Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 31, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-13948 | |
Entity Registrant Name | MATIV HOLDINGS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 62-1612879 | |
Entity Address, Address Line One | 100 North Point Center East, | |
Entity Address, Address Line Two | Suite 600 | |
Entity Address, City or Town | Alpharetta, | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30022 | |
City Area Code | 800 | |
Local Phone Number | 514-0186 | |
Title of 12(b) Security | Common stock, $0.10 par value | |
Trading Symbol | MATV | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 54,943,231 | |
Entity Central Index Key | 0001000623 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income/(Loss) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Net sales | $ 674.1 | $ 383.6 | $ 1,507.3 | $ 1,049.6 |
Cost of products sold | 551 | 298.4 | 1,192 | 795.5 |
Gross profit | 123.1 | 85.2 | 315.3 | 254.1 |
Selling expense | 22.3 | 13.2 | 51.6 | 34.2 |
Research and development expense | 7.7 | 5.7 | 18.3 | 14.9 |
General expense | 105.2 | 41.4 | 203.5 | 126.7 |
Total nonmanufacturing expenses | 135.2 | 60.3 | 273.4 | 175.8 |
Restructuring and impairment expense | 1.8 | 1.9 | 17.4 | 5.9 |
Operating profit/(loss) | (13.9) | 23 | 24.5 | 72.4 |
Interest expense | 23.8 | 15.3 | 58.7 | 31.3 |
Other income, net | 2.4 | 3.7 | 15.2 | 0.8 |
Income/(loss) before income taxes and income from equity affiliates | (35.3) | 11.4 | (19) | 41.9 |
Income tax expense/(benefit) | (11.5) | 1.5 | (4.8) | 12.4 |
Income from equity affiliates, net of income taxes | 1.3 | 2.3 | 5.1 | 6.1 |
Net income/(loss) | $ (22.5) | $ 12.2 | $ (9.1) | $ 35.6 |
Net income/(loss) per share: | ||||
Basic (in dollars per share) | $ (0.43) | $ 0.38 | $ (0.25) | $ 1.13 |
Diluted (in dollars per share) | $ (0.43) | $ 0.38 | $ (0.25) | $ 1.12 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 52,593,900 | 31,046,100 | 38,415,900 | 31,022,100 |
Diluted (in shares) | 52,593,900 | 31,401,000 | 38,415,900 | 31,381,600 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income/(Loss) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income/(loss) | $ (22.5) | $ 12.2 | $ (9.1) | $ 35.6 |
Other comprehensive income/(loss), net of tax: | ||||
Foreign currency translation adjustments | (84.1) | (20.2) | (95.2) | (20.7) |
Unrealized gain on derivative instruments | 19.9 | 1.3 | 50 | 3.3 |
Less: Reclassification adjustment for gain on derivative instruments included in net income | 3 | 0.4 | 4.6 | 2 |
Amortization of postretirement benefit plans' costs included in net periodic cost | (0.2) | 0.9 | 1.7 | 3.4 |
Other comprehensive income/(loss) | (61.4) | (17.6) | (38.9) | (12) |
Comprehensive income/(loss) | $ (83.9) | $ (5.4) | $ (48) | $ 23.6 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 82.3 | $ 74.7 |
Accounts receivable, net | 454.3 | 238 |
Inventories | 485.4 | 259.5 |
Income taxes receivable | 15.5 | 10 |
Assets held for sale | 10.5 | 0 |
Other current assets | 16 | 12.4 |
Total current assets | 1,064 | 594.6 |
Property, plant and equipment, net | 843.4 | 463.9 |
Deferred income tax benefits | 30.7 | 33.9 |
Investment in equity affiliates | 64.7 | 64.6 |
Goodwill | 849 | 648.3 |
Intangible assets | 661.2 | 513.9 |
Other assets | 199.7 | 101.1 |
Total assets | 3,712.7 | 2,420.3 |
Current liabilities | ||
Current debt | 1.8 | 3.2 |
Accounts payable | 238.7 | 116 |
Income taxes payable | 12.2 | 2.6 |
Accrued expenses and other current liabilities | 186.6 | 109.3 |
Total current liabilities | 439.3 | 231.1 |
Long-term debt | 1,826.7 | 1,267.1 |
Long-term income tax payable | 13.9 | 16.6 |
Pension and other postretirement benefits | 94.5 | 39 |
Deferred income tax liabilities | 140.5 | 95.1 |
Other liabilities | 64.9 | 89.2 |
Total liabilities | 2,579.8 | 1,738.1 |
Stockholders’ equity: | ||
Preferred stock, $0.10 par value; 10,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock, $0.10 par value; 100,000,000 shares authorized; 54,951,290 and 31,449,563 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | 5.5 | 3.1 |
Additional paid-in-capital | 654.5 | 101.7 |
Retained earnings | 630.8 | 696.4 |
Accumulated other comprehensive loss, net of tax | (157.9) | (119) |
Total stockholders’ equity | 1,132.9 | 682.2 |
Total liabilities and stockholders’ equity | $ 3,712.7 | $ 2,420.3 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Preferred shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred shares issued (in shares) | 0 | 0 |
Preferred shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common shares issued (in shares) | 54,951,290 | 31,449,563 |
Common stock outstanding (in shares) | 54,951,290 | 31,449,563 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Millions | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning Balance (in shares) at Dec. 31, 2020 | 31,324,745 | ||||
Beginning Balance at Dec. 31, 2020 | $ 649.6 | $ 3.1 | $ 92.2 | $ 666.2 | $ (111.9) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 35.6 | 35.6 | |||
Other comprehensive loss, net of tax | (12) | (12) | |||
Dividends declared | (41.5) | (41.5) | |||
Restricted stock issuances, net (in shares) | 200,645 | ||||
Stock-based employee compensation expense | 6.3 | 6.3 | |||
Stock issued to directors as compensation (in shares) | 1,662 | ||||
Stock issued to directors as compensation | 0.8 | 0.8 | |||
Purchases and retirement of common stock (in shares) | (70,068) | ||||
Purchases and retirement of common stock | (3.1) | (3.1) | |||
Ending Balance (in shares) at Sep. 30, 2021 | 31,456,984 | ||||
Ending Balance at Sep. 30, 2021 | 635.7 | $ 3.1 | 99.3 | 657.2 | (123.9) |
Beginning Balance (in shares) at Jun. 30, 2021 | 31,426,129 | ||||
Beginning Balance at Jun. 30, 2021 | 653 | $ 3.1 | 97.3 | 658.9 | (106.3) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 12.2 | 12.2 | |||
Other comprehensive loss, net of tax | (17.6) | (17.6) | |||
Dividends declared | (13.9) | (13.9) | |||
Restricted stock issuances, net (in shares) | 32,549 | ||||
Stock-based employee compensation expense | 1.7 | 1.7 | |||
Stock issued to directors as compensation (in shares) | 588 | ||||
Stock issued to directors as compensation | 0.3 | 0.3 | |||
Purchases and retirement of common stock (in shares) | (2,282) | ||||
Ending Balance (in shares) at Sep. 30, 2021 | 31,456,984 | ||||
Ending Balance at Sep. 30, 2021 | 635.7 | $ 3.1 | 99.3 | 657.2 | (123.9) |
Beginning Balance (in shares) at Dec. 31, 2021 | 31,449,563 | ||||
Beginning Balance at Dec. 31, 2021 | 682.2 | $ 3.1 | 101.7 | 696.4 | (119) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (9.1) | (9.1) | |||
Other comprehensive loss, net of tax | (38.9) | (38.9) | |||
Dividends declared | (50.1) | (50.1) | |||
Restricted stock issuances, net (in shares) | 875,149 | ||||
Restricted stock issuances, net | 0 | $ 0.1 | (0.1) | ||
Stock-based employee compensation expense | 16.5 | 16.5 | |||
Stock issued to directors as compensation (in shares) | 66,678 | ||||
Stock issued to directors as compensation | 0.8 | 0.8 | |||
Purchases and retirement of common stock (in shares) | (254,662) | ||||
Purchases and retirement of common stock | (6.4) | (6.4) | |||
Issuance of shares related to Merger (in shares) | 22,814,562 | ||||
Issuance of shares related to Merger | 537.9 | $ 2.3 | 535.6 | ||
Ending Balance (in shares) at Sep. 30, 2022 | 54,951,290 | ||||
Ending Balance at Sep. 30, 2022 | 1,132.9 | $ 5.5 | 654.5 | 630.8 | (157.9) |
Beginning Balance (in shares) at Jun. 30, 2022 | 31,922,911 | ||||
Beginning Balance at Jun. 30, 2022 | 694.5 | $ 3.1 | 109.2 | 678.7 | (96.5) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (22.5) | (22.5) | |||
Other comprehensive loss, net of tax | (61.4) | (61.4) | |||
Dividends declared | (22) | (22) | |||
Restricted stock issuances, net (in shares) | 368,123 | ||||
Restricted stock issuances, net | 0 | $ 0.1 | (0.1) | ||
Stock-based employee compensation expense | 9.5 | 9.5 | |||
Stock issued to directors as compensation (in shares) | 4,122 | ||||
Stock issued to directors as compensation | 0.3 | 0.3 | |||
Purchases and retirement of common stock (in shares) | (158,428) | ||||
Purchases and retirement of common stock | (3.4) | (3.4) | |||
Issuance of shares related to Merger (in shares) | 22,814,562 | ||||
Issuance of shares related to Merger | 537.9 | $ 2.3 | 535.6 | ||
Ending Balance (in shares) at Sep. 30, 2022 | 54,951,290 | ||||
Ending Balance at Sep. 30, 2022 | $ 1,132.9 | $ 5.5 | $ 654.5 | $ 630.8 | $ (157.9) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared (in dollars per share) | $ 0.40 | $ 0.44 | $ 1.28 | $ 1.32 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating | ||
Net income/(loss) | $ (9.1) | $ 35.6 |
Non-cash items included in net income: | ||
Depreciation and amortization | 92.3 | 70.3 |
Impairments | 13.7 | 0 |
Deferred income tax | (8.7) | 2.4 |
Pension and other postretirement benefits | (4.7) | (0.2) |
Stock-based compensation | 16.5 | 6.3 |
Income from equity affiliates | (5.1) | (6.1) |
Brazil tax assessment and settlements, net | 0 | (6.1) |
Gain on sale of assets | (2.9) | 0 |
Cash dividends received from equity affiliates | 1.1 | 0.8 |
Gain on foreign currency transactions | (19.8) | (3.9) |
Other items | 1.2 | (0.5) |
Cash received from settlement of interest swap agreements | 23.6 | 0 |
Changes in operating working capital, net of assets acquired: | ||
Accounts receivable | (36.3) | (30.4) |
Inventories | (56.1) | (29.6) |
Prepaid expenses | 1 | (2.4) |
Accounts payable and other current liabilities | 27.6 | (0.9) |
Accrued income taxes | (17.1) | (7.8) |
Net changes in operating working capital | (80.9) | (71.1) |
Net cash provided by operations | 17.2 | 27.5 |
Investing | ||
Capital spending | (36.5) | (23.8) |
Capitalized software costs | (2.1) | (1.9) |
Acquisitions, net of cash acquired | (462.5) | (630.6) |
Cash received from settlement of cross-currency swap contracts | 35.8 | 0 |
Other investing | 3.7 | (2) |
Net cash used in investing | (461.6) | (658.3) |
Financing | ||
Cash dividends paid | (50.1) | (41.5) |
Proceeds from issuances of long-term debt | 720.4 | 729.7 |
Payments on long-term debt | (180.6) | (19.5) |
Payments on financing lease obligations | (0.4) | 0 |
Purchases of common stock | (6.4) | (3.1) |
Payments for debt issuance costs | (22.6) | (14.6) |
Net cash provided by financing | 460.3 | 651 |
Effect of exchange rate changes on cash and cash equivalents | (8.3) | (1.3) |
Increase in cash and cash equivalents | 7.6 | 18.9 |
Cash and cash equivalents at beginning of period | 74.7 | 54.7 |
Cash and cash equivalents at end of period | 82.3 | 73.6 |
Supplemental Cash Flow Disclosures | ||
Cash paid for interest, net | 48 | 27.5 |
Cash paid for taxes, net | 16.8 | 17.7 |
Capital spending in accounts payable and accrued liabilities | 8.7 | 4.7 |
Merger non-cash consideration | $ 537.9 | $ 0 |
General
General | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | General Nature of Business On July 6, 2022, Schweitzer-Mauduit International, Inc. ("SWM") consummated its previously announced merger transaction involving Neenah, Inc. ("Neenah"). A wholly-owned subsidiary of SWM merged with and into Neenah (the "Merger"), with Neenah surviving the Merger as a direct and wholly-owned subsidiary of SWM. Effective as of the closing date of the Merger, SWM changed its name to Mativ Holdings, Inc. ("Mativ," "we," "our", or the "Company"). Mativ is a global leader in specialty materials headquartered in Alpharetta, Georgia, United States of America. The Company offers a wide range of critical components and engineered solutions to solve customers' most complex challenges, targeting premium applications across diversified and growing end-markets. Combined with global manufacturing, supply chain, innovation, and material science capabilities, our broad portfolio of technologies combines polymers, fibers, and resins to optimize the performance of customers' products across multiple stages of the value chain. Effective with the Merger, the Company changed the name of its two reporting segments to: Advanced Technical Materials ("ATM") and Fiber-Based Solutions ("FBS"). There was no change to the historical reporting segments or historical results for the segments. Refer to Note 16. Segment Information for additional information on our segments. We conduct business in over 100 countries and operate 48 production locations worldwide, with offices and facilities in the United States, United Kingdom, China, Germany, France, Belgium, Poland, India, Brazil, Canada, Spain, Italy, Mexico, Netherlands, Malaysia, and Luxembourg. Basis of Presentation The accompanying unaudited condensed consolidated financial statements and the notes thereto have been prepared in accordance with the instructions on Form 10-Q and Rule 10-01 of Regulation S-X of the Securities and Exchange Commission ("SEC") and do not include all the information and disclosures required by accounting principles generally accepted in the United States of America ("U.S. GAAP"). However, such information reflects all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim periods. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the full year. The unaudited condensed consolidated financial statements and these notes thereto included herein should be read in conjunction with the audited consolidated financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 1, 2022. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned, majority-owned and controlled subsidiaries. The Company’s share of the net income of its 50%-owned joint ventures in China is included in the unaudited Condensed Consolidated Statements of Income/(Loss) as Income from equity affiliates, net of income taxes. Intercompany balances and transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities in the unaudited condensed consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, inventory valuation, useful lives of tangible and intangible assets, business acquisitions, equity-based compensation, derivatives, sales returns and rebates, receivables valuation, pension, postretirement and other benefits, restructuring and impairment, taxes and contingencies. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The Company has two main sources of revenue: product sales and materials conversion. The Company recognizes product sales revenues when control of a product is transferred to the customer. For the majority of product sales, transfer of control occurs when the products are shipped from one of the Company’s manufacturing facilities to the customer. The cost of delivering finished goods to the Company’s customers is recorded as a component of Cost of products sold. Those costs include the amounts paid to a third party to deliver the finished goods. Any freight costs billed to and paid by a customer are included in net sales. The Company also provides services to customers through the conversion of customer-owned raw materials into processed finished goods. In these transactions, the Company generally recognizes revenue as processing is completed. Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied, which generally occurs when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Generally, the Company considers collectability of amounts due under a contract to be probable upon inception of a sale based on an evaluation of the credit worthiness of each customer. If collectability is not considered to be probable, the Company defers recognition of revenue on satisfied performance obligations until the uncertainty is resolved. We record estimates for bad debts based on our expectations for the collectability of amounts due from customers, considering historical collection history, expectations for future activity and other discrete events as applicable. Variable consideration, such as discounts or price concessions, is set forth in the terms of the contract at inception and is included in the assessment of the transaction price at the outset of the arrangement. The transaction price is allocated to the individual performance obligations due under the contract based on the relative stand-alone fair value of the performance obligations identified in the contract. The Company typically uses an observable price to determine the stand-alone selling price for separate performance obligations. The Company does not typically include extended payment terms or significant financing components in its contracts with customers. Certain product sales contracts may include cash-based incentives (volume rebates or credits), which are accounted for as variable consideration. We estimate these amounts at least quarterly based on the expected forecast quantities to be provided to customers and reduce revenues recognized accordingly. Incidental items that are immaterial in the context of the contract are recognized as expense in the period incurred. The Company generally expenses sales commissions when incurred because the amortization period is one year or less. These costs are recorded within selling expenses. The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. As a practical expedient, the Company treats shipping and handling activities that occur after control of the good transfers as fulfillment activities, and therefore, does not account for shipping and handling costs as a separate performance obligation. Net sales attributed by geographic location based on the location of the Company’s direct customers were as follows (in millions): Three Months Ended September 30, 2022 September 30, 2021 ATM FBS Total ATM FBS Total United States $ 219.1 $ 138.1 $ 357.2 $ 152.3 $ 40.8 $ 193.1 Europe and the former Commonwealth of Independent States 121.1 49.2 170.3 60.9 42.3 103.2 Asia/Pacific (including China) 50.5 31.4 81.9 32.3 16.0 48.3 Americas (excluding U.S.) 22.3 23.4 45.7 8.1 11.8 19.9 Other foreign countries 13.1 5.9 19.0 6.5 12.6 19.1 Net sales (1) $ 426.1 $ 248.0 $ 674.1 $ 260.1 $ 123.5 $ 383.6 (1) Net sales include net hedging gains and losses for the three months ended September 30, 2021. Nine Months Ended September 30, 2022 September 30, 2021 ATM FBS Total ATM FBS Total United States $ 545.7 $ 213.8 $ 759.5 $ 412.1 $ 116.6 $ 528.7 Europe and the former Commonwealth of Independent States 250.6 151.2 401.8 134.5 139.8 274.3 Asia/Pacific (including China) 124.5 82.5 207.0 93.2 61.7 154.9 Americas (excluding U.S.) 40.0 53.0 93.0 21.6 34.0 55.6 Other foreign countries 26.3 19.7 46.0 13.7 22.4 36.1 Net sales (1) $ 987.1 $ 520.2 $ 1,507.3 $ 675.1 $ 374.5 $ 1,049.6 (1) Net sales include net hedging gains and losses for the nine months ended September 30, 2021. The ATM segment supplies customers serving generally high-growth end-markets as follows: Industrials – substrates for tape, industrial, construction, infrastructure, performance labels, cable wrapping, abrasives, and other specialty applications. Protective Solutions – paint protection films for transportation in aftermarket channel, interlayer lamination for ballistic resistant and security glass, high-performance graphics substrates, and emerging smart glass applications. Filtration – advanced media for transportation applications (such as air intake, cabin air, fuel oil), reverse osmosis water filtration, industrial process air and liquid applications, air purification, and HVAC and life science/personal protective equipment. Healthcare – advanced woundcare, consumer wellness, device fixation, and finger bandages. Release Liners – substrates critical to adhesive separation for applications in the personal care, label, tape, industrial, graphic arts, composites, and medical categories. Net sales as a percentage by end market for the ATM business were as follows: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Industrials 34 % 37 % 35 % 33 % Protective Solutions 17 % 25 % 23 % 31 % Filtration 25 % 16 % 20 % 19 % Healthcare 14 % 22 % 17 % 17 % Release Liners 10 % — % 5 % — % Net sales 100 % 100 % 100 % 100 % The FBS segment supplies customers serving generally both growing and mature end-markets as follows: Packaging & Specialty Papers – sustainable premium packaging solutions, imaging and communication, home & office, consumer goods, and other applications. Engineered Papers – combustibles and reduce risk products, primarily for the tobacco industry, alternative fibers lightweight papers, and emerging alternative solutions. Net sales as a percentage by end market for the FBS business were as follows: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Packaging & Specialty Papers 52 % — % 25 % — % Engineered Papers 48 % 100 % 75 % 100 % Net sales 100 % 100 % 100 % 100 % Receivable Sales Programs The Company has entered into uncommitted trade account receivable sales programs under which certain customer invoices are sold, without recourse, to a third-party financial institution in exchange for cash. The Company does not retain any interest in or continuing involvement with the invoices after they are sold. The invoices are sold at face value, less a transaction fee, and are treated as a sale and accounted for as a reduction in trade account receivables. The transaction fees were not material for the three and nine months ended September 30, 2022 and 2021. |
