adjusted risk-free rate of 5.7%. In October 2019, the Company received a billing from PIUMPF for the withdrawal liability, which confirmed the $1.0 million liability. In addition to the withdrawal liability, PIUMPF ~~may~~ also ~~demand~~demanded immediate payment ~~from~~of $1.3 million for the ~~Company of a~~Company's pro-rata share of the fund's accumulated funding deficiency. The Company ~~estimates the demand of accumulated funding deficiency to be in the range of $1.0 to $1.25 million. The Company reserves the right to challenge any such~~is challenging this demand and believes ~~this demand is~~it to be unenforceable. As such, the Company has not recorded a liability for this amount as of ~~September 30, 2019.~~March 31, 2020.

Note 8.6. Stock Compensation Plan

Stock Options and Stock Appreciation Rights ("Options")

~~The following table presents information regarding~~There were no Options awarded during the ~~nine~~three months ended ~~September 30, 2019:~~

Options granted 1,272
Per share weighted average exercise price $ 66.59
Per share weighted average grant date fair value $ 10.32

The weighted-average grant date fair value for Options granted during the nine months ended September 30, 2019 was estimated using the Black-Scholes option valuation model with the following assumptions:



~~Expected term in years~~	~~5.0~~
~~Risk free interest rate~~	~~1.8~~	%
~~Volatility~~	~~23.1~~	%
~~Dividend yield~~	~~3.0~~	%

March 31, 2020.

The following table presents information regarding Options that vested during the ~~nine~~three months ended ~~September 30, 2019:~~March 31, 2020:


Options vested	111,615		66,953
Aggregate grant date fair value of Options vested (in millions)	$	1.6	$	1.0

The following table presents information regarding outstanding Options:


	September 30, 2019		December 31, 2018		March 31, 2020		December 31, 2019
Options outstanding	432,406		451,081		406,719		416,548
Aggregate intrinsic value (in millions)	$	3.2	$	2.7	$	0.6	$	3.9
Per share weighted average exercise price	$	69.31	$	67.46	$	70.59	$	70.08
Exercisable Options	333,887		240,903		377,517		318,029
Aggregate intrinsic value (in millions)	$	3.2	$	2.6	$	0.6	$	3.9
Unvested Options	98,519		210,178		29,202		98,519
Per share weighted average grant date fair value	$	14.37	$	14.21	$	14.74	$	14.41

Performance Share Units ("PSUs") and Restricted Share Units ("RSUs")

For the ~~nine~~three months ended ~~September 30, 2019,~~March 31, 2020, the Company granted target awards of ~~49,457~~27,773 PSUs. The measurement period for ~~three-fourths of~~ the PSUs is January 1, ~~2019~~2020 through December 31, ~~2019, and for the remaining one-fourth of the PSUs is January 1, 2019 through December 31, 2021.~~2022. The PSUs vest on December 31, ~~2021.~~2022. Common Stock of an amount between 0 and 200 percent of the PSUs target will be awarded based on the Company’s return on invested capital, consolidated revenue growth, ~~EPS~~free cash flow as a percentage of net sales, and total return to shareholders relative to the companies in the Russell 2000® Value small cap index. The Company’s return on invested capital, consolidated revenue growth, and ~~EPS~~free cash flow as a percentage of net sales are adjusted for certain items as further described in the Performance Share Award Agreement. The market price on the date of grant for the PSUs was ~~$69.04~~$71.88 per share.

For the ~~nine~~three months ended ~~September 30, 2019,~~March 31, 2020, the Company awarded ~~36,441~~58,587 RSUs to certain employees. The weighted average grant date fair value of such awards was ~~$69.09~~$68.54 per share and the one third of the shares will vest on each of the first three anniversaries of the grant date, with certain exceptions for retiring employees. For the nine months ended September 30, 2019, the Company also awarded 10,056 RSUs to non-employee members of the Board of Directors. The weighted average grant date fair value of such awards was $59.67 per share and the awards vest one year from the date of grant. During the vesting period, the holders of the RSUs are entitled to dividends, but the RSUs do not have voting rights. Generally, the RSUs and PSUs are forfeited in the event the holder is no longer working for the Company on the vesting date. However, under specific circumstances, vesting may be accelerated or reflect pro-rata vesting.

Note ~~9. Stockholders’~~7. Stockholders' Equity

Common Stock

As of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, the Company had ~~16,815,000~~16,791,000 shares and ~~16,859,000~~16,843,000 shares of Common Stock outstanding, respectively.

In November ~~2018,~~2019, the Company's Board of Directors authorized a program for the purchase of up to $25 million of outstanding Common Stock effective January 1, ~~2019~~2020 (the ~~"2019~~"2020 Stock Purchase Plan"). The program does not require the Company to purchase any specific number of shares and may be suspended or discontinued at any time. Purchases under the ~~2019~~2020 Stock Purchase Plan will be made from time to time in the open market or in privately negotiated transactions in accordance with the requirements of applicable law. The timing and amount of any purchases will depend on share price, market conditions and other factors. Among the measures taken to manage the Company's cash flow and preserve its liquidity, purchases under the 2020 Stock Purchase Plan were curtailed in March 2020 and remain suspended. The Company also had $25 million repurchase programs in place during the preceding two years that expired in December 2019 (the “2019 Stock Purchase Plan”) and December 2018 (the “2018 Stock Purchase Plan”) ~~and December 2017 (the “2017 Stock Purchase Plan”)~~,

respectively.

The following table shows shares purchased and value ($ in millions) under the respective stock purchase plans:


	Nine Months Ended September 30,						Three Months Ended March 31,
	2019			2018			2020			2019
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount
2020 Stock Purchase Plan							59,577	$	3.6	—	$	—
2019 Stock Purchase Plan	79,676	$	4.9	—	$	—	—	—		4,285	0.3
2018 Stock Purchase Plan	—	—		79,179	6.3

For the ~~nine~~three months ended ~~September 30, 2019,~~March 31, 2020, the Company acquired ~~2,432~~3,476 shares of Common Stock, at a cost of $0.2 million for shares surrendered by employees to pay taxes due on vested restricted stock awards.

Note ~~10.~~8. Contingencies and Legal Matters

Litigation

The Company is involved in certain legal actions and claims arising in the ordinary course of business. While the outcome of these legal actions and claims cannot be predicted with certainty, it is the opinion of management that the outcome of any such claim which is pending or threatened, either individually or on a combined basis, will not have a material effect on the consolidated financial condition, results of operations or cash flows of the Company.

Income Taxes

The Company periodically undergoes examination by the IRS, as well as various state and foreign jurisdictions. These tax authorities routinely challenge certain deductions and credits reported by the Company on its income tax returns. No significant tax audit findings are being contested at this time with either the IRS or any state or foreign tax authority.

Employees and Labor Relations

The Company’s U.S. union employees are represented by the USW. Approximately 50 percent of salaried employees and 80 percent of hourly employees of Neenah Germany are eligible to be represented by the Mining, Chemicals and Energy Trade Union, Industriegewerkschaft Bergbau, Chemie and Energie (the "IG BCE"). In the Netherlands, most of our employees are eligible to be represented by the CNV and the FNV. As of ~~September 30, 2019,~~March 31, 2020, the Company had 96205 U.S. employees covered under collective bargaining agreements that have or will expire in the next 12 months.

The following table shows the expiration dates of the Company’s various bargaining agreements and the number of employees covered under each of these ~~agreements.~~ agreements:



Contract Expiration Date	Location	Union	Number of Employees
~~May 2019 (b)~~	~~Appleton, WI~~	~~USW~~	96
April 2020	Eerbeek, Netherlands	CNV, FNV	(a) (b)
August 2020	Neenah Germany	IG BCE	(a)
January 2021	Whiting, WI	USW	~~202~~205
June 2021	Neenah, WI	USW	~~255~~228
July 2021	Munising, MI	USW	~~189~~182
November 2021	Lowville, NY	USW	9996
May 2022	Appleton, WI	USW	84

(a) Under German and Dutch laws, union membership is voluntary and does not need to be disclosed to the Company. As a result, the number of employees covered by the collective bargaining agreement with the IG BCE, and the CNV and FNV cannot be determined.

(b) The Company is currently in negotiations with the ~~USW.~~CNV and the FNV. Until a new contract is signed, the terms of the previous contract still apply.

The Company’s United Kingdom salaried and hourly employees are eligible to participate in Unite the Union ("UNITE") on an individual basis, but not under a collective bargaining agreement.

~~Note 11. Leases~~

~~Effective January 1, 2019, the Company adopted ASU 2016-02,~~ ~~Leases (Topic 842)~~ using the modified retrospective transition option. The Company also elected the package of transition provisions available for expired or existing contracts, which allowed us to carry forward our historical assessments of (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. The most significant impact was recognition of right-of-use ("ROU") assets of $16.2 million and lease liabilities of $17.0 million on the Condensed Consolidated Balance Sheet as of January 1, 2019. The adoption of this standard did not have a significant effect related to existing leases and, as a result, no cumulative-effect adjustment was needed. The Company also completed the implementation of new processes to assist in the ongoing lease data collection and analysis, and updated its accounting policies and internal controls in connection with the adoption of the new standard.

The Company has operating leases for corporate offices, warehouses and certain equipment, with remaining lease terms of up to 11 years, some of which include options to extend the leases for up to five years. The Company determines if an arrangement is a lease at inception. Operating leases with terms greater than 12 months are included in "Lease Right-of-Use Assets", "Lease liabilities payable within one year" and "Noncurrent Lease Liabilities" on the Condensed Consolidated Balance Sheets. As of September 30, 2019, the Company did not have any material finance leases.

Operating lease ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future

payments. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

The Company’s lease agreements contain lease and non-lease components, which are accounted for as a single lease component. Additionally, for certain equipment leases, the Company applies a portfolio approach to effectively account for the operating lease ROU assets and liabilities.

~~The components of lease expense were as follows:~~

Three Months Ended
September 30, 2019 Nine Months Ended
September 30, 2019

Operating lease cost $ 0.8
$ 2.4
Short-term lease cost 0.3
1.2
Variable lease cost (a) 0.7
1.8


~~(a)~~	~~The variable lease costs consist mainly of a warehouse lease where the cost is determined based on the square footage used each month.~~

For the nine months ended September 30, 2019, the Company paid $2.3 million for amounts included in the measurement of operating lease liabilities. For the nine months ended September 30, 2019, new ROU assets of $1.2 million were obtained in exchange for operating lease liabilities.

~~As of September 30, 2019, the weighted average remaining lease term and weighted average discount rate for operating leases were 8.3 years and 4.9%, respectively.~~

~~Maturities of lease liabilities were as follows:~~

Year Ending December 31, Operating Leases
Remainder of 2019 $ 0.4
2020 2.5
2021 2.5
2022 2.3
2023 2.0
Thereafter 9.1
Total lease payments 18.8
Less: Imputed interest 3.8
Total lease liabilities $ 15.0

~~Note 12. Sale of Brattleboro Mill and Impairment Loss~~

In the second quarter of 2018, as a result of a broad scope review of various initiatives to improve margins and optimize the portfolio of products and manufacturing footprint in the Fine Paper and Packaging segment, the Company determined that the Brattleboro mill was not a strategic part of the Fine Paper and Packaging manufacturing footprint, given the nature of the office supply category. Historically, the Brattleboro mill had manufactured products primarily for the office supply category, and more recently had been adversely impacted by manufacturing inefficiencies due to changes in input costs, product category and grade complexity. Following the review, the Company initiated a process to sell the Brattleboro mill, its business operations and associated research and office facilities ("disposal group"). The disposal transaction did not constitute a strategic shift in the business that would have a major effect on operations of the Company.

Upon classifying the disposal group as assets held for sale, the Company tested the individual assets of the disposal group for impairment. The disposal group was measured at fair value (a Level 3 measurement, using unobservable estimates), less costs to sell. During the three months ended June 30, 2018, the Company recorded an estimated non-cash impairment loss of $32.0 million. The impairment loss of $25.1 million, $1.1 million and $5.8 million was reported within the Fine Paper and Packaging, Technical Products and Other business segments, respectively. During the three months ended September 30, 2018, the Company recorded an additional $2.0 million non-cash impairment loss, based on the sale negotiations with a potential buyer,

for a total impairment loss of $34.0 million for the nine months ended September 30, 2018. On December 31, 2018, the Company completed the sale of the Brattleboro mill to Long Falls Paperboard, LLC for a purchase price of $5.0 million. In conjunction with the sale, the Company adjusted its previous estimates of the impairment loss to $31.1 million, of which $24.4 million, $1.1 million and $5.6 million was reported within the Fine Paper and Packaging, Technical Products and Other business segments, respectively.

Note ~~13.~~9. Business Segment Information

Following the disposition of the Brattleboro mill which eliminated a significant portion of the products of the Other business segment, in January 2019 the Company realigned the remaining products manufactured in the Other business segment to be managed as part of the Technical Products business segment. As a result, the Company recast the comparable 2018 information and presented the $4.1 million and $12.3 million of net sales for the three and nine months ended September 30, 2018, respectively, of this remaining portion of the Other business segment within the Technical Products business segment. The 2018 operating income (loss) of the Other business segment was immaterial and was not recast. The Company also recast the total assets by segment and presented the $12.9 million of total assets as of December 31, 2018 of this remaining portion of the Other business segment within the Technical Products business segment.

The Company’s reportable operating segments consist of Technical Products and Fine Paper and ~~Packaging and, in the prior year period only, Other.~~Packaging.

The Technical Products segment is an aggregation of the Company’s ~~filtration~~performance materials and ~~performance materials~~filtration businesses which are similar in terms of economic characteristics, nature of products, processes, customer class and product distribution methods. The segment is an international producer of fiber-formed, coated and/or saturated specialized media that deliver high performance benefits to customers. Included in this segment are ~~transportation and other filtration media,~~ tape and abrasives backings products, digital image transfer, durable label and other specialty substrate products ("Performance Materials"), and filtration media for transportation, water and other end use applications ("Filtration"). During the three months ended March 31, 2020, the Company aggregated the backings and specialties revenues into Performance Materials and recast the prior year period disclosure based on the economic similarity of the products per ASC Topic 280, Segment Reporting, and changes in the internal management of these products. The following table presents sales by product category for the technical products business:



	Three Months Ended March 31,
	2020		2019
Performance Materials	58	%	58	%
Filtration	42	%	42	%
Total	100	%	100	%

The Fine Paper and Packaging segment is a leading supplier of premium printing and other high-end specialty papers ("Graphic Imaging"), and premium packaging ("Packaging"), primarily in North America. The following table presents sales by product category for the fine paper and packaging business:



	Three Months Ended March 31,
	2020		2019
Graphic Imaging	76	%	79	%
Packaging	24	%	21	%
Total	100	%	100	%

The former Other segment was composed of papers sold to converters for end uses such as archival products and stencil board. These product lines represented an operating segment which did not meet the quantitative threshold for a reportable segment, however, due to the dissimilar nature of these products, they were previously not managed as part of either the Fine Paper and Packaging or Technical Products segments.

Each segment employs different technologies and marketing strategies. Disclosure of segment information is on the same basis that management uses internally for evaluating segment performance and allocating resources. Transactions between segments are eliminated in consolidation. The costs of shared services, and other administrative functions managed on a common basis, are allocated to the segments based on usage, where possible, or other factors based on the nature of the activity. General corporate expenses that do not directly support the operations of the business segments are shown as Unallocated corporate costs.

The following tables summarize the net sales and operating income ~~and total assets~~ for each of the Company’s business ~~segments.~~segments:


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2019		2018		2019		2018		2020		2019
Net sales
Technical Products	$	131.7	$	142.3	$	418.1	$	449.7	$	142.2	$	140.0
Fine Paper and Packaging	100.1		112.5		306.8		339.9		91.4		99.7
Other	—		1.4		—		4.4
Consolidated	$	231.8	$	256.2	$	724.9	$	794.0	$	233.6	$	239.7


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2019 (a)			2018 (b)			2019 (c)			2018 (d)			2020 (a)			2019
Operating income (loss)
Technical Products	$	9.5		$	10.9		$	33.3		$	44.2		$	16.2		$	11.3
Fine Paper and Packaging	13.2			11.3			38.0			15.3			14.8			11.9
Other	—			(0.6		)	—			(6.8		)
Unallocated corporate costs	(3.7		)	(5.1		)	(15.1		)	(16.4		)	(7.4		)	(5.8		)
Consolidated	$	19.0		$	16.5		$	56.2		$	36.3		$	23.6		$	17.4

(a) Operating income for the three months ended ~~September 30, 2019~~March 31, 2020 included (1) ~~$2.3~~$1.1 million of costs ($0.6 million within Technical Products and $0.5 million within Fine Paper and Packaging) related to a one-time special payment to its mill operators related to the COVID-19 pandemic; (2) $1.4 million of restructuring and other non-routine costs ($0.2 million within Technical Products, $0.9 million within Fine Paper and Packaging, ~~related mostly to accelerated depreciation~~ and ~~spare parts inventory reserves related to an idled paper machine; and (2) $0.2~~$0.3 million ~~of pension settlement and restructuring costs~~ within Unallocated corporate ~~costs. Refer to Note 7, "Pension~~costs); and ~~Other Postretirement Benefits" for discussion on SERP settlement~~(3) $1.0 million of due diligence and transaction costs of a terminated acquisition attempt within Unallocated corporate costs.