Other Comprehensive Income_(Los
Other Comprehensive Income/(Loss) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Other Comprehensive Income/(Loss) | Other Comprehensive Income/(Loss)Comprehensive income includes Net income/(loss), as well as certain items charged and credited directly to stockholders' equity, which are excluded from Net income/(loss). The Company has presented Comprehensive income/(loss) in the unaudited Condensed Consolidated Statements of Comprehensive Income/(Loss). Reclassification adjustments of derivative instruments from Accumulated other comprehensive loss, net of tax are presented in Net sales; Other income, net; or Interest expense in the unaudited Condensed Consolidated Statements of Income/(Loss). Refer to Note 11. Derivatives for additional information. Amortization of accumulated pension and other postretirement benefit ("OPEB") liabilities are included in the computation of net periodic pension and OPEB costs, which are more fully discussed in Note 13. Postretirement and Other Benefits. Components of Accumulated other comprehensive loss, net of tax, were as follows (in millions): September 30, 2022 December 31, 2021 Accumulated pension and OPEB liability adjustments, net of income tax benefit of $7.1 million and $8.9 million at September 30, 2022 and December 31, 2021, respectively $ (12.7) $ (14.4) Accumulated unrealized gain/(loss) on derivative instruments, net of income tax benefit (expense) of $(8.3) million and $2.1 million at September 30, 2022 and December 31, 2021, respectively 52.7 (1.9) Accumulated unrealized foreign currency translation adjustments, net of income tax benefit of $7.7 million and $9.5 million at September 30, 2022 and December 31, 2021, respectively (197.9) (102.7) Accumulated other comprehensive loss, net of tax $ (157.9) $ (119.0) Changes in the components of Accumulated other comprehensive loss, net of tax, were as follows (in millions): Three Months Ended September 30, 2022 September 30, 2021 Pre-tax Tax Net of Pre-tax Tax Net of Pension and OPEB liability adjustments $ 0.7 $ (0.9) $ (0.2) $ 1.1 $ (0.2) $ 0.9 Derivative instrument adjustments 30.1 (7.2) 22.9 2.3 (0.6) 1.7 Unrealized foreign currency adjustments (65.8) (18.3) (84.1) (20.1) (0.1) (20.2) Total $ (35.0) $ (26.4) $ (61.4) $ (16.7) $ (0.9) $ (17.6) Nine Months Ended September 30, 2022 September 30, 2021 Pre-tax Tax Net of Pre-tax Tax Net of Pension and OPEB liability adjustments $ 3.5 $ (1.8) $ 1.7 $ 3.4 $ — $ 3.4 Derivative instrument adjustments 65.0 (10.4) 54.6 6.1 (0.8) 5.3 Unrealized foreign currency translation adjustments (93.4) (1.8) (95.2) (17.3) (3.4) (20.7) Total $ (24.9) $ (14.0) $ (38.9) $ (7.8) $ (4.2) $ (12.0) |
Business Acquisitions
Business Acquisitions | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Acquisitions | Business Acquisitions Neenah On March 28, 2022, the Company entered into an Agreement and Plan of Merger to combine with Neenah, Inc. ("Neenah"), a specialty materials company incorporated in Delaware, in an all-stock merger of equals (the "Merger Agreement"), to create a global leader in specialty materials, accelerate growth and innovation, as well as achieve cost synergies. The Merger was approved by the shareholders of both the Company and Neenah on June 29, 2022 and was consummated on July 6, 2022. Under the terms of the Merger Agreement, which was unanimously approved by the board of directors of both companies, Neenah merged into a directly owned subsidiary of the Company, with Neenah surviving the Merger as a direct, wholly-owned subsidiary of Mativ. Pursuant to the Merger Agreement, each share of Neenah's common stock outstanding was exchanged for 1.358 shares of common stock in the Company. As such, the Company issued approximately 22.8 million shares of its common stock to Neenah's shareholders under the terms of the Merger Agreement. Based on the Company's closing stock price on July 5, 2022, the total value of shares issued to Neenah's shareholders was approximately $534.1 million. The total consideration transferred to merge with Neenah was $1,056.3 million, which included the equity portion consideration of $534.1 million, repayment of Neenah debt of $504.9 million, repayment of acquisition costs incurred by Neenah of $13.5 million and the fair value of unvested stock awards allocated to the pre-merger period of $3.8 million. The Company used the proceeds of the borrowings under the amended Credit Agreement, as defined and discussed in Note 10. Debt, to repay existing indebtedness of Neenah and to pay other costs and expenses in connection with the Merger. The transaction was accounted for as a business combination with the Company being treated as the accounting acquirer in accordance with Accounting Standards Codification ("ASC") 805, Business Combinations. Under this method of accounting, the total consideration has been allocated to Neenah's assets acquired and liabilities assumed based upon fair values at the Merger date. The assets acquired and liabilities assumed were measured at fair value as of the Merger date primarily using Level 3 inputs. The excess of the total consideration over the net assets acquired was recorded as goodwill and has been allocated to the ATM segment. The goodwill recorded is not expected to be deductible for tax purposes as it is primarily attributable to expected revenue synergies. The initial purchase price allocation below is preliminary and may be revised during the remainder of the measurement period, not to exceed one year, as new information is received and analyzed. Any potential adjustments could be material in relation to the preliminary values below. The estimated fair values of the assets acquired and liabilities assumed as of the Merger date were as follows (in millions): Preliminary Fair Value Cash and cash equivalents $ 55.9 Accounts receivable 206.6 Inventory 191.8 Assets held for sale 10.7 Other current assets 16.8 Property, plant and equipment 453.6 Identifiable intangible assets 219.0 Other non-current assets 41.8 Total assets $ 1,196.2 Current debt $ 1.9 Accounts payable and other current liabilities 207.9 Long-term debt 22.8 Deferred income tax liabilities 67.7 Other non-current liabilities 82.0 Net assets acquired $ 813.9 Goodwill 242.4 Total consideration $ 1,056.3 The fair value of receivables acquired approximates the gross contractual value. The contractual amount not expected to be collected is immaterial. Acquired inventory was comprised of finished goods, work in progress and raw materials. The fair value of finished goods was based on net realizable value adjusted for the costs of selling and manufacturing and a reasonable profit margin on selling effort and manufacturing costs. The fair value of work in progress was based on net realizable value adjusted for the costs of selling and a reasonable profit margin on selling effort. The fair value of raw materials was determined to approximate book value. Property, plant and equipment is comprised of buildings and leasehold improvements, machinery and equipment, furniture and fixtures, computer equipment and construction in progress. The preliminary estimated fair value was primarily determined using a reproduction/replacement cost approach which measures the value of an asset by estimating the cost to acquire or construct comparable assets adjusted for age and condition of the asset. Acquired intangible assets include customer relationships, tradenames and developed technologies. Intangible assets were valued using the multi-period excess earnings and relief-from-royalty methods, both forms of the income approach which considers a forecast of future cash flows generated from the use of each asset. The following table sets forth the components of identifiable intangible assets (in millions) and their estimated useful lives (in years): Fair Value Weighted-Average Amortization Period (Years) Amortizable intangible assets: Customer relationships $ 182.0 14.3 Tradenames and other 14.7 20 Developed technology 22.3 7 Total amortizable intangible assets $ 219.0 The preliminary estimate of deferred tax effects resulting from the Merger include the expected federal, state and foreign tax consequences associated with temporary differences between the preliminary fair values of the assets acquired, liabilities assumed and the respective tax basis. During the three and nine months ended September 30, 2022, the Company recognized direct and indirect costs related to the Merger of $32.7 million and $46.3 million, respectively, predominantly related to severance and termination costs resulting from the change in control, legal and other professional fees. Direct and indirect merger-related costs were expensed as incurred and are primarily included in the General expense in the unaudited Condensed Consolidated Statements of Income/(Loss). Net sales and Net loss from Neenah included in the Company's unaudited Condensed Consolidated Statements of Income/(Loss) from the Merger date are as follows (in millions): July 6, 2022 - September 30, 2022 Net sales $ 289.8 Net loss $ (5.8) Pro Forma Financial Information The supplemental pro forma financial information presents the combined results of operations for the periods presented, as if the Merger had occurred on January 1, 2021. The supplemental pro forma financial information includes the following adjustments related to the Merger: amortization of intangible assets and fair value adjustments to inventory, interest expense for the additional indebtedness incurred to complete the Merger, acquisition and severance costs, and applicable tax adjustments based on statutory rates in the jurisdictions where the adjustments occurred. The supplemental pro forma financial information presented below is not necessarily indicative of consolidated results of operations of the combined business had the Merger occurred as of January 1, 2021 (in millions): Three Months Ended September 30, 2022 September 30, 2021 Net sales $ 683.7 $ 651.4 Net income $ 27.2 $ 7.4 Nine Months Ended September 30, 2022 September 30, 2021 Net sales $ 2,108.4 $ 1,813.8 Net income (loss) $ 56.5 $ (62.9) In 2022, the Company incurred $62.8 million of direct and indirect acquisition and integration costs. These expenses are included in General expense on the unaudited Condensed Consolidated Statements of Income/(Loss) and are reflected in pro forma net income for the three and nine months ended September 30, 2021. Scapa On April 15, 2021, we completed the previously announced acquisition of Scapa Group plc (“Scapa”), a UK-based innovation, design, and manufacturing solutions provider for healthcare and industrial markets for aggregate cash consideration of $630.6 million, net of $22.7 million of Cash and cash equivalents acquired and including $568.9 million for the purchase of all Scapa ordinary shares, $75.9 million for the repayment of Scapa debt and $8.5 million for the repayment of acquisition costs incurred by Scapa. The acquisition adds to our portfolio of precision engineered performance materials, expands our innovation, design, and formulation capabilities, and brings a variety of new coating and converting technologies to the Company. Scapa is part of the ATM segment and operates globally with manufacturing and sales operations in the Americas, Asia and Europe. The purchase price was funded with borrowings under the amended Credit Agreement, as defined and discussed in Note 10. Debt. The acquisition was accounted for as a business combination with the assets acquired and liabilities assumed measured at their fair values as of the acquisition date, primarily using Level 3 inputs. The excess of the acquisition consideration over the estimated fair values of the acquired assets and assumed liabilities is assigned to goodwill. The goodwill is assigned to the ATM reporting segment and is primarily attributable to expected revenue synergies. It is not expected to be deductible for tax purposes. The estimated purchase price allocation disclosed as of June 30, 2021 was revised during the measurement period as new information was received and analyzed resulting in a decrease in Deferred tax liabilities of $12.3 million, an increase in Property, plant and equipment of $7.7 million, an increase in Other non-current liabilities, primarily due to changes in certain tax positions of $7.0 million, a $3.0 million decrease in Other non-current assets, and other insignificant changes, as presented in the table below. The consideration paid for Scapa, and the fair values of the assets acquired and liabilities assumed as of the April 15, 2021 acquisition date were as follows (in millions): Final Fair Value Adjustments Preliminary Fair Value Cash and cash equivalents $ 22.7 $ — $ 22.7 Accounts receivable 67.7 — 67.7 Inventory 60.0 (0.9) 60.9 Other current assets 9.7 (0.1) 9.8 Property, plant and equipment 159.8 7.7 152.1 Identifiable intangible assets 246.2 — 246.2 Other non-current assets 23.3 (3.0) 26.3 Total assets $ 589.4 $ 3.7 $ 585.7 Current debt $ 15.0 $ — $ 15.0 Accounts payable and other current liabilities 83.9 (2.0) 85.9 Deferred income tax liabilities 49.2 (12.3) 61.5 Other non-current liabilities 40.1 7.0 33.1 Net assets acquired $ 401.2 $ 11.0 $ 390.2 Goodwill 252.1 (11.0) 263.1 Total consideration $ 653.3 $ — $ 653.3 The fair value of receivables acquired approximates the gross contractual value. The contractual amount not expected to be collected is not material. Acquired inventory was comprised of finished goods and raw materials. The fair value of finished goods was based on net realizable value adjusted for the costs of selling and a reasonable profit margin on selling effort. The fair value of raw materials was determined to approximate book value. Property, plant and equipment is comprised of buildings and leasehold improvements, machinery and equipment, furniture and fixtures, computer equipment, and construction in progress. The fair value was determined using a reproduction/replacement cost approach which measures the value of an asset by estimating the cost to acquire or construct comparable assets adjusted for age and condition of the asset. Acquired intangible assets include customer relationships, tradenames and developed technologies. Intangible assets were valued using the multi-period excess earnings and relief-from-royalty methods, both are forms of the income approach which considers a forecast of future cash flows generated from the use of each asset. The following table shows the fair values assigned to identifiable intangible assets (in millions): Fair Value Weighted-Average Amortization Period (Years) Amortizable intangible assets: Customer relationships $ 205.4 15 Tradenames and other 7.7 10 Developed technology 33.1 7 Total amortizable intangible assets $ 246.2 The deferred tax effects resulting from the acquisition include the expected federal, state, and foreign tax consequences associated with temporary differences between the fair values of the assets acquired, liabilities assumed and the respective tax basis. During the three and nine months ended September 30, 2022, the Company did not incur any direct and indirect acquisition-related costs for the Scapa acquisition. During the three and nine months ended September 30, 2021, the Company recognized zero and $8.7 million of direct and indirect acquisition-related costs, respectively. Direct and indirect acquisition-related costs were expensed as incurred and are included in General expense in the unaudited Condensed Consolidated Statements of Income/(Loss). Pro Forma Financial Information The supplemental pro forma financial information presents the combined results of operations for the periods presented, as if the Scapa acquisition had occurred on January 1, 2020. The supplemental pro forma financial information includes the following adjustments related to the Scapa acquisition: amortization of intangible assets and fair value adjustments to inventory, interest expense for the additional indebtedness incurred to complete the transaction, acquisition and severance costs, and applicable tax adjustments based on statutory rates in the jurisdictions where the adjustments occurred. The supplemental pro forma financial information presented below is not necessarily indicative of consolidated results of operations of the combined business had the Scapa acquisition occurred as of January 1, 2020 (in millions): Nine Months Ended September 30, 2021 Net sales $ 1,180.2 Net income $ 47.9 |
Net Income_(Loss) Per Share