~~(b)~~

Operating income for the three months ended September 30, 2018 included an impairment loss, acquisition-related adjustments, insurance-related settlement, and restructuring and other non-routine costs of $(2.6) million in Technical Products, $1.9 million in Fine Paper and Packaging, $0.6 million in Other, and $0.8 million in Unallocated corporate costs. Refer to Note 12, "Brattleboro Impairment Loss" for discussion of the $2.0 million impairment loss and Note 1, "Background and Basis of Presentation" for discussion of the $(3.1) million of acquisition-related adjustments related to the Coldenhove Acquisition.

~~(c)~~

Operating income for the nine months ended September 30, 2019 included (1) $5.3 million of non-routine costs within Fine Paper and Packaging, consisting of $4.4 million of accelerated depreciation and spare parts inventory reserves related to an idled paper machine, $0.7 million accrual for a 2012-15 indirect tax audit, and a $0.2 million adjustment primarily related to inventory reserve related to termination of a royalty arrangement; (2) $0.4 million expense within Technical Products, primarily related to a 2016 electricity grid charge; and (3) $0.3 million of pension settlement and restructuring costs within Unallocated corporate costs. Refer to Note 7, "Pension and Other Postretirement Benefits" for discussion on SERP settlement costs.

~~(d)~~

Operating income for the nine months ended September 30, 2018 included the Brattleboro mill impairment loss, pension settlement and other costs, acquisition-related adjustments, restructuring, integration, and other costs, and insurance-related settlement of $(0.8) million in Technical Products, $27.4 million in Fine Paper and Packaging, $6.6 million in Other and $1.6 million in Unallocated corporate costs. Refer to Note 12, "Brattleboro Impairment Loss" for discussion of the $34.0 million impairment loss and $1.2 million of restructuring costs, Note 1, "Background and Basis of Presentation" for discussion of the $(3.1) million acquisition-related adjustments and Note 7, "Pension and Other Postretirement Benefits" for discussion of the $1.8 million cost of withdrawal from the multi-employer pension plan and a settlement loss related to SERP.

The following tables represent a disaggregation of revenue from contracts with customers by location of the selling entities for the three months ended March 31, 2020 and 2019:



	Three Months Ended March 31,
	2020		2019
United States	70	%	71	%
Germany	23	%	22	%
Rest of Europe	7	%	7	%
Total	100	%	100	%

September 30, 2019 December 31, 2018
Total Assets (a)

Technical Products $ 568.3
$ 599.3
Fine Paper and Packaging 219.6
234.7
Corporate (b) 34.5
27.2
Consolidated $ 822.4
$ 861.2


~~(a)~~	~~Segment identifiable assets are those that are directly used in the segments operations.~~


~~(b)~~	~~Corporate assets are primarily deferred income taxes and lease ROU assets.~~

Note 10. Subsequent Event

On May 6, 2020, Bonnie C. Lind notified Neenah of her plans to retire on October 1, 2020. In addition, Ms. Lind will relinquish her role as Senior Vice President, Chief Financial Officer and Treasurer (“CFO”) as of May 13, 2020. Ms. Lind will remain with the Company through October 1 to ensure a smooth transition.

On May 7, 2020, the Company announced the appointment of Paul DeSantis as CFO, effective as of May 13, 2020. Mr. DeSantis, most recently served as Chief Financial Officer of OMNOVA Solutions, Inc., a global producer of emulsion polymers, specialty chemicals, and decorative and functional surfaces. Mr. DeSantis previously served as Chief Financial

Officer, Treasurer & Assistant Corporate Secretary of Bob Evans Farms, Inc. and as Chief Financial Officer of the A. Schulman Company.

In connection with his appointment, Mr. DeSantis will participate in the Company’s long-term equity compensation plan on an ongoing basis pursuant to the terms of the Company’s 2018 Omnibus Stock and Incentive Compensation Plan, all as determined by the Company’s Compensation Committee.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis presents the factors that had a material effect on our financial position as of ~~September 30, 2019~~March 31, 2020 and our results of operations for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019. You should read this discussion in conjunction with our consolidated financial statements and the notes to those consolidated financial statements included in our most recent Annual Report on Form 10-K. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. See "Forward-Looking Statements" for a discussion of the uncertainties, risks and assumptions associated with these statements.

Executive Summary

For the three months ended ~~September 30, 2019,~~March 31, 2020, consolidated net sales of ~~$231.8~~$233.6 million decreased ~~$24.4~~$6.1 million ~~(10%~~(3%) from the prior year period. ~~Both periods reflected typical seasonal slowing of sales in Technical Products.~~ The decline in revenues resulted from lower volumes ~~reflecting weaker global market conditions~~in the Fine Paper and Packaging segment, including impacts from the change from a major distributor, lower net selling prices in both segments ~~the divestiture of the Brattleboro mill in December 2018,~~ and unfavorable currency translation effects. These items were only partly offset by increased ~~selling prices~~volumes in ~~both segments.~~Technical Products. On a constant currency basis, ~~and excluding the sale of Brattleboro,~~net sales declined 62 percent compared with the prior year.

Consolidated operating income of ~~$19.0~~$23.6 million for the three months ended ~~September 30, 2019~~March 31, 2020 increased ~~$2.5~~$6.2 million from the prior year period. The increase was mainly due to ~~higher selling prices,~~ lower input costs ~~a more profitable~~in both segments, and higher sales volumes and improved manufacturing costs and efficiencies in Technical ~~Products mix, and lower SG&A expense,~~Products. These items were only partly offset by lower ~~sales and production volumes~~net selling prices in both ~~segments. In the third quarter of both years, we also experienced the usual~~segments, higher SG&A expense due to an increased reserve for uncollectible accounts and legal costs, ~~of downtime for maintenance work.~~and lower volume in Fine Paper and Packaging. Excluding ~~$2.5~~$3.5 million of adjustments for ~~2019 and $0.7 million of adjustments for 2018,~~2020, adjusted operating income in ~~2019~~2020 increased ~~$4.3~~$9.7 million ~~(25%~~(56%), to ~~$21.5~~$27.1 million from ~~$17.2~~$17.4 million. Adjusting items in ~~2019~~2020 included ~~$2.4 million~~an accrual for ~~accelerated depreciation~~a one-time special payment to our mill operators related to COVID-19, costs for the intended Vectorply acquisition, and restructuring and other ~~costs related to~~non-routine costs. There were no adjusting items for the ~~planned consolidation of the fine paper manufacturing footprint with an idling of a paper machine.~~same period in 2019. See the reconciliation table on ~~F-26~~F-19 for further detail of adjusting items.

Cash provided by operating activities of ~~$74.4~~$14.2 million for the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 was ~~$10.7~~$11.2 million higher than cash generated of ~~$63.7~~$3.0 million in the prior year period. The increase resulted primarily from lower working capital ~~improvements~~requirements and ~~lower pension plan contributions, partly offset by lower cash~~higher earnings. Cash used for investing activities of ~~$14.9~~$4.9 million was ~~$14.0 million lower than $28.9 million~~consistent with the prior year period.

Impact of COVID-19 on Our Business

As are virtually all other companies, we are dealing with the outbreak and pandemic of COVID-19. The COVID-19 pandemic and measures to prevent its spread, including imposition of quarantines and prolonged closures of manufacturing facilities and retail stores, may impact our business in a number of ways. These impacts are expected to include an adverse effect from significantly reduced global economic activity and resulting demand for our products and our customers’ products and, therefore, the products we manufacture. They could also adversely affect our ability to operate our business, including potential disruptions to our supply chain and workforce. The COVID-19 impact on capital markets could also impact the timing of our plans to refinance our long-term debt and the cost of borrowing.

The impact of the COVID-19 pandemic on our business operations and results of operations began to be noticeable to a limited degree in March, with decreased customer demand and interruptions of collections of some accounts receivable. We expect the ongoing COVID-19 pandemic to have a material adverse impact on our business operations and our financial results, including our net sales, earnings and cash flows in the ~~prior period. The decrease was primarily~~upcoming quarters. While it is currently too early to estimate, we expect the ultimate significance of the impact of these disruptions, including the extent of their adverse impact on our financial results, will be determined by the length of time that such disruptions continue, which will, in turn, depend on the duration of the COVID-19 pandemic and the impact of governmental regulations or guidelines in response to the pandemic. We have been designated as an "essential business" by the U.S. federal and state governments, and thus far have had no manufacturing operations disruptions at any U.S. or European facility due to ~~lower~~governmental orders or labor availability. At this time, we do not foresee any mandated closures of any of our global manufacturing facilities.

Both of the Company’s business segments have continued to operate during the pandemic as vital suppliers of goods and services and the Company has taken certain proactive and precautionary steps to ensure the safety of its employees, including frequent cleaning and disinfection of workspaces, property and equipment, instituting social distancing measures and mandating remote working environments for certain employees.

We have been taking, and will continue to take actions to ensure our employees' safety, manage our cash flow and preserve our liquidity. Such measures could include reducing discretionary spending, minimizing capital expenditures ~~in 2019.~~and contributions to pension plans, postponing acquisition and other investment initiatives, suspending purchases under our 2020 Stock Purchase Plan, consolidating our manufacturing footprint and reducing payroll costs through a wage increase deferral, hiring freeze, furloughs or other measures.

As of March 31, 2020, there was no indication that the carrying values of our goodwill, indefinite-lived intangibles or long-lived assets were impaired as a result of impacts from COVID-19.

Refer to Part II, Item 1A,"Risk Factors," for the risk factor related to COVID-19.

Results of Operations and Related Information

In this section, we discuss and analyze our net sales, earnings before interest and taxes (which we refer to as "operating income") and other information relevant to an understanding of our results of operations for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019.

Following the disposition of the Brattleboro mill in December 2018, which reduced sales in the Fine Paper and Packaging business segment and eliminated a significant portion of the products of the Other business segment, in January 2019 we realigned the remaining products manufactured in the Other business segment to be managed as part of the Technical Products business segment. As a result, we recast the comparable 2018 information and presented the $4.1 million and $12.3 million of net sales for the three and nine months ended September 30, 2018, respectively, of this remaining portion of the Other business segment within the Technical Products business segment. The 2018 operating income (loss) of the Other business segment was immaterial and was not recast.

Analysis of Net Sales — Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~

The following table presents net sales by segment, expressed as a percentage of total net sales:


	Three Months Ended September 30,								Nine Months Ended September 30,								Three Months Ended March 31,
	2019				2018				2019				2018				2020				2019
Net sales
Technical Products	$	131.7	57	%	$	142.3	56	%	$	418.1	58	%	$	449.7	57	%	$	142.2	61	%	$	140.0	58	%
Fine Paper and Packaging	100.1		43	%	112.5		44	%	306.8		42	%	339.9		43	%	91.4		39	%	99.7		42	%
Other	—		—	%	1.4		—	%	—		—	%	4.4		—	%
Consolidated	$	231.8	100	%	$	256.2	100	%	$	724.9	100	%	$	794.0	100	%	$	233.6	100	%	$	239.7	100	%

Commentary:

The following table presents our net sales by segment for the three months ended ~~September 30, 2019~~March 31, 2020 and ~~2018:~~2019:


	Three Months Ended September 30,				Change in Net Sales Compared to Prior Period													Three Months Ended March 31,				Change in Net Sales Compared to Prior Period
								Change Due To										Three Months Ended March 31,							Change Due To
	Three Months Ended September 30,	2019		2018		Total Change				Volume			Net Price (a)			Currency			2020		2019		Total Change				Volume			Net Price (a)			Currency
Technical Products	$	131.7	$	142.3	$	(10.6	)		$	(11.8	)	$	4.2		$	(3.0	)	$	142.2	$	140.0	$	2.2			$	10.1		$	(5.8	)	$	(2.1	)
Fine Paper and Packaging	100.1		112.5		(12.4		)		(12.1		)	(0.3		)	—			91.4		99.7		(8.3		)		(5.8		)	(2.5		)	—
Other	—		1.4		(1.4		)		(1.4		)	—			—
Consolidated	$	231.8	$	256.2	$	(24.4	)		$	(25.3	)	$	3.9		$	(3.0	)	$	233.6	$	239.7	$	(6.1	)		$	4.3		$	(8.3	)	$	(2.1	)

(a) Includes changes in selling price and product mix.

Consolidated net sales of ~~$231.8~~$233.6 million for the three months ended ~~September 30, 2019~~March 31, 2020 decreased ~~$24.4~~$6.1 million ~~(10%~~(3%) from the prior year period. The decline in revenues resulted from lower volumes ~~reflecting weaker global market conditions~~in the Fine Paper and Packaging segment, including impacts from the change from a major distributor, lower net selling prices in both segments ~~the divestiture of the Brattleboro mill in December 2018,~~ and unfavorable currency translation effects. These items were only partly offset by increased ~~selling prices~~volumes in ~~both segments.~~Technical Products. On a constant currency basis, ~~and excluding the sale of Brattleboro,~~net sales declined 62 percent compared with the prior year.

Net sales in our technical products business ~~decreased $10.6~~increased $2.2 million ~~(7%~~(2%) from the prior year period. The revenue ~~decline~~increase resulted primarily from higher volumes in the performance materials and filtration businesses, partly offset by lower ~~backings volumes~~selling prices, a lower-priced mix and ~~$3.0 million of~~ unfavorable foreign currency ~~effects, partly offset by higher selling prices and a higher value sales mix.~~

effects.

Net sales in our fine paper and packaging business decreased ~~$12.4~~$8.3 million ~~(11%~~(8%) from the prior year period. The decline was primarily due to lower commercial print volume, ~~(including impacts due to~~reflecting unusually weak market conditions and the impact of a ~~significant~~ change in the relationship with a major ~~distributor), the sale of Brattleboro~~distributor, along with lower selling prices and a less favorable sales mix. ~~This was~~These items were only partly offset by ~~higher selling prices and~~sales growth in both premium packaging and the consumer ~~segment.~~

~~The following table presents our net sales by segment for the nine months ended September 30, 2019 and 2018:~~

Nine Months Ended September 30, Change in Net Sales Compared to Prior Period
Change Due To
2019 2018 Total Change Volume Net Price (a) Currency
Technical Products $ 418.1
$ 449.7
$ (31.6 ) $ (36.6 ) $ 18.1
$ (13.1 )
Fine Paper and Packaging 306.8
339.9
(33.1 ) (35.2 ) 2.1
—
Other —
4.4
(4.4 ) (4.4 ) —
—
Consolidated $ 724.9
$ 794.0
$ (69.1 ) $ (76.2 ) $ 20.2
$ (13.1 )

~~(a)Includes changes in selling price and product mix.~~channel.

Consolidated net sales of $724.9 million for the nine months ended September 30, 2019 decreased $69.1 million (9%) from the prior year period as a result of lower volumes, including the divestiture of the Brattleboro mill, and unfavorable currency effects, partially offset by increased selling prices and, in Technical Products, a higher-value sales mix.

Net sales in our technical products business decreased $31.6 million (7%) from the prior period. The revenue decline resulted from volume declines primarily in backings and negative foreign currency impacts partially offset by higher net selling prices and a higher value mix.

Net sales in our fine paper and packaging business decreased $33.1 million (10%) from the prior year period. Slightly more than half of the decline was due to the sale of Brattleboro, with the remainder mostly due to lower volumes. These items were partly offset by higher selling prices.

Analysis of Operating Income — Three and Nine Months Ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~

The following table sets forth line items from our Condensed Consolidated Statements of Operations as a percentage of net sales for the periods indicated and is intended to provide a perspective of trends in our historical results:


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2019		2018		2019		2018		2020		2019
Net sales	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Cost of products sold	80.7		83.9		80.8		81.3		76.9		81.8
Gross profit	19.3		16.1		19.2		18.7		23.1		18.2
Selling, general and administrative expenses	10.1		9.2		10.4		9.5		11.4		10.6
Impairment loss	—		0.8		—		4.3
COVID-19 costs									0.5		—
Restructuring and other non-routine costs	1.0		0.9		0.8		0.3		0.6		—
Pension settlement and other benefit costs	—		—		—		0.2
Acquisition-related adjustments	—		(1.2	)	—		(0.4	)
Insurance settlement	—		(0.2	)	—		(0.1	)
Acquisition and due diligence costs									0.4		—
Other expense - net	—		0.2		0.2		0.3		0.1		0.3
Operating income	8.2		6.4		7.8		4.6		10.1		7.3
Interest expense - net	1.2		1.2		1.3		1.3		1.2		1.4
Income from continuing operations before income taxes	7.0		5.2		6.5		3.3		8.9		5.9
Provision for income taxes	0.8		0.2		1.0		0.3		1.9		1.0
Income from continuing operations	6.2	%	5.0	%	5.5	%	3.1	%	7.0	%	4.9	%

Commentary:

The following table presents our operating income by segment for the three months ended ~~September 30, 2019~~March 31, 2020 and ~~2018:~~2019:


								Change in Operating Income Compared to Prior Period																									Change in Operating Income Compared to Prior Period
	Three Months Ended September 30,										Change Due To															Three Months Ended March 31,										Change Due To
							Total							Net			Input									Three Months Ended March 31,						Total							Net				Input
	Three Months Ended September 30,	2019			2018				Change			Volume				Price (a)			Costs (b)		Currency			Other (c)			2020			2019				Change			Volume				Price (a)				Costs (b)		Currency			Other (c)
Technical Products	$	9.5		$	10.9			$	(1.4	)	$	(3.5	)		$	3.3		$	2.7	$	(0.2	)	$	(3.7	)	$	16.2		$	11.3			$	4.9		$	3.1			$	(5.4	)		$	7.4	$	(0.3	)	$	0.1
Fine Paper and Packaging	13.2			11.3				1.9			(1.7		)		1.6			2.0		—			—			14.8			11.9				2.9			(1.5		)		(1.2		)		6.1		—			(0.5		)
Other	—			(0.6		)		0.6			—				—			—		—			0.6
Unallocated corporate costs	(3.7		)	(5.1		)		1.4			—				—			—		—			1.4			(7.4		)	(5.8		)		(1.6		)	—				—				—		—			(1.6		)
Consolidated	$	19.0		$	16.5			$	2.5		$	(5.2	)		$	4.9		$	4.7	$	(0.2	)	$	(1.7	)	$	23.6		$	17.4			$	6.2		$	1.6			$	(6.6	)		$	13.5	$	(0.3	)	$	(2.0	)

(a) Includes changes in selling price and product mix.