Net Income/(Loss) Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Net Income/(Loss) Per Share | Net Income/(Loss) Per Share The Company uses the two-class method to calculate earnings/(loss) per share. The Company has granted restricted stock that contains non-forfeitable rights to dividends on unvested shares. Since these unvested shares are considered participating securities under the two-class method, the Company allocates earnings/(loss) per share to common stock and participating securities according to dividends declared and participation rights in undistributed earnings. Diluted net income per common share is computed based on Net income divided by the weighted average number of common and potential common shares outstanding. Potential common shares during the respective periods are those related to dilutive stock-based compensation, including long-term stock-based incentive compensation and directors’ accumulated deferred stock compensation, which may be received by the directors in the form of stock or cash. Diluted loss per share excludes the weighted average potential common shares as their inclusion would be anti-dilutive. The following table is a reconciliation of the average number of common and potential common shares outstanding used in the calculations of basic and diluted net income/(loss) per share (in millions, shares in thousands): Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Numerator (basic and diluted): Net income/(loss) $ (22.5) $ 12.2 $ (9.1) $ 35.6 Less: Dividends paid to participating securities (0.2) (0.2) (0.7) (0.5) Undistributed and distributed earnings/(loss) available to common stockholders $ (22.7) $ 12.0 $ (9.8) $ 35.1 Denominator: Average number of common shares outstanding 52,593.9 31,046.1 38,415.9 31,022.1 Effect of dilutive stock-based compensation — 354.9 — 359.5 Average number of common and potential common shares outstanding 52,593.9 31,401.0 38,415.9 31,381.6 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories are valued at the lower of cost (using the first-in, first-out and weighted average methods) or net realizable value. The Company's costs included in inventory primarily include resins, pulp, chemicals, direct labor, utilities, maintenance, depreciation, finishing supplies and an allocation of certain overhead costs. Machine start-up costs or abnormal machine shutdowns are expensed in the period incurred and are not reflected in inventory. The Company reviews inventories at least quarterly to determine the necessity of write-offs for excess, obsolete or unsalable inventory. These reviews require the Company to assess customer and market demand. The Company estimates write-offs for inventory obsolescence and shrinkage. The following table details inventories by major class (in millions): September 30, December 31, Raw materials $ 183.6 $ 113.4 Work in process 80.5 41.9 Finished goods 193.7 95.7 Supplies and other 27.6 8.5 Total inventories $ 485.4 $ 259.5 |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The allocation between segments of the goodwill recorded related to the Merger has not been completed as of September 30, 2022. The changes in the carrying amount of goodwill by reporting segment were as follows (in millions): ATM FBS Total Balance at December 31, 2021 $ 643.4 $ 4.9 $ 648.3 Goodwill acquired during the period (1) 243.8 — 243.8 Foreign currency translation and other (2) (42.4) (0.7) (43.1) Balance at September 30, 2022 $ 844.8 $ 4.2 $ 849.0 (1) $242.4 million related to the Merger and $1.4 million related to measurement period adjustments for the Scapa acquisition. (2) During the first quarter of 2022, goodwill with a carrying amount of $2.1 million was allocated to the disposal group classified as held for sale and subsequently impaired. Goodwill was allocated to the disposal group on the basis of relative fair value, primarily utilizing Level 3 inputs which included forecasted future cash flows. We considered the planned divestiture of this business as a potential indicator that the fair value of the ATM reporting unit may be below its carrying amount and performed a qualitative impairment assessment in the first quarter of 2022. As a result of this assessment, we concluded the fair value of the reporting unit was in excess of its carrying value and therefore no additional impairment was identified or recognized. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets At September 30, 2022, the Company had $615.0 million of intangible assets in its ATM segment and $46.2 million in its FBS segment. The gross carrying amount and accumulated amortization for intangible assets consisted of the following (in millions): September 30, 2022 Gross Accumulated Net Amortized Intangible Assets Customer relationships $ 692.9 $ 142.9 $ 550.0 Developed technology 70.1 24.2 45.9 Trade names 31.8 3.7 28.1 Acquired technology 21.5 0.7 20.8 Non-compete agreements 2.9 2.7 0.2 Patents 1.9 0.7 1.2 Total $ 821.1 $ 174.9 $ 646.2 Unamortized Intangible Assets Trade names (1) $ 15.0 $ — $ 15.0 (1) During the first quarter of 2022, indefinite-lived trade names and developed technology with net carrying amounts of $4.2 million and $0.5 million were allocated to the disposal group classified as held for sale and subsequently impaired. December 31, 2021 Gross Accumulated Net Amortized Intangible Assets Customer relationships $ 541.7 $ 119.2 $ 422.5 Developed technology 74.6 20.7 53.9 Trade names 18.9 2.7 16.2 Non-compete agreements 2.9 2.5 0.4 Patents 1.5 0.6 0.9 Total $ 639.6 $ 145.7 $ 493.9 Unamortized Intangible Assets Trade names $ 20.0 $ — $ 20.0 |
Restructuring and Impairment Ac
Restructuring and Impairment Activities | 9 Months Ended |
Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Impairment Activities | Restructuring and Impairment Activities The Company incurred restructuring and impairment expenses of $1.8 million and $1.9 million for the three months ended September 30, 2022 and 2021, respectively, and $17.4 million and $5.9 million for the nine months ended September 30, 2022 and 2021, respectively. In the FBS segment, there were $0.1 million of restructuring and impairment expenses for the three months ended September 30, 2022 and $1.9 million of restructuring and impairment expenses for the three months ended September 30, 2021. Restructuring and impairment expenses for the three months ended September 30, 2021 included $0.7 million related to severance and other accruals for the Winkler, Manitoba facility, $0.7 million related to severance accruals at other manufacturing facilities as part of the ongoing optimization project and $0.5 million related to the Spotswood site closure. In addition, $0.5 million related to the write-down of certain inventories to net realizable value and the acceleration of depreciation of machinery and equipment due to the change in the estimated lives of these assets at the Winkler, Manitoba facility was included in Cost of products sold. Restructuring and impairment expenses in the FBS segment were $1.7 million and $5.9 million for the nine months ended September 30, 2022 and 2021, respectively. Restructuring and impairment expenses for the nine months ended September 30, 2022 included $1.5 million primarily related to pension benefits for the Winkler, Manitoba facility. Restructuring and impairment expenses for the nine months ended September 30, 2021 included $2.9 million related to the Spotswood site closure, $2.3 million related to severance accruals at other manufacturing facilities as part of the ongoing cost optimization project and $0.7 million related to pension benefits for the Winkler, Manitoba facility. In addition, $0.5 million related to the write-down of certain inventories to net realizable value and the acceleration of depreciation of machinery and equipment due to the change in the estimated lives of these assets at the Winkler, Manitoba facility was included in Cost of products sold. During the remainder of 2022, the Company expects to record an insignificant amount of additional restructuring costs in the FBS segment related to the closing of the Winkler, Manitoba facility. In the ATM segment, restructuring and impairment expenses were $0.9 million and $14.9 million for the three and nine months ended September 30, 2022, respectively. Restructuring and impairment expenses for the three months ended September 30, 2022 included $0.7 million related to the closure of the Appleton, Wisconsin facility, a facility acquired through the Merger. The closure of this facility was substantially completed in September 2021 and its divestiture was planned prior to the Merger. The assets held for sale consist primarily of property, plant and equipment, which are measured at fair value as part of the purchase price allocation. Refer to Note 4. Business Acquisitions for the purchase price allocation. In addition, there was $0.2 million related to severance accruals resulting from the divestiture during the three months ended September 30, 2022 of a portion of the legacy SWM segment serving the industrials end-market. Restructuring and impairment expenses in the ATM segment for the nine months ended September 30, 2022 was primarily due to $12.9 million of impairment of certain assets in conjunction with the divestiture of a portion of the legacy SWM ATM segment serving the industrials end-market. These assets were sold during the quarter for net proceeds of $4.6 million and a loss of $0.4 million. In addition, there was $1.1 million for the termination of a contract with an existing customer related to exclusivity in product manufacturing and $0.7 million related to the closure of the Appleton, Wisconsin facility. There were no restructuring and impairment expenses for the three and nine months ended September 30, 2021. During the remainder of 2022, the Company expects to record additional restructuring related costs in the ATM segment of approximately $0.5 million related to the closing of the Appleton, Wisconsin facility. Restructuring and impairment costs related to the Merger are included in corporate expenses as other unallocated items as these costs are not included in management's evaluation of the segments' performance. Unallocated restructuring expenses for the three and nine months ended September 30, 2022 included $0.8 million related to the modification of leases resulting from the Merger. There were no unallocated restructuring expenses for the three and nine months ended September 30, 2021. The following table summarizes total restructuring and impairment expense (in millions): Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Restructuring and impairment expense: Severance $ 0.3 $ 1.2 $ 1.6 $ 2.8 Other 0.7 0.7 2.1 3.1 Asset impairment 0.8 — 13.7 — Total restructuring and impairment expense $ 1.8 $ 1.9 $ 17.4 $ 5.9 Other restructuring related charges - Cost of products sold Accelerated depreciation and amortization $ — $ 0.1 $ — $ 0.1 Spare parts and inventory write-downs to estimated net realizable value $ — $ 0.4 $ — $ 0.4 Other restructuring related charges - Cost of products sold — 0.5 — 0.5 Total restructuring costs and related charges $ 1.8 $ 2.4 $ 17.4 $ 6.4 The following table summarizes changes in restructuring liabilities (in millions): Nine Months Ended September 30, 2022 September 30, 2021 Balance at beginning of period $ 6.2 $ 7.4 Accruals for announced programs 0.4 2.8 Accruals assumed from Merger (1) 2.3 — Cash payments (2.6) (4.8) Foreign exchange impact (0.4) (0.1) Balance at end of period $ 5.9 $ 5.3 (1) Accrued liabilities primarily for severance related to an optimization program at the Coldenhove, Netherlands facility and the closure of the Appleton, Wisconsin facility, both of which were acquired through the Merger. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt The components of total debt are summarized in the following table (in millions): September 30, December 31, Revolving facility - U.S. dollar borrowings $ 288.0 $ 393.0 Term loan A facility 192.5 193.5 Term loan B facility 345.6 348.2 Delayed draw term loan 650.0 — 6.875% senior unsecured notes due October 1, 2026, net of discount of $6.0 million and $5.2 million at September 30, 2022 and December 31, 2021, respectively (1) 352.4 344.8 French employee profit sharing 3.4 4.1 Finance lease obligations 17.8 2.8 German loan agreement 9.7 — Debt issuance costs and discounts (30.9) (16.1) Total debt 1,828.5 1,270.3 Less: Current debt (1.8) (3.2) Total long-term debt $ 1,826.7 $ 1,267.1 (1) Amount includes a $6.8 million increase in fair value due to changes in benchmark interest rates related to the senior unsecured notes. Refer to Note 11. Derivatives for additional information on our interest rate swaps designated as a fair value hedge. Credit Facility On September 25, 2018, the Company entered into a $700.0 million credit agreement (the “Credit Agreement”), which replaced the Company’s previous senior secured credit facilities and provided for a five-year $500.0 million revolving line of credit (the “Revolving Credit Facility”) and a seven-year $200.0 million bank term loan facility (the “Term Loan A Facility”). Subject to certain conditions, including the absence of a default or event of default under the Credit Agreement, the Company may request incremental loans to be extended under the Revolving Credit Facility or as additional Term Loan Facilities so long as the Company is in pro forma compliance with the financial covenants set forth in the Credit Agreement and the aggregate of such increases does not exceed $400.0 million. On February 10, 2021 we amended our Credit Agreement to, among other things, add a new seven-year $350.0 million Term Loan B Facility (the “Term Loan B Facility”) and to decrease the incremental loans that may be extended at the Company’s request to $250.0 million. The Credit Agreement was further amended effective February 22, 2022 to adjust the step-down schedule for the maximum net debt to EBITDA ratio. In connection with the Merger, we amended our Credit Agreement on May 6, 2022 in order to extend the maturity of the Revolving Credit Facility and the Term Loan A Facility to May 6, 2027, and to increase the availability under the Revolving Credit Facility, subject to consummation of the Merger, to $600.0 million. Additionally, we added a $650.0 million delayed draw term loan facility (the "Delayed Draw Term Loan Facility") to be funded concurrent with the closing of the Merger. On July 5, 2022, in connection with the consummation of the Merger, the Company borrowed $650.0 million under the Delayed Draw Term Loan Facility. The funds were used to repay all of Neenah's outstanding debt of $445.9 million under its term loan B facility and $59.0 million under its global secured revolving credit facility, as well as pay down $100.0 million of our Revolving Facility. The Delayed Draw Term Loan Facility matures on May 6, 2027. Borrowings under the amended Term Loan A Facility ("Term Loan A Credit Facility") will bear interest, at a rate equal to either (1) a forward-looking term rate based on the Secured Overnight Financing Rate (“Term SOFR”), plus the applicable margin or (2) the highest of (a) the federal funds effective rate plus 0.5%, (b) the rate of interest as published by the Wall Street Journal as the “bank prime loan” rate, and (c) Term SOFR plus 1.0%, in each case plus the applicable margin. The applicable margin for borrowings under the Term Loan A Credit Facility is expected to range from 1.25% to 2.75% for SOFR loans and from 0.25% to 1.75% for base rate loans, in each case depending on the Company’s then current net debt to EBITDA ratio. Borrowings under the amended Revolving Credit Facility (Revolving Facility) or the Delayed Draw Term Loan facility in U.S. dollars will bear interest, at the Company’s option, at a rate equal to either (1) a forward-looking term rate based on Term SOFR, plus the applicable margin or (2) the highest of (a) the federal funds effective rate plus 0.5%, (b) the rate of interest as published by the Wall Street Journal as the “bank prime loan” rate, and (c) one-month Term SOFR plus 1.0%, in each case plus the applicable margin. Borrowings under the Revolving Facility in Euros will bear interest at a rate equal to the reserve-adjusted Euro interbank offered rate, or EURIBOR, plus the applicable margin. The applicable margin for borrowings under the revolving credit agreement is expected to range from 1.00% to 2.50% for SOFR loans and EURIBOR loans, and from 0.00% to 1.50% for base rate loans, in each case, depending on the Company’s then current net debt to EBITDA ratio. Borrowings under the Term Loan B Facility will bear interest, at the Company's option, at either (i) 3.75% in excess of a reserve adjusted LIBOR rate (subject to a minimum floor of 0.75%) or (ii) 2.75% in excess of an alternative base rate. Under the terms of the amended Credit Agreement, the Company is required to maintain certain financial ratios and comply with certain financial covenants, including maintaining a net debt to EBITDA ratio, as defined in the amended Credit Agreement, calculated on a trailing four fiscal quarter basis, not greater than 5.50x and an interest coverage ratio, also as defined in the amended Credit Agreement, of not less than 3.00x. The maximum allowable net debt to EBITDA ratio will decrease quarterly returning to 4.50x effective as of the end of December 2023. In addition, borrowings and loans made under the amended Credit Agreement are secured by substantially all of the Company’s and the guarantors’ personal property, excluding certain customary items of collateral, and will be guaranteed by the Company’s existing and future wholly-owned direct material domestic subsidiaries and by SWM Luxembourg. The Company was in compliance with all of its covenants under the Credit Agreement at September 30, 2022. Debt Commitment Letter Prior to the merger, we had obtained financing commitments for (i) a $648.0 million senior 364-day unsecured bridge facility (the “Bridge Facility”) and (ii) a $500.0 million senior secured revolving credit facility pursuant to a commitment letter (the “Debt Commitment Letter”) dated as of March 28, 2022. On May 6, 2022, in conjunction with the amendment of our Credit Agreement, the Debt Commitment Letter was amended, reducing the commitments under the Bridge Facility and senior secured revolving credit facility to $50.0 million and zero, respectively. Upon consummation of the Merger, we terminated our Bridge Facility. Indenture for 6.875% Senior Unsecured Notes Due 2026 On September 25, 2018, the Company closed a private offering of $350.0 million of 6.875% senior unsecured notes due 2026 (the “Notes”). The Notes were sold in a private placement in reliance on Rule 144A and Regulation S under the Securities Act of 1933, as amended, pursuant to a purchase agreement between the Company, certain subsidiaries of the Company and J.P. Morgan Securities LLC, as representative of the initial purchasers. The Notes are guaranteed on a senior unsecured basis by each of the Company’s existing and future wholly-owned subsidiaries that is a borrower under or that guarantees obligations under the Credit Agreement or that guarantees certain other indebtedness, subject to certain exceptions. The Notes were issued pursuant to an Indenture, dated as of September 25, 2018 (the “Indenture”), by and among the Company, the guarantors listed therein and Wilmington Trust, National Association, as trustee. The Indenture provides that interest on the Notes will accrue from September 25, 2018 and is payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2019, and the Notes mature on October 1, 2026. The Company may redeem some or all of the Notes at any time on or after October 1, 2021, at the redemption prices set forth in the Indenture, together with accrued and unpaid interest, if any, to, but excluding, the redemption date. If the Company sells certain assets or consummates certain change of control transactions, the Company will be required to make an offer to repurchase the Notes, subject to certain conditions. The Indenture contains certain covenants that, among other things, limit the Company’s ability and the ability of its restricted subsidiaries to incur additional indebtedness, make certain dividends, repurchase Company stock or make other distributions, make certain investments, create liens, transfer or sell assets, merge or consolidate and enter into transactions with the Company’s affiliates. Such covenants are subject to a number of exceptions and qualifications set forth in the Indenture. The Indenture also contains certain customary events of default, including failure to make payments in respect of the principal amount of the Notes, failure to make payments of interest on the Notes when due and payable, failure to comply with certain covenants and agreements and certain events of bankruptcy or insolvency. The Company was in compliance with all of its covenants under the Indenture at September 30, 2022. Other On May 30, 2022, Neenah entered into a project financing agreement for the construction of a melt blown machine (the "German Loan Agreement"). This debt was assumed by the Company upon consummation of the Merger. The German Loan Agreement provided €10.0 million ($10.7 million as of May 30, 2022) of construction financing which is secured by the melt blown machine. The loan matures in March 2027 and principal is repaid in equal quarterly installments beginning in June 2023. The interest rate on amounts outstanding is 1.75% and is payable quarterly. As of September 30, 2022, the average interest rate was 5.77% on outstanding Revolving Facility borrowings, 5.88% on outstanding Term Loan A Credit Facility borrowings, 6.88% on outstanding Term Loan B Facility borrowings, and 5.63% on outstanding Delayed Draw Term Loan Facility borrowings. The effective rate on the 6.875% senior unsecured notes due 2026 was 7.248%. The weighted average effective interest rate on the Company's debt facilities, including the impact of interest rate hedges, was approximately 4.90% and 4.12% for the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022, and December 31, 2021, the Company's total deferred debt issuance costs and discounts, net of accumulated amortization, were $30.9 million and $16.1 million, respectively. Principal Repayments The following is the expected maturities for the Company's debt obligations as of September 30, 2022 (in millions): 2022 $ 9.8 2023 39.3 2024 39.2 2025 39.6 2026 391.8 Thereafter 1,337.2 Total $ 1,856.9 Fair Value of Debt |