(b) Includes price changes for raw materials and energy.

(c) Includes other manufacturing costs, over (under) absorption of fixed costs, distribution and SG&A expenses. In addition, in ~~2018~~2020 it included ~~$4.2~~$1.1 million of unfavorable adjustments ~~primarily~~ related to ~~the divestiture~~COVID-19 (as described below), $1.4 million of ~~the Brattleboro mill~~restructuring and ~~restructuring~~other non-routine costs and ~~$3.5~~$1.0 million of ~~favorable adjustments related to the Coldenhove Acquisition~~acquisition and an insurance-related settlement. In 2019, it includes non-routine costs of $2.5 million primarily related to the accelerated depreciation and other costs related to the consolidation of the fine paper manufacturing footprint with an idling of a paper machine.due diligence costs. See the breakdown by segment and the reconciliation table on ~~F-26~~F-19 for further detail.

Consolidated operating income increased ~~$2.5~~$6.2 million from the prior year period to ~~$19.0~~$23.6 million for the three months ended ~~September 30, 2019.~~March 31, 2020. The increase was mainly due to ~~higher selling prices,~~ lower input costs ~~a more profitable~~in both segments, and higher sales volumes and improved manufacturing costs and efficiencies in Technical ~~Products mix, and lower SG&A expense,~~Products. These items were only partly offset by lower ~~sales and production volumes~~net selling prices in both ~~segments. In the third quarter of both years, we also experienced the usual~~segments, higher SG&A expense due to an increased reserve for uncollectible accounts and legal costs, ~~of downtime for maintenance work.~~and lower volume in Fine Paper and Packaging. Excluding ~~$2.5~~$3.5 million of adjustments for ~~2019 and $0.7 million of adjustments for 2018,~~2020, adjusted operating income in ~~2019~~2020 increased ~~$4.3~~$9.7 million ~~(25%~~(56%), to ~~$21.5~~$27.1 million from ~~$17.2~~$17.4 million. Adjusting items in ~~2019~~2020 included ~~$2.4 million~~an accrual for ~~accelerated depreciation~~a one-time special payment to our mill operators related to COVID-19, costs for the intended Vectorply acquisition, and restructuring and other ~~costs related to~~non-routine costs. There were no adjusting items for the ~~planned consolidation of the fine paper manufacturing footprint with an idling of a paper machine.~~same period in 2019. See the reconciliation table on ~~F-26~~F-19 for further detail.

•

Operating income for our technical products business ~~decreased $1.4~~increased $4.9 million from the prior year period. Excluding ~~favorable~~unfavorable adjusting items of ~~$2.6~~$0.8 million in ~~2018,~~2020 related to COVID-19 and restructuring costs, adjusted operating income increased $~~1.2~~5.7 million ~~(14%~~(50%) from ~~$8.3~~$11.3 million to ~~$9.5~~$17.0 million. ~~Adjusted operating~~Operating income increased as a result of lower input costs, increased selling prices, and a higher value mix, which more than offset lower sales, lower production volumes and associated manufacturing fixed cost inefficiencies, and higher SG&A expense.

lower input costs, higher sales volumes and improved manufacturing costs, which more than offset lower net selling prices and $1.3 million of higher SG&A expense due to increased provisions for uncollectible accounts and legal costs.

Operating income for our fine paper and packaging business increased ~~$1.9~~$2.9 million from the prior year period. Excluding ~~$2.3~~$1.4 million of non-routine costs in ~~2019 primarily~~2020 related to ~~idling a paper machine~~COVID-19, restructuring and ~~$1.9 million of~~indirect tax costs, ~~in 2018 primarily related to the Brattleboro mill impairment loss,~~ adjusted operating income of ~~$15.5~~$16.2 million in ~~2019~~2020 increased ~~$2.3~~$4.3 million ~~(17%~~(36%) from ~~$13.2~~$11.9 million in the prior year as a result of lower input costs and ~~higher selling prices~~other cost improvements, partly offset by lower sales volumes and ~~a less favorable sales mix.~~

An operating loss of $0.6 million for our Other segment in 2018 was due to impairment and restructuring costs assigned to this segment. The Other segment was discontinued following the sale of the Brattleboro mill in December 2018.

lower net selling prices.

•

Unallocated corporate expenses for the three months ended ~~September 30, 2019~~March 31, 2020 of ~~$3.7~~$7.4 million ~~decreased $1.4~~increased $1.6 million from the prior year. Excluding ~~2019~~2020 adjustments of ~~$0.2~~$1.3 million ~~for pension settlement~~primarily related to acquisition and ~~restructuring costs, and 2018 adjustments of $0.8 million for restructuring~~due diligence costs, adjusted unallocated corporate expenses ~~decreased $0.8 million, primarily due to timing of certain items.~~increased $0.3 million.

~~The following table presents our operating income by segment for the nine months ended September 30, 2019 and 2018:~~

Change in Operating Income Compared to Prior Period
Nine Months Ended September 30, Change Due To
Total Net Input
2019 2018 Change Volume Price (a) Costs (b) Currency Other (c)
Technical Products $ 33.3
$ 44.2
$ (10.9 ) $ (10.2 ) $ 12.5
$ (3.0 ) $ (1.4 ) $ (8.8 )
Fine Paper and Packaging 38.0
15.3
22.7
(2.8 ) 6.5
(3.9 ) —
22.9
Other —
(6.8 ) 6.8
—
—
—
—
6.8
Unallocated corporate costs (15.1 ) (16.4 ) 1.3
—
—
—
—
1.3
Consolidated $ 56.2
$ 36.3
$ 19.9
$ (13.0 ) $ 19.0
$ (6.9 ) $ (1.4 ) $ 22.2

~~(a)Includes changes in selling price and product mix.~~

~~(b)Includes price changes for raw materials and energy.~~

~~(c)~~Includes other manufacturing costs, over (under) absorption of fixed costs, distribution and SG&A expenses. In addition, in 2018 it included $38.3 million of unfavorable adjustments primarily related to the divestiture of the Brattleboro mill and restructuring costs, and $3.5 million of favorable adjustments related to the Coldenhove Acquisition and an insurance-related settlement. In 2019, it included $6.0 million of non-routine costs primarily related to the accelerated depreciation and other costs related to the planned consolidation of the fine paper manufacturing footprint with an idling of a paper machine. See the breakdown by segment and the reconciliation table on F-26 for further detail.

Consolidated operating income of $56.2 million for the nine months ended September 30, 2019 increased $19.9 million from the prior year period. The increase was mainly due to the absence of a $34.0 million impairment loss related to the divestiture of the Brattleboro mill recognized in 2018. Excluding $6.0 million of previously identified adjustments in 2019 and $34.8 million of adjustments in 2018, adjusted operating income decreased $8.9 million (13%), primarily due to lower sales, higher input costs, and lower production volumes and associated manufacturing cost inefficiencies, that were only partially offset by higher net selling prices. See the reconciliation table on F-26 for further detail.

•

Operating income for our technical products business decreased $10.9 million from the prior year period. The decrease in income resulted from lower sales volumes, higher input costs, SG&A and unfavorable foreign currency impacts, partially offset by increased selling prices, a higher-value mix and lower distribution costs. Excluding 2019 adjustments of $0.4 million and 2018 favorable adjustments of ~~$0.8~~ ~~million, adjusted operating income decreased $9.7 million (22%).~~

Operating income for our fine paper and packaging business increased $22.7 million from the prior year period. The increase was mainly due to adjustments in 2018 of $27.4 million for impairment related to the divestiture of the Brattleboro mill and other one-time items referenced above, partly offset by $5.3 million of non-routine costs in 2019. In addition, higher input costs, lower sales volumes and associated manufacturing cost inefficiencies, were only partly offset by higher selling prices, and lower SG&A and distribution costs. Excluding cost adjustments of $5.3 million in 2019 and $27.4 million in 2018, adjusted operating income increased $0.6 million (1%).

Operating loss for our Other segment was $6.8 million in 2018 due to costs of $6.6 million for impairment, pension settlement costs, restructuring, and insurance-related settlement assigned to the Other segment.

Unallocated corporate expenses for the nine months ended September 30, 2019 of $15.1 million were $1.3 million lower than the prior year period due to pension settlement and restructuring costs of $1.6 million in 2018. These costs compared to $0.3 million of pension settlement and restructuring costs in 2019. Excluding these items, adjusted unallocated corporate expenses were consistent with the prior year period.

The following table sets forth our operating income by segment, adjusted for the effects of certain costs, for the periods indicated:

Three Months Ended September 30, Nine Months Ended September 30,
2019 2018 2019 2018
Technical Products

GAAP Operating Income $ 9.5
$ 10.9
$ 33.3
$ 44.2
Impairment loss —
—
—
1.1
Restructuring and other non-routine costs —
0.5
0.4
0.8
Pension settlement and other benefit costs —
—
—
0.4
Acquisition-related adjustments —
(3.1 ) —
(3.1 )
Adjusted Operating Income 9.5
8.3
33.7
43.4

Fine Paper and Packaging

GAAP Operating Income 13.2
11.3
38.0
15.3
Impairment loss —
1.6
—
26.7
Idled paper machine costs 2.4
—
4.4
—
2012-15 indirect tax audit costs 0.1
—
0.7
—
Restructuring and other non-routine costs (0.2 ) 0.6
0.2
0.6
Pension settlement and other benefit costs —
—
—
0.4
Insurance settlement —
(0.3 ) —
(0.3 )
Adjusted Operating Income 15.5
13.2
43.3
42.7

Other/Unallocated Corporate

GAAP Operating Loss (3.7 ) (5.7 ) (15.1 ) (23.2 )
Impairment loss —
0.4
—
6.2
Restructuring and other non-routine costs 0.1
1.1
0.2
1.1
Pension settlement and other benefit costs 0.1
—
0.1
1.0
Insurance settlement —
(0.1 ) —
(0.1 )
Adjusted Operating Loss (3.5 ) (4.3 ) (14.8 ) (15.0 )

Consolidated

GAAP Operating Income 19.0
16.5
56.2
36.3
Impairment loss —
2.0
—
34.0
Idled paper machine costs 2.4
—
4.4
—
2012-15 indirect tax audit costs 0.1
—
0.7
—
Restructuring and other non-routine costs (0.1 ) 2.2
0.8
2.5
Pension settlement and other benefit costs 0.1
—
0.1
1.8
Acquisition-related adjustments —
(3.1 ) —
(3.1 )
Insurance settlement —
(0.4 ) —
(0.4 )
Adjusted Operating Income $ 21.5
$ 17.2
$ 62.2
$ 71.1



	Three Months Ended March 31,
	2020			2019
Technical Products
GAAP Operating Income	$	16.2		$	11.3
COVID-19 costs	0.6			—
Restructuring and other non-routine costs	0.2			—
Adjusted Operating Income	17.0			11.3

Fine Paper and Packaging
GAAP Operating Income	14.8			11.9
COVID-19 costs	0.5			—
Restructuring and other non-routine costs	0.5			—
2016-19 indirect tax costs	0.4			—
Adjusted Operating Income	16.2			11.9

Unallocated Corporate Costs
GAAP Operating Loss	(7.4		)	(5.8		)
Restructuring and other non-routine costs	0.3			—
Acquisition and due diligence costs	1.0			—
Adjusted Operating Loss	(6.1		)	(5.8		)

Consolidated
GAAP Operating Income	23.6			17.4
COVID-19 costs	1.1			—
Restructuring and other non-routine costs	1.0			—
Acquisition and due diligence costs	1.0			—
2016-19 indirect tax costs	0.4			—
Adjusted Operating Income	$	27.1		$	17.4

In accordance with generally accepted accounting principles in the United States ("GAAP"), consolidated operating income includes the pre-tax effects of ~~the impairment loss, pension settlement~~COVID-19 costs, restructuring and other prior year costs, ~~integration/restructuring costs, acquisition-related adjustments,~~ and ~~insurance-related settlement proceeds.~~acquisition and due diligence costs. We believe that by adjusting reported operating income to exclude the effects of such items, the resulting adjusted operating income is on a basis that reflects the results of our ongoing operations. In assessing COVID-19 impacts, we excluded only costs which were unusual, incremental and directly attributable to mitigating the effects COVID-19 on our operations. We believe that providing adjusted operating results will help investors gain an additional perspective of underlying business trends and results. Adjusted operating income is not a recognized term under GAAP and should not be considered in isolation or as a substitute for operating income derived in accordance with GAAP. Other companies may use different methodologies for calculating their non-GAAP financial measures and, accordingly, our non-GAAP financial measures may not be comparable to their measures.

Additional Statement of Operations Commentary:

•

~~SG&A expense of $23.1 million for the three months ended September 30, 2019 was $0.5 million lower than SG&A expense of $23.6 million in the prior year period due in part to timing of items.~~For the three months ended September 30, 2019, SG&A expense as a percent of sales increased to 10.1% from 9.2% in the prior year period due to lower sales and timing of SG&A costs. SG&A expense of $75.3 million for the nine months ended September 30, 2019 was $0.3 million lower than SG&A expense of $75.6SG&A expense of $26.6 million for the three months ended March 31, 2020 was $1.3 million higher than SG&A expense of $25.3 million in the prior year period. Costs in 2020 included a higher provision for uncollectible accounts receivable and legal expenses. For the three months ended March 31, 2020, SG&A expense as a percent of sales increased to 11.4% from 10.6% in the prior year period. ~~For the nine months ended September 30, 2019, SG&A expense as a percent of sales increased to 10.4% from 9.5% in the prior year period.~~

For the three months ended ~~September 30, 2019,~~March 31, 2020, net interest expense of ~~$2.8~~$2.9 million decreased compared with $3.2 million in the prior year period, due to lower average debt levels in 2020.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") was signed into law in the U.S. The CARES Act includes various income and payroll tax provisions that we ~~made net repayments~~are in the process of ~~$31.7 million under~~analyzing to determine the financial impact on our ~~Global Revolving Credit Facilities resulting~~financial statements. The most significant impact is expected to result from the ability to delay payment of certain 2020 payroll taxes until 2021 and 2022. Similar COVID-19 relief legislation has also been enacted in ~~only Euro-denominated borrowings (with lower interest rates compared to USD-denominated borrowings) outstanding under these facilities as~~Germany, the Netherlands and the U.K. aimed at providing subsidies for employee retention and deferral of ~~September 30, 2019.~~tax payments.

•

Historically, our effective tax rate has differed from the U.S. statutory tax rate primarily due to the proportion of pre-tax income in jurisdictions with marginal tax rates that differ from the U.S. statutory tax rate, research and development and other tax credits and excess tax benefits from stock compensation. For the three months ended September 30, 2019 and 2018, we recorded an income tax expense of $1.8 million and $0.4 million, respectively. The effective income tax rate was 11% for the three months ended September 30, 2019 and 3% for the three months ended September 30, 2018. For the nine months ended September 30, 2019 and 2018, we recorded an income tax provision of ~~$7.4 million~~ ~~and~~ ~~$2.2 million, respectively. The effective income tax rate was~~ ~~16%~~ ~~for the nine months ended September 30, 2019 and~~ 8% for the nine months ended September 30, 2018. The effective income tax rates for the three and nine months ended September 30, 2019 were reduced by a $1.2 million reversal of U.S. federal and state reserves for uncertain tax positions as a result of expiration of statutes of limitation for audit. The effective income tax rate for the three and nine months ended September 30, 2018 were significantly impacted by the effects of the impairment loss of the Brattleboro mill and associated research and office facilities, as similar sized reconciling items had a larger percentage impact on lower pre-tax book income. In addition, the effective income tax rates for these 2018 periods were favorably impacted by incremental pension plan contributions applied to the 2017 tax year and excess tax benefits on stock compensation. See Note 5, "Income Taxes" of Notes to Condensed Consolidated Financial Statements for a reconciliation of the effective income tax rate to the U.S. federal statutory income tax rate for each period.

Liquidity and Capital Resources


	Nine Months Ended September 30,						Three Months Ended March 31,
	2019			2018			2020			2019
Net cash flow provided by (used in):
Operating activities	$	74.4		$	63.7		$	14.2		$	3.0

Investing activities:
Capital expenditures	(13.9		)	(28.1		)	(4.8		)	(4.3		)
Other investing activities	(1.0		)	(0.8		)	(0.1		)	(0.4		)
Total	(14.9		)	(28.9		)	(4.9		)	(4.7		)

Financing activities:
Net repayments of long-term debt	(33.3		)	(4.8		)
Net borrowings of long-term debt							71.7			7.4
Cash dividends paid	(22.9		)	(20.8		)	(8.0		)	(7.6		)
Shares purchased	(5.1		)	(6.3		)	(3.8		)	(0.3		)
Other financing activities	(0.4		)	0.3			(0.5		)	(0.2		)
Total	(61.7		)	(31.6		)	59.4			(0.7		)
Effect of exchange rate changes on cash and cash equivalents	(0.3		)	(0.3		)	(0.2		)	0.1
Net increase (decrease) in cash and cash equivalents	$	(2.5	)	$	2.9		$	68.5		$	(2.3	)

Operating Cash Flow Commentary

Cash provided by operating activities of ~~$74.4~~$14.2 million for the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 was ~~$10.7~~$11.2 million higher than cash provided by operating activities of ~~$63.7~~$3.0 million in the prior year period. The increase resulted primarily from lower working capital ~~improvements~~requirements and ~~lower pension plan contributions, partly offset by lower cash~~higher earnings.