Derivatives
Derivatives | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives In the normal course of business, the Company is exposed to foreign currency exchange rate risk and interest rate risk on its variable-rate debt. To manage these risks, the Company utilizes a variety of practices including, where considered appropriate, derivative instruments. The Company has no derivative instruments for trading or speculative purposes or derivatives with credit risk-related contingent features. All derivative instruments used by the Company are either exchange traded or are entered into with major financial institutions in order to reduce credit risk and risk of nonperformance by third parties. The fair values of the Company’s derivative instruments are determined using observable inputs and are considered Level 2 assets or liabilities. The Company utilizes currency forward, swap and, to a lesser extent, option contracts to selectively hedge its exposure to foreign currency risk when it is practical and economical to do so. The use of these contracts minimizes transactional exposure to exchange rate changes. We designate certain of our foreign currency hedges as cash flow hedges. Changes in the fair value of cash flow hedges are reported as a component of Accumulated other comprehensive loss, net of tax and reclassified into earnings when the forecasted transaction affects earnings. For foreign exchange contracts not designated as cash flow hedges, changes in the contracts’ fair values are recorded to net income each period. The Company selectively hedges its exposure to interest rate increases on variable-rate, long-term debt when it is practical and economical to do so. Changes in the fair value of interest rate contracts considered cash flow hedges are reported as a component of Accumulated other comprehensive loss, net of tax and reclassified into earnings when the forecasted transaction affects earnings. Interest rate contracts are also used to hedge changes in the fair value of a portion of our senior unsecured notes attributable to changes in the benchmark interest rate. Changes in the fair value of the interest rate contracts and corresponding portion of the hedged debt are recognized in interest expense. The Company also uses cross-currency swap contracts to selectively hedge its exposure to foreign currency related changes in our net investments in certain foreign operations. We designate these cross-currency swap contracts as net investment hedges. Changes in the fair value of these hedges are deferred within the foreign currency translation component of Accumulated other comprehensive loss, net of tax and reclassified into earnings when the foreign investment is sold or substantially liquidated. During the three months ended June 30, 2022, cross-currency swaps with a combined notional value of €488.8 million ($550.0 million) were terminated and a total settlement of $35.8 million was received from the counterparties. Immediately following the termination of the aforementioned swaps, the Company entered into cross-currency swaps with a combined notional value of €450.0 million ($478.2 million), maturing on April 1, 2024 and 2025 and October 1, 2026, designated as a hedge of a portion of the Company’s net investment in Euro-denominated subsidiaries. These contracts involve the periodic exchange of U.S. dollar fixed interest rate payments for fixed Euro-denominated payments over the respective contract terms, in addition to an exchange of notional amounts upon maturity. One cross-currency swap involves the periodic exchange of U.S dollar variable interest rate payments for Euro-denominated variable payments. During 2019 and 2021, the Company entered into a series of pay-fixed, receive-variable interest rate swaps, maturing on January 31, 2027 and December 31, 2027. During March of 2022, the interest rate swaps, which had a combined notional value of $500.0 million were terminated and a total settlement of $23.6 million was received from the counterparties. The settlement amount, which represents the fair value of contracts at the time of termination, was recorded in Accumulated other comprehensive loss, net of tax and will be amortized as a component of Interest expense over the remaining term of the hedged forecasted transaction. During March of 2022, immediately following the termination of the aforementioned interest rate swaps, the Company entered into pay-fixed, receive-variable interest rate swaps, maturing on January 31, 2027 and December 31, 2027. The swaps have a combined notional value of $500.0 million which declines over the terms of the underlying contracts. The terms of the interest rate swaps mirror the terms of the underlying debt, including timing of the payments and interest rates. During June 2022, the Company entered into a fixed to float interest rate swap with a notional amount of $173.4 million, maturing on October 1, 2026. The swap was designated as a fair value hedge for a portion of our 6.875% senior unsecured notes due in 2026. The contract involves the periodic exchange of fixed interest rate payments for variable payments. During September 2022, the Company entered into pay-fixed, receive-variable interest rate swaps, maturing on May 6, 2027 and April 20, 2028. The swaps have a combined notional value of $650.0 million which declines over the terms of the underlying contracts. The terms of the interest rate swaps mirror the terms of the underlying debt, including timing of the payments and interest rates. The following table presents the fair value of asset and liability derivatives and the respective locations on the unaudited Condensed Consolidated Balance Sheets at September 30, 2022 (in millions): Asset Derivatives Liability Derivatives Balance Sheet Fair Balance Sheet Fair Derivatives designated as hedges: Foreign exchange contracts - net investment hedge Accounts receivable, net $ 4.9 Accrued expenses and other current liabilities $ 0.2 Foreign exchange contracts - net investment hedge Other assets 35.9 Other liabilities — Interest rate contracts - cash flow hedge Accounts receivable, net 0.2 Accrued expenses and other current liabilities — Interest rate contracts - cash flow hedge Other assets 40.2 Other liabilities — Interest rate contracts - fair value hedge Other assets 6.8 Total derivatives designated as hedges $ 88.0 $ 0.2 Derivatives not designated as hedges: Foreign exchange contracts Accounts receivable, net 0.7 Accrued expenses and other current liabilities 6.2 Total derivatives not designated as hedges $ 0.7 $ 6.2 Total derivatives $ 88.7 $ 6.4 The following table presents the fair value of asset and liability derivatives and the respective locations on the Condensed Consolidated Balance Sheets at December 31, 2021 (in millions): Asset Derivatives Liability Derivatives Balance Sheet Fair Balance Sheet Fair Derivatives designated as hedges: Foreign exchange contracts - net investment hedge Accounts receivable, net $ 1.6 Accrued expenses and other current liabilities $ — Foreign exchange contracts - net investment hedge Other assets — Other liabilities 9.8 Interest rate contracts - cash flow hedge Accounts receivable, net 0.2 Accrued expenses and other current liabilities — Interest rate contracts - cash flow hedge Other assets 3.3 Other liabilities 2.1 Total derivatives designated as hedges $ 5.1 $ 11.9 Derivatives not designated as hedges: Foreign exchange contracts Accounts receivable, net 0.2 Accounts payable 0.6 Total derivatives not designated as hedges $ 0.2 $ 0.6 Total derivatives $ 5.3 $ 12.5 The following table presents the fair value of fixed-to-floating interest rate swaps designated as a fair value hedge of our Notes and the respective location on the unaudited Condensed Consolidated Balance Sheets at September 30, 2022 (in millions): Balance Sheet Location Carrying Amount of Hedged Item Cumulative Amount of Adjustment Included in Carrying Amount Interest rate contracts - fair value hedge Long-term debt $ 352.4 $ 6.8 Refer to Note 10. Debt for further information on the Notes. The following table provides the net effect that derivative instruments designated in hedging relationships had on Accumulated other comprehensive loss, net of tax and results of operations (in millions): Derivatives Designated in Hedging Relationships Unrealized Gain/(Loss) Recognized in AOCI on Derivatives, Net of Tax Location of Loss Reclassified Loss Reclassified Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2022 2021 2022 2021 2022 2021 2022 2021 Derivatives designated as cash flow hedge Foreign exchange contracts $ — $ (0.2) $ — $ (0.1) Net sales $ — $ (0.3) $ — $ (1.3) Foreign exchange contracts 0.1 (0.4) 0.3 (0.5) Other income, net — (0.1) (0.1) (0.7) Interest rate contracts 19.7 1.9 47.8 3.9 Interest expense (3.0) — (4.5) — Derivatives designated as net investment hedge Foreign exchange contracts 0.1 1.9 43.7 7.1 Total gain/(loss) $ 19.9 $ 3.2 $ 91.8 $ 10.4 $ (3.0) $ (0.4) $ (4.6) $ (2.0) The Company's designated derivative instruments are highly effective. As such, related to the hedge ineffectiveness or amounts excluded from hedge effectiveness testing, there were no gains or losses recognized immediately in income for the three and nine months ended September 30, 2022 and 2021, other than those related to the cross-currency swap, noted below. The Company’s net investment hedges were designated with terms based on the spot rate of the EUR. Future changes in the components related to the spot change on the notional will be recorded in OCI and remain there until the hedged subsidiaries are substantially liquidated. All coupon payments are recorded in earnings and the initial value of excluded components currently recorded in Accumulated other comprehensive loss, net of tax as an unrealized translation adjustment are amortized to interest expense over the remaining term of the swap. For the three months ended September 30, 2022 and 2021, we recognized as income $2.1 million and $2.4 million, respectively, in Interest expense as derivative amounts excluded from effectiveness testing. For the nine months ended September 30, 2022 and 2021, we recognized as income $6.9 million and $4.5 million, respectively, in Interest expense as derivative amounts excluded from effectiveness testing. The following table provides the effect that derivative instruments not designated as cash flow hedging instruments had on Net income/(loss) (in millions): Derivatives Not Designated as Cash Flow Hedging Instruments Location of Gain/(Loss) Recognized in Income Amount of Gain/(Loss) Recognized in Income/(Loss) Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Foreign exchange contracts Other income, net $ 0.3 $ (0.3) $ (0.2) $ (0.6) |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation Brazil SWM-Brazil ("SWM-B") received assessments from the tax authorities of the State of Rio de Janeiro (the "State") for unpaid Imposto sobre Circulação de Mercadorias e Serviços ("ICMS") and Fundo Estadual de Combate à Pobreza ("FECP") value-added taxes on interstate purchases of electricity. The State issued four sets of assessments against SWM-B for periods from May 2006 through December 2017 (collectively the "Electricity Assessments"). The first through fourth assessments were received in February 2008, June 2011, October 2013, and August 2018, respectively. SWM-B challenged all Electricity Assessments in administrative proceedings before the State tax council (in the Junta de Revisão Fiscal “first-level administrative court” and the Conselho de Contribuintes “administrative appellate court”) based on Resolution 1.610/89, which defers these taxes on electricity purchased by an "electricity-intensive consumer." In 2014, a majority of the administrative appellate court sitting en banc ruled against SWM-B in each of the first and second Electricity Assessments ($10.7 million based on the foreign currency exchange rate at September 30, 2022), and SWM-B is now pursuing challenges to these assessments in the State judicial system where SWM-B obtained preliminary injunctions against enforcement of both assessments. In March 2020, the first-level judicial court ruled in favor of SWM-B in the second Electricity Assessment, a decision that is now on appeal. The third Electricity Assessment was dismissed on technical grounds in 2018. In August 2018, the State filed revised fourth Electricity Assessments for a combined amount of $8.8 million. SWM-B filed challenges to these 2018 assessments in the first-level administrative court on the same grounds as the older cases, receiving unfavorable rulings from the courts in 2019. Both 2019 decisions are being appealed. The State issued a new regulation effective January 1, 2018 that only specific industries are “electricity-intensive consumers,” a list that excludes paper manufacturers. SWM-B contends this regulation shows that paper manufacturers were electricity-intensive consumers eligible to defer ICMS before 2018. SWM-B cannot determine the outcome of the Electricity Assessments matters; as such, no loss has been accrued in our unaudited condensed consolidated financial statements. In December of 2000, SWM-B received two assessments from the tax authorities of the State for unpaid ICMS taxes on certain raw materials from January 1995 through October 1998 and from November 1998 through November 2000 (collectively, the "Raw Materials Assessments"). The Raw Materials Assessments concerned the accrual and use by SWM-B of ICMS tax credits generated from the production and sale of certain non-combustible related grades of paper sold domestically. An adverse judgement was received during 2019 and a provision of $8.6 million (based on the foreign currency exchange rate at March 31, 2021) was recorded in Other Liabilities. On April 9, 2021, SWM-B resolved the Raw Materials Assessment by paying $2.6 million (based on the foreign currency exchange rate at March 31, 2021) under a tax amnesty program which reduced the tax liability by approximately 70%. All litigation is now concluded on this matter which is fully resolved. As the result of the favorable settlement, we recognized a total benefit of $6.1 million in the first quarter of 2021, of which $4.6 million was in Interest expense and $1.6 million was in Other income, net. Germany In January 2015, the Company initiated patent infringement proceedings in Germany against Glatz under multiple LIP-related patents. In December 2017, the Dusseldorf Appeal Court affirmed the German District Court judgment on infringement of EP1482815 against Glatz. The Company filed an action against Glatz in the German District Court to set the amount of damages for the infringement and Glatz has filed a counterclaim. Glatz filed an action in the German Patent Court to invalidate the German part of EP1482815. The German Patent Court held that some of the patent claims at issue were invalid and also that another claim at issue was valid. The Company has appealed the portion of the decision with respect to the claims held to be invalid. The German Supreme Court held that the claims of German counterpart of EP1482815 relevant to the Glatz infringement action were invalid. This ruling has the effect of nullifying the infringement decision and injunction against Glatz and the Company’s claim for damages against Glatz. Glatz’s counterclaim against the Company is still pending and is scheduled for hearing in February, 2023. The cost, timing and outcome of intellectual property litigation can be unpredictable and thus no assurances can be given as to the outcome or impact of such litigation. The Company cannot determine the outcome of the patent infringement matters; as such, no loss has been accrued in our unaudited condensed consolidated financial statements. Environmental Matters The Company's operations are subject to various nations' federal, state and local laws, regulations and ordinances relating to environmental matters. The nature of the Company's operations exposes it to the risk of claims with respect to various environmental matters, and there can be no assurance that material costs or liabilities will not be incurred in connection with such claims. While the Company has incurred in the past several years, and will continue to incur, capital and operating expenditures in order to comply with environmental laws and regulations, it believes that its future cost of compliance with environmental laws, regulations and ordinances, and its exposure to liability for environmental claims and its obligation to participate in the remediation and monitoring of certain hazardous waste disposal sites, will not have a material effect on its financial condition or results of operations. However, future events, such as changes in existing laws and regulations, or unknown contamination or costs of remediation of sites owned, operated or used for waste disposal by the Company (including contamination caused by prior owners and operators of such sites or other waste generators) may give rise to additional costs which could have a material effect on its financial condition or results of operations. Employees and Labor Relations As of September 30, 2022, approximately 25% of our U.S. workforce and 6.5% of our Non-U.S. workforce are under collective bargaining agreements. Approximately 23% of all U.S. employees and 2% of our Non-U.S. employees are under collective bargaining agreements that will expire in the next 12 months. General Matters In the ordinary course of conducting business activities, the Company and its subsidiaries become involved in certain other judicial, administrative and regulatory proceedings involving both private parties and governmental authorities. These proceedings include insured and uninsured regulatory, employment, intellectual property, general and commercial liability, environmental and other matters. At this time, the Company does not expect any of these proceedings to have a material effect on its reputation, business, financial condition, results of operations or cash flows. However, the Company can give no assurance that the results of any such proceedings will not materially affect its reputation, business, financial condition, results of operations or cash flows. |