Investing Commentary:

For the ~~nine~~three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ cash used by investing activities was ~~$14.9~~$4.9 million and ~~$28.9~~$4.7 million, respectively. ~~The decrease was primarily due to reduced~~Increased capital spending in ~~2019.~~2020 of $0.5 million was due to timing of certain projects. For the full year ~~2019,~~2020, we expect aggregate annual capital expenditures to be ~~slightly below~~approximately half of our ~~targeted~~normal range of 3%2% to 5%4% of net sales.

Financing Commentary:

Our liquidity requirements are provided by cash generated from operations and short and long-term borrowings.

For the ~~nine~~three months ended ~~September 30,~~March 31, 2020, cash and cash equivalents increased $68.5 million to $77.5 million at March 31, 2020 from $9.0 million at December 31, 2019. Total debt increased $71.1 million to $271.9 million at March 31, 2020 from $200.8 million at December 31, 2019. We increased cash on hand through $65.0 million of borrowings against our Global Revolving Credit Facilities near quarter-end as a precautionary measure to protect against any potential disruption in the banking system that would adversely impact our short-term ability to access cash as a result of COVID-19 effects and to enhance our liquidity.

As of March 31, 2020, our cash balance of $77.5 million consisted of $71.2 million in the U.S. and $6.3 million held at entities outside of the U.S. As of March 31, 2020, there were no restrictions regarding the repatriation of our non-U.S. cash.

For the three months ended March 31, 2020 and 2019, ~~and 2018,~~ cash ~~used in~~provided by (used in) financing activities was ~~$61.7~~$59.4 million and ~~$31.6~~$(0.7) million, respectively. Cash related to financing activities consists primarily of net ~~repayments/borrowings~~borrowings/repayments of long-term debt, dividends paid and share repurchases. During the ~~nine~~three months ended ~~September 30, 2019,~~March 31, 2020, we made net ~~repayments~~borrowings of ~~$33.3~~$71.7 million on our debt compared to ~~$4.8~~$7.4 million in the prior year ~~period.~~

period, as noted above.

Availability under our revolving credit facility varies over time depending on the value of our inventory, receivables and various capital assets. As of ~~September 30, 2019,~~March 31, 2020, we had ~~$25.1~~$93.0 million outstanding under our Global Revolving Credit Facilities and ~~$176.3~~$117.2 million of available credit (based on exchange rates at ~~September 30, 2019)~~March 31, 2020).

Our $175.0 million Senior Notes are due on May 15, 2021 and will become a current liability soon. We continue to actively monitor the debt markets for refinancing opportunities and believe that we will be able to refinance these notes later this year on more favorable terms than are currently available in the market. As of March 31, 2020, we were in compliance with all terms of the indenture for the 2021 Senior Notes.

We have required debt principal payments through ~~September 30, 2020~~March 31, 2021 of ~~$2.6~~$3.3 million for principal payments on the two German loan agreements.

For the nine months ended September 30, 2019, cash and cash equivalents decreased $2.5 million to $7.4 million at September 30, 2019 from $9.9 million at December 31, 2018. Total debt decreased $34.5 million to $204.6 million at September 30, 2019 from $239.1 million at December 31, 2018.

As of September 30, 2019, our cash balance of $7.4 million consists of $1.4 million in the U.S. and $6.0 million held at entities outside of the U.S. As of September 30, 2019, there were no restrictions regarding the repatriation of our non-U.S. cash.

Transactions With Shareholders

In November ~~2018,~~2019, our Board of Directors approved a ~~10%~~4% increase in the quarterly dividend on our Common Stock, to ~~$0.45~~$0.47 per share, effective with the March ~~2019~~2020 dividend payment. For the ~~nine~~three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ we paid cash dividends of ~~$22.9~~$8.0 million ~~($1.35~~(0.47 per common share) and ~~$20.8~~$7.6 million ~~($1.23~~(0.45 per common share), respectively.

~~Purchases~~Among the measures taken to manage our cash flow and preserve our liquidity, purchases under the ~~2019~~2020 Stock Purchase Plan ~~will be made from time to time~~were curtailed in ~~the open market or in privately negotiated transactions in accordance with the requirements of applicable law.~~March 2020 and remain suspended. The ~~timing and amount of any purchases will depend on share price, market conditions and other factors. The 2019~~2020 Stock Purchase Plan does not require us to purchase any specific number of shares and may be suspended or discontinued at any time. For the ~~nine~~three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ we repurchased ~~79,676~~59,577 shares of Common Stock at a cost of ~~$4.9~~$3.6 million and ~~79,179~~4,285 shares of Common Stock at a cost of ~~$6.3~~$0.3 million, respectively. For further details on our Stock Purchase Plans refer to Note 9,7, "Stockholders' Equity" of Notes to Condensed Consolidated Financial Statements.

Other Items:

As of March 31, 2020, we had $42.3 million of state net operating losses ("NOLs"). Our state NOLs may be used to offset $2.6 million in state income taxes. If not used, substantially all of the state NOLs will expire in various amounts between 2021 and 2039. In addition, as of March 31, 2020, we had $21.0 million of U.S. federal and $7.6 million of U.S. state research and development tax credits ("R&D Credits") which, if not used, will expire between 2032 and 2040 for the U.S. federal R&D Credits and between 2020 and 2035 for the state R&D Credits.

•

As of September 30, 2019, we had $43.3 million of state net operating losses ("NOLs"). Our state NOLs may be used to offset $2.7 million in state income taxes. If not used, substantially all of the state NOLs will expire in various amounts between 2019 and 2038. In addition, as of September 30, 2019, we had $19.6 million of U.S. federal and $7.4 million of U.S. state research and development tax credits ("R&D Credits") which, if not used, will expire between 2031 and 2039 for the U.S. federal R&D Credits and between 2020 and 2034 for the state R&D Credits.

Management believes that our ability to generate cash from operations and our borrowing capacity are adequate to fund working capital, capital spending and other cash needs for the next 12 months. Our ability to generate adequate cash from operations beyond ~~2019~~2020 will depend on, among other things, our ability to successfully implement our business strategies, control costs in line with market conditions, and manage the impact of changes in input prices and ~~currencies.~~the impact and duration of COVID-19. We can give no assurance we will be able to successfully implement these items.

Critical Accounting Policies and Use of Estimates

The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. We believe that the estimates, assumptions and judgments described in "Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Use of Estimates" of our most recent Annual Report on Form 10-K have the greatest potential impact on our financial statements, so we consider these to be our critical accounting policies. The critical accounting policies used in the preparation of the consolidated financial statements are those that are important both to the presentation of financial condition and results of operations and require significant judgments with regard to estimates used. These critical judgments relate to the timing of recognizing sales revenue, the recoverability of deferred income tax assets, pension benefits and future cash flows associated with impairment testing of long-lived assets. Actual results could differ from these estimates and changes in these estimates are recorded when known. We believe that the consistent application of these policies enables us to provide readers of our financial statements with useful and reliable information about our operating results and financial condition. There have been no significant changes in these policies, or the estimates used in the application of the policies, since December 31, ~~2018.~~2019.

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q may constitute "forward-looking" statements as defined in Section 27A of the Securities Act of 1933 (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), the Private Securities Litigation Reform Act of 1995 (the "PSLRA"), or in releases made by the SEC, all as may be amended from time to time. Statements contained in this quarterly report that are not historical facts may be forward-looking statements within the meaning of the PSLRA and we caution investors that any forward-looking statements we make

are not guarantees or indicative of future performance. These forward-looking statements rely on a number of assumptions concerning future events and are subject to risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to materially differ from such statements. Such risks, uncertainties and other factors include, but are not necessarily limited to, those set forth under the captions "Cautionary Note Regarding Forward-Looking Statements" and/or "Risk Factors" of our latest Form 10-K filed with the SEC as periodically updated by subsequently filed Form 10-Qs (these securities filings can be located on our website at www.neenah.com). Unless specifically required by law, we assume no obligation to update or revise these forward-looking statements to reflect new events or circumstances. These cautionary statements are being made pursuant to the Securities Act, the Exchange Act and the PSLRA with the intention of obtaining the benefits of the "safe harbor" provisions of such laws.