Postretirement and Other Benefi
Postretirement and Other Benefits | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Postretirement and Other Benefits | Postretirement and Other Benefits The Company sponsors pension benefits in the United States, France, United Kingdom, Germany, Italy, Netherlands, and Canada and OPEB benefits related to postretirement healthcare and life insurance in the United States, Germany, and Canada. The Company’s pension benefits in Italy and Canada and Canadian OPEB liability are not material and therefore are not included in the following disclosures. In connection with the Merger, the Company assumed Neenah's pension and OPEB plans. In addition, Neenah has a supplemental employee retirement plan ("SERP"), which is a non-qualified defined benefit plan, and a supplemental retirement contribution plan ("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. Pension and OPEB Benefits The components of net pension benefit costs for the employees in the United States, France, United Kingdom Germany, and Netherlands were as follows (in millions): Three Months Ended September 30, U.S. Pension Plans Non-U.S. Pension Plans 2022 2021 2022 2021 Service cost $ 0.5 $ — $ 0.7 $ 0.5 Interest cost 4.1 0.7 2.0 0.9 Expected return on plan assets (5.0) (1.0) (1.9) (1.0) Amortizations and other 0.5 0.9 0.1 0.2 Net periodic benefit cost $ 0.1 $ 0.6 $ 0.9 $ 0.6 Nine Months Ended September 30, U.S. Pension Plans Non-U.S. Pension Plans 2022 2021 2022 2021 Service cost $ 0.5 $ — $ 1.4 $ 1.2 Interest cost 5.7 2.1 3.2 1.8 Expected return on plan assets (7.0) (3.0) (3.2) (1.9) Amortizations and other 1.3 2.7 0.4 0.7 Net periodic benefit cost $ 0.5 $ 1.8 $ 1.8 $ 1.8 |
Equity-Based Compensation
Equity-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Equity-Based Compensation | Equity-Based Compensation Restricted Stock Plan Service Based Shares The 2015 Long-Term Incentive Plan (“LTIP”) provided for any unvested service awards to immediately vest on occurrence of a qualifying Change in Control event (“CIC event”) upon which the awardee is either terminated by the Company or the employee voluntarily resigns from the Company for good reason as defined in the LTIP within 24 months of the CIC event (“CIC Qualifying Termination”). As the Merger was a qualifying CIC event, the unvested service awards of employees that met the criteria of CIC Qualifying Termination immediately vested on such CIC Qualifying Termination date. The total fair value of such accelerated service awards of $2.1 million was expensed during the three months ended September 30, 2022 when the awards fully vested upon the termination of the employees and is included in General expense in the unaudited Condensed Consolidated Statements of Income/(Loss). Restricted Stock Plan Performance Based Shares On the Merger date, the Company modified the 2022 and 2021 performance share awards issued under the LTIP to remove the performance and market conditions for continuing employees, effectively converting the awards to service-only modified awards that cliff vest upon the original date of lapse of restrictions defined in the LTIP. The fair value of the continuing employee awards of $0.6 million will be recognized on a straight-line basis over the remaining service period, less any cost previously recognized on these performance share awards. The performance share awards of CIC Qualifying Termination employees were also modified to accelerate vesting and to set the number of shares underlying these awards at 100% of the target level defined in the LTIP rather than at the pro-rata target level based on service period completed as of the Merger date. The fair value as of the Merger date of $2.5 million was expensed during the three and nine months ended September 30, 2022 when the awards fully vested upon the termination of the employees and is included in General expense in the unaudited Condensed Consolidated Statements of Income/(Loss). Stock compensation expense related to the modified performance share awards was $2.5 million during the three and nine months ended September 30, 2022 and was recognized in General expense. Acquired Equity-Based Compensation Awards As provided in the Merger Agreement, all stock options (“Options”), stock appreciation rights ("SARs"), restricted stock units (“RSUs”) and performance share units (“PSUs”) granted pursuant to Neenah’s 2018 Omnibus Stock and Incentive Compensation Plan (“2018 Plan”) that were outstanding immediately prior to the Merger were generally automatically converted into Options, SARs, RSUs and RSUs, respectively, of the Company's common stock at the exchange ratio and otherwise generally on the same terms and conditions (including vesting exercisability and/or settlement requirements) as applied to such awards. At the closing of the Merger, the Options and SARs had fully vested and are payable to the grantees. Accordingly, there is no ongoing compensation expense related to the Options. The RSUs generally vest over a three-year term as follows: 33.3% on each of the first, second and third anniversaries of the grant date, except for RSUs issued as retirement and special grant awards, which vest over a one-year term on the first anniversary of the grant date. Vesting is contingent upon continued employment or service. The unvested portion of a grantee’s RSU will be immediately forfeited and cancelled if the grantee ceases employment or service, except for retirement awards which vest on a pro rata basis according to the proportion of days employed during the vesting period of one year. At the Merger date, the Company assumed 180,149 unvested Neenah RSUs, converted at the exchange ratio, with a total fair value of $4.2 million. In accordance with the terms of the PSU award agreements, the change in control eliminated the performance condition and market condition; as such, only the three-year service condition remains. At the Merger date, the Company assumed 292,032 unvested PSUs, converted at the exchange ratio, with a total fair value of $6.8 million automatically converted to RSUs of the Company. PSUs unvested and converted RSUs will be accounted for the same as the RSUs described above and be recognized over a weighted-average period of approximately 2 years. Stock compensation expense related to the acquired awards was $1.9 million during the three and nine months ended September 30, 2022 and was recognized in General expense. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For interim financial reporting, the Company estimates the annual tax rate based on projected taxable income for the full year and records a quarterly income tax provision in accordance with ASC No. 740-270 "Accounting for Income Taxes in Interim Periods." These interim estimates are subject to variation due to several factors, including the ability of the Company to accurately forecast pre-tax and taxable income and loss by jurisdiction, changes in laws or regulations, and expenses or losses for which tax benefits are not recognized. Jurisdictions with a projected loss for the year or an actual year-to-date loss where no tax benefit can be recognized are excluded from the estimated annual effective tax rate. The impact of including these jurisdictions on the quarterly effective tax rate calculations could result in a higher or lower effective tax rate during a quarter, based upon the mix and timing of actual earnings versus annual projections. Prior to the Tax Cuts and Jobs Act of 2017, the Company asserted that substantially all of the undistributed earnings of its foreign subsidiaries were considered indefinitely reinvested and accordingly, no deferred taxes were provided. Due to the Tax Act, the Company has significant previously taxed earnings and profits from its foreign subsidiaries, as a result of transition tax, that is generally able to be repatriated free of U.S. federal tax. In addition, future earnings of foreign subsidiaries are generally expected to be able to be repatriated free of U.S. federal income tax because these earnings were taxed in the U.S. under the GILTI regime or would be eligible for a 100% dividends received deduction. As a result of the Company’s treasury policy to simplify and expediate the intercompany cash flows to SWM US, as evidenced by the implementation of the Cash Pool, and in light of the Company’s demonstrated goal of driving growth though inorganic/acquisitional means, the Company has decided to no longer assert indefinite reinvestment with respect to earnings generated by foreign subsidiaries prior to January 1, 2018. Therefore, the Company does not intend to assert indefinite reinvestment of its foreign subsidiaries to the extent of each CFC’s earnings and profits and to the extent of any foreign partnership’s U.S. tax capital accounts. As a result, the Company has provided for non-U.S. withholding taxes, U.S. federal tax related to currency movement on previously-taxed earnings and profits, and U.S. state taxes on unremitted earnings. All unrecognized tax positions could impact the Company's effective tax rate if recognized. With respect to penalties and interest incurred from income tax assessments or related to unrecognized tax benefits, the Company’s policy is to classify penalties as provision for income taxes and interest as interest expense in its unaudited Condensed Consolidated Statements of Income/(Loss). There were no material income tax penalties or interest accrued during the three and nine months ended September 30, 2022 or 2021. The Company's effective tax rate from continuing operations was 32.6% and 13.2% for the three months ended September 30, 2022 and 2021, respectively. The increase was primarily due to significant one-time items related to the Merger in the three months ended September 30, 2022, as well as an unfavorable mix of earnings by jurisdiction. The Company's effective tax rate from continuing operations was 25.3% and 29.6% for the nine months ended September 30, 2022 and 2021, respectively. The decrease was primarily due to unfavorable discrete items in 2021, partially offset by unfavorable mix of earnings in 2022. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Prior to the completion of the Merger, we operated in two reporting segments: Advanced Materials & Structures and Engineered Papers. Effective with the Merger, the Company reassessed its reporting segments. Management concluded that it has two operating product line segments that are also the reporting segments for financial reporting purposes: Advanced Technical Materials and Fiber-Based Solutions. ATM is comprised of the legacy SWM Advanced Materials & Structures segment and FBS is comprised of the legacy Engineered Papers segment. As such, there were no changes to the historical results of these segments. The merged Neenah segments have been allocated to ATM and FBS based on performance, market focus, technologies, and reporting structure. The ATM segment provides solutions that filter and purify air and liquids, supports adhesive and protective applications, advances healing and wellness, and solves some of material science’s most demanding performance needs across a number of categories. The FBS segment leverages the company’s extensive natural fiber capabilities to provide specialty solutions for various end-uses, including sustainable packaging, imaging and communications, home and office, consumer goods, and other applications. The accounting policies of the reporting segments are the same as those described in Note 2. Summary of Significant Accounting Policies in the notes to the consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2021. The Company primarily evaluates segment performance and allocates resources based on operating profit. General corporate expenses that do not directly support the operations of the business segments are unallocated expenses. Assets are managed on a total company basis and are therefore not disclosed at the segment level. Net sales and operating profit by segments were (in millions): Net Sales Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 ATM $ 426.1 63.2 % $ 260.1 67.8 % $ 987.1 65.5 % $ 675.1 64.3 % FBS 248.0 36.8 % 123.5 32.2 % 520.2 34.5 % 374.5 35.7 % Total Consolidated $ 674.1 100.0 % $ 383.6 100.0 % $ 1,507.3 100.0 % $ 1,049.6 100.0 % Operating Profit/Loss Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 ATM $ 31.5 N.M. $ 15.9 69.1 % $ 71.2 N.M. $ 56.1 77.5 % FBS 27.8 N.M. 24.0 104.4 % 75.9 N.M. 78.1 107.9 % Unallocated (73.2) N.M. (16.9) (73.5) % (122.6) N.M. (61.8) (85.4) % Total Consolidated $ (13.9) 100.0 % $ 23.0 100.0 % $ 24.5 100.0 % $ 72.4 100.0 % N.M. - Not meaningful |
General (Policies)
General (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements and the notes thereto have been prepared in accordance with the instructions on Form 10-Q and Rule 10-01 of Regulation S-X of the Securities and Exchange Commission ("SEC") and do not include all the information and disclosures required by accounting principles generally accepted in the United States of America ("U.S. GAAP"). However, such information reflects all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim periods. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the full year. The unaudited condensed consolidated financial statements and these notes thereto included herein should be read in conjunction with the audited consolidated financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 1, 2022. |
Principles of Consolidation | Principles of Consolidation |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities in the unaudited condensed consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, inventory valuation, useful lives of tangible and intangible assets, business acquisitions, equity-based compensation, derivatives, sales returns and rebates, receivables valuation, pension, postretirement and other benefits, restructuring and impairment, taxes and contingencies. |
Recently Adopted Accounting Standards | Recently Adopted Accounting StandardsIn March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The new standard provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform and the anticipated discontinuance of the London Interbank Offered Rate ("LIBOR") if certain criteria are met. The amendments in this ASU are effective for all entities as of March 12, 2020, through December 31, 2022. We adopted this ASU as of April 1, 2022 with no material impact to our financial statements. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | Net sales attributed by geographic location based on the location of the Company’s direct customers were as follows (in millions): Three Months Ended September 30, 2022 September 30, 2021 ATM FBS Total ATM FBS Total United States $ 219.1 $ 138.1 $ 357.2 $ 152.3 $ 40.8 $ 193.1 Europe and the former Commonwealth of Independent States 121.1 49.2 170.3 60.9 42.3 103.2 Asia/Pacific (including China) 50.5 31.4 81.9 32.3 16.0 48.3 Americas (excluding U.S.) 22.3 23.4 45.7 8.1 11.8 19.9 Other foreign countries 13.1 5.9 19.0 6.5 12.6 19.1 Net sales (1) $ 426.1 $ 248.0 $ 674.1 $ 260.1 $ 123.5 $ 383.6 (1) Net sales include net hedging gains and losses for the three months ended September 30, 2021. Nine Months Ended September 30, 2022 September 30, 2021 ATM FBS Total ATM FBS Total United States $ 545.7 $ 213.8 $ 759.5 $ 412.1 $ 116.6 $ 528.7 Europe and the former Commonwealth of Independent States 250.6 151.2 401.8 134.5 139.8 274.3 Asia/Pacific (including China) 124.5 82.5 207.0 93.2 61.7 154.9 Americas (excluding U.S.) 40.0 53.0 93.0 21.6 34.0 55.6 Other foreign countries 26.3 19.7 46.0 13.7 22.4 36.1 Net sales (1) $ 987.1 $ 520.2 $ 1,507.3 $ 675.1 $ 374.5 $ 1,049.6 (1) Net sales include net hedging gains and losses for the nine months ended September 30, 2021. |
Schedule of Disaggregation of Revenue, Percent | Net sales as a percentage by end market for the ATM business were as follows: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Industrials 34 % 37 % 35 % 33 % Protective Solutions 17 % 25 % 23 % 31 % Filtration 25 % 16 % 20 % 19 % Healthcare 14 % 22 % 17 % 17 % Release Liners 10 % — % 5 % — % Net sales 100 % 100 % 100 % 100 % Net sales as a percentage by end market for the FBS business were as follows: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Packaging & Specialty Papers 52 % — % 25 % — % Engineered Papers 48 % 100 % 75 % 100 % Net sales 100 % 100 % 100 % 100 % |
Other Comprehensive Income_(L_2
Other Comprehensive Income/(Loss) (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Loss | Components of Accumulated other comprehensive loss, net of tax, were as follows (in millions): September 30, 2022 December 31, 2021 Accumulated pension and OPEB liability adjustments, net of income tax benefit of $7.1 million and $8.9 million at September 30, 2022 and December 31, 2021, respectively $ (12.7) $ (14.4) Accumulated unrealized gain/(loss) on derivative instruments, net of income tax benefit (expense) of $(8.3) million and $2.1 million at September 30, 2022 and December 31, 2021, respectively 52.7 (1.9) Accumulated unrealized foreign currency translation adjustments, net of income tax benefit of $7.7 million and $9.5 million at September 30, 2022 and December 31, 2021, respectively (197.9) (102.7) Accumulated other comprehensive loss, net of tax $ (157.9) $ (119.0) |
Changes in Components of Other Comprehensive (Loss) Income | Changes in the components of Accumulated other comprehensive loss, net of tax, were as follows (in millions): Three Months Ended September 30, 2022 September 30, 2021 Pre-tax Tax Net of Pre-tax Tax Net of Pension and OPEB liability adjustments $ 0.7 $ (0.9) $ (0.2) $ 1.1 $ (0.2) $ 0.9 Derivative instrument adjustments 30.1 (7.2) 22.9 2.3 (0.6) 1.7 Unrealized foreign currency adjustments (65.8) (18.3) (84.1) (20.1) (0.1) (20.2) Total $ (35.0) $ (26.4) $ (61.4) $ (16.7) $ (0.9) $ (17.6) Nine Months Ended September 30, 2022 September 30, 2021 Pre-tax Tax Net of Pre-tax Tax Net of Pension and OPEB liability adjustments $ 3.5 $ (1.8) $ 1.7 $ 3.4 $ — $ 3.4 Derivative instrument adjustments 65.0 (10.4) 54.6 6.1 (0.8) 5.3 Unrealized foreign currency translation adjustments (93.4) (1.8) (95.2) (17.3) (3.4) (20.7) Total $ (24.9) $ (14.0) $ (38.9) $ (7.8) $ (4.2) $ (12.0) |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired And Liabilities Assumed | The estimated fair values of the assets acquired and liabilities assumed as of the Merger date were as follows (in millions): Preliminary Fair Value Cash and cash equivalents $ 55.9 Accounts receivable 206.6 Inventory 191.8 Assets held for sale 10.7 Other current assets 16.8 Property, plant and equipment 453.6 Identifiable intangible assets 219.0 Other non-current assets 41.8 Total assets $ 1,196.2 Current debt $ 1.9 Accounts payable and other current liabilities 207.9 Long-term debt 22.8 Deferred income tax liabilities 67.7 Other non-current liabilities 82.0 Net assets acquired $ 813.9 Goodwill 242.4 Total consideration $ 1,056.3 The consideration paid for Scapa, and the fair values of the assets acquired and liabilities assumed as of the April 15, 2021 acquisition date were as follows (in millions): Final Fair Value Adjustments Preliminary Fair Value Cash and cash equivalents $ 22.7 $ — $ 22.7 Accounts receivable 67.7 — 67.7 Inventory 60.0 (0.9) 60.9 Other current assets 9.7 (0.1) 9.8 Property, plant and equipment 159.8 7.7 152.1 Identifiable intangible assets 246.2 — 246.2 Other non-current assets 23.3 (3.0) 26.3 Total assets $ 589.4 $ 3.7 $ 585.7 Current debt $ 15.0 $ — $ 15.0 Accounts payable and other current liabilities 83.9 (2.0) 85.9 Deferred income tax liabilities 49.2 (12.3) 61.5 Other non-current liabilities 40.1 7.0 33.1 Net assets acquired $ 401.2 $ 11.0 $ 390.2 Goodwill 252.1 (11.0) 263.1 Total consideration $ 653.3 $ — $ 653.3 |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The following table sets forth the components of identifiable intangible assets (in millions) and their estimated useful lives (in years): Fair Value Weighted-Average Amortization Period (Years) Amortizable intangible assets: Customer relationships $ 182.0 14.3 Tradenames and other 14.7 20 Developed technology 22.3 7 Total amortizable intangible assets $ 219.0 The following table shows the fair values assigned to identifiable intangible assets (in millions): Fair Value Weighted-Average Amortization Period (Years) Amortizable intangible assets: Customer relationships $ 205.4 15 Tradenames and other 7.7 10 Developed technology 33.1 7 Total amortizable intangible assets $ 246.2 |