You can identify forward-looking statements as those that are not historical in nature, particularly those that use terminology such as "may," "will," "should," "expect," "anticipate," "contemplate," "estimate," "believe," "plan," "project," "predict," "potential" or "continue," or the negative of these, or similar terms. In evaluating these forward-looking statements, you should consider the following factors, as well as others contained in our public filings from time to time, which may cause our actual results to differ materially from any forward-looking statement:

changes in market demand for our products due to global economic and political conditions;

the potential impact of COVID-19 on our projected customer demand, mill operations and supply chain, as well as our consolidated financial position, consolidated results of operations and consolidated cash flows in 2020;

the impact of competition, both domestic and international, changes in industry production capacity, including the construction of new mills or new machines, the closing of mills and incremental changes due to capital expenditures or productivity increases;

the loss of current customers or the inability to obtain new customers;

increases in commodity prices (particularly for pulp, energy and latex);

our ability to control costs, including transportation, and implement measures designed to enhance operating efficiencies;

the availability of raw materials and energy;

the enactment of adverse federal, state or foreign tax or other legislation or changes in government policy or regulation;

the impact of increased trade protectionism and tariffs on our business, results of operations and financial condition;

unanticipated expenditures related to the cost of compliance with environmental and other governmental regulations;

fluctuations in (i) exchange rates (in particular, changes in the U.S. dollar/Euro currency exchange rates) and (ii) interest rates;

increases in the funding requirements for our pension and postretirement liabilities;

our ability to identify attractive acquisition targets and to successfully integrate acquired businesses into our existing operations;

changes in asset valuations including write-downs of assets including property, plant and equipment; inventory, accounts receivable, deferred tax assets or other assets for impairment or other reasons;

loss of key personnel;

strikes, labor stoppages and changes in our collective bargaining agreements and relations with our employees and unions;

capital and credit market volatility and fluctuations in global equity and fixed-income markets;

our existing and future indebtedness;

our net operating losses may not be available to offset our tax liability and other tax planning strategies may not be effective; and

other risks that are detailed from time to time in reports we file with the SEC.

Any subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth or referred to above, as well as the risk factors contained in our most recent Annual Report on Form 10-K. Except as required by law, we disclaim any obligation to update such statements or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the disclosure on this matter made in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management in a timely manner.

As of ~~September 30, 2019,~~March 31, 2020, an evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of ~~September 30, 2019.~~March 31, 2020.

Internal ~~Controls~~Control over Financial Reporting

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated whether any change in our internal control over financial reporting occurred during the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2020. Based on that evaluation, we have concluded that there has been no change in our internal control over financial reporting during the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. We implemented internal controls to ensure we adequately evaluated our contracts and properly assessed the impact of the new accounting standard related to leases on our financial statements to facilitate the adoption on January 1, 2019. There were no significant changes to our internal control over financial reporting due to the adoption of the new leases standard.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

See Note ~~10,~~8, "Contingencies and Legal Matters" of Notes to Condensed Consolidated Financial Statements of Item 1 — Financial Statements.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed below and in Part I, "Item ~~1A. Risk~~1A, "Risk Factors" inof our most recent Annual Report on Form 10-K, which could materially affect our business, financial condition or future results. The risks described below and in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

The following supplements the risk factors disclosed in Part I, Item 1A, "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

Our financial condition and results of operations have been and are expected to continue to be adversely affected by the recent coronavirus pandemic.

A novel strain of coronavirus, COVID-19, was first identified in Wuhan, China in December 2019, and subsequently declared a pandemic by the World Health Organization. The COVID-19 pandemic and measures taken to contain or mitigate the pandemic have caused, and are continuing to cause, business slowdown or shutdown in affected areas and significant disruption in the financial markets both globally and in the U.S., which has led to a decline in discretionary spending by consumers, which in turn has started to adversely impact our business, sales, financial condition and results of operations in March 2020. We cannot predict the degree to, or the time period over, which our sales and operations will be affected by this pandemic and preventive measures.

COVID-19 and measures to prevent its spread, including imposition of quarantines and prolonged closures of manufacturing facilities and retail stores, may impact our business in a number of ways. These impacts are expected to include an adverse effect from significantly reduced global economic activity and resulting demand for our products and our customers’ products and, therefore, the products we manufacture. They could also adversely affect our ability to operate our business, including potential disruptions to our supply chain and workforce. The COVID-19 impact on capital markets could impact our ability to successfully refinance our long-term debt and increase our cost of borrowing. Our $175.0 million Senior Notes mature on May 15, 2021 and the adverse impacts of COVID-19 could prevent us from being able to refinance the 2021 Senior Notes in a timely manner or could result in unfavorable borrowing arrangements due to major volatility in the credit markets.

The impact of the COVID-19 pandemic on our business operations and results of operations began to be noticeable to a limited degree in March, with decreased customer demand and interruptions of collections of some accounts receivable. We expect the ongoing COVID-19 pandemic to have a material adverse impact on our business operations and our financial results, including our net sales, earnings and cash flows in the upcoming quarters. While it is currently too early to estimate, we expect the ultimate significance of the impact of these disruptions, including the extent of their adverse impact on our financial results, will be determined by the length of time that such disruptions continue, which will, in turn, depend on the duration of the COVID-19 pandemic and the impact of governmental regulations or guidelines in response to the pandemic. Although all of our global manufacturing facilities are currently operational and have been designated by governmental authorities as an "essential business", in the future they may be required to curtail or cease production in response to the spread of COVID-19, either in response to changing governmental orders or labor availability. In addition, our customers, distribution partners, service providers or suppliers may experience operational challenges, financial distress, file for bankruptcy protection, go out of business or suffer disruptions in their business due to COVID-19 which would have a material negative impact on our business.

The spread of COVID-19 and the requirements to take action to help limit the spread of the illness, will impact our ability to carry out our business as usual and may materially adversely impact global economic conditions, our business, results of operations, cash flows and financial condition. Even in those regions where we are beginning to experience business recovery, should those regions fail to fully contain COVID-19 or suffer a COVID-19 relapse, those markets may not recover as quickly or at all, which could have a material adverse effect on our business and results of operations.

To the extent the COVID-19 pandemic adversely affects our business, results of operations and financial condition, it may also have the effect of heightening many of the other risks described in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2019.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities:

The following table contains information about our purchases of our equity securities for the three months ended ~~September 30, 2019.~~ March 31, 2020:

Month
Total Number of
Shares Purchased

Average Price Paid
Per Share

Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs (a)

Approximate Dollar
Value of Shares that May
Yet Be Purchased Under
Publicly Announced
Plans or Programs (a)
July 442 $— — $23,150,883
August 2,048 $60.02 1,909 $23,036,307
September 46,499 $63.32 46,499 $20,092,060



Month	Total Number of Shares Purchased	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (a)	Approximate Dollar Value of Shares that May Yet Be Purchased Under Publicly Announced Plans or Programs (a)
January	343	$—	—	$25,000,000
February	49,560	$61.06	46,667	$22,150,513
March	13,130	$58.18	12,890	$21,400,573

(a) As of ~~September 30, 2019,~~March 31, 2020, the Company has purchased ~~79,676~~59,577 shares of Common Stock at an aggregate cost of ~~$4.9~~$3.6 million under the 2019 Stock Purchase Plan. For further discussion on the share repurchase plans refer to Note 9,7, "Stockholders' Equity" of Notes to Condensed Consolidated Financial Statements.

Item 6. Exhibits



Exhibit Number			Exhibit
10.1			Second Amendment, dated March 12, 2020, to the Fourth Amended and Restated Credit Agreement dated December 10, 2018 by and among Neenah, Inc., certain of its subsidiaries, the lenders listed therein and JPMorgan Chase Bank, N.A., as agent for the Lenders (filed herewith)

10.2*			Form of Performance Share Unit Award Agreement (filed herewith)

10.3*			Form of Restricted Stock Unit Award Agreement (filed herewith)

10.4*			Form of Restricted Stock Unit Award Agreement (retirement) (filed herewith)

31.1			Certification of the CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2			Certification of the CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1			Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2			Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS			XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH			Inline XBRL Taxonomy Extension Schema Document (filed herewith).

101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).

101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).

101.LAB			Inline XBRL Taxonomy Extension Label Linkbase Document (filed herewith).

101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).

_______________________

* Indicates management contract or compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		NEENAH, INC.

	By:	/s/ John P. O'Donnell
		John P. O’Donnell
		President, Chief Executive Officer and Director (Principal Executive Officer)

		/s/ Bonnie C. Lind
		Bonnie C. Lind
		Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)

		/s/ Larry N. Brownlee
		Larry N. Brownlee
		Vice President, Controller (Principal Accounting Officer)


~~November 6, 2019~~May 11, 2020



Options granted	1,272
Per share weighted average exercise price	$	66.59
Per share weighted average grant date fair value	$	10.32



	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease cost	$	0.8	$	2.4
Short-term lease cost	0.3		1.2
Variable lease cost (a)	0.7		1.8



Year Ending December 31,	Operating Leases
Remainder of 2019	$	0.4
2020	2.5
2021	2.5
2022	2.3
2023	2.0
Thereafter	9.1
Total lease payments	18.8
Less: Imputed interest	3.8
Total lease liabilities	$	15.0



	September 30, 2019		December 31, 2018
Total Assets (a)
Technical Products	$	568.3	$	599.3
Fine Paper and Packaging	219.6		234.7
Corporate (b)	34.5		27.2
Consolidated	$	822.4	$	861.2