Actual and Pro Forma Net Sales and Income from Continuing Operations | Net sales and Net loss from Neenah included in the Company's unaudited Condensed Consolidated Statements of Income/(Loss) from the Merger date are as follows (in millions): July 6, 2022 - September 30, 2022 Net sales $ 289.8 Net loss $ (5.8) The supplemental pro forma financial information presented below is not necessarily indicative of consolidated results of operations of the combined business had the Merger occurred as of January 1, 2021 (in millions): Three Months Ended September 30, 2022 September 30, 2021 Net sales $ 683.7 $ 651.4 Net income $ 27.2 $ 7.4 Nine Months Ended September 30, 2022 September 30, 2021 Net sales $ 2,108.4 $ 1,813.8 Net income (loss) $ 56.5 $ (62.9) The supplemental pro forma financial information presented below is not necessarily indicative of consolidated results of operations of the combined business had the Scapa acquisition occurred as of January 1, 2020 (in millions): Nine Months Ended September 30, 2021 Net sales $ 1,180.2 Net income $ 47.9 |
Net Income_(Loss) Per Share (Ta
Net Income/(Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Reconciliation of the Common and Potential Common Shares Outstanding Used in Earnings Per Share Calculation | The following table is a reconciliation of the average number of common and potential common shares outstanding used in the calculations of basic and diluted net income/(loss) per share (in millions, shares in thousands): Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Numerator (basic and diluted): Net income/(loss) $ (22.5) $ 12.2 $ (9.1) $ 35.6 Less: Dividends paid to participating securities (0.2) (0.2) (0.7) (0.5) Undistributed and distributed earnings/(loss) available to common stockholders $ (22.7) $ 12.0 $ (9.8) $ 35.1 Denominator: Average number of common shares outstanding 52,593.9 31,046.1 38,415.9 31,022.1 Effect of dilutive stock-based compensation — 354.9 — 359.5 Average number of common and potential common shares outstanding 52,593.9 31,401.0 38,415.9 31,381.6 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories by Major Class | The following table details inventories by major class (in millions): September 30, December 31, Raw materials $ 183.6 $ 113.4 Work in process 80.5 41.9 Finished goods 193.7 95.7 Supplies and other 27.6 8.5 Total inventories $ 485.4 $ 259.5 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amount of goodwill by reporting segment were as follows (in millions): ATM FBS Total Balance at December 31, 2021 $ 643.4 $ 4.9 $ 648.3 Goodwill acquired during the period (1) 243.8 — 243.8 Foreign currency translation and other (2) (42.4) (0.7) (43.1) Balance at September 30, 2022 $ 844.8 $ 4.2 $ 849.0 (1) $242.4 million related to the Merger and $1.4 million related to measurement period adjustments for the Scapa acquisition. (2) During the first quarter of 2022, goodwill with a carrying amount of $2.1 million was allocated to the disposal group classified as held for sale and subsequently impaired. Goodwill was allocated to the disposal group on the basis of relative fair value, primarily utilizing Level 3 inputs which included forecasted future cash flows. We considered the planned divestiture of this business as a potential indicator that the fair value of the ATM reporting unit may be below its carrying amount and performed a qualitative impairment assessment in the first quarter of 2022. As a result of this assessment, we concluded the fair value of the reporting unit was in excess of its carrying value and therefore no additional impairment was identified or recognized. |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Amortized Intangible Assets | The gross carrying amount and accumulated amortization for intangible assets consisted of the following (in millions): September 30, 2022 Gross Accumulated Net Amortized Intangible Assets Customer relationships $ 692.9 $ 142.9 $ 550.0 Developed technology 70.1 24.2 45.9 Trade names 31.8 3.7 28.1 Acquired technology 21.5 0.7 20.8 Non-compete agreements 2.9 2.7 0.2 Patents 1.9 0.7 1.2 Total $ 821.1 $ 174.9 $ 646.2 Unamortized Intangible Assets Trade names (1) $ 15.0 $ — $ 15.0 (1) During the first quarter of 2022, indefinite-lived trade names and developed technology with net carrying amounts of $4.2 million and $0.5 million were allocated to the disposal group classified as held for sale and subsequently impaired. December 31, 2021 Gross Accumulated Net Amortized Intangible Assets Customer relationships $ 541.7 $ 119.2 $ 422.5 Developed technology 74.6 20.7 53.9 Trade names 18.9 2.7 16.2 Non-compete agreements 2.9 2.5 0.4 Patents 1.5 0.6 0.9 Total $ 639.6 $ 145.7 $ 493.9 Unamortized Intangible Assets Trade names $ 20.0 $ — $ 20.0 |
Schedule of Unamortized Intangible Assets | The gross carrying amount and accumulated amortization for intangible assets consisted of the following (in millions): September 30, 2022 Gross Accumulated Net Amortized Intangible Assets Customer relationships $ 692.9 $ 142.9 $ 550.0 Developed technology 70.1 24.2 45.9 Trade names 31.8 3.7 28.1 Acquired technology 21.5 0.7 20.8 Non-compete agreements 2.9 2.7 0.2 Patents 1.9 0.7 1.2 Total $ 821.1 $ 174.9 $ 646.2 Unamortized Intangible Assets Trade names (1) $ 15.0 $ — $ 15.0 (1) During the first quarter of 2022, indefinite-lived trade names and developed technology with net carrying amounts of $4.2 million and $0.5 million were allocated to the disposal group classified as held for sale and subsequently impaired. December 31, 2021 Gross Accumulated Net Amortized Intangible Assets Customer relationships $ 541.7 $ 119.2 $ 422.5 Developed technology 74.6 20.7 53.9 Trade names 18.9 2.7 16.2 Non-compete agreements 2.9 2.5 0.4 Patents 1.5 0.6 0.9 Total $ 639.6 $ 145.7 $ 493.9 Unamortized Intangible Assets Trade names $ 20.0 $ — $ 20.0 |
Restructuring and Impairment _2
Restructuring and Impairment Activities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Changes in Restructuring Liabilities | The following table summarizes total restructuring and impairment expense (in millions): Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Restructuring and impairment expense: Severance $ 0.3 $ 1.2 $ 1.6 $ 2.8 Other 0.7 0.7 2.1 3.1 Asset impairment 0.8 — 13.7 — Total restructuring and impairment expense $ 1.8 $ 1.9 $ 17.4 $ 5.9 Other restructuring related charges - Cost of products sold Accelerated depreciation and amortization $ — $ 0.1 $ — $ 0.1 Spare parts and inventory write-downs to estimated net realizable value $ — $ 0.4 $ — $ 0.4 Other restructuring related charges - Cost of products sold — 0.5 — 0.5 Total restructuring costs and related charges $ 1.8 $ 2.4 $ 17.4 $ 6.4 The following table summarizes changes in restructuring liabilities (in millions): Nine Months Ended September 30, 2022 September 30, 2021 Balance at beginning of period $ 6.2 $ 7.4 Accruals for announced programs 0.4 2.8 Accruals assumed from Merger (1) 2.3 — Cash payments (2.6) (4.8) Foreign exchange impact (0.4) (0.1) Balance at end of period $ 5.9 $ 5.3 (1) Accrued liabilities primarily for severance related to an optimization program at the Coldenhove, Netherlands facility and the closure of the Appleton, Wisconsin facility, both of which were acquired through the Merger. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Total Debt | The components of total debt are summarized in the following table (in millions): September 30, December 31, Revolving facility - U.S. dollar borrowings $ 288.0 $ 393.0 Term loan A facility 192.5 193.5 Term loan B facility 345.6 348.2 Delayed draw term loan 650.0 — 6.875% senior unsecured notes due October 1, 2026, net of discount of $6.0 million and $5.2 million at September 30, 2022 and December 31, 2021, respectively (1) 352.4 344.8 French employee profit sharing 3.4 4.1 Finance lease obligations 17.8 2.8 German loan agreement 9.7 — Debt issuance costs and discounts (30.9) (16.1) Total debt 1,828.5 1,270.3 Less: Current debt (1.8) (3.2) Total long-term debt $ 1,826.7 $ 1,267.1 (1) Amount includes a $6.8 million increase in fair value due to changes in benchmark interest rates related to the senior unsecured notes. Refer to Note 11. Derivatives for additional information on our interest rate swaps designated as a fair value hedge. |
Schedule of Maturities of Long-term Debt | The following is the expected maturities for the Company's debt obligations as of September 30, 2022 (in millions): 2022 $ 9.8 2023 39.3 2024 39.2 2025 39.6 2026 391.8 Thereafter 1,337.2 Total $ 1,856.9 |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives by Balance Sheet Location | The following table presents the fair value of asset and liability derivatives and the respective locations on the unaudited Condensed Consolidated Balance Sheets at September 30, 2022 (in millions): Asset Derivatives Liability Derivatives Balance Sheet Fair Balance Sheet Fair Derivatives designated as hedges: Foreign exchange contracts - net investment hedge Accounts receivable, net $ 4.9 Accrued expenses and other current liabilities $ 0.2 Foreign exchange contracts - net investment hedge Other assets 35.9 Other liabilities — Interest rate contracts - cash flow hedge Accounts receivable, net 0.2 Accrued expenses and other current liabilities — Interest rate contracts - cash flow hedge Other assets 40.2 Other liabilities — Interest rate contracts - fair value hedge Other assets 6.8 Total derivatives designated as hedges $ 88.0 $ 0.2 Derivatives not designated as hedges: Foreign exchange contracts Accounts receivable, net 0.7 Accrued expenses and other current liabilities 6.2 Total derivatives not designated as hedges $ 0.7 $ 6.2 Total derivatives $ 88.7 $ 6.4 The following table presents the fair value of asset and liability derivatives and the respective locations on the Condensed Consolidated Balance Sheets at December 31, 2021 (in millions): Asset Derivatives Liability Derivatives Balance Sheet Fair Balance Sheet Fair Derivatives designated as hedges: Foreign exchange contracts - net investment hedge Accounts receivable, net $ 1.6 Accrued expenses and other current liabilities $ — Foreign exchange contracts - net investment hedge Other assets — Other liabilities 9.8 Interest rate contracts - cash flow hedge Accounts receivable, net 0.2 Accrued expenses and other current liabilities — Interest rate contracts - cash flow hedge Other assets 3.3 Other liabilities 2.1 Total derivatives designated as hedges $ 5.1 $ 11.9 Derivatives not designated as hedges: Foreign exchange contracts Accounts receivable, net 0.2 Accounts payable 0.6 Total derivatives not designated as hedges $ 0.2 $ 0.6 Total derivatives $ 5.3 $ 12.5 The following table presents the fair value of fixed-to-floating interest rate swaps designated as a fair value hedge of our Notes and the respective location on the unaudited Condensed Consolidated Balance Sheets at September 30, 2022 (in millions): Balance Sheet Location Carrying Amount of Hedged Item Cumulative Amount of Adjustment Included in Carrying Amount Interest rate contracts - fair value hedge Long-term debt $ 352.4 $ 6.8 |
Schedule of Net Effect Of Derivative Instruments | The following table provides the net effect that derivative instruments designated in hedging relationships had on Accumulated other comprehensive loss, net of tax and results of operations (in millions): Derivatives Designated in Hedging Relationships Unrealized Gain/(Loss) Recognized in AOCI on Derivatives, Net of Tax Location of Loss Reclassified Loss Reclassified Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2022 2021 2022 2021 2022 2021 2022 2021 Derivatives designated as cash flow hedge Foreign exchange contracts $ — $ (0.2) $ — $ (0.1) Net sales $ — $ (0.3) $ — $ (1.3) Foreign exchange contracts 0.1 (0.4) 0.3 (0.5) Other income, net — (0.1) (0.1) (0.7) Interest rate contracts 19.7 1.9 47.8 3.9 Interest expense (3.0) — (4.5) — Derivatives designated as net investment hedge Foreign exchange contracts 0.1 1.9 43.7 7.1 Total gain/(loss) $ 19.9 $ 3.2 $ 91.8 $ 10.4 $ (3.0) $ (0.4) $ (4.6) $ (2.0) |
Derivative Instruments Effect on AOCI and Results of Operations | The following table provides the effect that derivative instruments not designated as cash flow hedging instruments had on Net income/(loss) (in millions): Derivatives Not Designated as Cash Flow Hedging Instruments Location of Gain/(Loss) Recognized in Income Amount of Gain/(Loss) Recognized in Income/(Loss) Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Foreign exchange contracts Other income, net $ 0.3 $ (0.3) $ (0.2) $ (0.6) |
Postretirement and Other Bene_2
Postretirement and Other Benefits (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Net Benefit Costs | The components of net pension benefit costs for the employees in the United States, France, United Kingdom Germany, and Netherlands were as follows (in millions): Three Months Ended September 30, U.S. Pension Plans Non-U.S. Pension Plans 2022 2021 2022 2021 Service cost $ 0.5 $ — $ 0.7 $ 0.5 Interest cost 4.1 0.7 2.0 0.9 Expected return on plan assets (5.0) (1.0) (1.9) (1.0) Amortizations and other 0.5 0.9 0.1 0.2 Net periodic benefit cost $ 0.1 $ 0.6 $ 0.9 $ 0.6 Nine Months Ended September 30, U.S. Pension Plans Non-U.S. Pension Plans 2022 2021 2022 2021 Service cost $ 0.5 $ — $ 1.4 $ 1.2 Interest cost 5.7 2.1 3.2 1.8 Expected return on plan assets (7.0) (3.0) (3.2) (1.9) Amortizations and other 1.3 2.7 0.4 0.7 Net periodic benefit cost $ 0.5 $ 1.8 $ 1.8 $ 1.8 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Net Sales and Operating Profit | The Company primarily evaluates segment performance and allocates resources based on operating profit. General corporate expenses that do not directly support the operations of the business segments are unallocated expenses. Assets are managed on a total company basis and are therefore not disclosed at the segment level. Net sales and operating profit by segments were (in millions): Net Sales Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 ATM $ 426.1 63.2 % $ 260.1 67.8 % $ 987.1 65.5 % $ 675.1 64.3 % FBS 248.0 36.8 % 123.5 32.2 % 520.2 34.5 % 374.5 35.7 % Total Consolidated $ 674.1 100.0 % $ 383.6 100.0 % $ 1,507.3 100.0 % $ 1,049.6 100.0 % Operating Profit/Loss Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 ATM $ 31.5 N.M. $ 15.9 69.1 % $ 71.2 N.M. $ 56.1 77.5 % FBS 27.8 N.M. 24.0 104.4 % 75.9 N.M. 78.1 107.9 % Unallocated (73.2) N.M. (16.9) (73.5) % (122.6) N.M. (61.8) (85.4) % Total Consolidated $ (13.9) 100.0 % $ 23.0 100.0 % $ 24.5 100.0 % $ 72.4 100.0 % N.M. - Not meaningful |
General (Details)
General (Details) | Jul. 06, 2022 segment | Sep. 30, 2022 country production_location |
Schedule of Equity Method Investments [Line Items] | ||
Number of reportable segments | segment | 2 | |
Number of countries in which entity operates (more than) | country | 100 | |
Number of production locations | production_location | 48 | |
Joint ventures in China | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership of joint ventures | 50% |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) revenue_source | Sep. 30, 2021 USD ($) | |
Revenue from Contract with Customer [Abstract] | ||||
Number of revenue sources | revenue_source | 2 | |||
Revenue from External Customer [Line Items] | ||||
Net sales | $ 674.1 | $ 383.6 | $ 1,507.3 | $ 1,049.6 |
United States | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 357.2 | 193.1 | 759.5 | 528.7 |
Europe and the former Commonwealth of Independent States | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 170.3 | 103.2 | 401.8 | 274.3 |
Asia/Pacific (including China) | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 81.9 | 48.3 | 207 | 154.9 |
Americas (excluding U.S.) | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 45.7 | 19.9 | 93 | 55.6 |
Other foreign countries | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 19 | 19.1 | 46 | 36.1 |
ATM | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 426.1 | 260.1 | 987.1 | 675.1 |
ATM | United States | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 219.1 | 152.3 | 545.7 | 412.1 |
ATM | Europe and the former Commonwealth of Independent States | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 121.1 | 60.9 | 250.6 | 134.5 |
ATM | Asia/Pacific (including China) | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 50.5 | 32.3 | 124.5 | 93.2 |
ATM | Americas (excluding U.S.) | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 22.3 | 8.1 | 40 | 21.6 |
ATM | Other foreign countries | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 13.1 | 6.5 | 26.3 | 13.7 |
FBS | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 248 | 123.5 | 520.2 | 374.5 |
FBS | United States | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 138.1 | 40.8 | 213.8 | 116.6 |
FBS | Europe and the former Commonwealth of Independent States | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 49.2 | 42.3 | 151.2 | 139.8 |
FBS | Asia/Pacific (including China) | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 31.4 | 16 | 82.5 | 61.7 |
FBS | Americas (excluding U.S.) | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 23.4 | 11.8 | 53 | 34 |
FBS | Other foreign countries | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | $ 5.9 | $ 12.6 | $ 19.7 | $ 22.4 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregation of Revenue, Percent (Details) - Net sales - End Market | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
ATM | ||||
Product Information [Line Items] | ||||
Net sales | 100% | 100% | 100% | 100% |
ATM | Industrials | ||||
Product Information [Line Items] | ||||
Net sales | 34% | 37% | 35% | 33% |
ATM | Protective Solutions | ||||
Product Information [Line Items] | ||||
Net sales | 17% | 25% | 23% | 31% |
ATM | Filtration | ||||
Product Information [Line Items] | ||||
Net sales | 25% | 16% | 20% | 19% |
ATM | Healthcare | ||||
Product Information [Line Items] | ||||
Net sales | 14% | 22% | 17% | 17% |
ATM | Release Liners | ||||
Product Information [Line Items] | ||||
Net sales | 10% | 0% | 5% | 0% |
FBS | ||||
Product Information [Line Items] | ||||
Net sales | 100% | 100% | 100% | 100% |
FBS | Packaging & Specialty Papers | ||||
Product Information [Line Items] | ||||
Net sales | 52% | 0% | 25% | 0% |
FBS | Engineered Papers | ||||
Product Information [Line Items] | ||||
Net sales | 48% | 100% | 75% | 100% |
Revenue Recognition - Receivabl
Revenue Recognition - Receivable Sales Programs (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Accounts receivable sold | $ 38.1 |
Cash proceeds | $ 37.9 |
Other Comprehensive Income_(L_3
Other Comprehensive Income/(Loss) - Components of Accumulated Comprehensive Loss (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated other comprehensive loss, net of tax | $ 1,132.9 | $ 694.5 | $ 682.2 | $ 635.7 | $ 653 | $ 649.6 |
Accumulated other comprehensive loss, net of tax | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated other comprehensive loss, net of tax | (157.9) | $ (96.5) | (119) | $ (123.9) | $ (106.3) | $ (111.9) |
Pension and OPEB liability adjustments | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated other comprehensive loss, tax benefit (expense) | 7.1 | 8.9 | ||||
Accumulated other comprehensive loss, net of tax | (12.7) | (14.4) | ||||
Derivative instrument adjustments | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated other comprehensive loss, tax benefit (expense) | (8.3) | 2.1 | ||||
Accumulated other comprehensive loss, net of tax | 52.7 | (1.9) | ||||
Unrealized foreign currency adjustments | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated other comprehensive loss, tax benefit (expense) | 7.7 | 9.5 | ||||
Accumulated other comprehensive loss, net of tax | $ (197.9) | $ (102.7) |
Other Comprehensive Income_(L_4
Other Comprehensive Income/(Loss) - Changes in Components of Other Comprehensive (Loss) Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Pre-tax | $ (35) | $ (16.7) | $ (24.9) | $ (7.8) |
Tax | (26.4) | (0.9) | (14) | (4.2) |
Other comprehensive income/(loss) | (61.4) | (17.6) | (38.9) | (12) |
Pension and OPEB liability adjustments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Pre-tax | 0.7 | 1.1 | 3.5 | 3.4 |
Tax | (0.9) | (0.2) | (1.8) | 0 |
Other comprehensive income/(loss) | (0.2) | 0.9 | 1.7 | 3.4 |
Derivative instrument adjustments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Pre-tax | 30.1 | 2.3 | 65 | 6.1 |
Tax | (7.2) | (0.6) | (10.4) | (0.8) |
Other comprehensive income/(loss) | 22.9 | 1.7 | 54.6 | 5.3 |
Unrealized foreign currency adjustments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Pre-tax | (65.8) | (20.1) | (93.4) | (17.3) |
Tax | (18.3) | (0.1) | (1.8) | (3.4) |
Other comprehensive income/(loss) | $ (84.1) | $ (20.2) | $ (95.2) | $ (20.7) |
Business Acquisitions - Additio
Business Acquisitions - Additional Information (Details) shares in Millions | 3 Months Ended | 9 Months Ended | 18 Months Ended | |||||
Jul. 05, 2022 USD ($) | Mar. 28, 2022 shares | Apr. 15, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | |
Business Acquisition [Line Items] | ||||||||
Cash consideration, net of cash and cash equivalents acquired | $ 462,500,000 | $ 630,600,000 | ||||||
Neenah | ||||||||
Business Acquisition [Line Items] | ||||||||
Share exchange ratio (in shares) | 1.358 | |||||||
Common stock issued (in shares) | shares | 22.8 | |||||||
Value of shares issued | $ 534,100,000 | |||||||
Consideration transferred | 1,056,300,000 | |||||||
Repayment of debt | 504,900,000 | |||||||
Transactions costs | 13,500,000 | $ 62,800,000 | 62,800,000 | $ 62,800,000 | ||||
Pre-acquisition period | $ 3,800,000 | |||||||
Acquisition related costs | 32,700,000 | 46,300,000 | ||||||
Scapa | ||||||||
Business Acquisition [Line Items] | ||||||||
Repayment of debt | $ 75,900,000 | |||||||
Acquisition related costs | $ 0 | $ 0 | $ 0 | $ 8,700,000 | ||||
Cash consideration | 630,600,000 | |||||||
Cash consideration, net of cash and cash equivalents acquired | 22,700,000 | |||||||
Business acquisition purchase | 568,900,000 | |||||||
Repayment of acquisition costs | $ 8,500,000 | |||||||
Decrease in deferred income tax liabilities | 12,300,000 | |||||||
Property, plant and equipment | 7,700,000 | |||||||
Uncertain tax positions | 7,000,000 | |||||||
Decrease in Other non-current assets | $ 3,000,000 |
Business Acquisitions - Schedul
Business Acquisitions - Schedule of Recognized Identifiable Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | 9 Months Ended | 18 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2022 | Jul. 05, 2022 | Dec. 31, 2021 | Apr. 15, 2021 | |
Fair value of assets acquired and liabilities assumed | |||||
Goodwill | $ 849 | $ 849 | $ 648.3 | ||
Neenah | |||||
Fair value of assets acquired and liabilities assumed | |||||
Cash and cash equivalents | $ 55.9 | ||||
Accounts receivable | 206.6 | ||||
Inventory | 191.8 | ||||
Assets held for sale | 10.7 | ||||
Other current assets | 16.8 | ||||
Property, plant and equipment | 453.6 | ||||
Identifiable intangible assets | 219 | ||||
Other non-current assets | 41.8 | ||||
Total assets | 1,196.2 | ||||
Current debt | 1.9 | ||||
Accounts payable and other current liabilities | 207.9 | ||||
Long-term debt | 22.8 | ||||
Deferred income tax liabilities | 67.7 | ||||
Other non-current liabilities | 82 | ||||
Net assets acquired | 813.9 | ||||
Goodwill | 242.4 | ||||
Total consideration | $ 1,056.3 | ||||
Scapa | |||||
Fair value of assets acquired and liabilities assumed | |||||
Cash and cash equivalents | 22.7 | 22.7 | $ 22.7 | ||
Accounts receivable | 67.7 | 67.7 | 67.7 | ||
Inventory | 60 | 60 | 60.9 | ||
Other current assets | 9.7 | 9.7 | 9.8 | ||
Property, plant and equipment | 159.8 | 159.8 | 152.1 | ||
Identifiable intangible assets | 246.2 | 246.2 | 246.2 | ||
Other non-current assets | 23.3 | 23.3 | 26.3 | ||
Total assets | 589.4 | 589.4 | 585.7 | ||
Current debt | 15 | 15 | 15 | ||
Accounts payable and other current liabilities | 83.9 | 83.9 | 85.9 | ||
Deferred income tax liabilities | 49.2 | 49.2 | 61.5 | ||
Other non-current liabilities | 40.1 | 40.1 | 33.1 | ||
Net assets acquired | 401.2 | 401.2 | 390.2 | ||
Goodwill | 252.1 | 252.1 | 263.1 | ||
Total consideration | 653.3 | 653.3 | $ 653.3 | ||
Adjustments | |||||
Cash and cash equivalents | 0 | ||||
Accounts receivable | 0 | ||||
Inventory | (0.9) | ||||
Other current assets | (0.1) | ||||
Property, plant and equipment | 7.7 | ||||
Identifiable intangible assets | 0 | ||||
Other non-current assets | (3) | ||||
Total assets | 3.7 | ||||
Current debt | 0 | ||||
Accounts payable and other current liabilities | (2) | ||||
Deferred income tax liabilities | (12.3) | ||||
Other non-current liabilities | 7 | ||||
Net assets acquired | 11 | ||||
Goodwill | $ 1.4 | (11) | |||
Total consideration | $ 0 |
Business Acquisitions -Schedule
Business Acquisitions -Schedule of Intangible Assets (Details) - USD ($) $ in Millions | Jul. 05, 2022 | Apr. 15, 2021 |
Neenah | ||
Business Acquisition [Line Items] | ||
Fair Value | $ 219 | |
Neenah | Customer relationships | ||
Business Acquisition [Line Items] | ||
Fair Value | $ 182 | |
Weighted-Average Amortization Period (Years) | 14 years 3 months 18 days | |
Neenah | Tradenames and other | ||
Business Acquisition [Line Items] | ||
Fair Value | $ 14.7 | |
Weighted-Average Amortization Period (Years) | 20 years | |
Neenah | Developed technology | ||
Business Acquisition [Line Items] | ||
Fair Value | $ 22.3 | |
Weighted-Average Amortization Period (Years) | 7 years | |
Scapa | ||
Business Acquisition [Line Items] | ||
Fair Value | $ 246.2 | |
Scapa | Customer relationships | ||
Business Acquisition [Line Items] | ||
Fair Value | $ 205.4 | |
Weighted-Average Amortization Period (Years) | 15 years | |
Scapa | Tradenames and other | ||
Business Acquisition [Line Items] | ||
Fair Value | $ 7.7 | |
Weighted-Average Amortization Period (Years) | 10 years | |
Scapa | Developed technology | ||
Business Acquisition [Line Items] | ||
Fair Value | $ 33.1 | |
Weighted-Average Amortization Period (Years) | 7 years |
Business Acquisitions - Sched_2
Business Acquisitions - Schedule of Sales and Income from Business Combination (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2021 | |
Neenah | ||
Business Acquisition [Line Items] | ||
Net sales | $ 289.8 | |
Net income (loss) | $ (5.8) | |
Scapa | ||
Business Acquisition [Line Items] | ||
Net sales | $ 1,180.2 | |
Net income (loss) | $ 47.9 |
Business Acquisitions - Pro For
Business Acquisitions - Pro Forma Financial Information (Details) - Neenah - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | ||||
Net sales | $ 683.7 | $ 651.4 | $ 2,108.4 | $ 1,813.8 |
Net income (loss) | $ 27.2 | $ 7.4 | $ 56.5 | $ (62.9) |
Net Income_(Loss) Per Share (De
Net Income/(Loss) Per Share (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator (basic and diluted): | ||||
Net income/(loss) | $ (22.5) | $ 12.2 | $ (9.1) | $ 35.6 |
Less: Dividends paid to participating securities | (0.2) | (0.2) | (0.7) | (0.5) |
Undistributed and distributed earnings/(loss) available to common stockholders, basic | (22.7) | 12 | (9.8) | 35.1 |
Undistributed and distributed earnings/(loss) available to common stockholders, diluted | $ (22.7) | $ 12 | $ (9.8) | $ 35.1 |
Denominator: | ||||
Average number of common shares outstanding (in shares) | 52,593,900 | 31,046,100 | 38,415,900 | 31,022,100 |
Effect of dilutive stock-based compensation (in shares) | 0 | 354,900 | 0 | 359,500 |
Average number of common and potential common shares outstanding (in shares) | 52,593,900 | 31,401,000 | 38,415,900 | 31,381,600 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 183.6 | $ 113.4 |
Work in process | 80.5 | 41.9 |
Finished goods | 193.7 | 95.7 |
Supplies and other | 27.6 | 8.5 |
Total inventories | $ 485.4 | $ 259.5 |
Goodwill - Schedule of Goodwill
Goodwill - Schedule of Goodwill (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 18 Months Ended |
Mar. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | |
Goodwill [Roll Forward] | |||
Goodwill, beginning of period | $ 648,300,000 | $ 648,300,000 | |
Goodwill acquired during the period | 243,800,000 | ||
Foreign currency translation and other | (43,100,000) | ||
Goodwill ending balance | 849,000,000 | $ 849,000,000 | |
Goodwill carrying value classified held for sale | 2,100,000 | ||
Goodwill impairment | 0 | ||
Scapa | |||
Goodwill [Roll Forward] | |||
Goodwill acquired during the period | 242,400,000 | ||
Goodwill ending balance | 252,100,000 | 252,100,000 | |
Goodwill | 1,400,000 | (11,000,000) | |
ATM | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning of period | 643,400,000 | 643,400,000 | |
Goodwill acquired during the period | 243,800,000 | ||
Foreign currency translation and other | (42,400,000) | ||
Goodwill ending balance | 844,800,000 | 844,800,000 | |
FBS | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning of period | $ 4,900,000 | 4,900,000 | |
Goodwill acquired during the period | 0 | ||
Foreign currency translation and other | (700,000) | ||
Goodwill ending balance | $ 4,200,000 | $ 4,200,000 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||||||
Intangible assets | $ 661.2 | $ 661.2 | $ 513.9 | |||
Unamortized Intangible Assets | ||||||
Amortization expense of intangible assets | 14.8 | $ 11.2 | 37 | $ 28.4 | ||
Estimated average amortization, year one | 60.2 | 60.2 | ||||
Estimated average amortization, year two | 60.2 | 60.2 | ||||
Estimated average amortization, year three | 60.2 | 60.2 | ||||
Estimated average amortization, year four | 60.2 | 60.2 | ||||
Estimated average amortization, year five | 60.2 | 60.2 | ||||
Customer relationships | ||||||
Unamortized Intangible Assets | ||||||
Intangible assets classified as held for sale | $ 4.2 | |||||
Developed technology | ||||||
Unamortized Intangible Assets | ||||||
Intangible assets classified as held for sale | $ 0.5 | |||||
ATM | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Intangible assets | 615 | 615 | ||||
Amortized Intangible Assets | ||||||
Gross Carrying Amount | 821.1 | 821.1 | 639.6 | |||
Accumulated Amortization | 174.9 | 174.9 | 145.7 | |||
Net Carrying Amount | 646.2 | 646.2 | 493.9 | |||
ATM | Trade names | ||||||
Unamortized Intangible Assets | ||||||
Gross Carrying Amount | 15 | 15 | 20 | |||
Net Carrying Amount | 15 | 15 | 20 | |||
ATM | Customer relationships | ||||||
Amortized Intangible Assets | ||||||
Gross Carrying Amount | 692.9 | 692.9 | 541.7 | |||
Accumulated Amortization | 142.9 | 142.9 | 119.2 | |||
Net Carrying Amount | 550 | 550 | 422.5 | |||
ATM | Developed technology | ||||||
Amortized Intangible Assets | ||||||
Gross Carrying Amount | 70.1 | 70.1 | 74.6 | |||
Accumulated Amortization | 24.2 | 24.2 | 20.7 | |||
Net Carrying Amount | 45.9 | 45.9 | 53.9 | |||
ATM | Trade names | ||||||
Amortized Intangible Assets | ||||||
Gross Carrying Amount | 31.8 | 31.8 | 18.9 | |||
Accumulated Amortization | 3.7 | 3.7 | 2.7 | |||
Net Carrying Amount | 28.1 | 28.1 | 16.2 | |||
ATM | Acquired technology | ||||||
Amortized Intangible Assets | ||||||
Gross Carrying Amount | 21.5 | 21.5 | ||||
Accumulated Amortization | 0.7 | 0.7 | ||||
Net Carrying Amount | 20.8 | 20.8 | ||||
ATM | Non-compete agreements | ||||||
Amortized Intangible Assets | ||||||
Gross Carrying Amount | 2.9 | 2.9 | 2.9 | |||
Accumulated Amortization | 2.7 | 2.7 | 2.5 | |||
Net Carrying Amount | 0.2 | 0.2 | 0.4 | |||
ATM | Patents | ||||||
Amortized Intangible Assets | ||||||
Gross Carrying Amount | 1.9 | 1.9 | 1.5 | |||
Accumulated Amortization | 0.7 | 0.7 | 0.6 | |||
Net Carrying Amount | 1.2 | 1.2 | $ 0.9 | |||
FBS | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Intangible assets | $ 46.2 | $ 46.2 |
Restructuring and Impairment _3
Restructuring and Impairment Activities - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and impairment expense | $ 1,800,000 | $ 1,900,000 | $ 17,400,000 | $ 5,900,000 |
Write-down of certain inventories | 0 | 100,000 | 0 | 100,000 |
FBS | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and impairment expense | 100,000 | 1,900,000 | 1,700,000 | 5,900,000 |
FBS | Winkler, Manitoba facility | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and impairment expense | 700,000 | 1,500,000 | 700,000 | |
Write-down of certain inventories | 500,000 | 500,000 | ||
FBS | Other manufacturing facilities | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and impairment expense | 700,000 | 2,300,000 | ||
FBS | Spotswood, New Jersey facility | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and impairment expense | 500,000 | 2,900,000 | ||
ATM | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and impairment expense | 900,000 | 0 | 14,900,000 | 0 |
Impairment of certain assets divested | 12,900,000 | |||
Proceeds | 4,600,000 | |||
Loss | 400,000 | |||
Loss on contract settlement | 1,100,000 | |||
ATM | Appleton, Wisconsin Facility | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and impairment expense | 700,000 | |||
Expected additional restructuring and impairment and restructuring related costs | 500,000 | 500,000 | ||
Severance accruals | 200,000 | |||
Corporate | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and impairment expense | $ 800,000 | $ 0 | $ 800,000 | $ 0 |
Restructuring and Impairment _4
Restructuring and Impairment Activities - Restructuring and Related Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and impairment expense | $ 1.8 | $ 1.9 | $ 17.4 | $ 5.9 |
Accelerated depreciation and amortization | 0 | 0.1 | 0 | 0.1 |
Spare parts and inventory write-downs to estimated net realizable value | 0 | 0.4 | 0 | 0.4 |
Other restructuring related charges - Cost of products sold | 0 | 0.5 | 0 | 0.5 |
Total restructuring costs and related charges | 1.8 | 2.4 | 17.4 | 6.4 |
Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and impairment expense | 0.3 | 1.2 | 1.6 | 2.8 |
Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and impairment expense | 0.7 | 0.7 | 2.1 | 3.1 |
Asset impairment | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and impairment expense | $ 0.8 | $ 0 | $ 13.7 | $ 0 |
Restructuring and Impairment _5
Restructuring and Impairment Activities - Restructuring Activities (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Restructuring Reserve [Roll Forward] | ||
Beginning balance | $ 6.2 | $ 7.4 |
Accruals for announced programs | 0.4 | 2.8 |
Accruals assumed from Merger | 2.3 | 0 |
Cash payments | (2.6) | (4.8) |
Foreign exchange impact | (0.4) | (0.1) |
Ending balance | $ 5.9 | $ 5.3 |
Debt - Schedule of Debt Summari
Debt - Schedule of Debt Summarized (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 25, 2018 |
Debt Instrument [Line Items] | |||
Finance lease obligations | $ 17.8 | $ 2.8 | |
Debt issuance costs and discounts | (30.9) | (16.1) | |
Total debt | 1,828.5 | 1,270.3 | |
Less: Current debt | (1.8) | (3.2) | |
Total long-term debt | 1,826.7 | 1,267.1 | |
Revolving Credit Facility | Revolving facility - U.S. dollar borrowings | Credit Facility | |||
Debt Instrument [Line Items] | |||
Carrying Amount of Hedged Item | 288 | 393 | |
Term loan facility | Term loan A facility | Credit Facility | |||
Debt Instrument [Line Items] | |||
Carrying Amount of Hedged Item | 192.5 | 193.5 | |
Term loan facility | Term loan B facility | Credit Facility | |||
Debt Instrument [Line Items] | |||
Carrying Amount of Hedged Item | 345.6 | 348.2 | |
Term loan facility | Delayed draw term loan | Credit Facility | |||
Debt Instrument [Line Items] | |||
Carrying Amount of Hedged Item | 650 | 0 | |
Unsecured Debt | |||
Debt Instrument [Line Items] | |||
Net of fair value hedge adjustments | $ 6.8 | ||
Unsecured Debt | 6.875% Senior Unsecured Notes Due 2026 | |||
Debt Instrument [Line Items] | |||
Interest rate (percent) | 6.875% | 6.875% | |
Discount | $ 6 | 5.2 | |
Carrying Amount of Hedged Item | 352.4 | 344.8 | |
French employee profit sharing | |||
Debt Instrument [Line Items] | |||
Carrying Amount of Hedged Item | 3.4 | 4.1 | |
German loan agreement | German Loan Agreement | |||
Debt Instrument [Line Items] | |||
Carrying Amount of Hedged Item | $ 9.7 | $ 0 |
Debt - Additional Information (
Debt - Additional Information (Details) | 9 Months Ended | ||||||||||
Jul. 05, 2022 USD ($) | Mar. 28, 2022 USD ($) | Feb. 10, 2021 USD ($) | Sep. 25, 2018 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 | Jun. 30, 2023 | May 30, 2022 USD ($) | May 30, 2022 EUR (€) | May 06, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | |||||||||||
Deferred debt issuance costs | $ 30,900,000 | $ 16,100,000 | |||||||||
New Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Effective interest rate on debt facilities (percent) | 4.90% | 4.12% | |||||||||
Senior 364-day Unsecured Bridge Facility | Bridge Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument term | 364 days | ||||||||||
German loan agreement | $ 648,000,000 | ||||||||||
German Loan Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face amount | $ 10,700,000 | ||||||||||
Average interest rate on outstanding borrowings (percent) | 1.75% | 1.75% | |||||||||
Credit Facility | New Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowings under credit facility | $ 700,000,000 | ||||||||||
EBITDA ratio | 5.50 | ||||||||||
Interest coverage ratio | 3 | ||||||||||
Credit Facility | New Credit Facility | Forecast | |||||||||||
Debt Instrument [Line Items] | |||||||||||
EBITDA ratio | 4.50 | ||||||||||
Revolving Credit Facility | New Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowings under credit facility | $ 400,000,000 | ||||||||||
Revolving Credit Facility | Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument term | 1 month | ||||||||||
Basis spread on variable interest rate (percent) | 1% | ||||||||||
Revolving Credit Facility | Credit Facility | Federal Funds Effective Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable interest rate (percent) | 0.50% | ||||||||||
Revolving Credit Facility | Credit Facility | Minimum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable interest rate (percent) | 1% | ||||||||||
Revolving Credit Facility | Credit Facility | Minimum | Base Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable interest rate (percent) | 0% | ||||||||||
Revolving Credit Facility | Credit Facility | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable interest rate (percent) | 2.50% | ||||||||||
Revolving Credit Facility | Credit Facility | Maximum | Base Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable interest rate (percent) | 1.50% | ||||||||||
Revolving Credit Facility | Credit Facility | New Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowings under credit facility | $ 500,000,000 | $ 600,000,000 | |||||||||
Debt instrument term | 5 years | ||||||||||
Revolving Credit Facility | Credit Facility | Senior 364-day Unsecured Bridge Facility | Bridge Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
German loan agreement | 50,000,000 | ||||||||||
Revolving Credit Facility | Credit Facility | Debt Commitment Letter | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowings under credit facility | $ 500,000,000 | 0 | |||||||||
Revolving Credit Facility | Credit Facility | Revolving facility - U.S. dollar borrowings | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt balance | $ 100,000,000 | ||||||||||
Average interest rate on outstanding borrowings (percent) | 5.77% | ||||||||||
Revolving Credit Facility | Credit Facility | Neenah, Inc. Global Secured Revolving Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Repayments of lines of credit | $ 59,000,000 | ||||||||||
Term loan facility | Term loan A facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Average interest rate on outstanding borrowings (percent) | 5.88% | ||||||||||
Term loan facility | Term loan B facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Average interest rate on outstanding borrowings (percent) | 6.88% | ||||||||||
Term loan facility | Term loan B facility | Base Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable interest rate (percent) | 2.75% | ||||||||||
Term loan facility | Term loan B facility | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable interest rate (percent) | 3.75% | ||||||||||
Term loan facility | Term loan B facility | Minimum Floor | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable interest rate (percent) | 0.75% | ||||||||||
Term loan facility | Delayed draw term loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Average interest rate on outstanding borrowings (percent) | 5.63% | ||||||||||
Term loan facility | Credit Facility | Term loan A facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument term | 7 years | ||||||||||
Face amount | $ 200,000,000 | ||||||||||
Term loan facility | Credit Facility | Term loan A facility | Federal Funds Effective Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable interest rate (percent) | 0.50% | ||||||||||
Term loan facility | Credit Facility | Term loan A facility | SOFR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable interest rate (percent) | 1% | ||||||||||
Term loan facility | Credit Facility | Term loan A facility | Minimum | SOFR | Expected | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable interest rate (percent) | 1.25% | ||||||||||
Term loan facility | Credit Facility | Term loan A facility | Minimum | Base Rate | Expected | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable interest rate (percent) | 0.25% | ||||||||||
Term loan facility | Credit Facility | Term loan A facility | Maximum | SOFR | Expected | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable interest rate (percent) | 2.75% | ||||||||||
Term loan facility | Credit Facility | Term loan A facility | Maximum | Base Rate | Expected | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable interest rate (percent) | 1.75% | ||||||||||
Term loan facility | Credit Facility | Term loan B facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument term | 7 years | ||||||||||
Face amount | $ 350,000,000 | ||||||||||
Incremental loans | $ 250,000,000 | ||||||||||
Repayments of debt | $ 445,900,000 | ||||||||||
Term loan facility | Credit Facility | Delayed draw term loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowings under credit facility | $ 650,000,000 | ||||||||||
Proceeds from lines of credit | $ 650,000,000 | ||||||||||
Unsecured Debt | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Fair market value | $ 312,400,000 | $ 365,800,000 | |||||||||
Unsecured Debt | 6.875% Senior Unsecured Notes Due 2026 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face amount | $ 350,000,000 | ||||||||||
Interest rate (percent) | 6.875% | 6.875% | |||||||||
Effective rate (percent) | 7.248% | ||||||||||
German loan agreement | German Loan Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face amount | € | € 10,000,000 |
Debt - Schedule of Principal Re
Debt - Schedule of Principal Repayments (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2022 | $ 9.8 |
2023 | 39.3 |
2024 | 39.2 |
2025 | 39.6 |
2026 | 391.8 |
Thereafter | 1,337.2 |
Total debt | $ 1,856.9 |
Derivatives - Additional Inform
Derivatives - Additional Information (Details) | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Jun. 30, 2022 EUR (€) | Jun. 30, 2022 USD ($) | Sep. 25, 2018 | |
6.875% Senior Unsecured Notes Due 2026 | Unsecured Debt | |||||||||
Derivative [Line Items] | |||||||||
Interest rate (percent) | 6.875% | 6.875% | 6.875% | ||||||
Cross Currency Swap Terminated | Derivatives designated as hedges: | |||||||||
Derivative [Line Items] | |||||||||
Notional value | € 488,800,000 | $ 550,000,000 | |||||||
Derivative, cash received on hedge | $ 35,800,000 | ||||||||
Cross-currency swap | |||||||||
Derivative [Line Items] | |||||||||
Derivative amounts excluded from effectiveness testing as interest expense | $ 2,100,000 | $ 2,400,000 | $ 6,900,000 | $ 4,500,000 | |||||
Cross-currency swap | Derivatives designated as hedges: | |||||||||
Derivative [Line Items] | |||||||||
Notional value | € 450,000,000 | 478,200,000 | |||||||
Series Of Pay-fixed, Receive-variable Interest Rate Swaps, Terminated | |||||||||
Derivative [Line Items] | |||||||||
Notional value | $ 500,000,000 | ||||||||
Derivative, cash received on hedge | 23,600,000 | ||||||||
Pay-fixed, receive-variable interest rate swaps, maturing on January 31, 2027 and December 31, 2027 | |||||||||
Derivative [Line Items] | |||||||||
Notional value | $ 500,000,000 | ||||||||
Interest rate swap | Interest rate contracts - fair value hedge | |||||||||
Derivative [Line Items] | |||||||||
Notional value | $ 173,400,000 | ||||||||
Pay Fixed Receive Variable Interest Rate Swaps Maturing On May 6 2027 And April 20 2028 | |||||||||
Derivative [Line Items] | |||||||||
Notional value | $ 650,000,000 | $ 650,000,000 |
Derivatives - Derivatives by Ba
Derivatives - Derivatives by Balance Sheet Location (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | $ 88.7 | $ 5.3 |
Liability Derivatives | 6.4 | 12.5 |
Derivatives designated as hedges: | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 88 | 5.1 |
Liability Derivatives | 0.2 | 11.9 |
Derivatives designated as hedges: | Foreign exchange contracts - net investment hedge | Accounts receivable, net | Foreign exchange contracts - net investment hedge | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 4.9 | 1.6 |
Derivatives designated as hedges: | Foreign exchange contracts - net investment hedge | Other assets | Foreign exchange contracts - net investment hedge | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 35.9 | 0 |
Derivatives designated as hedges: | Foreign exchange contracts - net investment hedge | Accrued expenses and other current liabilities | Foreign exchange contracts - net investment hedge | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives | 0.2 | 0 |
Derivatives designated as hedges: | Foreign exchange contracts - net investment hedge | Other liabilities | Foreign exchange contracts - net investment hedge | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives | 0 | 9.8 |
Derivatives designated as hedges: | Interest rate contracts - cash flow hedge, one | Accounts receivable, net | Interest rate contracts - cash flow hedge | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 0.2 | |
Derivatives designated as hedges: | Interest rate contracts - cash flow hedge, one | Accrued expenses and other current liabilities | Interest rate contracts - cash flow hedge | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives | 0 | |
Derivatives designated as hedges: | Interest rate contracts - cash flow hedge, two | Other assets | Interest rate contracts - cash flow hedge | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 40.2 | |
Derivatives designated as hedges: | Interest rate contracts - cash flow hedge, two | Other liabilities | Interest rate contracts - cash flow hedge | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives | 0 | |
Derivatives designated as hedges: | Interest rate contracts - cash flow hedge | Accounts receivable, net | Interest rate contracts - cash flow hedge | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 0.2 | |
Derivatives designated as hedges: | Interest rate contracts - cash flow hedge | Other assets | Interest rate contracts - cash flow hedge | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 3.3 | |
Derivatives designated as hedges: | Interest rate contracts - cash flow hedge | Other assets | Interest rate contracts - fair value hedge | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 6.8 | |
Derivatives designated as hedges: | Interest rate contracts - cash flow hedge | Accrued expenses and other current liabilities | Interest rate contracts - cash flow hedge | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives | 0 | |
Derivatives designated as hedges: | Interest rate contracts - cash flow hedge | Other liabilities | Interest rate contracts - cash flow hedge | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives | 2.1 | |
Derivatives Not Designated as Cash Flow Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 0.7 | 0.2 |
Liability Derivatives | 6.2 | 0.6 |
Derivatives Not Designated as Cash Flow Hedging Instruments | Foreign exchange contracts - net investment hedge | Accounts receivable, net | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 0.7 | 0.2 |
Derivatives Not Designated as Cash Flow Hedging Instruments | Foreign exchange contracts - net investment hedge | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives | $ 6.2 | |
Derivatives Not Designated as Cash Flow Hedging Instruments | Foreign exchange contracts - net investment hedge | Accounts payable | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives | $ 0.6 |
Derivatives - Fair Value Hedge
Derivatives - Fair Value Hedge (Details) - Long-Term Debt and Lease Obligation - Interest rate contracts - cash flow hedge - Interest rate contracts - fair value hedge - Derivatives designated as hedges: $ in Millions | Sep. 30, 2022 USD ($) |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Carrying Amount of Hedged Item | $ 352.4 |
Cumulative Amount of Adjustment Included in Carrying Amount | $ 6.8 |
Derivatives - Derivative Instru
Derivatives - Derivative Instruments Effect on AOCI and Results of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized Gain/(Loss) Recognized in AOCI on Derivatives, Net of Tax | $ 19.9 | $ 1.3 | $ 50 | $ 3.3 |
Derivatives Designated in Hedging Relationships | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total gain/(loss) | 19.9 | 3.2 | 91.8 | 10.4 |
Loss Reclassified from AOCI | (3) | (0.4) | ||
Interest rate contracts - cash flow hedge | Derivatives Designated in Hedging Relationships | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss Reclassified from AOCI | (4.6) | (2) | ||
Foreign exchange contracts | Interest rate contracts - cash flow hedge | Derivatives Designated in Hedging Relationships | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized Gain/(Loss) Recognized in AOCI on Derivatives, Net of Tax | 0 | (0.2) | 0 | (0.1) |
Loss Reclassified from AOCI | 0 | (0.3) | 0 | (1.3) |
Foreign exchange contracts | Interest rate contracts - cash flow hedge | Derivatives Designated in Hedging Relationships | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized Gain/(Loss) Recognized in AOCI on Derivatives, Net of Tax | 0.1 | (0.4) | 0.3 | (0.5) |
Loss Reclassified from AOCI | 0 | (0.1) | (0.1) | (0.7) |
Interest rate contracts | Interest rate contracts - cash flow hedge | Derivatives Designated in Hedging Relationships | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized Gain/(Loss) Recognized in AOCI on Derivatives, Net of Tax | 19.7 | 1.9 | 47.8 | 3.9 |
Loss Reclassified from AOCI | (3) | 0 | (4.5) | 0 |
Foreign exchange contracts | Foreign exchange contracts - net investment hedge | Derivatives Designated in Hedging Relationships | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized Gain/(Loss) Recognized in AOCI on Derivatives, Net of Tax | $ 0.1 | $ 1.9 | $ 43.7 | $ 7.1 |
Derivatives - Derivatives Desig
Derivatives - Derivatives Designated as Cash Flow Hedges on Net Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Foreign exchange contracts | Derivatives Not Designated as Cash Flow Hedging Instruments | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of Gain/(Loss) Recognized in Income/(Loss) | $ 0.3 | $ (0.3) | $ (0.2) | $ (0.6) |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 3 Months Ended | 9 Months Ended | ||||
Apr. 09, 2021 USD ($) | Mar. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) | Aug. 31, 2018 USD ($) | Dec. 31, 2017 assessment | Dec. 31, 2000 assessment | |
Workforce Subject to Collective-Bargaining Arrangements | Unionized Employees Concentration Risk | U.S. Pension Plans | ||||||
Loss Contingencies [Line Items] | ||||||
Net sales | 25% | |||||
Workforce Subject to Collective-Bargaining Arrangements | Unionized Employees Concentration Risk | Non-US | ||||||
Loss Contingencies [Line Items] | ||||||
Net sales | 6.50% | |||||
Workforce Subject to Collective-Bargaining Arrangements Expiring within One Year | Unionized Employees Concentration Risk | U.S. Pension Plans | ||||||
Loss Contingencies [Line Items] | ||||||
Net sales | 23% | |||||
Workforce Subject to Collective-Bargaining Arrangements Expiring within One Year | Unionized Employees Concentration Risk | Non-US | ||||||
Loss Contingencies [Line Items] | ||||||
Net sales | 2% | |||||
S W M B Brazilian Mill | Raw Materials Assessment | ||||||
Loss Contingencies [Line Items] | ||||||
Number of assessments from the tax authorities regarding ICMS taxes | assessment | 2 | |||||
Loss accrued | $ 8,600,000 | |||||
Loss accrued payments | $ 2,600,000 | |||||
Reduction of tax liability | 70% | |||||
Recognized total benefit on settlement | 6,100,000 | |||||
S W M B Brazilian Mill | Raw Materials Assessment | Interest expense | ||||||
Loss Contingencies [Line Items] | ||||||
Recognized total benefit on settlement | 4,600,000 | |||||
S W M B Brazilian Mill | Raw Materials Assessment | Other expense, net | ||||||
Loss Contingencies [Line Items] | ||||||
Recognized total benefit on settlement | $ 1,600,000 | |||||
Assessment | Electricity Assessment | ||||||
Loss Contingencies [Line Items] | ||||||
Number of assessments from the tax authorities regarding ICMS taxes | assessment | 4 | |||||
Loss accrued | $ 0 | |||||
Assessment | First and second Electricity Assessments | ||||||
Loss Contingencies [Line Items] | ||||||
Estimate of possible loss | $ 10,700,000 | |||||
Assessment | Revised third and fourth Electricity Assessments | ||||||
Loss Contingencies [Line Items] | ||||||
Estimate of possible loss | $ 8,800,000 |
Postretirement and Other Bene_3
Postretirement and Other Benefits (Details) - Pension Benefits - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
U.S. Pension Plans | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | $ 0.5 | $ 0 | $ 0.5 | $ 0 |
Interest cost | 4.1 | 0.7 | 5.7 | 2.1 |
Expected return on plan assets | (5) | (1) | (7) | (3) |
Amortizations and other | 0.5 | 0.9 | 1.3 | 2.7 |
Net periodic benefit cost | 0.1 | 0.6 | 0.5 | 1.8 |
French | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | 0.7 | 0.5 | 1.4 | 1.2 |
Interest cost | 2 | 0.9 | 3.2 | 1.8 |
Expected return on plan assets | (1.9) | (1) | (3.2) | (1.9) |
Amortizations and other | 0.1 | 0.2 | 0.4 | 0.7 |
Net periodic benefit cost | $ 0.9 | $ 0.6 | $ 1.8 | $ 1.8 |
Equity-Based Compensation (Deta
Equity-Based Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2015 | Mar. 28, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Stock compensation expense | $ 1.9 | $ 1.9 | ||
Restricted Stock Plan Service Based Shares | CIC event | LTIP | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Immediate vesting period | 24 months | |||
Accelerated service awards expensed | 2.1 | |||
Restricted Stock Plan Performance Based Shares | LTIP | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Accelerated service awards expensed | 2.5 | 2.5 | ||
Costs to be recognized | 0.6 | 0.6 | ||
Stock compensation expense | $ 2.5 | $ 2.5 | ||
Restricted Stock Plan Performance Based Shares | CIC event | LTIP | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Vesting percent | 100% | |||
RSUs | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Vesting percent | 33.30% | |||
RSUs issued as retirement and special grant awards | 3 years | |||
RSUs | Retirement and special grant awards | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
RSUs issued as retirement and special grant awards | 1 year | |||
RSUs | Neenah | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Assumed unvested shares converted (in shares) | 180,149 | |||
Assumed unvested shares converted | $ 4.2 | |||
PSUs | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Service condition | 3 years | |||
Weighted-average period for recognition | 2 years | |||
PSUs | Neenah | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Assumed unvested shares converted (in shares) | 292,032 | |||
Assumed unvested shares converted | $ 6.8 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income tax penalties and interest accrued | $ 0 | $ 0 | $ 0 | $ 0 |
Effective income tax rate from continuing operations (percent) | 32.60% | 13.20% | 25.30% | 29.60% |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jul. 06, 2022 segment | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 2 | ||||
Net Sales | |||||
Net Sales | $ 674.1 | $ 383.6 | $ 1,507.3 | $ 1,049.6 | |
Percentage of Net Sales | 100% | 100% | 100% | 100% | |
Operating Profit/Loss | |||||
Operating Profit/Loss | $ (13.9) | $ 23 | $ 24.5 | $ 72.4 | |
Percent of Operating Profit/Loss | 100% | 100% | 100% | 100% | |
ATM | |||||
Net Sales | |||||
Net Sales | $ 426.1 | $ 260.1 | $ 987.1 | $ 675.1 | |
FBS | |||||
Net Sales | |||||
Net Sales | 248 | 123.5 | 520.2 | 374.5 | |
Operating Segments | ATM | |||||
Net Sales | |||||
Net Sales | $ 426.1 | $ 260.1 | $ 987.1 | $ 675.1 | |
Percentage of Net Sales | 63.20% | 67.80% | 65.50% | 64.30% | |
Operating Profit/Loss | |||||
Operating Profit/Loss | $ 31.5 | $ 15.9 | $ 71.2 | $ 56.1 | |
Percent of Operating Profit/Loss | 69.10% | 77.50% | |||
Operating Segments | FBS | |||||
Net Sales | |||||
Net Sales | $ 248 | $ 123.5 | $ 520.2 | $ 374.5 | |
Percentage of Net Sales | 36.80% | 32.20% | 34.50% | 35.70% | |
Operating Profit/Loss | |||||
Operating Profit/Loss | $ 27.8 | $ 24 | $ 75.9 | $ 78.1 | |
Percent of Operating Profit/Loss | 104.40% | 107.90% | |||
Unallocated | |||||
Operating Profit/Loss | |||||
Operating Profit/Loss | $ (73.2) | $ (16.9) | $ (122.6) | $ (61.8) | |
Percent of Operating Profit/Loss | (73.50%) | (85.40%) |